2019 11 – Mao’s Economic Success

Mao’s Economic Success

By Gwydion M. Williams

What China Means

If China under Mao was a Failed State, then the enormous aid and generous trade terms given to non-Communist Asia up to the 1980s was an Act of Benevolence.  And the ending of this in the 1980s would also be down to Benevolence, rather than Greed.

But if the Soviet Union was still flourishing till the 1960s, and China viable and rising up until 1976, then what is commonly called the Keynesian Era was only possible because a greedy global elite curbed their greed in face of a very real threat.P17_chart1

Which makes it understandable why they began taking back in the 1980s, when the Soviet Union was increasingly unpopular.  When China appeared to have surrendered to Western values.

From the late 1940s and well into the 1970s, almost everyone recognised that the West made sacrifices to stop the spread of Communism.

That the Centre-Right has swept such Off-Message Facts under the carpet is unsurprising.

What is astonishing is that the Left has allowed them to get away with it.

Most of the Left.  We in the Bevin Society always challenged it.[1]

I read about China from my teenage years.  Then, many Europeans and Americans had known China before 1949.  They knew how much Mao had improved it.  There was even a French writer who was appalled to see Chinese suddenly become efficient and effective.  He had preferred it when they were loveable silly ineffective people.  So he called them ‘Blue Ants’.[2]

To be exact, the book was by Robert Guillain, born in 1908 and considered one of the most experienced and knowledgeable Western journalist on Asia, especially Japan and China.[3] The French original is 600 millions de Chinois sous le drapeau rouge.  But he also uses the phrase ‘Blue Ants’ (Les Formise Bleu), and an English translation became The Blue Ants: 600 Million Chinese under the Red Flag.  I recall the phrase ‘Blue Ants’ being used quite widely in the 1960s: this is of course an Off-Message Fact for current Western writers, supposing their background reading is wide enough to know of it.

The Chinese should republish Guillain’s book, deleting the insulting ‘Blue Ants’ from the title, but adding a brief account of how it was used and spread.  Also the highly sympathetic I Stayed in China by a British teacher William Sewell.  Sewell, a committed Christian who had spent many years in China, decided to stay after 1949.  He was influenced by pupils of his who’d decided that the Kuomintang were hopeless and moved towards the Communists.[4]

Chinese efforts to project ‘soft power’ might be much more effective if they republished these and other Western books about China from the period.  They need to discredit the claim that China back then was going nowhere.  Not just to vindicating Mao, whom the current leaders have reservations about.  But the West implicitly bad-mouth the work of all of the leaders of the period, including Zhou Enlai, Deng before 1976 and also President Xi’s father.

It would also influence some of their young people who’ve become excessively respectful of Western opinion.  Make them aware of what Westerners thought when they had direct experience of Mao’s China.

I’m surprised they keep missing it.

The West’s “China Experts” have been wonderfully successful in giving the impression that Mao’s 27 calendar years were a disaster.  That China was only rescued when it listened to Western advice and replaced socialism with capitalism.

This is a double untruth.

  1. Deng and his heirs never abandoned socialism.
  2. Mao made the key breakthrough into dynamic change for a society that had been a classic Failed State.

Moreover, the Soviet Union was a success till the 1970s.  This too is known to the experts, but usually evaded:

“Soviet living standards rose relative to those in the US in the interwar period – from 20 per cent in 1920 to 35 per cent in 1938 – only to return to 21 per cent in the immediate aftermath of the Second World War.  They rose again during the Cold War, reaching a peak of 38 per cent of American incomes in 1975, before falling to 31 per cent as the Berlin Wall came down in 1989.  The Soviet version of economic progress … just didn’t deliver the goods.”[5]

The last sentence does not fit the rest.  The Soviet system did deliver the goods for several decades, and then took a wrong turn.  Had broadly declined after the Stalin era:

“Official Soviet data exaggerated the economy’s performance, but work by CIA analysts and other economists points to robust growth in the 1950s, with real output per person rising by nearly 6% annually. In the 1960s it grew by a slower but still solid 3%. In the 1961 edition of his seminal economics textbook, Paul Samuelson, a Nobel-prizewinning American economist, predicted that the Soviet economy would be larger than America’s by the 1990s. When Nikita Khrushchev told the West ‘We will bury you’, the threat seemed credible.

