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Preface

June 4, 1989, stands as a stark watershed in China's modern history. The slaughter of unarmed civilians by units of the Peoples Liberation Army as they blasted their way to Tiananmen Square illuminated the "reform" era as nothing else could. It lit up, like a bolt of cosmic lightning, the reactionary essence of China's current leading group.

    This essence was known to many in China and to some abroad long before the lightning struck in June 1989, but most members of the Western media and academic world were too mesmerized by China's reform rhetoric and market progress to apprehend the reality of the events unfolding before their eyes. Since privatization matched their prejudices and a consumption boom confirmed its validity, they preferred not to look too closely at the underlying currents of economic dislocation, infrastructural decay, environmental degradation, social disintegration, cultural malaise, and rising class antagonisms that threatened to unravel the fabric of Chinese society.

    Mao Zedong was far more astute. More than twenty years ago during the Cultural Revolution, he exposed Deng Xiaoping, Yang Shangkun, and most of their "hard line" colleagues as capitalist roaders. He accurately predicted that if such persons ever came to power they would transform the Communist Party into a revisionist party and finally into a fascist party and then the whole of China would change color.

    The surprising thing is not how accurate Mao's prediction turned out to be, but rather how quickly it materialized in history. The Third

 
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Plenary Session of the Eleventh Central Committee, dominated by Deng, set out to "reform" China only eleven years ago. Big changes, such as family contracts for farmers and the exploitation of wage labor by private entrepreneurs, large and small, surfaced in a major way only five years ago. Yet in this short span unforeseen afflictions have so alienated the Chinese people, especially the urban dwellers most favored by reform, that in May and June 1989 they filled the streets with protesters from one end of China to the other.

    Deng responded with guns and tanks that churned up the pavement of Changan Avenue, leaving thousands of dead and wounded in their wake. The moral bankruptcy of this ferocious military repression coupled with a revengeful nationwide hunt for culprits demonstrated to all who cared to see what the color of the reform really was and had been all along.

    Make no mistake. The leaders in Beijing are not motivated by communist ideals; they are not revolutionary planners or socialist builders. They are newly constituted bureaucratic capitalists, busy carving the economy into gigantic family fiefs, ready, in true comprador style, to sell China out to the highest bidder. Their armed assault on the square was not an aberration but rather the culmination of a process that began when they first assumed leading posts after the death of Mao. They set out then to dismantle whatever socialist institutions, culture, customs, and habits the Chinese people had so painstakingly built up in the course of postliberation reconstruction. In doing so they put in motion a chain of events that led inexorably to confrontation with the whole Chinese people.

    How, in so short a span of time, did Deng go from the status of admired hero, defiant yet irrepressible victim of the hated gang of four, to that of corrupt autocrat and bloodstained oppressor?

    Part of the answer may be found in the reforms currently sweeping China. These essays chronicle and analyze the course of those reforms since the beginning, with the break-up of cooperative farming in the countryside. The collection makes a strong case for doubting the viability of any capitalist road strategy for China and asks whether China's reform leaders, having chosen just such a road, do not already show signs of degenerating into a group of bureaucratic capitalists similar to the Chiang Kaishek clique -- the four-family junta that dominated China both politically and economically prior to liberation.

 
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    The events of June 3 and 4 point toward a conclusion that Deng and his colleagues have matured into just such a group. They used reform, particularly the openings provided by privatization and free-market trading, to parlay bureaucratic power into economic dominance at home, leading to comprador-type profit-sharing partnerships with multinationals abroad. This helps explain why, when faced with student demands for dialogue, for free speech, for truthful reporting, and for exposure of high cadres' personal assets Deng firmly rejected any and all concessions. At Tiananmen, it was not the future of the revolution that was at stake, it was the credibility of the dominant clique, its very mandate to rule. Any breach in the wall of secrecy surrounding wheeling and dealing by high cadres spelled "red alert" to Deng and his new emerging gang of four.

    "It doesn't matter whether the cat is black or white, just so long as it can catch mice," Deng said in the early 1960s. This phrase, more than any other, made him famous. By the 1980s many people, observing the great man's social practice, came up with a phrase more apt: "It doesn't matter whether the cat is black or white, it doesn't even matter whether the cat can catch mice. What matters is that the cat not get caught."

    With the students and the people of China hot on the track of the cat, the hunter became the hunted. Disdainful of consequences, he struck back.







 

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these articles express few signs of contrition, few hints that there may be anything fundamentally wrong with the path that has been chosen. All the rising contradictions, all the accumulating costs are written off as "transitional," troubles that can and will be exorcized in time. They are not -- to borrow a term from political scientist John Elster -- "equilibrium features," built-in and inevitable negative consequences of the new policy, but merely transient ripples on the broad current of triumphant reform. Thus the call, as problems mount, is for more, deeper, faster change. Problems arise not from "too much, too fast," but from "too little, too slow." Worrisome inflation may require a pause, a mandatory period of consolidation, but that is only one small backward step in the grand march forward down the road to full privatization in the sphere of production and untrammeled freedom in the sphere of circulation. On the eve of the final decade of the twentieth century legions of Chinese economists, social scientists, and officials are eagerly rediscovering Adam Smith and busily engaged in reinventing the wheel -- the great myth of the "free market." For them, all the profound and bitter lessons inflicted on China during the first nine decades of this century and the last six decades of the previous one seem to have faded quietly away into the mists of time, never to plague the living again. Foreign media pundits, almost without exception, echo these Chinese voices and urge them on toward new heights of pragmatism.

    One might have expected a more sophisticated response both from within China and from without, but ever since Deng Xiaoping came to power and launched the reform in 1978 very few voices have been raised in criticism anywhere on the four seas or the six continents. In China many people, high and low, have indeed questioned and even protested, but although they have sparked continuous internal challenge and debate very little, if any, of the conflict has surfaced. Since all media are in the hands of those who support reform -- whether the state, state-sponsored organizations, or private entrepreneurs, this is not surprising. But that hardly accounts for the lack of critical voices from abroad.

    Meanwhile, in the United States, we seem to have arrived at a situation that curiously mirrors, in reverse image, the 1950s when I first returned after seven years participation in the Chinese Revolution.

 
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Then I was one of a handful of persons speaking out in defense of what the Chinese people had wrought under Mao. Over the years the climate slowly changed. Here and there, concerned young scholars raised additional sympathetic voices. By 1972 even that diehard Nixon reversed himself, traveling to Beijing and beginning the legitimization of Mao's dominion in Western eyes. Thereafter China gained friends at an accelerating rate until by 1978, when Deng Xiaoping changed course, the whole Western establishment lined up in support. The experts quickly concluded, over Chinese protests, that the new course represented reform "capitalist style."

    As Deng's policy unfolded to all but universal applause, I found myself sliding back into "glorious isolation" once more, a lonely if not entirely lone critic of what seemed to me to be an unnecessary and probably calamitous reversal of the self-reliant, planned national reconstruction of the previous thirty years.

    I did not leap from defender to critic overnight, however. As an old friend of New China living abroad I was certainly free to speak out. But at the beginning of the reform period I consciously avoided passing hasty judgment. I decided, with uncharacteristic forbearance, to wait and see what the new regime, with most of the old heroes gone, would do. My particular concern was, of course, the countryside.

    The reorganization of collective agriculture began in 1980 with a low-key Central Committee directive recommending the introduction of the "family contract system" on an experimental basis. Under this system, each family enters into a contract with the production brigade or village, which specifies its obligations to the state and the brigade. Anything the household produces beyond this it can keep. In remote areas, where the population was so scattered that meetings, work in common, and joint accounts made little sense, the family contract, or "responsibility system" was proposed as the "method where no other method would do." It never occurred to me that Deng would escalate this relatively noncontroversial, partial retreat from collective agriculture into the mass liquidation of the whole collective system in the countryside. In the course of time it became clear, however, that universal privatization was the goal and that the regime would pursue it with little regard for community preference, local conditions, or other special circumstances.

 
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Noodle Land Triumphant

 
After thirty years of uphill fight
We're back to the old ways overnight.
-- Rhyme from the Northeast
 

    Over the last ten years, a momentous decade of reform in China, I had a ringside seat at the edge, if not in the center, of the action. Every year but one after 1978 I spent from five to six months in China. For five years starting in 1980 I served as a consultant to the United Nations Grasslands Management Project in Wengniute Banner, Chao region, Inner Mongolia, some 600 miles northeast of Beijing. There we sought a solution to the problem of desertification. In the intervals between busy seasons at the project I also traveled, whenever possible, about an equal distance southwest to Long Bow village, Changzhi City, Shanxi province, where I helped the peasants launch an unprecedented experiment in comprehensive mechanization.

    As the so-called reform challenged collective ownership throughout the countryside it soon came into conflict with both projects I was working on. Wengniute Ranch, as we called our huge spread of swamp, alkali flat, depleted range, and desert dune, was a unique, state-collective joint enterprise where a team of local herdsmen shared ownership, expressed as shares of stock, with the provincial government. This dual cooperative arrangement (a collective of herdsmen cooperating with the state) conflicted with the privatization drive of the reformers and the ambitions of some better off herdsmen who keenly wanted a chance to "get rich first." Together they fanned up local sentiment for liquidation.

