The perhaps apocryphal comment attributed to Zhou Enlai, is that it is too early to tell what the impact of the French Revolution has been. Superficially this seems like a cryptic or even ignorant remark, but it is actually quite the opposite, it was an observation with acute contemporary relevance for modern Chinese politics.
Firstly, it is necessary to understand that Chinese political culture is much better informed than ours in Britain about history and political philosophy; and that there is a modern tradition of comparing China’s developmental model with other countries. So for example any discussion about agricultural policy is likely to also compare Chinese experience with Soviet collectivisation, the Stolypin reforms in Czarist Russia, and the experience of smallholder settlement in the USA. So Zhou’s remark would be that of a person knowledgable about the French revolution, and of Marxist commentaries upon that event.
Let us look at the economic and social context of eighteenth century France, drawing on the account from Isaac Ilyich Rubin, in the “History of Economic Thought” [Pluto 1979, originally published Leningrad, 1929]. France was locked in a global war of military and economic competition with England, that forced the development of the most modern manufacturing techniques and technological developments onto an essentially feudal social system. Starting with the administration of Colbert (1661 to 1682) the French monarchy had pursued a rigorous mercantilist policy, characteristic of early capitalism in Holland and England, using the state to promote trade, shipping and industry; as well as strictly regulating manufacturing processes. The French state used its regulation of foreign trade to ban manufactured imports, and subsidise manufacturing industry for export. There was of course also a substantial state industry in the construction of shipping and military materiel.
The political reform of the Bourbon monarchy had moved away from classic feudalism towards absolutism, and the growth of a centralised state; the nobility were compensated for their loss of political power by a complex and rich court life, based upon prestige and material luxury.
But France had an extremely limited internal market, and the industrial sector and the court were sustained by cripplingly high taxes on the peasantry: and although serfdom had been abolished, the peasantry were still subject to innumerable feudal obligations. In the eighty years prior to the revolution, France experienced thirty severe famines, and the desperately low standard of living of the French peasantry was legendary – bare foot, emaciated and clothed in sack-cloth. So industrialisation on a state sponsored mercantilist model produced increasing grinding poverty alongside obscene wealth.
It is worth considering at this point the intellectual impact of China upon seventeenth century and eighteenth century Europe. The most widely read account of Chinese society at this time were the works of Gottfried Wilhelm Leibniz, who idealised Chinese society, and regarded it as both an ethical and political model for Europe. Leibnitz was highy knowledeable about Chinese society, and was in regular correspondence with Jesuits in China, and through them had followed Chinese philosophy, science, mathematics and political theory. The Jesuits translated most major Chinese texts into Latin. China was at this time considered in advance of Europe, and indeed Chinese society was even closer to God, as the Lutheran pastor Andreas Müller announced in 1674 that key to mastery of the Chinese language, was to recognise that it is the God given Universal language of Adam and Eve. In 1601 the Jesuit missionary Matteo Ricci had entered the Chinese court, and at this period the Jesuits even argued that Confucianism was a form of innate Christianity with Chinese characteristics – as shown by the seventeenth century St Paul’s church in Macao with it distinctive Chinese iconography. (It is worth pointing out that there is no reference in European thought to Chinese people being racially different from Europeans until the mid nineteenth century)
Leibniz was in particular concerned about the slide of the French monarchy towards absolutism, and the extreme luxury coexisting with ruinous exploitation of the peasantry; in his own terms he saw this as being government unconstrained by any mediation from natural law deriving from God, and he compared French absolutism unfavourably with the rule of the Chinese emperor. But more significantly, this theme of China being exemplary was taken up by a number of other major enlightenment thinkers, from Voltaire to François Quesnay, who were concerned with maintaining absolutist government, but using it as a vehicle for progressive and transformative social change; and who saw democracy as mob-rule that challenged the integrity of the state to carry out such necessary reforms.
