August 12, 1953

[Speech at the National Conference on Financial and Economic Work held in
the summer of 1953.]


Our conference has been a success, and Premier Chou has made a fine summing-up.

It is now clear that since the movements against the "three evils" and the
"five evils" two kinds of mistake which are different in nature have been
found in the Party. One kind is of an ordinary nature, for instance, the
"five excesses", mistakes which anyone can make and which may crop up at
any time; the "five excesses" may also turn into the "five deficiencies".
The other kind is mistakes of principle, such as the tendency towards capitalism.
This kind is a reflection of bourgeois ideas within the Party and a matter
of stand that is contrary to Marxism-Leninism.

The movements against the "three evils" and the "five evils" dealt heavy
blows to bourgeois ideas inside the Party. But at the time only bourgeois
ideas related to corruption and waste got a good thrashing, while those
manifesting themselves in questions concerning the Party line were not dealt
with. The latter are to be found not only in our financial and economic work
but also in political and judicial, cultural and educational and other fields,
and among comrades in the localities as well as at the national level.

Mistakes in our financial and economic work have been severely criticized
ever since last December when Comrade Po I-po came out with his new tax system
entailing "equality between public and private enterprises"
[1] and also at the present conference. That system,
if allowed to develop, would have led inevitably to capitalism, in contravention
of Marxism-Leninism and the Party's general line for the transition period.

What will the transition period lead to, socialism or capitalism? The Party's
general line prescribes transition to socialism. This requires a period of
struggle of considerable length. Unlike that of Chang Tzu-shan,
[2] the mistake made in the new tax system involves
a question of ideology and a departure from the Party's general line. We
must unfold a struggle in the Party against bourgeois ideas. Ideologically,
the Party membership falls into three categories: some comrades are firm
and unwavering and are Marxist-Leninist in their thinking; quite a number
are essentially Marxist-Leninist but infected with non-Marxist-Leninist ideas;
and a small number are no good, their thinking is non-Marxist-Leninist. In
criticizing Po I-po's erroneous ideas, some say his mistake stems from
petty-bourgeois individualism; that's not quite right. He should be criticized
mainly for his bourgeois ideas, which are favourable to capitalism and harmful
to socialism. Only such criticism is correct. "Left" opportunist mistakes,
as we said before, are a reflection of petty-bourgeois fanaticism within
the Party; they occurred in times when we broke with the bourgeoisie. On
the three occasions when we have co-operated with the bourgeoisie, namely,
in the first period of co-operation between the Kuomintang and the Communist
Party, in the period of the War of Resistance Against Japan and in the present
period, it has been bourgeois ideology that has influenced a number of people
in the Party, and they have vacillated. That was how Po I-po came to make
his mistake.

Po I-po's mistake is not an isolated case. Such mistakes are found not only
at the national level but also at those of the greater administrative areas
and the provinces and municipalities. Each greater administrative area, each
province and municipality, should call a meeting to review its work in the
light of the resolution of the Second Plenary Session of the Seventh Central
Committee and of the summing-up of the present conference, so as to educate
the cadres.

Recently I made a trip to Wuhan and Nanking and learned a lot, which was
very helpful. Practically nothing comes to my ear in Peking, and therefore
I shall go on tour from time to time. The central leading organ is a factory
which turns out ideas as its products. If it does not know what is going
on at the lower levels, gets no raw material or has no semi-processed products
to work on, how can it turn out any products? Sometimes finished products
are turned out by the localities, and the central leading organ need only
popularize them throughout the country. For instance, take the movements
against the old and new "three evils". [3] Both
were initiated in the localities. The departments under the central authorities
issue directives arbitrarily. The products from these departments ought to
be top grade, but actually they are inferior in quality and there are large
numbers of completely worthless rejects. Leading organs in the greater
administrative areas and the provinces and municipalities are local factories
for turning out ideas, and their products should be top grade too.

Po I-po's mistake is a manifestation of bourgeois ideas. It benefits capitalism
and harms socialism and semi-socialism and runs counter to the resolution
of the Second Plenary Session of the Seventh Central Committee.

On whom should we rely? On the working class, or on the bourgeoisie? The
resolution of the Second Plenary Session of the Seventh Central Committee
made it clear long ago: "We must wholeheartedly rely on the working class."
The resolution also says that in the rehabilitation and development of production
the following must be the rule: the production of state industry comes first,
that of private industry second and handicraft production third. The emphasis
is on industry, and first of all on heavy industry, which is owned by the
state. Of the five sectors of our present-day economy, the state-owned economy
is the leading sector. Capitalist industry and commerce must be gradually
guided towards state capitalism.