    After five years, after the investment of $4 million by the United Nations and an equal amount by the Chinese government, privatization brought the Grasslands Project to its knees. The regional government, refusing to consider any exception based on special circumstances, contracted all livestock, all hay lands, and most pastures back to individual herdsmen. In 1984, with the newly irrigated croplands also at risk and without cattle, sheep, or pastures with which to run grazing trails, the UN reluctantly withdrew, without having found the answers everyone sought to the problems posed by des-

 
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ertification. The machinery the UN brought remains at the site. Work goes forward in the form of custom services for individual contractors, but the project as conceived expired.

    While this was happening on the northern frontier, down in the southeast corner of Shanxi province five years of heavy capital investment and hard work on the part of the peasants of Long Bow village also came to naught. In 1978, Long Bow villagers had begun the mechanization of almost 200 acres of corn with a collection of scrounged, tinkered, and homemade equipment that did everything from spreading manure to tilling land, planting seed, killing weeds, picking ears, drying kernels, and augering the kernels into storage. The twelve members of the machinery team multiplied labor productivity by a factor of fifteen while cutting the cost of raising grain almost in half. But when the reform, offering subsistence plots to all and contract parcels to the land hungry, broke the fields into myriad small pieces comprehensive mechanization gave way perforce to intermittent plowing and planting. This left the peasants no alternative but to abandon most of their advanced equipment and reactivate their hoes. When the bank asked for its loan money back the village head said "take the machinery." But the bank never found a buyer, so to this day the manure spreaders, the smoothing harrows, the sprayers, the sprinkle irrigation sets, the corn pickers, and the grain dryers lie rusting in the machinery yard, mute testimony to a bygone -- or is it a bypassed? -- era.

    These two experiences shook me. Not only had I personally put a lot of effort, sweat, and pain into both projects, I knew how much others had also contributed, how much store they set on success and how important that success was to China's future. But the circumstances, in both cases, were exceptional. State-collective joint enterprises were rare indeed, even more rare, it seems, than mechanized villages. One could hardly fault the whole reform because of two stillborn experiments, though one certainly could fault the mindless, dogmatic way the local functionaries applied it.

    At about that time an experience of a different sort brought home to me how far beyond the remote mountain hamlets mentioned in the original Central Committee directive the so-called reform had spread. In the summer of 1983 I flew by plane from Beijing to Shanghai. From

 
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my comfortable seat 30,000 feet up I saw for the first time the vast extent and astonishing physical results of the "responsibility system" on the North China plain.

    I looked down in growing disbelief and I wept. Where once, under a seamless web of adobe villages and their linking roads, clear squares and oblongs of land -- green, yellow, and brown -- had stretched unbroken to the horizon, now 1,000 kilometers of miniscule strips crowding first in one direction, then in another, in haphazard, never duplicated patterns. This was not "postage stamp" land such as used to exist before land reform, but ''ribbon land," "spaghetti land," "noodle land" -- strips so narrow that often not even the right wheel of a cart could travel down one man's land without the left wheel pressing down on the land of another.

    After decades of revolutionary struggle, after China's peasants had finally managed to create a scale and an institutional form for agriculture that held out some promise for the future, some promise that the tillers could at last lay down their hoes and enter the modern world more-or-less in step with their hi-tech-oriented, machine-savvy urban fellow citizens -- it had come to this! With one blip on the screen of time, scale and institution both dissolved. The latest page in the great book of history barely rustled as it turned hundreds of millions back to square one.

    A stunned peasant comrade said to me, "With this reform the Communist Party has shrugged off the burden of the peasantry. From now on, fuck your mother, if you get left behind blame yourself."

    I was aware that many millions of peasants welcomed reform, that many villages had stagnated as cooperatives, and that the privatization of use rights to the land coupled with sharp price increases for farm produce and the right to engage at will in whatever sidelines caught one's fancy had brought many independent operators a welcome measure of prosperity.

    Nevertheless, to me, the irrational fragmentation alone meant the eventual neutralization of whatever advantages the government saw in it or had served up with it to make it palatable. "Noodle land" could only lead, in the long run, to a dead end. I could not think of any place in the world where rural smallholders were faring well, certainly not smallholders with only a fraction of a hectare to their names and that in scattered fragments. The low output of peasants farming with hoes

 
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meant that on the average each full-time laborer could produce about a ton of grain a year, one eight-hundredth of the amount I harvested farming with tractors in Pennsylvania. And that ton of grain, worth about $100, would determine the standard of living for countless tillers of the land far into the future. Whatever prosperity any peasant now enjoyed was bound to be ephemeral as the gap between industry and agriculture, city and country, mental and manual labor expanded and the relentless price scissors imposed by the free market opened wide.

 

One Step Forward, Two Steps Back

 
Think it, say it, do it, screw it.
Everything ends in a mess!
-- Rhyme on pragmatism from rural Shanxi
 

    Some of the early results of the "responsibility system," however, seemed to prove my fears wrong. The income of many "noodle land" contractors increased beyond most expectations. Behind this rise lay not only the big price increases decreed for many farm products but also the bonuses paid by the state for above-quota deliveries. Peasants in previously stagnant villages found these bonuses easier to earn now that ample supplies of fertilizers and pesticides, long in the pipeline, found their way onto the market. At the same time many individuals who chose not to contract land for commodity grain or lost out in the scramble for contracts, went out to seek their fortunes elsewhere and by other means. Less than half of them found work at first, but among those that did -- artisans, peddlers, carters, construction workers, and day laborers of all sorts -- there were many whose income also increased. And so, as the reform gathered momentum, prosperity came to many in the countryside. Contrary to my expectations, yields generally held their own or even went up at first, at least on the charts (government statisticians never hesitated to make the most of what, viewed soberly, were no more than crop estimates), and on top of that the output of commercial crops -- cotton, oil seeds, tobacco, and other specialty products -- suddenly favored with incentive prices, rose even faster. Add the receipts from these sources at enhanced prices to the

 
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receipts from off-the-farm labor at enhanced wages, and one has the basis for a lively expansion of the rural economy.

    In 1984, the government reported and celebrated an historic break-through in grain production -- a gross harvest of over 400 million long tons. So much commodity grain appeared for sale that the price of free market grain fell to almost the same level as that of state-controlled grain. This generated euphoria in regard to reform. Responsible officials decided that the grain problem had been solved and trade negotiators began to discuss contracts for substantial exports of feed grains. The reform, it seemed, was really working, at least on the production front. If there were serious questions they were about where the privatized new society was heading. Did the reform road lead to socialism?

    With prosperity breaking out all over (progress actually was very uneven), not too many people seemed to care about end results. Nevertheless, given the Communist Party's long-standing commitment to socialism and mindful of Mao's dictum that the only road open to China was the socialist road, the "reformers" wooed the "diehards" (or was it the waverers?) with polemics that reconfirmed socialism as the goal while fundamentally redefining what the word meant. Certain theoreticians turned to this task with a will. Since at that point they had not yet discovered the "first stage of socialism," an umbrella stage that could justify just about any economic behavior, they reduced socialism to (1) public ownership (the land still belongs to the state), and (2) payment according to work (each contracting peasant family takes responsibility for its own profits and losses).

    When no one could deny any longer that many peasants (fish pond operators, orchard magnates, and laying hen tycoons -- the new darlings of the press) were hiring their neighbors and pocketing big profits, the theorists declared managing to be legitimate work (which was never in dispute), but failed to make any distinction between return on capital invested and payment for services rendered. The lumped both these things together as the legitimate rewards of entrepreneurial effort. Thus surplus value disappeared and along with it exploitation. "How can there be exploitation," they asked, "when the employees earn more at their new jobs than they did as peasants?"

    This "fair day's pay for a fair day's work" logic laid exploitation fears to rest, at least for the uninitiated. The Central Committee decided that

 
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hiring wage labor was all right, even desirable, so long as the number of workers did not exceed eight. Establishments with up to eight workers it called "individual enterprises." It considered workers in these enterprises, most of whom were indeed often relatives, to be family members. If there was any surplus value it remained in the family, so to speak. But soon knottier problems arose, in the form of newly rich entrepreneurs who built and owned whole factories and employed hundreds, even thousands, of workers. They really did look like, talk like, earn like, and spend like capitalists. No one could maintain that their workers were all family, nor could anyone maintain that the wages they paid or the conditions they granted were fair. Since theory could not exorcize such "devils" it soon made room for them with a proposition as eclectic as the still to be invented "first stage of socialism." The new apologia went more or less like this: socialism, as everyone knows, requires an advanced level of productive forces; therefore, whatever stimulates production ipso facto advances the cause of socialism. Economic development, by definition, turns into socialist progress. Deng always put the emphasis on "catching mice," by which he meant producing goods and services by any method that worked, including that good old-fashioned method, private investment for private profit -- what my old colleague, Archie Wright, the leader of the New York State Dairy Farmer's Union, used to call "making a dollar like a dollar ought-a-be made." Based on this type of reasoning, the Central Committee then created a new category of enterprise called "private," a category that had no limits.

    When translated into social reality this pragmatism quickly produced all sorts of anomalies, contradictions, and conflicts, foremost among which was accelerated social polarization throughout a society, both urban and rural, where classes and class struggle had been declared passé. By polarization I mean class differentiation, primarily the large-scale shift from peasant smallholder (in cooperative China this meant community shareholder) to wage laborer, and at the same time, the small-scale counter shift from peasant smallholder to capitalist (mostly petty). The vast majority, it goes without saying, took part in the former transformation, dropping out of their birthright, petty bourgeois class status, and landing in the working class, probably the most massive class transfer in world history. And it took place without mechanization of crop production by drawing off some of the surplus population

 
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backed up on the land. Taking part in the transfer were some who did not want to contract land and many who were unable to do so due to age, health, gender, lack of labor power, or lack of the means to farm.