“But flaws became increasingly apparent in the 1970s. Despite high investment, growth in output and productivity slowed sharply. By the 1980s productivity was declining.”[6]

This reminds me of a pattern you see within big companies in Western capitalism.  A company has spectacular success in its early years, like IBM or Ford Motors.  It then declines, because they hang on rigidly to a system that no longer works so well.

But most on the Left would balk at admitting that Stalin’s system worked, and that it was attempts to change it that failed.Russia and the USARussia Hurt by the West (1)

Hiding Off-Message Facts

Very occasionally, you’ll find a Western source that admits that China grew fast under Mao.  Thus when the Financial Times reported China’s celebrations of the 70th Anniversary of founding the People’s Republic, the following slipped through:

“China’s GDP growth rate averaged 8.1 per cent between 1952 and 2018, according to official figures. Some 770m people living in rural China have been raised from poverty since 1978 and life expectancy has risen from 35 in 1949 to 77 today. More than $2tn in foreign direct investment entered the country over the past 40 years.”[7]

Roughly the picture I formed doing my own sums based on Angus Maddison’s widely-respected book.[8]  He worked for the OECD, the West’s economic equivalent of NATO.  I’m sure he had no wish to show China’s success under Mao’s Collectivism.  But his grand project was to show growth for all countries across the decades and centuries.  Born in 1926, he’d also have been well aware of how much China had improved since 1949.

You can also hide China’s rise if you do a graph of increasing wealth from 1949 to 2019.  China in 1949 was one of the poorest nations in the world.  When Mao died in 1976, it was still poor, but had caught up a great deal.  You see this if you graph the increase per year.P17_chart5

And what do the critics of China do about these Off-Message Facts?  They simply don’t mention them.  They look just at failures caused by over-enthusiasm and bad weather during the Great Leap Forward.  Never admit that it was a rare failure within a run of success.

The data also shows that the extreme collectivism and equality of the Cultural Revolution were not economic failures.  There was a slight decline in the Red Guard disorders of 1967 and 1968, and then a return to harmony with Maoist leftism in command.  And the decline in 1976 was down to a tragic massive earthquake, which was no one’s fault.

Could China have had the same success by more moderate methods?  Two reasons why not:

  1. Western Imperialism had discredited China’s ancient traditions, but not properly replaced them by a complete copy of Western ways. Not taken over and trained ‘natives’ to work the new system.  Not created a regional modernism as they did in India, and much more decisively in Hong Kong and Singapore.
  2. The ‘moderation’ loved by liberals was possible in the West, only after a long and immoderate process of stamping new values into the society.

Current Anglo liberals don’t trace their origins back to Oliver Cromwell, or to Henry 8th and Thomas Cromwell before them.  But that’s how it actually happened.  The Church of England was the creation of Henry, confirmed by his daughter Elizabeth.  Britain’s once-ruling Liberal Party is a direct descendants of the Whigs who honoured Cromwell’s memory and threatened a second Civil War if they were asked to accept the openly Roman Catholic James as King.  Irish Nationalist leader Charles Parnell described them to his followers as Cromwell’s People, explaining the compromises necessary to work with them.  Meantime the USA had to smash and humiliate its southern states to secure a future for its version of liberalism.

Today’s liberals imagine themselves as an Immaculate Conception.  But while the supposed Immaculate Conception of the Virgin Mary is a religious opinion, the cruel and oppressive origins of functional liberalism are a recorded fact.  Yet all of the time they claim otherwise.  And failed to see that Saddam Hussein was the least bad option in Iraq if you wanted a Westernised Iraq, which we in the Bevin Society knew from the first.[9]

Chinese liberals ignorantly parrot all this.  And sweep under the carpet the way they were treated as inferiors in their own country, before Mao decisively broke with the West.

