Fundamentals of Political Economy

Xiaohu (Shawn) Wang, George Chung Wang

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351714921
• Edition: 1
• Topic: Commerce
• Subtopic: Commerce Général

This title was first published in 1977. Fundamentals of Political Economy is a popular introductory economics text published in the People's Republic of China in 1974 as a part of the Youth Self-Education series designed particularly for individual or group study. The primary purpose of this series, according to the preface, is to elevate the cultural level of the youths going down to the countryside, to advance their knowledge of the social and natural sciences, as well as to arouse their class consciousness. It was originally published in two volumes. The first volume (11 chapters) is a critical review of the historical development of capitalism. The second volume (12 chapters) deals with Marxist economic principles and the manner in which they are applied in China.

1
Learn Some Political Economy

The Object of Political Economy*

The great Chairman Mao teaches us over and over again to learn some political economy. This is not only a requirement for Communist Party members and revolutionary cadres; it is also a requirement for every combatant in the Three Great Revolutionary Struggles. To learn some political economy is very important for understanding Marxism, for penetratingly criticizing revisionism and transforming our world outlook of our own accord, and especially for a deeper appreciation of the Party’s basic line and policies in the whole socialist historical stage.

The youths fighting in the front lines of the countryside and factories are our country’s hope and the successors to the proletarian revolutionary enterprise. To better engage in combat, to grow healthily and more quickly, the youths must learn some political economy.

The Object of Political Economy Is Production Relations

What kind of science is political economy? We must start from its object of study. The object of study for Marxist political economy is production relations. Engels clearly pointed out that “what economics investigates is not things, but the relations among people and ultimately the relations among classes.” (1) How do production relations among people arise? We must start from man’s productive activities.

Chairman Mao said, “Marxists regard man’s production activities as the most basic practical activities which determine all other activities.” (2) But, over a hundred years ago, before Marxism was created, people did not have this scientific understanding. Thinkers of the exploiting class all opposed this viewpoint. They either championed the fallacy that human society developed according to God’s will or peddled the heresy of heroes creating history. These so-called thinkers glossed over the simplest fact, namely, that people must first be able to feed, clothe, and shelter themselves before they can engage in politics, science, fine arts, and religious activities. If people need food, clothing, and shelter, they must engage in productive activities. Therefore, the direct production of material commodities forms the basis of human societal development. Without the productive activities of the laboring class, people cannot survive, and society cannot develop. It was Marx who discovered this law of development in human history.

To produce, people must form certain mutual relationships. Isolated individuals cannot engage in production. Just as Marx pointed out: “To engage in production, people form certain associations and relationships. Only within these social associations and relationships can there be a relation between them and Nature and can there be production.” (3) These relations formed by people during the production process are called production relations. In class society, these relations are ultimately reflected in class relationships.

Production relations consist of three aspects: (1) the ownership pattern of the means of production; (2) people’s roles in production and their mutual relations; (3) the pattern of product distribution. The ownership pattern refers to who owns the means of production (including means of labor, such as machines, plants, and land, and objects of labor, such as raw materials). In production relations, the most important aspect is the ownership pattern of the means of production. It is the basis of production relations. The ownership pattern of the means of production determines the nature of production relations. Primitive society, slave society, feudal society, capitalist society, and socialist society in human societal development are classified according to the differences in their ownership patterns of the means of production. The ownership pattern determines people’s roles in production and their mutual relations and thus the distribution pattern of products.

To produce, it is necessary not only to have relations among people but also relations between man and Nature. Man must conquer and transform Nature. The power which man uses to conquer and transform Nature is called productive forces. Productive forces are composed of men and materials (namely, means of production). In productive forces, tools of production are the most important. The types of tools used for production reflect the magnitude of man’s power to conquer Nature. But we cannot regard tools of production as the determining factor in productive forces. “The determining factor is man, not materials.” (4) “Of all things in the world, man is the most valuable.” (5) Because tools have to be used by man, created by man, and renovated by man, without man, there would be no tools and no know-how. Without man, the best “automatic” tools are never really “automatic.”

Production relations and productive forces comprise the two aspects of social production. In overall historical development, productive forces are generally revealed as the major determining factor. Any transformation of production relations is necessarily a result of a certain development in productive forces. Production relations must be compatible with productive forces. When certain production relations become incompatible with the development of productive forces, these production relations must be replaced by some other new production relations which better match the development in productive forces. This is to say, the form of production relations is not determined by man’s subjective will, but by the level of development of productive forces. Production relations must conform to the development of productive forces. This is an objective law which is not subject to change according to people’s will. The emergence, development, and extinction of certain production relations unfold with a corresponding evolution of the contradictions of certain productive forces. Therefore, in the study of production relations, Marxist political economy also studies productive forces.