The key thinker here is the Physiocrat, François Quesnay, who described the absolutist monarchy as “the only power standing above all the different exclusive interests, which it must restrain”, their economic programme was to abolish all remnants of economic feudalism, and concentrate upon increasing agricultural production, which they regarded as the sole source of wealth. In Theories of Surplus Value, [Volume I, Chapter 2] Marx credits the Physiocrats with being the first to understand that labour and not trade generates wealth: “The Physiocrats transferred the inquiry into the origin of surplus-value from the sphere of circulation into the sphere of direct production, and thereby laid the foundation for the analysis of capitalist production. Quite correctly they lay down the fundamental principle that only that labour is productive which creates a surplus-value, in whose product therefore a higher value is contained than the sum of the values consumed during the production of this product.”
Abolition of the economic legacy of feudalism in agriculture could follow two paths; either the peasants would be dispossesed from the land and become labourers, which was the English model creating large estates; or the peasantry would become the owners of their own plots, as small capitalists – which was in fact the result of the French revolution. The Physiocrats looked to establish the English model in France, through the enclosure of the land and the proletarianisation of the peasantry; that would then attract capital investment into agriculture, and the development of modern capitalist farming.
But this would be done in the context of a non-capitalist society in two important aspects. Firstly, political power would reside with the feudal monarchy and its absolutist state, with no democracy; and secondly, the Physiocrats saw the capitalist class itself as having no inherent virtue, in great contrast to the whig tradition in England, and its successor theories that even today conflate capitalism with democracy.
As Marx explains (Theories of Surplus Value, Chapter II) “Profit is seen by them as only a kind of higher wages paid by the landowners, which the capitalists consume as revenue (and which therefore enters into their costs of production in the same way as the minimum wages of the ordinary workmen); this increases the value of the raw material, because it enters into the consumption costs which the capitalist, [the] industrialist, consumes while he is producing the product, transforming the raw material into a new product.”
So in the Physiocratic tradition – that sought to reform the absolutist French monarchy as an alternative to revolution – the capitalist class were seen as a parasitical burden upon production, and the role of the state was to encourage the generation of wealth through providing the conditions to reward investment in agriculture. What is more, social wealth was measured by the success in producing use values and not profits or money.
While Voltaire and the Physiocrats praised Chinese monarchism as a model for enlightened government, in contrast the writing of the French political theorist, Charles de Montesquieu, popularised the concept of Asiatic despotism; Montesquieu became an influential inspiration through the American and French revolutions, and the victory of these revolutions and the historical eclipse of the reforming tradition within absolutism that held China to be exemplary, has coloured the popular perception of China and the Chinese ever since. China was seen as undemocratic, and democracy became the hallmark of progress. In particular it marked the end of the era of European thinking that looked to China as a more advanced society to which Europe should aspire.
So the debates in pre-revolutionary France not only have an echo in contemporary Western views of China; but they also have current echoes in modern Chinese politics.
The French revolution identified economic progress and individual liberty with the conquest of state power by the capitalist class, and therefore the concept of a political revolution that coincides with a bourgeois social revolution became regarded as normative. Currently, the Chinese Communist Party (CCP) is seeking to expand capitalist investment in the context of what still remains a partially state directed economy, and without ceding political power to the capitalist class; and without the democratic forms of liberal democracy. In its own eyes, the CCP stands in the tradition of enlightened dictatorship.
According to Li Changping, in his essay “The Crisis in the Countryside”, in Chaohua Wang’s anthology “One China, Many Paths” [Verso, 2003] the economic and social situation of the Chinese peasantry is currently disastrous, precisely because they bear both the burden of asymmetrical trading relationships with the cities (that is worsened by World Trade Organisation membership), and also arbitrary and punishing taxes set by unaccountable local authorities.
