Tuesday, February 6, 2007

China 1989 - Second installment

Part II of a series from my mid-1990s paper entitled "Exorcising the Ghost of Mass Political Activism: Deng Xiaoping, Workers, Peasants and the 1989 Spring Uprising":

[A prefatory comment. While visiting China in the early 1990s I was witness to a scene that we wouldn't see in the US. I was having a meal in my Shanghai hotel, a 4-star place. At a table near mine a short guy (Napolean-like) was standing in front of his table fuming over something while his wife and two kids (they were perhaps Indonesian) were sitting at the table trying to mollify him. The guy was clearly some overseas capitalist upset at something about the service he was getting. This in itself wasn't terribly remarkable, although he clearly wasn't very skillful, at least by American standards, at acting like a miffed superior. His tantrum was more akin to that of a petulant child. What was remarkable was that a few yards away from him a group of five Chinese restaurant workers were observing this customer's fit and were openly making fun of him. This was something I'd never seen in the US or anywhere else I'd ever been: workers who felt free to make no secret of their contempt for someone who was behaving badly. In the US, restaurant workers, or any other workers for that matter, would confine such responses to the backroom among the other workers or do something behind the irate and obnoxious customer's back, not in front of him.

I was immediately reminded while watching this of how the workers of China were still not that far away in time from the days when they were treated as the masters of the society. You will see in the quotes that follow in my paper numerous references by workers to having once been the masters/leaders of society. This was one of the central reasons why the 1989 Spring Uprising occurred.]

Workers and the Spring Uprising

"All bosses are the same -- they're only there for making money. God damn it, I've worked for thirty years and still have to serve dishes to capitalists! I still don't understand why we have to enter into joint ventures with bosses and that the masters of our country, the workers, have to work for capitalists."
--Restaurant worker, Shenzhen Special Economic Zone, China, 1987

"We work more than 13 hours a day, overtime everyday, but have never received any overtime pay. The boss doesn't allow us to drink water during work hours, we are body searched when we go off work. Our living dormitory is crowded beyond imagination - 20-30 women squeezed into an iron-walled room, without toilet or bathroom. How can we bear this life?"
--Shenzhen temporary woman worker, Da Kung Pao, a China-linked Hong Kong paper, March, 1988, cited in Leung (1989), p. 153

"An older worker (who was wearing a Mao button) told the reporter: 'They [the demonstrators] represent the people's thinking, the sense that we the people are in control. The leaders cover everything up. People don't know anything, and we are no longer the masters. That's why there is this uprising.'"
--The New York Times, May 31, 1989

"This government favors every social group except the working class. The so-called 'leading class of the society' has been consigned to limbo. Not only has the government not showed any kindness to workers, it has further tried in various ways to abuse us. "
--Chinese worker, Zoomlens, December 6, 1988

Though students definitely initiated and led the 1989 Spring Uprising in China, the majority of participants ended up being workers, especially young, male workers, many of them unemployed (Calhoun, 1989, Wang, 1990). Nearly all accounts of the protests, however, have focused primarily on the students and intelligentsia. This has taken attention away from the specifics and social impact of the Deng economic reforms themselves and those reforms' impact on the working class in particular.

Indeed, the mainstream descriptions of the uprising as a "pro-western style democracy and anti-communist" movement appear plausible only by their ignoring the workers. These mainstream descriptions are, hence, at best highly misleading. Any large-scale social movement will, of course, be characterized by a wide diversity of political views. And certainly some of the middle class forces involved in the movement look(ed) to the west for answers. Even among the middle class forces, however, the picture is much more variegated than depicted by most accounts. This is even more true since the massacre than before. One recent Reuters account, for example, points to the pronounced upsurge of interest in Mao among Beijing's youth evidenced by what T-shirts are popular:

"A cartoon of a black cat shedding tears is a jibe at ...Deng Xiaoping's famous reformist motto... T-shirts [such as these] have far outstripped sales of former favorites ... of American movie stars Tom Cruise, Brook Shields and Madonna... One designer said his next T-shirt will borrow a slogan coined by Mao during the Cultural Revolution: 'Never Forget Class Struggle.' Indeed, the former Communist Party chairman has provided inspiration for a number of T-shirt slogans that are intended as veiled attacks on his successors. Hawkers in the Xidan shopping area offer one T-shirt carrying Mao's portrait and his phrase: 'A single spark can start a prairie fire' that predicted the victory of Chinese communism, but which continues to give hope for change. 'Sweep Away All Vermin' reads another slogan in an ironic echo of a line from a poem written by Mao in 1963. A third recalls Mao's admonition, 'Do not fear hardship or death' but which adds a new line '... and I'm not afraid of YOU.'" (San Francisco Chronicle, July 21, 1991)

Moreover, as previously discussed, there are certain distinct differences in aims between middle class and working class participants in the uprising(s). In focusing herein on the workers, the specifics and social impact of the Deng reforms stand out most starkly. By looking at the particularities of these reforms, not only does the essence of the authorities' economic reforms become clearer, the actual content of their political reform agenda is clarified as well.

As Halpern (1989), for example, points out, Deng, Zhou and others have swiftly called a halt to liberalization campaigns when criticisms began to emerge aimed at the reforms themselves. For example, both in 1983-4 and 1987, elites halted or strictly limited "political campaigns directed against the effects of liberalization because these campaigns threatened [to get out of hand and]...undermine the economic reforms" (p. 149). Especially when viewed from the working class' perspective, the Deng reforms constitute a reversion to pre-revolutionary exploitation.

The Role Reversal

By opening the door to the market and elevating production to first place in the economy, Deng fundamentally abandoned the Party's original revolutionary mandate. Modernization instead of revolution was now the goal and market forces rather than class struggle were now the means. Since China was, and is, still a relatively poor Third World country, Deng's strategy was not without appeal. By tying his regime's legitimacy primarily to continuing rises in production and an ever-rising standard of living, Deng effectively turned upside down the class alliance which had brought the CCP to power, and kept it in power since 1949. The groups once most celebrated and favored--the working class and poor peasants--switched places with the group formerly most despised--capitalists.

The CCP under Mao's leadership, because it did not owe its mandate exclusively or even principally to material wealth per se, was able to weather setbacks and major problems, including acute shortages and starvation during the Great Leap Forward and intense factional fighting during the Cultural Revolution. Deng, on the other hand, staked everything on bringing the Four Modernizations to fruition and making China a world power by the year 2000. When the economy bogged down around 1985, then, and production faltered, inflation ran out of control, salaries lost ground to ever-rising prices, social disorder, class polarization and lack of direction became starkly apparent, Deng's regime's legitimacy was open to fundamental challenge.

After Mao's death in 1976 the new Chinese government systematically set about dismantling and thoroughly criticizing the policies and practices of the Maoist years, particularly those brought forward during the Cultural Revolution. In the economic arena the policy reversals have been based on four key assumptions: 1) that a greater separation between administration and economics should exist, with the latter allowed to operate according to its own "organic" logic; 2) a more "rational" division of labor should be established between central and local governments, with the micro-economy guided less by directive (i.e. political) means and more through "economic levers"; 3) market processes were to be permitted wide scope under the recognition that socialism is still a commoditized economy; and 4) individual industrial enterprises' decision-making powers should be expanded.

Maoist axioms about stressing revolution over economic development, equity over efficiency, and so on, have been supplanted by the "primary stage of socialism" (Zhao Ziyang's term): this phase, projected to last until the middle of the twenty-first century, will be characterized by diverse systems of ownership and the "basic criterion for judging our work should be whether it serves" economic growth. In other words, if it promotes production, it is good. If it interferes with production, it is bad. In the words of the party's theoretical journal, Red Flag, "ideals are far-away, politics are meaningless, but cash is real." Coming from a communist theoretical journal, these sentiments are nothing short of shocking.