The resolution of the Second Plenary Session says that the livelihood of
the workers and other working people is to improve on the basis of increased
production. People with bourgeois ideas pay no attention to this point, and
Po I-po is typical in this respect. We must lay emphasis on the development
of production, but consideration must be given to both the development of
production and the improvement of the people's livelihood. Something must
be done for their material well-being, but neither too much nor nothing at
all. At present there are quite a few cadres who ignore the people's livelihood
and couldn't care less about their sufferings. There was a regiment in Kweichow
Province which occupied large tracts of peasant farmland. That was a serious
encroachment on the people's interests. It is wrong to ignore the people's
livelihood, but the emphasis must be laid on production and construction.

The question of utilizing, restricting and transforming the capitalist sector
of the economy was also made quite clear at the Second Plenary Session. The
resolution it adopted says that the private capitalist economy must not be
allowed to expand uncurbed but should be restricted from several directions
-- in the scope of its operations, by tax policy and by market prices and
working conditions. The relationship of the socialist economy to the capitalist
economy is that of the leader to the led. Restriction versus opposition to
restriction is the main form of class struggle in the new-democratic state.
Now the new tax system talks about "equality between public and private
enterprises"; that is at variance with the line which makes the state-owned
economy the leading sector.

As for the co-operative transformation of individual farming and handicrafts,
the resolution of the Second Plenary Session puts it clearly:

Such co-operatives are collective economic organizations of the working people,
based on private ownership and under the direction of the state power led
by the proletariat. The fact that the Chinese people are culturally backward
and have no tradition in organizing co-operatives makes it quite difficult
for us to promote and develop the co-operative movement, but co-operatives
can and must be organized and they must be promoted and developed. If we
had only a state-owned economy and no co-operative economy, it would be
impossible for us to lead the individual economy of the working people step
by step towards collectivization, impossible to develop from the new-democratic
state to the socialist state of the future and impossible to consolidate
the leadership of the proletariat in the state power.

This resolution was adopted in March 1949, but quite a few comrades have
failed to take note of it and what is no longer news strikes them as novel.
In his article "Strengthen the Party's Political Work in the Rural Areas",
Po I-po said that the individual peasants' road to collectivization through
mutual aid and co-operation "is sheer fantasy, because the present mutual-aid
teams, based as they are on the individual economy, cannot develop gradually
into collective farms, still less can such a road lead to the collectivization
of agriculture as a whole". This runs counter to the Party's resolution.

There are now two united fronts, two alliances. One is the alliance of the
working class and the peasants; this is the foundation. The other is the
alliance of the working class and the national bourgeoisie. As the peasants
are labourers and not exploiters, the alliance of the working class and the
peasants is a long-term one. Nevertheless, there are contradictions between
the working class and the peasants. We should guide the peasants step by
step from individual ownership to collective ownership in accordance with
the voluntary principle. In the future there will also be contradictions,
between state ownership and collective ownership. These contradictions are
all non-antagonistic. On the other hand, the contradictions between the working
class and the bourgeoisie are antagonistic.

The bourgeoisie is sure to corrode people and aim its sugar-coated bullets
at them. Its sugar-coated bullets are of two kinds, material and spiritual.
A spiritual one hit its target, Po I-po. He made his mistake because he succumbed
to the influence of bourgeois ideas. The editorial preaching the new tax
system was applauded by the bourgeoisie, and Po I-po was pleased. Before
the new tax system was initiated, he solicited suggestions from the bourgeoisie
and reached a gentleman's agreement with them, but he failed to report to
the Central Committee. The Ministry of Commerce and the Federation of Supply
and Marketing Co-operatives objected at the time, and the Ministry of Light
Industry was dissatisfied too. Of the 1,100,000 cadres and employees working
in the financial, economic and trade fields, the overwhelming majority are
good and only a small number are not. Those who are not fall into two categories:
counter-revolutionaries, who should be weeded out; and revolutionaries, including
Party members and non-Party personnel, who have made mistakes and who should
therefore be remoulded through criticism and education.