    The transfer of millions into the working class had a unique aspect, however. In the majority of cases the individuals involved and their families still retained a share of per capita grain land, a subsistence plot or plots that could provide food for survival but not enough income to live on. In so far as their main source of livelihood was concerned, these men and women became wage workers, but they did not forego all land-use rights. They simply abstained or lost out in the scramble for contract rights to land used for commodity production. Some of the implications of this for China's future development are discussed in the final essay, "Why Not the Capitalist Road?"

    Next to social polarization, the most striking consequence of reform was the far-reaching cultural regression. Privatization, by returning the rural economy to something closely resembling pre-revolutionary China (even to the generation of large contractors who subcontracted the extended land-use rights they usurped just as subletting landlords of old had done) brought with it, a revival of all the worst features of the old society -- prostitution, gambling, drug abuse, and the proliferation of underworld gangs that controlled and profited from these phenomena. In the cultural sphere, old customs, old habits, old ideology, and old superstitions, all bearing a distinctly feudal flavor, also surfaced. On their own once more, without the collective strength to tackle the challenges of the environment, families tended to fall back on the cultural props of the past, such as shrines to the earth god, the kitchen god, the fertility god, and others. The newest building in Long Bow village is a temple to the earth god. They also revived in ever more blatant form all the traditional ceremonies that mark progress through life from birth to death, paying more exorbitant brideprices, arranging more lavish weddings and more extravagant funerals, building more elaborate tombs and borrowing more money at more usurious rates to pay for all these excesses. Commitment to scientific rationalism receded along with all the emphasis on simplicity, frugality, and thrift that the revolution had tried so hard, without success, to propagate and consolidate.

    Cultural regression inside the Communist Party rivaled the regression in society as a whole. Once the party told the peasants to enrich

 
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themselves, communists had, perforce, to lead the way. Otherwise nobody would believe that the party meant to stand by those who made out well at production or in the marketplace. The scramble for personal advantage undermined whatever standards of communist conduct remained. Corruption, as abuse of privilege, had long been a serious problem linked to power holding in the collective system. Transformed now by the growing cash nexus, corruption as profit taking spread far and wide, from low to high and from high to low. Graft, kickbacks, and illegal speculation multiplied, sinking the party's prestige, what was left of it, to new lows. Most alarming, the country could no longer count on cadres, high or low, to put national interest first when dealing with foreign nationals and, more to the point, multinationals. At this level cultural regression threatened China's hard-won autonomy, the fruit of more than one hundred years of bitter struggle.

    Finally the reform unleashed in its wake an unprecedented attack on the environment. By making each family responsible for its own profit and loss the new policy changed the goal of economic effort from the long-term maximization of yields and other outputs through the mobilization of all skills, talents, and resources to the short-term maximization of family income. This change sent hundreds of millions out looking for anything that might turn an instant profit or be converted to immediate benefit. Thus began a wholesale attack on an already much-abused and enervated environment, on mountain slopes, on trees, on water resources, on grasslands, on fishing grounds, on wildlife, on minerals underground, on anything that could be cut down, plowed up, pumped over, dug out, shot dead, or carried away. During the collective period the state had reserved such things as mineral and timber rights to itself, but allowed some local exploitation under controlled conditions (unfortunately often violated). The state had also regulated (not always successfully) the use of steep mountain slopes, grasslands, large bodies of water, and other fragile ecosystems. Many peasant communities, for mutual benefit, also established and enforced some controls on the exploitation of local resources. With the reform, communities lost their clout in such matters and the state not only relaxed its regulations, but could no longer enforce those that still stood.

    I concluded from the experiences of those years that what the Deng group was building in China was not socialism, but something much

 
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closer to the old mixed economy of the New Democracy period which the revolution brought into being in the early 1950s with the successful completion of land reform -- a combination of public, private, joint public-private, and cooperatively owned enterprises. While it seemed that this was working reasonably well, it also seemed that from a socialist perspective it was very unstable. The most dynamic sector of industry, transport, and trade was the private sector. While it was still small in percentage terms it boasted the most rapid rate of growth. By contracting large chunks of publicly owned industry to individual managers the government was in effect privatizing the public sector as well. When one added to this the already completed, all but universal privatization of agriculture it became clear that: (1) the vast majority of Chinese, the peasants, were already functioning in a free enterprise environment; (2) the nonfarm private sector would soon be substantial; and (3) the public sector of the economy allocated by contract and concession to individual managers was headed in the same direction. This did not seem to be a very solid formula for building socialism.

    Beginning in autumn 1985, the euphoria concerning the progress brought about by reform in China began to wane. The 1985 crop report issued by the Ministry of Agriculture showed a shocking drop of 30 million tons. Alternative figures from competing ministries showed a shortfall closer to 50 million tons. Everyone finally agreed on 25 million, though where that figure came from is obscure. Since the weather had not been particularly bad there seemed to be no rational explanation for the setback. Some authorities blamed it on price fluctuations, on price promises broken by state grain stations when confronted with the 1984 glut.

    It seems clear now that the problem lay not with the 1985 crop but with the figures on the 1984 crop. The harvest of 1984 was never a record breaker. It was only normal or near normal. Most of the great increase registered that fall came out of collective storage. It found its way onto the market after the collectives broke up and dispersed their assets to their members. The sudden flow of grain all but broke the market because the government, fearing possible shortfalls with the family contract system, had simultaneously brought in millions of tons of grain from overseas. "We were all eating Canadian wheat that winter," said a Beijing resident.

    Since China's peasants had not in fact produced 405 million tons in

 
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1984 they could not subsequently duplicate the record "harvest" of that year. The reformers' most celebrated success turned out to be a phantom. The specter of chronic grain shortages sobered the whole country. In retrospect, the year 1985 proved to be a turning point in other fields as well, for that was the year when speculators in high positions, taking advantage of the new dual price system, raised official corruption not only to new quantitative but also to new qualitative levels. At the same time decentralization, some devolution of central power downward, allowed provinces and even some municipalities to act as virtual independent kingdoms in the realm of trade. On the one hand they set up barriers to interprovincial trade when it was advantageous to them -- hoarding scarce resources or commodities, for instance -- on the other they entered into huge foreign trade deals that brought in a flood of hard consumer items, including automobiles, at exorbitant prices. Thus they quickly ran through a large part of the nation's foreign currency reserves. China ran up an adverse trade balance of $15 billion that year, the bulk of it with Japan, and the imports undercut some struggling native industries.

    During the same period capital investment soared, but far too little of it went into productive enterprises and far too much into nonproductive projects such as housing (mainly urban high-rise apartments), office buildings, recreation facilities, and underbooked luxury hotels. Every division of the government tried to get in on the huge profits anticipated from the foreign tourist trade, but only a few succeeded. At the same time no unit could launch major projects to improve the agricultural infrastructure because without the cooperative system nobody could mobilize peasants for work without paying cash wages, and no unit had that kind of cash.

    All the spending without compensating production brought on inflation, particularly the inflation of food prices which hit urban residents hard. They were already spending half their incomes on food. But inflation hit industrial commodities as well, particularly the fuel, fertilizer, pesticides, and machinery needed by peasants to grow crops, which forced them to buy less and adversely affected yields.

    Thus 1985 was the year when the chickens began to come home to roost, when the impetus that the reform gave to the economy began to unravel. All the contradictions generated by direct and contracted privatization combined with the half steps taken to transfer decision-

 
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making from government offices to the marketplace sharpened. By the time October came around masses of students were marching in the streets of major cities throughout the country protesting the flood of Japanese goods, rising prices, and spreading corruption.

    Since then, the dislocations inside China have continued to escalate. While the reassertion of stricter controls from the center has reduced the trade imbalance somewhat, nonproductive capital expenditures are still out of hand. The inflation rate is higher than ever, leading in late 1988 to an epidemic of runs on banks. All other problems, crime, birth rates, population growth, epidemic diseases, environmental destruction and, last but not least, shortfalls in grain production are getting worse. In 1988, blaming bad weather, the government reported a drop of over 9 million tons in grain production and this was probably an understatement. Some city dwellers now have to take coarse grains along with the fine in their grain ration. Peasants are killing off chickens, pigs, and even slaughtering dairy cows because there are not enough coarse grains to go around.

    The question raised by all these developments is no longer: Does this road lead to socialism or capitalism? The capitalist character of the road is pretty clear. The question is: Does the road lead forward or backward?

 

Reviling Models

 
In the 1950s we helped one another.
In the 1960s we denounced one another.
In the 1970s we doubted one another.
In the 1980s we swindled one another.
-- Rhyme from rural Shanxi
 

    It is against the background of China's rapidly unfolding transformation, beginning late in 1978, filtered through my own slowly maturing perception and understanding, that over a period of ten years I put together the essays in this book.

 
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the consequences of the privatization wind Deng blew up, and he and his clique could not accept the consequences of any democratic concessions, token or otherwise, that might limit their power to run China as they pleased. The result was a tense, confrontational standoff between a disaffected population and a handful of autocrats stripped of any credible mandate to rule. Large numbers of Communist Party members, government functionaries, and army personnel now side with the people in demanding change. But no one, certainly not any of the students who sparked the protest, has come forward with a coherent explanation of what went wrong or a viable policy for putting things right. Appalled by the living results of the capitalist road, most people nevertheless fail to see the causal links between these results and the policies, the political line, that brought them about.