In the overall development of history, if productive forces are revealed to be the major determining factor, does it mean that production relations are entirely passive compared with productive forces? Definitely not. When production relations are compatible with productive forces, they exert an active impetus to the development of productive forces. When production relations become incompatible with productive forces, they will hinder the development of productive forces. As productive forces cannot be developed without changing production relations, the transformation of production relations plays a major determining role. When old China was under the rule of imperialism, feudalism, and bureaucratic capitalism, the landlord and the comprador represented the most reactionary and backward production relation of China. Productive forces were severely restricted and sabotaged. Before liberation, China did not have any machine-building industry or any automobile or airplane manufacturing. The annual output of steel was only several hundred thousand tons outside of Northeast China. Even daily necessities were imported. Cloth was called foreign cloth; umbrellas were called foreign umbrellas. Even a tiny nail was called a foreign nail. Under those circumstances, the overthrow of the rule of imperialism, feudalism, and bureaucratic capitalism, the transformation of comprador-feudal production relations, and the establishment of socialist production relations played an important role in promoting the development of productive forces.

Big development of productive forces often occurs after the transformation of production relations. This is a universal law. Big development of productive forces in capitalist society also occurred after the disintegration of feudal production relations induced by the bourgeois revolution and the rapid development of capitalist production relations. Take England, for example, where big development of productive forces occurred on the basis of the bourgeois revolution in the seventeenth century and the Industrial Revolution of the late eighteenth and early nineteenth centuries. The modern industries of France, Germany, the United States, and Japan rapidly developed only after the old superstructure and production relations had been transformed in various ways. On the issue of production relations and productive forces, one of the principal aspects of the long struggle between the Marxists and the Soviet revisionists has always been whether one should insist on taking the dialectical unity viewpoint or should expound the reactionary productivity-first viewpoint. Lin Piao, in league with Ch’en Po-ta, advocated that the major task after the Ninth Party Congress was to develop production. This is a copy of the revisionist fallacy inserted into the Resolution of the Eighth Party Congress by Liu Shao-ch’i and Ch’en Po-ta which pointed out “the contradiction between the advanced socialist system and the backward social productive forces.” In China, socialist production relations are basically compatible with the development of the productive forces. This opens up a new horizon for the development of the productive forces. But it also has its imperfect aspects. And these imperfections contradict the development of the productive forces. The experience of socialist revolution teaches us that it is always the superior socialist system which promotes the development of the productive forces. It is always after the transformation of those parts of production relations which are incompatible with the development of the productive forces that the development of the productive forces is promoted. Where is “the contradiction between the advanced socialist system and the backward social productive forces”? The criminal intent of Liu Shao-ch’i’s, Lin Piao’s, and other similar swindlers’ advocacy of this fallacy was to vainly attempt to use the productivity-first viewpoint as a weapon to oppose the continuing revolution under the proletarian dictatorship and the basic Party policy laid down by Chairman Mao for the socialist stage. This is their impossible dream.

Production relations must be compatible with productive forces. The development of productive forces necessitates the destruction of old production relations which are not compatible with it and their replacement by new production relations which are compatible with its development. But the process of disintegration of old production relations and the appearance of new production relations cannot be a smooth one. The transformation of old production relations and the establishment and perfection of new production relations are often realized only after revolutionary struggles. Therefore, if one wants to understand how old production relations are transformed and new production relations are established and perfected, it is not enough to explain in terms of the contradictions between production relations and productive forces. The relations between the superstructure and the economic substructure must also be investigated.

The superstructure refers to the national government, army, law, and other political systems and their corresponding ideological forms, such as philosophy, literature, and fine arts. The economic substructure is production relations. “The sum total of these production relations forms the economic substructure of society, the real basis upon which a legal and political superstructure arises and to which definite social forms of consciousness correspond.” (6) This statement by Marx scientifically explains the relation between the superstructure and the economic substructure.

In the contradiction between the superstructure and the economic substructure, the latter, in general, is the determining force. The economic substructure determines the superstructure. With change in the economic substructure, “the whole immense superstructure is slowly or rapidly transformed.” (7) This is to say, the old economic substructure has disintegrated, and the superstructure built upon this foundation must also disintegrate. But the rate of its disintegration varies. When reactionary state machinery has been transformed, the reactionary classes do not willingly bow out of the historical stage with the disappearance of the old economic substructure. They inevitably engage in prolonged and desperate struggle with the advanced classes in the political, ideological, and cultural spheres. In particular, old ideological forms associated with the overthrown classes remain for a long time.