 

China Rising

Imperial China had been at much the same level of pre-industrial contentment and harmony since the Han Dynasty, twenty-one centuries before Mao.[10]

Western Imperialism brought modern ideas, machinery and transport systems to their non-white colonies.  Also a small increase in prosperity in some of them, though much less than for the white colonies that ruled them.[11]

It was worse in China, where the Imperial government was repeatedly humbled and discredited, but then left to carry on.  China suffered an actual decay in its rural economy: it roughly balanced the seemingly healthy growth of the coastal cities.

China in 1949 was poorer than it had been in the 19th century.  Partly due to the Japanese invasion, but the Kuomintang in their best years made only very slight progress.  Wealth per head was equivalent to 600 US Dollars in 1850, 530 in 1870, 552 in 1913, 562 in 1929 under Kuomintang and peaking at 597 in 1936.[12]  And while Japan then did vast damage, the Kuomintang from 1945 to 1949 improved little and allowed lethal inflation.

Mao made a vast difference.  Wealth per head rose from 439 dollar-equivalents in 1950 to 706 in 1965 and 852 in 1976.[13]  Small compared to 1,827 in 1989 and 3,583 in 2001, but still a clear success.

Mao’s rule also saw a massive rise in population– 547 million in 1950, 715 million in 1985 and 931 million in 1976.[14]  China’s total economic wealth was 240 billion in 1950, 505 billion in 1965, and 793 billion in 1976.[15]  3.3 times larger in 1976 than 1950.

Quitting the World Market paid off.  After Britain forced its way into China with the Opium Wars, Britain got much richer while China got poorer.  Separated, the UK actually grew faster with its Empire gone.  But China grew far faster.

The UK economy was 348 billion in 1950, 530 in 1965 and 681 in 1976.  The Great Leap dream of overtaking Britain was over-optimistic, but was achieved under Mao.

And nice democratic India?  222, 374 and 551 billion for those years.  China’s model worked better – yet India too had remained poor before independence.  210 billion for 1909.

And the USA, heartland of global capitalism?  1,455 billion for 1950, 2,778 in 1965 and 3,701 for 1976.  Their economy was 6.1 times bigger than China’s in 1950, 5.5 in 1965 and only 4.7 times as big at the end of Mao’s rule.

Mao’s China was on course to overtake the USA eventually, though probably more slowly without the very favourable terms granted to Deng.  That, obviously, is why he got such good terms.  Had Mao’s rule been the disaster that most Westerners now believe, such generosity would have been unlikely.  The IMF has been the International Mammonists’ Feast, wherever there is a country that dare not say no to them.

How reliable are these figures?  If they could be discredited to make Mao look bad, would the legions of bitter Mao-critics not have done so?   I could only find one alternative set of figures,[16] and they still show massive growth under Mao.

That, of course, is why books on China never show graphs for growth before 1980.

Mao should perhaps have imposed the same limits on population growth that Deng later did with his One Child policy.  The West would assuredly have made an enormous noise about it, whereas they spoke softly when Deng seemed to serve Western interests.

But for most of Mao’s rule, China was creating a vast new workforce.  Young people given basic education and a view of life that fitted them for modern industry.  When Deng took over, the change was basically complete.  Whoever had been in charge could have taken advantage.

 

Bliaring

I’ve read widely in current Western literature on the Mao era.  I have yet to find any that deny the fast economic growth under Mao that official figures show.  They imply all sorts of bad things, by concentrating on particular choices that turned out to be errors.

We need a special word for people presenting facts that are not in themselves false, but obviously presented with a view to making the reader or listener believe something that the presenter knows to be untrue.  For instance one might say:

“It is untrue to say that Doctor Crippen strangled his wife.  At least there is no proof he did.”

Since police found only a dismembered torso buried in Crippen’s cellar, strangling cannot be ruled out.  But they also found a massive dose of poison, so probably not strangling as overkill.[17]

Or I might quite truthfully say:

“Millions of Britons died during the years that Thatcher ruled us.”