 
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    The tower of the old church was torn down long ago. The brigade leaders have installed a loudspeaker on the roof of their headquarters, and their booming voices can be heard in the farthest fields. For many years, they relied on loudspeaker "broadcasts" to regulate the collective production that came into full flower in 1958. The loudspeaker blasted forth before dawn to wake people up, at noon to summon them from the fields, and at sundown to signal that the day's work was done. But the music that rang out over the years was not "The East Is Red," that solemn hymn to Mao Zedong that dominated China; it was a lively Shanxi folk tune rendered on a double-reed horn (a cross between an oboe and a trumpet) and several Chinese snakeskin fiddles. Inside the village, the amplified jam session made eardrums ache. Out on the garden land of the First Production Team, half a mile away, it sounded like a wedding dance for elves, leprechauns, wood sprites, and fox spirits.

    In 1979, individual earnings were brought more closely in line with individual effort, so that material reward became the primary incentive to hard work. At the same time electronic exhortation, discipline by loudspeaker, was abandoned. The air over the village was turned back to the cocks that still crow before dawn and the peddlers who still hawk their wares in the alleys. But they can never hope to recapture the attention they once took for granted. There is too much background noise from the many locomotives in the railroad yards.

 
    As things used to be, one could look down from the summit of Great Ridge Hill and see the whole of Long Bow stretched out on the plain like a map. The polarization of village society was clearly revealed by the contrast between the adobe huts of the poor peasants and hired laborers, roofed with mud and straw, and the high brick dwellings of the landlords and rich peasants, roofed with tile. Gentry families occupied whole courtyards while poor peasants bedded down in whatever ramshackle sections of walled enclosure they could find. That was before the land reform giving land to individual peasants, which took place in Shanxi in 1945 and reached South China in 1950.

    Today, all that can be seen from the hill is a mass of greenery. A special crew began to plant trees in Long Bow as soon as the cooperative was created by the land-pooling movement in 1954. In the intervening years, more than 250,000 trees have been planted, and they

 
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have transformed the whole character of the settlement. The desolate, sunbaked, semiruined earthworks of the past, open to all the violence of heaven, have become a cool, shaded, gardenlike complex of interlocking courtyards, streets, and alleys that offer protection against the extremes of all seasons.

    Beneath the green of the newly planted trees, the predominant color of most Chinese villages in the North is still the glowing tan of natural adobe. Not so Long Bow. When the brigade leaders heard that foreign guests were coming in 1971, they mobilized the whole community to whitewash the walls on both sides of all the main streets, making the predominant color a dazzling white. The ever present crimson slogans stand out on this background as if molded in three dimensions. Whitewashing apparently pleased the inhabitants, because they have kept it up through all the years since.

    In 1971, Long Bow undertook another civic improvement. All the privies built along the streets, in anticipation of a contribution to the family store of fertilizer from anyone passing by, were removed. Now all privies are hidden away in courtyards, and ever since the brigade built its own cement plant, the deep cisterns are covered with concrete slabs that discourage flies, or at least the fly maggots down below. The latter require more fresh air than can circulate under a concrete cover, even one with a slot in it. This improvement has won Long Bow a citation for excellence in public health. But while the concrete slabs have certainly improved sanitation, they have not entirely done away with the background odor of night soil that is characteristic of the whole Chinese countryside -- and is in part responsible for that welcome sense of déjà vu that overwhelms one on returning.

 
    Of the famous Dazhai Brigade, high on Tigerhead Mountain, people said:

High mountains, rock-strewn
   slopes,
Step out the door, start
   climbing up or down.

 
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Flat land, high watertable,
Step out the door, walk five
   li without interruption.

    The real reason for this sluggishness was the character of Long Bow soil. The more the peasants watered the land, the more intractable it became. Water brought up salt instead of washing it down. When the sun dried the water out, the land cracked into small squares, tearing apart the roots of young plants. The people voted with their feet against irrigation, despairing of ever producing bumper crops, and turned their attention to sidelines, contract work in nearby industries, and even speculation.

    A notorious example of local entrepreneurship was Li Hongchang, a bachelor who used to ride freight trains into Hunan province, where he bought dried sweet potatoes that he swapped pound for pound for wheat back in Long Bow; then he sold the wheat for twice what the sweet potatoes had cost him. A four-day trip to Hunan brought in more cash than a month's work in the field.

    Hard work to transform the land was further inhibited by changes in ownership. Long Bow had already lost more than one third of its acreage to the railroad, the city-owned cement plant and the saw-blade works. The brigade was compensated for the loss of land by cash payments equal in value to three years of crops, but the saw-blade plant ruined an irrigation project, imposed from above, on which the peasants had expended tens of thousands of labor-days. That labor was never repaid.

 
    The Taihang Saw Blade Works moved to Long Bow from coastal Tianjin in the early 1960s. The educated youth in the village, ninety strong in 1977 but reduced to a handful by 1979 as the authorities

 
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stopped sending city dwellers to the countryside, were evenly divided between young men and women. Almost all of them came from Saw Blade, as they called it. They regarded themselves as big-city, Tianjin people, even though most of them had grown up only a few hundred yards from Long Bow. Their contribution to the life of the village was deep and many-faceted. There were science majors, musicians, actors, dancers, artists, and athletes among them. They painted the huge murals that enlivened Long Bow's walls, created the skits that mocked the gang of four during the Army Day celebrations on August 1, and made up at least half of the research group that eventually helped discover how to overcome the alkalinity of Long Bow's soil.

    The educated youth, with their Tianjin ways, are only one of many outside influences that have transformed the social life of Long Bow in the past decade. Between the highway and the railroad tracks, temporary reed-and-adobe shelters house tens of thousands of temporary residents -- the workers who have come to build a new east-west railroad and their dependents. The overflow from their hastily constructed camp floods Long Bow, and almost every family has one or two groups of outsiders living in its courtyard. There are Korean minority people from Jilin province, coal miners from Fuxun and mechanics from Kailan. Many of them have worked on railroad construction in Africa and have brought home radios, tape recorders, and hand calculators that cannot be bought anywhere in China.

    These tenants wear clothes, display hair styles, sing tunes, and use words different from those that Long Bow people are used to. Close contact with them has changed local customs in inconspicuous ways that add up. After a few years of this, Long Bow people find themselves already quite up-to-date compared with peasants who live only a few miles from the railroad, in what the initiated have come to regard as backcountry.

    One result of the new sophistication is that Long Bow leaders find it increasingly hard to hold meetings, because there is always a play being performed or a film being shown nearby. These films may be spy thrillers, historical dramas about events before the 1950s, romances in which boy meets girl on a construction project, or foreign films from Vietnam, Korea, and Yugoslavia. Watching these movies has become a habit that has had a devastating effect on other forms of cultural and political life. Some Long Bow children have even decided to reject the

 
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expanded local school. The brigade leader's daughter, entirely on her own, transferred to the school run by the Construction Headquarters for railroad workers' children. Her father beat her until his arms tired, but she refused to transfer back.

    It is now all but impossible to marry a Long Bow girl unless one is willing to move into Long Bow, because the sophisticated young women there will not leave home, certainly not for any village without quarter-hourly bus service to Changzhi City and twice-daily train service to Zhengzhou and Beijing.

 
    In principle, young people in rural China have a free choice in marriage, but in practice, this is very difficult to achieve because there are so few opportunities for young people to meet. Since most people in the home community are related, one must ordinarily meet someone outside before courtship can begin. Those who don't go away to school or to work in a factory have no chance to meet eligible partners and must rely on parental matchmaking.

    But Long Bow is unusually heterogeneous, and young people can sometimes meet and marry inside the village. One who did so in spite of going away to school is Li Lingchiao, a stunning young woman with braids down her back that fall all the way to her waist (at least they did until she cut them off in 1978). Her lips are so formed that they are almost always open, making her seem eager, even slightly breathless. She is vice-leader of the women's association and a member of the brigade's Community Party branch. As a communist, she should have waited until she was twenty-five to marry, and her husband should have waited until he was twenty-eight. But she was married at the age of twenty to a young man of the same age who had been her classmate in the middle school run by the commune at Horse Square, one mile to the north.

    She blushed when I asked her about this but explained that her husband's father had been very ill and wanted his son to get married before he died. She didn't want to break the rules, but he was so miserable that she was consumed by pity and agreed to marry the young man. His father, she told me, jumped up from his pallet after that and hasn't been sick a day since.

    "But how did you get a license? You were not really old enough."

    "We didn't go to our commune office in Horse Square. We went east

 
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to Congdao commune. They didn't care. When the gang of four were riding high, administration everywhere just broke down."

    If meeting nonrelated young people was the essential condition for free choice in marriage, the educated youth in Long Bow were in an enviable situation. They all lived together in a large two-story building on the site once occupied by the North Temple -- men on the ground floor, women upstairs. Yet there were no signs whatsoever of any attachments between them. I asked a delegation that came to talk to me point-blank: "Living here in this dormitory and working together, don't you ever fall in love?"

    They all blushed. They all denied that any such thought had ever crossed their minds. They all said that they were too young to be thinking about such things as love and marriage, and even though I pressed them very hard, I could not break this solid front.

 
    Chang was an ex-soldier from Hunan who was assigned to watch the gate of the old brigade headquarters after it was converted into a guesthouse for foreigners. He began almost every conversation with the phrase "I have discovered," and his discoveries almost always turned out to be worth investigating.

    "I have discovered," he said to me one day, "that there are still a few hates here."

    What he meant by "hates" were hard feelings left over from the Cultural Revolution that began in 1966 and ended sometime between 1970 and 1976, depending on whom you asked. The wounds inflicted by years of bitter factional conflict over who should hold power in the community had been slow to heal.