To ensure the triumph of the cause of socialism, we must combat erroneous
Right opportunist tendencies, that is, bourgeois ideas, throughout the Party,
and first of all in the leading bodies of the Party, government, army and
mass organizations at the national level and at those of the greater
administrative areas and the provinces and municipalities. The greater
administrative areas and the provinces and municipalities should call meetings
in due time with the participation of secretaries of prefectural Party committees
and commissioners of prefectures [4] to unfold
criticism and discussion and to clarify the question of the socialist road
versus the capitalist road.

To ensure the triumph of the cause of socialism, we must exercise collective
leadership and oppose decentralism and subjectivism.

At present we must combat subjectivism, not only in the form of rash advance
but also in the form of conservatism. In the days of the new-democratic
revolution both Right and "Left" subjectivist mistakes occurred. Chen Tu-hsiu
and Chang Kuo-tao made Right mistakes and Wang Ming first "Left" mistakes
and then Right ones. The rectification movement in Yenan concentrated its
efforts on combating dogmatism and opposed empiricism in passing. Both dogmatism
and empiricism are forms of subjectivism. No revolution can triumph unless
theory is integrated with practice. The problem was solved in that rectification
movement. We were right in adopting the policy of learning from past mistakes
to avoid future ones and curing the sickness to save the patient. This time
the unrelenting and thoroughgoing criticism of Po I-po is designed to help
those who have erred correct their mistakes and to ensure the victorious
advance of socialism. In the present period of the socialist revolution
subjectivism is still in evidence. Rash advance and conservatism both disregard
the actual state of affairs, both are subjectivist. The revolution and
construction cannot succeed unless subjectivism is overcome. In the days
of the democratic revolution rectification served to correct the error of
subjectivism and in consequence the whole Party was united, including both
the comrades who had adhered to the correct line and those who had made mistakes.
From Yenan they set out for different war theatres, and the whole Party,
pulling its weight as one man, went on to win nation-wide victory. Today,
the cadres are more mature and their political level is higher, and it is
hoped that it will not take long for them basically to overcome subjectivism
in their task of leadership and bring the subjective into correspondence
with the objective through their efforts.

The solution of all these problems hinges on strengthening collective leadership
and opposing decentralism. We have all along opposed decentralism. The directive
issued by the Central Committee to its bureaus and the army commanders on
February 2, 1941 stipulated that all circular telegrams, declarations and
inner-Party directives bearing on the country as a whole must have the prior
approval of the Central Committee. In May, the Central Committee issued a
directive calling for unified external propaganda by the various base areas.
On July 1 of the same year, on the twentieth anniversary of the founding
of the Party, the Central Committee issued its decision on strengthening
Party spirit with the emphasis on combating decentralism. In 1948 the Central
Committee issued more directives to the same effect. It issued a directive
on setting up a system of reports on January 7 and a supplementary directive
in March. The Political Bureau met in September and adopted a resolution
on rules governing reports to and requests for instructions from the Central
Committee. On September 20, the Central Committee made a decision on
strengthening the Party committee system. On March 10, 1953 the Central Committee
adopted a decision on strengthening its leadership over the work of the
government in order to avert the danger of government departments drifting
away from its leadership.

Centralization and decentralization are in constant contradiction with each
other. Decentralism has grown since we moved into the cities. To resolve
this contradiction all the principal and important issues must first be discussed
and decided on by the Party committee before its decisions are referred to
the government for implementation. For instance, such important decisions
as the erection of the Monument to the Heroes of the People in Tien An Men
Square and the demolition of Peking's city walls were made by the Central
Committee and carried out by the government. Matters of secondary importance
can be left to the leading Party groups in government departments. It just
won't do for the Central Committee to monopolize everything. Combating
decentralism will win maximum popular approval because most comrades in the
Party care about collective leadership. Party members fall into three categories
in their attitude towards collective leadership. Those in the first category
care about collective leadership. Those in the second do not care so much,
maintaining that the Party committees had better leave them alone, but they
don't mind being supervised. "Better leave me alone" reveals a lack of Party
spirit, while "don't mind being supervised" shows some measure of Party spirit.
We must seize on this "don't mind being supervised" and help such comrades
by education and persuasion to overcome their lack of Party spirit. Otherwise,
each ministry would go its own way and the Central Committee could not supervise
the ministries, the ministers could not supervise the department and bureau
heads, and the division heads could not supervise the section chiefs -- no
one, in short, could supervise anyone. In consequence, independent kingdoms
would proliferate and hundreds of feudal princes would emerge. Those in the
third category are only a handful. They flatly reject collective leadership
and always prefer to be left alone. The decision on strengthening Party spirit
puts the stress on the strict observance of discipline under democratic
centralism, in other words, the minority is subordinate to the majority,
the individual to the organization, the lower level to the higher level and
the entire Party to the Central Committee (a case of subordinating the majority
to the minority, as this minority represents the majority). Opinions are
welcome, but to undermine Party unity would be a most shameful thing. It
is reliance on the political experience and wisdom of the collective that
can guarantee the correct leadership of the Party and the state and the
unshakable unity of the ranks of the Party.