The superstructure is determined by the economic substructure. Once it is established, it has an immense negative effect on the economic substructure. Stalin pointed out, “The substructure creates its superstructure to serve its own establishment and consolidation and to destroy the old substructure and its superstructure.” (8) This explains why the superstructure always serves its economic substructure. The socialist superstructure serves its socialist economic substructure, and the capitalist superstructure serves its capitalist economic substructure.

In capitalist society, with the intensification of the contradictions between the socialization of production and the private ownership of means of production, there is an urgent need to replace capitalist private ownership with socialist public ownership. But the bourgeoisie controls the reactionary state machinery and uses it to maintain the capitalist economic substructure. If the proletariat does not first smash the capitalist state machinery, it is impossible to destroy the capitalist economic system. The new and old revisionists’ claim that “capitalism can peacefully grow into socialism” is all a pack of lies.

In socialist society, the superstructure and the economic substructure are basically compatible. But due to the existence of the bourgeoisie and its ideological forms, some bureaucratic styles of work in the state organs, and defects in certain parts of the state system, the consolidation, perfection, and development of the socialist economic substructure was hindered or undermined. We must make the socialist superstructure better serve the socialist economic substructure. We must firmly grasp the struggle in the superstructure and carry the socialist revolution in the superstructure to the end.

Political economy touches upon the most practical and immediate interests of various classes and strata. It explains the most acute and intense problems of class struggle. Marxist political economy, like Marxist philosophy, publicly proclaims that it is at the service of proletarian politics. Political economy is a science about class struggle.

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Table of contents

• Cover
• Half Title
• Title
• Copyright
• Dedication
• Contents
• Acknowledgments
• Introduction
• “Youth Self-Education Series” Editors’ Note
• 1. Learn Some Political Economy: The Object of Political Economy
• 2. Social and Economic Systems Preceding Capitalism: Production Relations in the Primitive, Slave, and Feudal Societies
• 3. The Analysis of Capitalist Society Must Start from Commodities: Commodities, Money, and the Law of Value
• 4. How the Capitalists Exploit and Oppress the Workers: Capital and Surplus Value
• 5. The Widening Gap between the Rich and the Poor in Capitalist Society: Capital Accumulation and the Impoverishment of the Working Class
• 6. The Process of the Movement of Capital Is the Process of Exploiting and Realizing Surplus Value: The Circular Flow of Capital, the Turnover of Capital, and the Reproduction of Social Capital
• 7. The Entire Bourgeoisie Exploits and Oppresses the Workers: The Division of Surplus Labor
• 8. The Incurable Disease of Capitalism: Economic Crises
• 9. The Unchanging Nature of Imperialism: Imperialism Is Monopoly Capitalism
• 10. Imperialism Is the Eve of Proletarian Socialist Revolution: Imperialism Is Decaying and Moribund Capitalism
• 11. Soviet Revisionist Social Imperialism Joins the Ranks of World Imperialism: Social Imperialism Is Socialism in Name but Imperialism in Substance
• 12. Socialist Society Ushers in a New Era in Human History: Socialist Society and Proletarian Dictatorship
• 13. The Socialist System of Public Ownership Is the Basis of Socialist Production Relations: The System of Socialist State Ownership and Collective Ownership by the Laboring Masses
• 14. Establish Interpersonal Relations according to Socialist Principles: People’s Status and Their Interrelations in Socialist Production
• 15. Develop Socialist Production with Greater, Faster and Better Results at Lower Costs: The Nature and Goal of Socialist Production and the Means of Achieving This Goal
• 16. The Socialist Economy Is a Planned Economy: Planned and Proportional Development of the National Economy
• 17. We Must Rely on Agriculture as the Foundation and Industry as the Leading Factor in Developing the National Economy: The Relations among Socialist Agriculture, Light Industry, and Heavy Industry
• 18. Frugality Is an Important Principle in the Socialist Economy: Practice Frugality and Economic Accounting
• 19. Exchange Is an Economic Form that Relates Production to Consumption: Socialist Exchange and Currency Circulation
• 20. Correctly Handle the Relations among the State, the Collective, and the Individual: The Distribution and Redistribution of the Socialist National Income
• 21. How are Personal Consumer Goods Distributed in Socialist Society?: The Socialist Principle of “From Each according to His Ability, to Each according to His Labor”
• 22. Mutual Aid and Exchange: The External Economic Relations of the Socialist State
• 23. Communism Must Be Realized: From the Socialist Society to the Communist Society
• About the Editor