    In the evening, Chang and I used to go outside the gate of the compound and squat in the street, peasant-style, to watch the passing scene. Chang owned a raucous little portable radio that had cost him 13 yuan ($8). He always turned it to Hunan opera, which was broadcast from somewhere south of the border -- Shanxi's provincial border. As Long Bow people came down the street, some of them would stop to listen and then to talk.

    One night an older man began to curse out the notorious "Little" Li Hongen, who had led the people of the south end of the village when they seized power in 1967. Seizing power meant occupying the brigade office and taking over the official seals. With seals in hand, one could

 
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stamp brigade documents, making them official. Above all, one could spend brigade money.

    Little Li was a communist of the older generation who backed the young people of Stormy Petrel and Shanggan Ridge, two mass organizations modeled on the student Red Guards who were agitating for power all over the country that year.

    When the Stormy Petrel (named after the bird in Gorki's poem "Song of the Stormy Petrel") and Shanggan Ridge (named after a battle in the Korean war) cadres took over the brigade office, they overthrew Shi Shuangguei, the party secretary, and his younger brother, Wang Jinhong, the party vice-secretary. But the rebels couldn't hold on to their power. Most people refused to carry out their orders. After about a week, they were forced to turn the seals over to the Takeover Committee, set up by five other hastily assembled village organizations with names like Truth Fighting Team and Expose Schemes Battle Corps. Within a month power was turned back to Wang as the new party secretary.

    To consolidate their power, it was necessary for the five "loyalist" groups to put the "rebels" down and keep them down. They had to make the rebels and their ancestors stink to high heaven, forever. Little Li and the leaders of Stormy Petrel and Shanggan Ridge were denounced as "landlords, rich peasants, counterrevolutionaries and bad elements" who were trying to "reverse the case" on land reform and bring back feudalism. They were arrested, beaten, and driven out of the village. When they ran out of grain, grain coupons and the hospitality of relatives in outlying counties, they returned to Long Bow, only to be arrested, beaten, and driven out again. It was late 1969 before they were able to come home and stay home, and late 1971 before the label "counterrevolutionary" was officially removed from the record. By that time, the charges had penetrated so deeply into the popular consciousness that they could not easily be erased. Years later, an old man on the street could still curse Little Li for trying to "reverse the case" on land reform.

 
    The first person killed in the Cultural Revolution in Shanxi died on the threshing floor of Long Bow's Fourth Production Team. He was not a Long Bow Brigade member but a student at the Luan middle school, housed at that time on the grounds of the old Catholic orphanage. He

 
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had come with members of his faction to raid the school for the grain and grain tickets needed for subsistence. He was killed by a random bullet fired by a railroad worker when the grain raid escalated into a night battle for control of the railroad yards.

    "When I think about it, it frightens me," said Wang Jinhong, now chairman but no longer party secretary of the Long Bow Brigade. In the struggle here, we could easily have killed someone. Brigade members could have died just as that student did. We were lucky. Things never went that far, but it scares me to think about it."

    "Do you really think that the rebels were 'landlords, rich peasants, counterrevolutionaries, and bad elements?'" I asked.

    "I don't now, but I did then. We convinced ourselves of it. The wind of denunciation was blowing through the whole region. Everybody thought their opposition was counterrevolutionary."

    Wang Jinhong has been in and out of local office so often that his career resembles that of Vice-Premier Deng Xiaoping at the national level. Since 1966, he has been twice overthrown and three times elevated to top posts in the brigade. Physically, Jinhong stands out because of his massive forehead and the fact that he is slightly hunchbacked. He carried loads that were too heavy for him when he was little, and the carrying pole bent his back and thrust his head permanently forward. This makes him look, when he walks, as if he cannot wait to get where he is going and is searching somewhat anxiously for a quicker way to his goal. This impression matches his true character. Jinhong is indeed eager, inquisitive, impatient -- and very smart.

    After he came back to power as party secretary in 1967, he led the village through the last years of the Cultural Revolution. Later, he was held responsible for the factional excesses that had shattered unity and undermined production. But he was caught up in events that no one could control. How could a brigade leader be blamed when the People's Liberation Army general, who was charged with reconciling the factions in the region, instead framed the civilian who was his rival for the top post, calling him a Kuomintang agent?

    Whatever his share of the blame, Wang Jinhong was removed from office in 1971 by a work team sent from Changzhi City to try and straighten out the tangle left behind by the Cultural Revolution. Frustrated and depressed by the sudden "reversal of case" that led to the

 
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rehabilitation of his arch-opponent. Little Li, Jinhong, and several associates ran away. But as Little Li had discovered when he was on the run, there was no place that a peasant without a ration book could go. After a few days, Jinhong returned home. For a while, he earned a living building houses for neighborhood families; then he agreed to manage a little repair shop for bicycles, handcarts, donkey carts, and tractor wagons that the brigade had set up beside the road. The shop prospered due to Jinhong's skills, at a time when other brigade production continued to stagnate. The work team took to calling Jinhong and his friends the Black Gang because they refused to bow their heads when they passed through the village. Proud of the label, the Black Gang stuck together, shared such things as the piglets from Jinhong's fertile sow, defied the rest of the community, and effectively undermined the authority of the group then in charge at brigade headquarters.

    The fact of the matter was that Jinhong was technically the most skillful and politically the most farsighted man in Long Bow. He had been recruited as an apprentice electrician in 1958 and had spent four years as a power plant construction worker on projects all over north China -- years that served him as a "university." He had learned enough about electrical wiring, welding, engine repair, and building design to support himself in any of these trades. And he had also learned some political economy. Most of the young people in the brigade looked to Jinhong for leadership, whether he was in office or out. When he was out, they lost interest in politics and tried to learn from him some of the technical skills he had acquired.

    Finally, in 1973, Wang Jinhong was restored to office. He criticized himself, accepted some responsibility for the factionalism of the 1960s, and vowed to unite with others to change things in Long Bow. That was the turning point. Wang Jinhong and the leaders who had temporarily replaced him put their differences aside and concentrated on making some sort of breakthrough in production. That they succeeded is illustrated by the steady rise in grain yields from 28 bushels per acre in 1970, the approximate level for the previous twenty years, to 48 bushels in 1973, then 60 in 1974, and 100 in 1979.

 
    I was fascinated by this sudden leap in production. Obviously it had awaited a political settlement that could unite the brigade. But once

 
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the brigade united, there was still the technical question -- how had the problem of the alkalinity of Long Bow's soil been overcome?

    "Ever since we lost so much land to industry." Jinhong said, "we have been growing more and more market vegetables. To make them grow, we get the night soil, the kitchen waste and the ashes from the workers' homes. We found that when we put a lot of coal ashes on the soil, the salt receded. It got washed down, not sucked up.

    "Then we noticed something strange," he continued. "At the power plant near Yellow Mill, the great chimney threw ashes all over the countryside. People protested, but the plant managers did nothing. In a circle around the plant, the crops all turned gray. But every year, they grew better than the year before. It was the ashes. They did something to the heavy clay. They increased the percolation.

    "So we put the schoolchildren to work at an experiment supervised by Shen Majin's research group. They hauled ashes from the waste pile at the power plant and put them on their experimental plot, over 100 tons to the acre. We covered the land three to four inches deep. It worked. The yields almost doubled. So after that, we put all the production teams to work hauling ashes. Each year, each team converted some of its land.

    "Once the land was converted, we could irrigate. We had to dig more wells, pump more water, divert more water from the reservoir, fix up irrigation channels and level the land. That took a lot of labor. Our best people used to be out earning money at various jobs -- unloading freight at the railroad station, cutting steel bars at the steel mill, hauling rock by handcart for the cement mill. We had to call them all home.

    "For the first time in twenty years, we put agriculture in first place, and it really paid off."

    "Your sidelines seem to be flourishing, too," I said.

    "Well, we concentrated on sidelines that could use partial labor power -- like the teenage girls. They are polishing the saw blades and making the saw handles for the saw-blade works. We needed wood for the saw handles, so we bought a sawmill. Of course, that takes skilled people. We needed phosphate fertilizer, but we found we could only buy the raw rock. So we set up a grinding mill. Then we converted it into a cement plant. With some of that output, we can supply the raw material for lining our irrigation canals. All these projects are very

 
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profitable, much more so than the wages we used to earn outside. Twelve percent of our labor power working at sidelines now produces seventy percent of our income.

 
    Wang Jinhong, the brigade chairman, can enjoy play as well as work, tradition as well as change. For example, he joined the Long Bow village stilt dancers when the people went to Changzih City to celebrate the conclusion of a national party congress. For the occasion, Jinhong was made up as a young bride riding home on a donkey to visit her mother. A papier-mâché donkey's neck and head protruded from his stomach, while matching rear and tail extended from his backside, and he leaped in response to a whip wielded by a colleague made up as a donkey driver. Another mock maiden dangled a butterfly from a string on the end of a fish pole while her symbolic suitor tried vainly to catch it. Still other stilt walkers portrayed Liberation Army soldiers, maidens of the minority nationalities, peasants, workers, and the political target of the times -- the gang of four, under whose influence stilts had been banned in Long Bow for years.

    Stilts are a very old tradition in Shanxi Province, but only Long bow has stilt dancers who do acrobatics, jump over tables, and climb up and down ramps. The village learned this kind of stilt walking from a captured Kuomintang officer who was "reeducated" there in 1945, when the Communists' famous Resistance University, headed by Lin Biao, migrated to Long Bow from Yan'an.