Raising production by increasing worker exploitation

"I have sung the song of socialism for several decades, and my hair has gone grey, and at the end we found we are singing the tune of 'primary stage of socialism'-- this historical regression is very worrying."
-- A Wuhan railway worker, circa 1988

"If the primary stage of socialism will take more than a hundred years, now I am thirty, I will have to live until I am over a hundred to see any sign of modern socialism. Thinking about that, that's not much fun, is it?"
-- a young Chinese worker

Both the current regime and Mao's before it face a similar problem: how to modernize and raise living standards. The fierce struggle between them was not over whether to promote production, it was over whether 1) the goal of the revolution was modernization per se (versus revolutionizing all relations) and 2) whether production was best promoted through "grasping revolution" as Mao put it (i.e., putting politics first), or through allowing the market and material incentives to spur greater worker productivity ("economics in command").

Under Deng’ s leadership, gone were the goals of revolution and social transformation. So long as the economy expanded, Deng's new social contract with the Chinese people could reasonably be expected to remain essentially intact. Initially, the reforms produced seemingly encouraging economic results. Agricultural production spurted upward. Special Economic Zones were introduced in coastal regions and initially attracted very sizable investment pledges from foreign investors. Intellectuals were restored to their former highly valued positions and told that they could go back to their studies. They were, indeed, seen as vital to China's push for modernization.

The Honeymoon is Over

"Reform initially meant a color television, a red bicycle and pork for dinner. Now many people worry that it means bribes, high prices and even lay-offs. Inflation and corruption along with fear of unemployment and resentment of the newly wealthy seem to be fostering reassessment among Chinese farmers and workers about the benefits of sweeping economic change." --New York Times, April 6, 1989

"[Y]ou are leading the people across a river, locating each stepping stone as you go. In what direction are you taking us? And what about those who find no stepping stone and drown?... We have had ten years of reform, and we still don't know where we are going. Who can tell us? Of course you can say, 'It doesn't matter what colour the cat, as long as it catches the mouse.' But if both cats start fighting over the mouse, only confusion and contradiction follow. Or, put another way, the bureaucratic cat will continue to get fat, and the people will starve. Is that the proper way to run a country?" --from a release entitled "The People in Command" by The Beijing Workers' Autonomous Federation, 1989

Beginning around 1985, the economic reforms began to founder. The 1985 crops yield plunged somewhere between 30-50 million tons, despite good weather. 1984's bumper crop of 400 million tons, it turned out, had been large primarily because grain that had been held in storage was released as collectives were being forcibly broken up on orders from the Party Center, and assets were being distributed to individual members. The much-touted Special Economic Zones (ringingly endorsed by Deng in 1984 as the economic future for China) which granted special concessions to foreign capital, revealed themselves to be a mirage in early 1985.

A poll taken in July 1985 asked 6,000 Beijing residents about their current food consumption compared to the previous year. For each category (Meat, Eggs, Vegetables) a majority said they were eating no better or less well than a year ago. Beijing Review (No. 49, December 9, 1985) reported that by mid-1985, uniform price controls on meat, fish, poultry, and eggs had been lifted in 35 major cities. As a result, food prices had risen, "sometimes to alarming degrees." A number of scandals and economic dislocations began to set in. This included panic buying, sharp rises in crime, revelations of official profiteering, shrinkage in arable land, violent confrontations in the villages pitting village against village, and often, villagers against party officials.

Some of the foreign press in 1988 began to discuss the bad news openly. For example,

"Price rises caused real incomes of more than a third of China's city dwellers to fall last year [1988]. The Central government has relinquished sweeping powers over investment, taxation and finance to provincial authorities and enterprises. These newly empowered local forces strongly oppose the drive to cool an expansion bringing them unprecedented profits.

"Strategic State-run industries are stagnating, showing only 1.85% growth last month. Controls on bank lending introduced last September have cooled overheated industrial growth from 20% in 1988 to 8% in January. Bottlenecks created by severe shortages of State-controlled goods are worsening as the output of coal, electricity, steel, transport, grain and cotton drops sharply.