As Li explains: “A key development was the decision in the mid-nineties to split fiscal planning into disconnected levels (fen zao chifan ) … When there was a planned economy, budgetary balances were controlled from above. Now with the abandonment of vertical checks, the financial situation at all levels of government is a tightly guarded secret. …. Dividing up fiscal administration without supervision or transparency has, in effect, led to a vicious growth of short term calculations and irresponsibility”. The local government farming communities ( xiang ) used to be collectively financed by taxation on the collective farms, and the taxation was regulated from above. Now the tax burden falls on individual farmers, and there is no regulation, so that each xiang imposes its own, often punitive taxes, to fund a rapidly expanding state payroll – a paradoxical result of the introduction of the market into the countryside. What is more, individual rather than collective taxation has priced many peasant families out of education and health services, that were previously provided by the collective farms.
Not only does China share with eighteenth century France the condition of an impoverished and over taxed peasantry, it also shares the economic problem of an under-developed internal market, and export led growth based upon state regulation, which is not developing that internal market.
One solution based upon the French revolution model would be to fully privatise the land, which is currently state owned, and leased to households in perpetuity. This would allow the peasantry freedom to abandon agricultural work, because currently there is no legal mechanism for peasants to leave or re-enter the rural economy. Land privatisation would also provide some respite from arbitrary land confiscation for industrial projects, that is a serious cause of grievance in the Chinese countryside. This would also solve the problem of the unregulated labour market of peasants who have gone to work in the cities without official work permits, and who are the most exploited and abused workers in China; because privatisation of the land would also require full citizen rights for the peasantry. Naturally, this course does have many advocates within the People’s Republic, and within the Communist Party.
But the key here is what the context of privatisation is. This would not be a Jacquerie, allowing the peasantry to seize the land and wipe off their debts, it would be a managed process that sustained and reproduced the current low economic and social status of the peasants. As Wang Hui points out in “China’s New Order” [Harvard, 2003] “if privatisation is carried out under undemocratic and unjust circumstances, this “legitimisation” will guarantee only an illegitimate process of distribution”. Wang recognises that while the formality of bourgeois society is political equality, economic equality undermines it, so privatisation does not solve the problems for the peasantry, rather it would exagerate them further.
Currently, rural households are hugely in debt, often to the tune of several times their annual income, so land privatisation would not lead to an egalitarian distribution based upon current land holdings, but would force indebted farmers off the land to repay money lenders – who are often state officials, and even CCP members, and who would be the very people supervising the privatisation! Land privatisation would therefore create a serious threat by transforming a layer of local government officials into private agricultural landlords, and rather than gaining a more secure land tenure, indebted farmers would actually be forced off their land by the money lenders.
The alternative is to restore greater state direction in the rural economy; but at this stage a return to farm collectivisation is impossible, not least because it is firmly associated with lower agricultural yields and famine.
One mechanism that the CCP could employ would be to control the prices for agricultural produce to guaranteeing a minimum income for rural communities. But the vital tasks are for the government to organise a debt cancellation programme; and an expansion of rural consumption. Li estimates that China has 230 million rural households, and an expansion of net income by just 1% would lead to an increase of consumption by 100 billion Yuan, creating an overall additional internal demand in the economy of 236 billion Yuan; making the People’s Republic less dependent upon exports.
To overcome the rural crisis requires government action. As Li explains “excessive concentration of power [by local government officials] without effective democratic supervision is the root cause of corruption … The most efficient way of countering corruption is to entrust authority to the people. It is democratic supervision and administration that can exercise effective control over the power of officials”.
The restoration of rigid central government supervision of local government would of course be desirable, but the entire culture of the current Chinese government militates against a model of “good governance”; the state is not too strong, it is too weak to stamp out corruption and self-interest.
There are significant voices within the CCP arguing that the Party can only solve the countryside’s economic and social problems by local democracy, based upon empowering the peasantry; but this requires the peasantry themselves to own the political process, and for them to resist the further exposure of their plight to the market.
Is China inevitably on the road to capitalist restoration? Too early to tell.