    The dancers stood so tall on their stilts that even the shortest of them looked down on the musicians playing on the high, jolting bed of a four-wheeled trailer drawn through the city streets by tractor. The horn player's cheeks puffed out like two swollen bladders. His fingers moved so swiftly that they blurred. Sometimes he held the horn away from his face and blew through the reed alone. This sounded like two turkeys in a forest squaring off for battle. The bamboo pipes, the snakeskin fiddles, and the bulging red drums of the other performers fell silent to let the turkeys quarrel, then suddenly resumed their frantic rhythm as the horn, two octaves lower now, rejoined its reed.

    The music trailer, with its long double line of elevated dancers, moved slowly down the city streets through dense crowds of celebrants. Ahead and behind it moved other floats, other performers, other dancers, and acrobats, some of them also on stilts, in what

 
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seemed to be an endless procession. Their motion on the street generated a dense cloud of dust that softened all outlines. Through the dust, one could look ahead to see villagers holding costumed children high overhead on flexible poles, and behind to see factory workers dip and roll various huge papier-mâché figures. A second trailer carried a pyramid of opera stars made up to resemble the heroes of Water Margin, the men driven onto Liang Mountain in the days of the Sung Dynasty, eight centuries ago. This was the first time these legendary figures had appeared in public for ten years.

 
    China's most persistent tradition is tilling the land by hoe.

    We were all out in the fields wielding our heavy, mattocklike hoes. Smash. Drive the blade in, pull the soil back, break the biggest lumps. Smash, drive the blade in again . . . try not to take any extra steps, they compact the soil.

    "How long is it going to be?" asked Jinhong.

    "How long is what going to be?"

    "This bit with the hoe! We're stuck here with hoes in our hands one thousand, two thousand, three thousand years. It's time to get rid of these jewels."

    "That it is," I said.

    "I'm not afraid of hard work. I'm willing to hoe alongside the next man. But I don't like it. In America you till 250 acres alone. I'm lucky if I till one. It's time for a change!"

    "It's hard to run a tractor through a field when you have two crops growing together."

    "Never mind two crops. We'll plant corn alone until we learn to do it with machines. And we'll push up yields while we do it."

    "Do you mean that?"

    "Yes."

    "What will the commune say?"

    "That's a problem. When you try things in America, you take a chance. If you fail, you can't pay back your crop loan. You risk your land. There is no such risk here, but I still can't try out most things to the point of finding out if they succeed or fail. The way it has been here the past few years, the commune has decided everything -- what to plant, where to plant it, what variety, how much seed, how deep, how far apart. If you try anything new, they come down hard right away.

 
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'What are you trying to do? Set up your own Central Committee?' The technical question turns into a political question. You are violating democratic centralism."

    "That makes it hard. How can you experiment with anything?"

    "It isn't easy. But really, here in the brigade we are in a better position than anyone else to try things. Take mechanization. We have land, labor power, money, and materials. What materials we don't have, we can usually find. Who else has that kind of leverage? The supply departments have materials, but no labor power. The factories have labor power but no materials. The mechanization office has nothing but a sign on the door. What can those fellows do but talk?"

    Wang Jinhong was not content with mere talk. He went ahead on his own without regard to the consequences. In 1977, he asked me such questions as, How would you put grain on the second floor of the office building? How would you irrigate corn land? How would you dry grain? I suggested a grain auger, a center-pivot irrigation system, and a coal-fired grain drier. (A grain auger is like a long, unbroken screw or drill bit that carries grain up the spiral formed by its turning threads. A center-pivot irrigation system is a pipe up to half a mile long, mounted on wheels every few yards; it turns in a huge circle around a well at the center, which provides water for the pipe to spray at intervals up to the outer circumference.)

    Instead of saying, as so many in China are wont to do, "Someday we'll have those things," Jinhong said, "I'm going to start tomorrow." In ten days, he built a grain auger twenty-six feet long. In a month, he built a center-pivot irrigation pipe 100 yards long that traveled full circle under its own power. Over the winter, he built a grain drier that broke through all the obstacles that had plagued grain handling in the brigade for years.

    Then in 1979, he launched a 100-acre experiment in the mechanization of corn farming. With some equipment borrowed from the Mechanization Institute of the province, with other equipment built in Long Bow, and with support and advice from various levels of the government, his special team produced over twenty-five tons of grain per worker, a fourteen fold increase in productivity in one year.

    This achievement had extraordinary implications. It meant that for every person left raising crops, fourteen could leave the land and do something else. In Long Bow, they could probably be absorbed man-

 
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ufacturing grain augers, irrigation systems and grain driers -- if the state supported the idea with the necessary supplies.

    That was a big "if." My impression was that China's leaders had not yet confronted the question of the mechanization of peasant agriculture. Or if they had, they had backed away from it. Combines for the wastelands of the Northeast and Xinjiang -- yes. Milking machines for state-operated dairies -- yes. But corn planters, corn pickers, and herbicides for Shanxi villages -- well, maybe, probably not. The upheaval this would cause in the economy staggered the imagination. There was no commitment to any program that could accomplish it. In fact, the thrust of much public argument was against it. The status quo of the hoe was defended with the slogan: no mechanization for mechanization's sake.

    Nevertheless, in the fall of 1978, the government did take concrete steps to untie the hands of peasant innovators. Beijing announced that state functionaries must respect the property rights of cooperative units. Within the framework of some general guidelines, production brigades and teams had the right to make their own management decisions, to grow what suited them best in a manner that reflected local conditions. If implemented, this decision could liberate enormous creative forces. One could only hope they would not be blocked by some new countercurrent of bureaucratic obstruction.

 
    Jinhong had been sick for three days. Since nothing seemed to be happening on the street and nobody came or went through the big door of the brigade office except the accountant, we decided to go and find out where all the action had gone. Gatekeeper Zhang and I followed the only person who seemed to be heading anywhere. His trail led straight to Jinhong's home.

    The main section of the house was ample in size. There was a low-ceilinged living room about 15 feet long, then a doorway leading to a dimly lit bedroom on the east. The main room was full of people, about ten in all, and there were two more in the bedroom talking to Jinhong, who was lying fully dressed on a wide wooden bed. Manfu, the opera lover from the saw-blade shop, lean Chou-fa covered with grime after a twelve-hour shift in the cement mill, Wende from the Fifth Team garden, reeking of raw pig manure, two capped and jacketed buyers from a trading organization in the city, and a messenger from Horse

 
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Square Commune milled about, waiting their turn and all talking at once. In the cookhouse outside, Dr. Shen of the brigade clinic was brewing a special cough medicine out of herbs. He had to compete for space on the adobe stove with Jinhong's willful daughter, who was heating some gruel for her father.

    When the two men in the bedroom came out -- they were leaders of a neighboring brigade -- the two buyers went in. As they ducked through the door, each pulled a pack of cigarettes from his pocket. It was a conditioned reflex. Prior to doing business, one offered a cigarette.

    Seeing this, Chang called me into a corner for a confidential aside. When dealing with certain industrial units and certain notorious functionaries, he said, buyers from the countryside had to be prepared with three kinds of armament -- the twenty-shot clip (pack of name-brand cigarettes), the hand grenade (bottle of fine wine), and the explosive satchel (box of sweet biscuits). Working out the terms of a deal had come to be known as yen chiu, yen chiu, which means "to study the question" -- but also means "cigarettes and wine, cigarettes and wine." Needless to say, Jinhong had no use for any such preliminaries. His policy was to judge each offer on its merits.

    While we waited for the buyers to complete their business -- they wanted guarantees on a large order of cement -- three other people came in. One was a cadre from the Railroad Construction Bureau who wanted to negotiate the transfer of more Long Bow land. The second was the head mechanic from the trucking depot at the railroad yards. He had completed repairs on one of Long Bow's tractors. The last one in was Zhang Wenying, head of the women's association. What she had to announce, with her usual good cheer, was that a delegation of sanitary inspectors was on its way. She wanted people mobilized to sweep the streets. Dr. Shen offered her a cigarette. She lit it from the burned stub already in her mouth.

    "Two more women have agreed to have their tubes tied," she said.

    "How many does that make altogether?"

    "Fifty this year."

    It was a commune record.

    Jinhong suddenly appeared out of the bedroom, concerned that we had not been offered tea.

    "Aren't you supposed to be sick?" I asked.

    "Oh, it's not that bad. I'm almost well now," he protested with a voice

 
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that faded halfway through the sentence. Then he coughed, a rasping sound that came from deep in his chest. He didn't sound well to me, but no one else seemed worried. The dampness underfoot aggravated coughs, and so did the dust in the air. Within a few hours after every rain the dust blew up again because so much of the earth was bare. You could feel grit in your mouth whenever you clenched your teeth.

 
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    Houyang is one of the showplaces of Fengyang county, the rural backwater that Vice-Premier Wan Li set on a new course in 1979. Since then this hamlet and many of its neighboring communities have enjoyed rising prosperity. Countywide grain production has gone up by 50,000 long tons a year to reach levels 100 percent above all previous records. Public warehouses overflow with rice, wheat, soybeans, and oil seeds that the overburdened railroads cannot move out. Stimulated by these abundant supplies, new processing industries are growing apace, financed by individual peasant investors who have both money and time on their hands.