"Beijing also lacks power to restrain consumption, another source of inflation. Premier Li last year called for a 20% cut in outlays for cars, banquets, video recorders, and other consumption by institutions. Instead spending rose 20%."
--The Christian Science Monitor, March 20, 1989

It is not the point of this paper to discuss in detail the economic crisis which the Far Eastern Economic Review characterized in a series of articles in 1988 and 1989 under the title: "The Reformers Reap a Bitter Harvest." It is important, however, to view the following discussion in the context of this overall situation. While material well-being has risen for fairly broad sections in China, Deng's reforms have enriched primarily a small minority. Its overall impact began to be treated with hostility, first by those who were most adversely affected in social terms, particularly the working class and poorer peasants. It is striking, for example, when reviewing workers' comments about China under Deng, to see the frequency with which workers state that workers "are no longer the masters of society."

As the economic advances turned into stagnation and uncontrollable inflation along with noxious corruption, as the lack of direction by the national leadership became painfully obvious, and so on, the government came under attack not only by angry workers, but now from exceptionally broad sections of the populace.

The Reforms

Deng the pragmatist promised to bring China forth as a world power by the year 2000 with the Four Modernizations. To accomplish this: speed-ups by tying wages heavily to bonuses and piece-work, giving managers the power to hire and fire (thus abolishing lifetime job security: smashing the "iron rice pot"), laying off "surplus" labor and creating a pool of unemployed labor, creating a category of temporary and migrant laborers with fewer or non-existent benefits, while expanding the proportion of the workforce who are temporary or migrant workers, cutting back on welfare programs, attracting foreign investment with cheap labor (the Special Economic Zones), and so on. In the countryside the collectives have been forcibly disbanded and the household responsibility system reinstituted.

The Carrot and the Stick

Taylorism, a system in which piece wages and bonuses are adjusted to individual productivities, was introduced to Chinese enterprises as a way to efficiently develop the productive forces. Piece-work and bonuses were introduced in an effort to spur greater worker productivity. While wages by themselves actually declined from 1978 to 1987 (from 547.40 yuan/year in real 1978 yuan to 536.78 yuan/year), piece work and bonuses came to occupy an increasing share of total worker income. Piece-work went from 5.15 yuan/worker or cadre/hr in 1978 to 90.95/yuan/hr in 1987. Bonuses went from 14.81 yuan/hr over the same period to 145.32 yuan/hr.: an increase over nine years of almost 900%.

State subsidies of income over this same period increased dramatically (from 41.86 yuan in 1978 to 186.83 yuan in 1987, a 446% increase) and were in fact a "major cause of real income growth for workers and cadres between 1978 and 1987." Without these state subsidies, real income actually fell between 1979 and 1982 and again from 1984 to 1985. The government admitted that these increases in subsidies were to keep urban real incomes from falling due to inflation.

Inflation, spurred by a number of factors due to the reform measures, including the initial wage hikes, was becoming a growing, and, for the post-1949 generation, an entirely new phenomenon. One of the government's problems, however, was that these state subsidies of wages, issued to buttress workers' incomes, were an increasing drain on the treasury and further fueled inflation. The government discovered that despite large increases in wages, expansion of incentive pay and a number of efforts to tie incentive money to individual productivity, state enterprises were plagued with low labor productivity and lax work discipline (Walder, 1987).

This was not how it was supposed to work. The supplanting of moral incentives with material incentives, plus the fear of losing one's job, was supposed to spur great efforts from the workers. Instead, these measures had the two-fold effect of 1) antagonizing workers broadly who resented the speed-ups and the managers who were pushing them and 2) provoked resistance, (e.g., slow-downs), thus actually causing a drop in productivity. Leung (1989), for example, notes that labor productivity declined in 1980-81. "The growth of industrial wages and bonuses exceeded the increase of productivity and budgetary income by a wide margin, a situation which the state could not afford to sustain very long." In a 1988 survey of managers, 89% said the workers were working less hard than they used to:

"In 1986, the NCTU conducted a large-scale survey about workers' attitude towards their jobs under the reform, which involved 640,000 state enterprise employees. One of its findings was astonishing: fifty percent of workers admitted that they did not work to their potential (Xu 1987). Since the (sic) Deng's regime and many managers treated workers as 'wage labor,' workers lost their initiatives. More and more workers began to take a 'working according to pay' attitude to their jobs... In a survey of 1988, 89 per cent of enterprise managers complained that workers were not working as hard as they used to."