She ruled for 11 years.  More than half a million Britons die in a typical year, so the statement is technically true.  But I’m not aware of any evidence that the death rate increased at all during her rule.[18]  Her closure of mental hospitals and other attacks on welfare might have caused a few thousand avoidable deaths: this has certainly happened under her heirs.[19]  But not millions, so ‘deaths of millions’ would be seriously misleading.

For Britain, you would not get away with it.  For China two generations back, misleading statements have misled many in the West.  Even some Chinese.

So what’s a good name for it?.

Paving the way for the ill-judged destruction of Iraq’s Baathist government, Tony Blair scaring the British public by saying that Saddam Hussein could deploy ‘weapons of mass destruction’ in 15 minutes.  He failed to mention that this was battlefield poison gas, of the sort he had repeatedly used against Iraqi Kurds and against Iranians.  People carried banners calling him ‘Bliar’.  From this I derive Bliaring.

I’m not aware of Blair having said anything in particular about Mao’s China.  But many others have, and deserved to be ridiculed.

But did Mao kill millions to make China strong, as some Chinese now believe?  Though errors were made, I’m confident that more Chinese had longer lives than any other plausible ruler for the times.  I have already written about exaggerations over the failure of the Great Leap Forward.[20]  But I will write again, with fresh data.

=========

Explaining about death rates has been delayed by the Brexit election, and then the key matter of the succession to Corbyn.  But here are some charts showing key facts. 

Chinese life 2

Chinese Life Expectency 1

[1] You can see what we were saying in the key years 1987 to 1991 at https://labouraffairsmagazine.com/very-old-issues-images/

[2] https://labouraffairsmagazine.com/problems-magazine-past-issues/china-blue-ants-and-dangerous-reds/

[3] https://en.wikipedia.org/wiki/Robert_Guillain

[4] https://labouraffairsmagazine.com/problems-magazine-past-issues/how-chinese-communism-fixed-a-broken-society-2/#_Toc471980338

[5] King, Stephen D.  Grave New World: The End of Globalisation, the Return of History.  Yale University press 2018.  Page 19

[6] https://www.economist.com/finance-and-economics/2018/12/15/the-lives-of-the-parties

[7] https://www.ft.com/content/d45119de-e11f-11e9-b112-9624ec9edc59.  (Pay site)

[8] The World Economy: Historical Statistics by Angus Maddison. Published in 2004 by the OECD Development Centre, and generally accepted as much the best source.

[9] See https://labouraffairsmagazine.com/very-old-issues-images/magazines-010-to-019/magazine-019-xx/warning-against-a-gulf-war-in-late-1990/ and https://labouraffairsmagazine.com/very-old-issues-images/magazines-010-to-019/magazine-023-xx/our-view-of-the-1991-gulf-war/

[10] 2154 years from 206 BC to 1949 – note that there is no Year Zero in the Western calendar.

[11] Based on figures in Maddison’s The World Economy: Historical Statistics.

[12] The World Economy: Historical Statistics, pages 180 and 182.  All figures given for the dollar as it was in 1990, to avoid confusions caused by inflation.

[13] Ibid, page 184

[14] Ibid, page 164.  Rounded to the nearest million.

[15] Ibid, page 174.  Rounded to the nearest billion

[16] China’s Growth and Productivity Performance Debate Revisited, by Harry X. Wu.  https://www.conference-board.org/pdf_free/workingpapers/EPWP1401.pdf.  Page 90.

[17] https://en.wikipedia.org/wiki/Hawley_Harvey_Crippen#Murder_and_disappearance

[18] The best I could find was https://www.closer.ac.uk/data/births-deaths/, which showed a positive trend suffering a small reversal before she came to power.

[19] https://www.theguardian.com/politics/2019/jun/01/perfect-storm-austerity-behind-130000-deaths-uk-ippr-report

[20] Ghost Scholarship, https://gwydionwilliams.com/42-china/china-three-bitter-years-1959-to-1961/.