 
    I went to Fengyang county in March 1983 to see the best that the new contract system, now all but mandatory in China, had to offer. In a 1981 meeting with Vice-Premier Wan Li I had expressed grave doubts about the wisdom of breaking up collective lands and especially those lands that were already well farmed by competently led, prosperous cooperators. Whereas Central Committee policy statements called for a selective policy, recommending family contracts only where collective management had failed, Shanxi province peasants to whom I had talked said the pressure on all collectives, good or bad, had been relentless. Party leaders were demanding break-up regardless of the circumstances, an all-or-nothing thrust that people called "one stroke of the knife." Wan Li hotly denied that this was the policy at the Central Committee level. "The people are free to choose," he insisted. He nevertheless recommended that I go and take a look at what the contract system had created in Anhui province. Two years later, just as my old friends in Long Bow village finally bowed to extreme pressure and broke up what had developed into one of the most advanced joint farming efforts in China, I finally found the time to travel southward and have a look at what the future might hold in store.

    The first thing that struck me while driving north from the provincial capital, Hefei, was the extreme backwardness of the North Anhui countryside. We seemed to have slipped in time toward the middle ages -- abandoned irrigation works led to clusters of crumbling adobe huts whose age-blackened thatch roofs topped frameless window and door openings. Mud-clogged yards rose only slightly above the level of the stagnant puddles in the street. Swaybacked pigs, lean and worm laden, wandered aimlessly between gangs of restless, unwashed chil-

 
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dren. Only the clothing on the backs of the latter belied the general impression of abject poverty. Boys and girls ran about, not in preliberation-style rags, but in fairly well made jackets and pants of printed machine woven cloth. Numerous as they were, the children on the streets were heavily outnumbered by the scores of loitering adults who seemed to have nothing but time on their hands -- the leisure time that is the curse of every backward countryside in the world.

    Production figures for the years before 1979 documented the economic stagnation that underlay the poverty and chronic underemployment we saw all around us. For more than twenty years yields had remained at or below 30 bushels to the acre and per capita gain production in 1977 (1978 was a disastrous drought year) had fallen below that of 1952. Here was a region where for whatever reason cooperation had failed. After two decades of social experimentation the peasants of North Anhui had nowhere to go but up.

    I could only conclude that Fengyang had suffered atrocious leadership in the past. County leaders told me that none of the cooperative policies seemed to work. Local cadres beat their heads against a stone wall of apathy and people on the land dragged their feet in defiance of their own best interests. Yields, after all, depended on sustained local effort. Why should the people with the most to gain do nothing or next to nothing to ensure them?

    Deputy County Chairman Wang Changtai said it was because the link between the effort put out by any given individual and the reward obtained was too tenuous. Peasants simply could not visualize any improvement coming to them personally through hard work. Their goal was to do as little as possible and depend on the state to carry everyone through until spring. When bad weather undermined their meager efforts even the state could not fill the gap. Tens of thousands went out to beg. Wang said that in the past natural disasters -- either droughts or floods -- struck nine years out of ten. On the average 50,000 left home to beg every winter. In the worst years 150,000 went out. Those who went out didn't always come back. Among the males who came back many never found wives. The population grew slowly. In some places it even declined -- a phenomenon that helped set the stage for the success of the new policy. When the time came to divide the land each person got at least 2 mou (1/3 acre) while some got as many as

 
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5 (almost 1 acre). This was from two to five times the national average and provided a relatively secure base for family-style production.

    I found it difficult to understand why cooperation should fail so dismally in Anhui while succeeding so well in many other places that I had visited over the years. A 1980 national survey made by a group of young economists that included the newly appointed second secretary of the Fengyang Party Committee, Wong Yongxi, concluded that in China as a whole 30 percent of the cooperative brigades had been doing well, 30 percent had been doing badly, while in the middle 40 percent had been holding their own, neither chalking up great successes on the one hand nor floundering on the other. Most, though not all, of the successful cooperatives that I had seen were in the north, in or near old liberated areas where the peasants first gave support to the Communist Party because it led the resistance war against Japan or the liberation war against the Guomindang. Years of armed struggle had developed a core of politically aware peasant cadres who later led the land reform and the cooperative movement, and led both fairly well, in many localities at least. Anhui, on the other hand, had gone through no such history. Liberated by northern armies in 1949, Anhui went through land reform under outside leadership in 1952, then without any trial period of mutual aid, plunged into a land-pooling movement that leaped from the lower to the higher stage in the course of a few months. In the lower stage land shares counted when distributing. income, in the higher stage only labor counted. Before the latter could even pretend to achieve consolidation the commune movement carried egalitarianism to unprecedented extremes. Joint tillage never recovered prestige.

    According to Wang Yongxi the cooperative movement in Anhui violated two fundamental principles of rural organization: the principle that peasant participation must be voluntary, based on the economic success of local models, and the principle that income must be distributed on the basis of work performed. Party leaders, ignoring these fundamentals, rushed the peasants into advanced levels of cooperation before they saw any convincing evidence of advantages to be gained and set up forms of income distribution that divided earnings more or less equally per capita, without regard for individual effort expended. Inexperienced local leaders, unable to generate any production enthu-

 
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siasm under the new share-and-share-alike system, ended up using their power to feather their own nests. Periodically those who exposed, challenged, and replaced them, when faced with the same inertia, ended up applying the same values and began to serve themselves rather than the community. When thirty years after liberation Anhui peasants failed to generate levels of per capita production any higher than those with which they started out, men like the current first secretary of the Party Committee, Wang Yuxin, his deputy Song Linsheng, and Deputy County Chairman Wang Changtai decided it was time for an agonizing reappraisal, time to reverse course.

    Wang Yuxin said the decision took courage because what they decided to try out was a variant of Liu Shoaqi's notorious "Three Freedoms, One Contract," a policy denounced over the years as "capitalist road." Wang and his colleagues introduced it in two stages. First they urged the peasants to split their production teams into small groups, each one of which then contracted to grow crops on designated plots of land. When this brought some positive results in 1979, the leaders urged the peasants to go further and contract land family by family according to a system that they called "Da Bao Gan" (the all-inclusive contract). Da Bao Gan can best be described as "render unto Caesar that which is Caesar's while I take the rest for myself."

    Fengyang peasants, frustrated by what they came to look on as their cooperative straitjacket, wanted an average per capita share of land to work, but they did not want production quotas, percentage bonuses, sliding-scale obligations. They wanted to know what the government, the public sector, absolutely had to have from the land in the way of cash and kind. Then they promised to deliver this minimum without question just so long as they could do what they pleased with the balance of their crops.

    Secretary Wang went along with this. At the provincial level Wan Li backed him up, and so the "responsibility system," in the form of the all-inclusive contract, was born. In Fengyang county, where there is more land per capita than almost anywhere else in China, each family got on the average the use of 2 mou (1/3 acre) of land per person. In return for this each promised to pay its national agricultural tax in kind to turn over a small sum for the support of local (brigade and commune) officials, and to sell to the state at established prices the low fixed quotas of grain that tradition had set for every mou. This arrangement,

 
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because it demanded relatively little, unleashed the energy and enthusiasm of the peasants and pushed production ahead in striking fashion. Overall grain production figures for the county showed a steady rise:

    During each crop season after 1979 the peasants got up earlier, worked harder, stayed longer in the fields than before and they accomplished each day much more than they ever had since pooling their land in 1956. As a result they finished off most of each year's work in a few intense months, then stood idle for the remainder of the season. "In our cooperative days," said Yang Chiangli, "we used to work all day, every day, year-in and year-out, but we got almost nothing done -- work a little, take a break, work a little more, take another break. We felt harassed and we produced very little. What we were doing looked like work but in fact we were stalling around. Now we make every minute count. Our labor produces results. We earn a good living and we have time on our hands, lots of time."

 
    With Deputy County Chairman Wang Changtai's help I examined several household accounts in detail. Here are the figures for Li Wanhua of Zhanglaozhuang team, Zhanglaozhuang brigade, Ershihying commune:

    With eight people in the family Li contracted 22.5 mou or 2.8 mou per person (slightly under 1/2 acre apiece). According to his contract for 1982 he obligated himself to pay 91.74 yuan into the team accumulation fund (to pay local cadres salaries, supply welfare to needy families, etc.), to turn over 545 catties (11 bushels) of grain to the state as his agricultural tax, and to sell 679 catties (13.5 bushels) of quota grain to the state at normal state grain prices. Over and above that he planned to sell 2,392 catties (47.84 bushels) of above-quota grain to the state at

 
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prices 50 percent above normal, and to sell 25.5 catties of vegetable oil 498 catties of dried tobacco, 2 fat pigs, and 10 catties of fresh eggs. His actual production far surpassed the above plan and he ended the year with 20,300 catties (406 bushels) of grain, 960 catties of tobacco 600 catties of oil seeds (mostly sesame), and 800 catties (15 bushels) of soybeans, not to mention the returns from such sidelines as pig and poultry raising. His net income from all sources reached 4,800 yuan or 600 yuan per capita, almost twice the county average. Prior to 1979, before contracting began, Li never accumulated enough work points to pay for the family's per capita grain at 520 catties per head supplied by the brigade. He always had to make up the difference by turning over the income realized from the sale of his two pigs. Cash income retained came to less than 100 yuan per person. Li insisted that in those days the family got along, but quite clearly its members were "getting along" much better in 1983.