At this conference Liu Shao-chi said he had made mistakes of a sort, and
Comrade Teng Hsiao-ping said he too had made some mistakes. Whoever makes
a mistake must make a self-criticism, and everybody without exception must
put himself under the Party's supervision and the leadership of Party committees
at various levels. This is a prime requirement for fulfilling the Party's
tasks. Throughout the country there are quite a number of people who thrive
on anarchy, and Po I-po is one such person. To some extent he has been corrupted
both politically and ideologically and it is absolutely necessary to criticize
him.

One final point. We must foster modesty, willingness to learn and perseverance.

We must have perseverance. In the war to resist U.S. aggression and aid Korea,
for instance, we hit U.S. imperialism where it hurt and struck fear into
its heart. This was an asset, an important factor, in our country's construction.
What was of the utmost importance was that our armed forces were thus steeled,
the fighters displaying valour and the commanders resourcefulness. True,
we suffered casualties and incurred a cost; we paid a price. But we had
absolutely no fear of sacrifice; once we set our mind on doing something,
we saw it through. When Hu Tsung-nan attacked the Shensi-Kansu-Ningsia Border
Region, we did not pull out although we had only one county seat left, and
we thought nothing of it when we had to live on the leaves of the trees.
This is the kind of fortitude we must have.

We must study and must not become conceited or look down on others. Goose
eggs don't think much of chicken eggs and the ferrous metals don't think
much of rare metals -- such a disdainful attitude is not scientific. Although
China is a big country and ours is a big Party, there is no reason to look
down on small countries or small parties. We must always be ready to learn
from the people of fraternal countries and maintain a genuine internationalist
spirit. In our foreign trade some people are arrogant and overweening, and
this is wrong. Education must be conducted in the whole Party, and particularly
among people working abroad. We must study hard and work hard so as basically
to accomplish socialist industrialization and socialist transformation in
fifteen years or a little longer. By then our country will have become strong,
yet wee should still be modest and should always be ready to learn.

There are several regulations which were adopted at the Second Plenary Session
of the Seventh Central Committee but not written into its resolution. The
first is a ban on birthday celebrations. Birthday celebrations don't beget
longevity. The important thing is to do our work well. The second is a ban
on gifts, at least in the Party. The third is to keep toasts to a minimum.
Toasts may be allowed on certain occasions. The fourth is to keep applause
to a minimum. There should be no ban and no pouring of cold water on the
masses who applaud out of enthusiasm. The fifth is a ban on naming places
after persons. The sixth is a ban on placing Chinese comrades on a par with
Marx, Engels, Lenin or Stalin. Our relationship to them is one of pupils
to teachers and that is how it should be. Observance of these regulations
is true modesty.

In short, we must remain modest, be willing to learn, retain our perseverance
and adhere to the system of collective leadership so as to achieve socialist
transformation and attain victory for socialism.

NOTES


1. This new tax system was introduced in December 1952
and put into effect in January 1953. Though nominally entailing "equality
between public and private enterprises", in reality it lightened the tax
burdens on private industrial and commercial enterprises and increased those
on state and co-operative enterprises, thus serving the interests of the
capitalists at the expense of the latter. Soon after Comrade Mao Tsetung
made his criticism, this error was corrected.

2. Chang Tzu-shan was at one time secretary of the Tientsin
Prefectural Committee of the Chinese Communist Party. Corroded by the
bourgeoisie, he degenerated and became a big embezzler and was sentenced
to death during the movement against the "three evils".

3. The movement against the old "three evils" was the struggle
launched in 1951 against corruption, waste and bureaucracy. The movement
against the new "three evils" was the struggle launched in 1953 against
bureaucracy, commandism and violations of the law and of discipline.


4. These commissioners were the administrative heads of
the commissioners' offices which were agencies of the provincial and autonomous
region people's councils and had jurisdiction over several counties.

Transcription by the Maoist Documentation Project.