Consider what this means. China is still a poor country and living standards and wages comparatively low. One might assume, under such circumstances, that workers would exert greater efforts to raise their income when income level is linked to hard work. Yet generally the opposite effect has occurred.

In 1986 a "labor contract system" was applied for the first time to state industrial enterprises. Under this system, new workers would be hired on contract, not enjoying job security as with other state workers. Not only does this consign newly hired workers to second-class status (with no pension), it threatens existing state workers who face the prospect of being replaced by a younger worker.

In 1987 a bankruptcy law was passed. If a plant does not show enough output, managers can lay off workers. This is called "optimal labor reorganization." If it still does not turn a profit, the plant will be allowed to go bankrupt, thus terminating all those who work for it. Under this policy, hundreds of thousands have lost their jobs. According to official reports, three hundred thousand lost their jobs by August of 1988. "What frightens workers more is an official estimate: at least fifteen to twenty million workers are underemployed. In theory they should be laid off too." Whereas in the past, social welfare and security were taken care of by the unit in which one worked, now that unemployment is being generated no "safety net" exists to assist these people. "As one woman worker, who had been dismissed because she had borne a child, put it: 'I lost my work for my child. But children are not our private property. On what grounds are they so ruthless to me?'"
Since the carrot was not working, inevitably the carrot's corollary, the stick, had to be relied on—that is, measures to "enforce labor discipline." Leung (1989), and Xu (1987), for example, note that workers no longer have any say in decision-making.

Managers as Bosses

Roughly beginning in 1984, the government decided that the best way to increase productivity was to push managers into taking a harder line toward workers... Some managers began to act as the real owners of their enterprises. They told the workers: "I am the boss. You have to obey my orders."... Indeed, piecework, strict discipline, subordination to bosses, commands and rigorous compliance have become the defining attributes of the new relationship between management and the work force.

In a trade union conference in October 1988 widespread labor unrest was revealed. Numerous incidents of increasing violence aimed at managers, including their murders, have broken out. In Liaoning province, for example, from January to July 1988, there were 276 reported cases in which factory managers were beaten and a total of 297 managers injured. Since on average more than one manager per incident was hurt, in some cases the attackers must have been organized groups. In Liaoning's capital, Shanyang, an investigation showed that 54% of managers had been threatened with force or blackmailed. "Workers in many cases showed no sympathy for the injured and the dead managers. Instead, they said: 'It is good to have someone to teach those sons of bitches a lesson.'"

This intensity of worker hatred for their managers, and, further, their frequent willingness to act directly upon that anger, is probably unparalleled internationally. This exemplifies how far in status workers feel they have fallen under Deng's regime and the degree of their class-consciousness. Had workers not played leading roles in numerous political mobilization campaigns, including especially the Cultural Revolution, then the starkness of the contrast between Mao and Deng would not be there.

Moreover, this anger expressed towards supervisors has not remained at the level of tensions between workers and their managers alone. "[M]ore and more workers have come to realize that the decline of their social status is neither an isolated nor a transient phenomenon... Thus workers' discontent has gradually become concentrated on the government which is responsible for those policies..."

There has also been a rash of heretofore unheard of strikes (conservatively in the high hundreds in 1988 alone), (despite Deng's abolishing the right to strike in 1982). "The biggest strike occurred in Xiaoshan (Zhejiang) textile mill when 1,500 workers took part in a two-day stoppage because of controversies about bonuses. The longest strike was at the Northwest Medical Appliance Factory, where 1,100 workers struck for three months after December 1987 to protest a factory director's violation of workers rights."

(End of Part II in a series. Part III is here.) Part IV is here.)

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