    At Yaoyin brigade we met a young married man, Yao Yukuo, who had also previously earned only 500 catties of per capita grain and 100 yuan per person in cash a year. Now, with 5.4 mou (just under 1 acre) contracted he and his wife each enjoyed a net income in cash and kind worth 700 yuan, and this after paying taxes that amounted to 20 yuan in cash to the local accumulation fund and 300 catties of grain (worth 60 yuan) for the state. Yao insisted that he worked only about four months out of every year and thoroughly enjoyed the long winter slack. As we talked we sat in his new stone and tile house (stone walls, fired tile roof). Since he had cut the stone himself the house cost him only 3,000 yuan, a sum he had already paid in full.

    Most prosperous of all the peasants we met was old Yang Changli, the former beggar from Houyang, who so annoyed us with his oratory. In 1982 he contracted 42 mou (7 acres) for eight people and harvested:

 
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peanuts (1,000 catties), rape seed (400 catties), hemp seed (50 catties), mint oil (20 catties). With his surplus grain and screenings he fed three fat pigs, sixteen suckling pigs, thirty ducks, and twenty-nine chickens. Both ducks and chickens laid eggs which he sold for cash.

    Yang's net income, after deducting all costs including taxes, topped 10,000 yuan, for a per capita income of 1,250 yuan. Rich beyond his wildest dreams he plunked down 6,000 yuan cash for his new two-story house, then bought three Shanghai bicycles and a sewing machine on the side.

 
    The three families described above were doing better than most. All of them surpassed the county average for per capita income by 100 percent or more. But the average per capita income in the county had doubled in four years' time and signs of this sharp increase made themselves evident everywhere. Most conspicuous were the many new houses built by individual families, the enormous new enclosed theaters built by communes, the bulging warehouses at the state grain stations, and the lively buying and selling at the rotating farm markets. Deputy County Chairman Wang liked to stress less conspicuous things like the 5 million yuan annual increase in private productive capital -- tools, machines, carts, and work buffalo; the sharp annual increase in peasant-owned bicycles, sewing machines, watches, and radios. Collective productive capital showed a parallel rise, pyramiding at the rate of 1 million yuan a year, the most conspicuous addition here being the 500 kilometers of power line built in four years, an amount equal to the total kilometers previously built. Each community not yet provided with power made a per capita assessment for this purpose. Everyone in Houyang had contributed 15 yuan. Concrete poles, ready for erection, lay along the road to the county seat. The road itself was new and had also been built by subscription.

    Houyang's Yang Chingli boasted that he meant to concentrate on grain production and break all his old production records in the years to come. It seemed obvious, however, that in the realm of grain Fengyang county was approaching a plateau. With over 60 bushels of wheat and over 100 bushels of rice per acre unit yields were pushing the limits set by the state of the art. If incomes were to continue to rise expanded livestock production, other rural sidelines, and many small industries must soon make their appearance. That also seemed the only way to

 
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employ the thousands who were idling away their winters without gainful employment.

    For promising examples of sidelines production Deputy County Chairman Wang took us to see Gaojen commune. There 7,300 ablebodied laborers farmed 31,875 mou, an average of 4.5 (over 2/3 of an acre) per person. Since one man or woman to every 10 mou would be enough, commune head Li figured that he had 3,500 too many workers on the land and was busy encouraging the establishment of every possible sideline. So far Gaojen people had set up eighty-three enterprises that employed some 2,500 people while more than 1,000 still remained jobless. Families started most of the enterprises, three to eight households joining up, pooling capital, and going into the production of such things as cement blocks, clay tiles, asbestos tiles, fired brick, phosphate fertilizer, fish ponds, flour milling, oil pressing, starch making, and stone crushing. Several had also set up construction companies. Individual families joined brigades and communes to set up a number of larger joint stock companies that financed, among other things, three mechanized stone crushing plants and one medium-sized flour mill.

    We went to see the flour mill, capitalized at 41,000 yuan. To build it the commune put up 4.5 mou of land valued at 2,000 yuan and 24 shares of stock valued at 1,000 yuan apiece. Individual families bought 15 shares of stock at 1,000 yuan apiece. Each share of stock bought by a family carried with it a full-time job in the plant plus one full vote at the shareholders meeting of seventeen (fifteen workers, one delegate from the commune, and one delegate from the local team). The meeting chose a management committee of three, which in turn hired a manager. During the last eight months of 1982 the flour mill turned a net profit of 10,812 yuan, distributed 23 percent as dividends and put the balance into an accumulation fund destined for new investment. The workers made 58.2 yuan a month in wages plus a year-end bonus of a pair of leather work shoes valued at 17 yuan per pair.

    "What are the advantages of such a plant?" asked commune chairman Li. "It provides employment for surplus labor, an outlet for surplus funds, and an opportunity for democratic management. Every worker owns stock and every stockholder has a vote."

    This last point was not unimportant. One of the continuing problems with rural cooperatives in China has been one-person rule, the abuse of

 
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power allocated from above, in units seen as part of the foundation of the state. These new enterprises, financed from below and outside the state system, are run by those who own them. If the manager does not suit the shareholders who are also the workers, they fire the manager. When the stockholders of one new stone crushing company were looking for a manager they stipulated that at least 65 yuan a month in wages per worker and 196 yuan in dividends per share per year (30 percent of the anticipated 57,500 net profit) had to be provided. This accomplishment would earn the manager the right to nominate the staff, sign contracts with workers, fire them if they violated their contracts, and receive twice the bonus allocated to each worker. (I forgot to ask how a manager could fire a worker who was also a shareholder.) If on the other hand the manager failed to meet the level of wages and profits stipulated the difference had to be made up out of his or her own pocket. A manager who did not make up the difference faced charges, arrest, and a sojourn in jail!

    At Gaojen commune new industries fell far short of providing employment for all. But in a lonely backwater at the opposite end of the county we visited a brigade where due to special circumstances every able-bodied person had full off-season employment. This brigade occupied a site near a big lake where the acreage of reeds almost equaled the acreage of arable land. Each family contracted, in addition to their per capita farm land, some reed land, and the reeds they cut and stored provided year-round work weaving mats. The average worker could weave at lest two mats a day worth 2 yuan apiece wholesale. The constant weaving combined with work on the land brought in the highest average income per capita in the whole county: 900 yuan a year. Here peasant families were building new houses by the dozen, buying bicycles, radios, television sets, and walking tractors. Their village lay way off the beaten track beyond the back of nowhere and seemed to be slowly sinking into the mud of the lake shore, but they displayed high spirits and an enthusiasm for modernization. All the families we talked to had ambitious plans for the future. They were planning two-story houses primarily because they wanted to convert ground floor space into mat-weaving workshops. They expected electricity to arrive within a year. This lakeside community demonstrated the income potential of a well-matched farming/sideline combination and the importance of year-round work as an income booster. Labor

 
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power remains China's most abundant resource. The big problem is putting it to work.

    Everywhere we went in Fengyang county people talked most about and expected the most from one crop: rice. The newest thing in rice culture was hybrid seed with a yield potential well above 100 bushels per acre. Some brigades were already specializing in hybrid rice seed, which they sold at 2.5 yuan per catty. Rice requires water. At least half the water came from large-scale irrigation works created by the mass movements of the 1950s. The rest came from small lakes, ponds, and catchment basins built locally over many years. Taken together they stored water that could irrigate about one-third of the county's arable land. In contrast to the disarray so evident in the counties to the south, almost all the water works, the canals, the sluices, and the pumps in Fengyang seemed to be in operating condition. Had all this been contracted out along with the land? And if so, how?

    Deputy County Chairman Wang assured us that the people still owned the water system collectively. Communes and brigades organized the distribution of water as needed, but in contrast to the past no one got water without advance cash payment. To learn how this system worked we went to the large Fengyashan reservoir on the western edge of the county. There low rolling hills suddenly gave way to two large mountains that provided a perfect dam site. With a water surface of 146 square kilometers the reservoir held some 125 million cubic meters of water, about half of which could be tapped for irrigation. The reservoir was currently supplying water to 89,000 mou (almost 15,000 acres) and stimulating striking increases in the yield of rice. At Yingjian commune, one of five supplied by the reservoir, yields had gone from 51 bushels to the acre in 1978 to 118 bushels to the acre in 1982. Deputy County Chairman Wang said the yields went up after peasants contracted the land out because (1) the peasants worked harder, (2) they bought more fertilizer (four times as much as in 1978), (3) they planted large areas to high-yielding hybrid rice, and (4) they watered every field carefully (paying for every cubic meter in advance made this a necessity).

    The reservoir, built by collective labor in the year of the Great Leap Forward, remained a state unit. The staff, hired by the county, was supposed to finance both daily operations and capital improvements through the sale of water and fish, but prior to 1979 neither product

 
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yielded much income. When peasant collectives needed water county officials had little choice but to order it released. Recipients promised to pay for it later but very few ever kept their promises. Every year the county had to invest 3,000-4,000 yuan to stock the water with fish but poachers took so many of them that the official annual catch never realized enough cash to pay for the fingerlings.

    In 1979 all this changed. First the reservoir staff put irrigation water on a pay-as-you-go basis. Teams, brigades, and communes down below had to collect cash in advance from peasant users at .50 yuan per 100 cubic meters. At the same time they organized a water watch, team-by-team, brigade-by-brigade, to make sure the water reached each locality. The reservoir staff, cash in hand, released enough extra water to cover all losses due to evaporation and seepage and kept up the flow until each family got what it paid for on its home fields. Water revenues went up from 6,000 yuan in 1978 to 49,000 yuan in 1982 and put the reservoir for the first time into the black.

    Next the reservoir staff reorganized the fishing industry. The reservoir as a state unit entered into contracts with three nearby communes and five shoreline brigades and sold development shares at 2,00