The issue of the people’s communes. Should we expand the natural economy, or the commodity economy, or both? It is incorrect to say that the economy of the people’s communes is primarily natural. In Xushui, factories have been set up, yet the workers do not engage in any exchange with the farmers—how are they supposed to eat? The communes should develop in two directions: they must simultaneously expand commodity exchange. Without exchange, consumption is impossible; without expanding exchange, wages cannot be paid. The prosperity of the suburban areas around Beijing and Tianjin stems precisely from the development of commodity production and the ability to engage in exchange.

The administrative zones are akin to commissioner’s offices. In Xushui County, everything is organized into communes, with administrative zones above them and then the county-level commune at the top. While tiered management is necessary, too many levels are undesirable. There are issues of institutional structure, of work style (the distinction between different types of contradictions), and of production (avoiding monotony by producing as much as possible for exchange—within the province, across the country, and even internationally).

We start from a position of “one poor and two blank”—the poorer we are, the more readily we tend to embrace radical measures. Now is not the time to boast about wealth. The People’s Liberation Army and the Party embody this collective will. Within the military, everyone is provided with food; since ancient times, the army has relied on communal cooking—the “big pot.” This reflects collectivization, combat readiness, and militarization. King Wu’s campaign against Zhou was likewise conducted under such principles.

[Comrade Chen Boda interjects: A single commune per county offers several advantages: (1) unified allocation of labor; (2) centralized fiscal revenue; (3) uniform distribution of products; (4) standardized wage payments (across different administrative zones). Over the next two to three years, it may not be necessary to strive for complete wage parity. Wage levels can be aligned as production develops, but maintaining some differentiation at present is beneficial. (5) Tiered management allows for the mobilization of initiative at all levels. Management could even be structured in four tiers. (6) Compliance with the state’s unified economic plan and profit remittance targets remains essential. Comparing a single commune per county with multiple communes within a single county: ① Unified labor allocation is feasible in either case, though joint communes find it harder to ensure consistent supply…]

Unity means unifying what can reasonably be unified. However, past central directives were always conditional; unconditional obedience is erroneous. The notion of unconditional submission to Party leadership is equally wrong. If a directive is incorrect, one need not obey it. We must dispel this superstition. At all times, there are conditions governing action. We should reject the doctrine of conditions while refraining from establishing new ones.

[Comrade Chen Boda continues: ② Each sub-commune within a joint commune operates on a self-sustaining budget, yet the joint commune may also draw upon a portion of each commune’s accumulated funds. ③ Coordinated distribution of commodities is easier when there is only one commune per county; multiple communes complicate this task. ④ Centralized fiscal accounting: within the confines of a single county, a single commune may be regarded as having a character akin to public ownership. However, such a designation cannot yet apply at the provincial level.]

At Anshan Iron and Steel, a worker earns 800 yuan, while the value of his labor output amounts to 18,000 yuan. After deducting 7,200 yuan for raw materials and other production costs, a surplus of 10,800 yuan remains—this constitutes national income. It is divided into two parts: one part is consumed as wages, totaling 800 yuan, while the other forms the state’s public accumulation fund. Communes operating at the county level can thus be seen as either small-scale public ownership or large-scale collective ownership.

Agriculture rests on two pillars: (1) Deep plowing. With deep cultivation, less seed is required, pest control becomes easier, and water retention improves. Deep, meticulous tillage yields more with less planting, whereas shallow, haphazard tillage results in lower returns despite greater input. By cultivating just one-third of our existing arable land—approximately 600 million mu—we could achieve significant gains. This would be the first step, with further reductions possible thereafter. Currently, average yields stand at 200 jin per mu; if future yields were to reach 10,000 jin per mu, why bother planting so extensively? (2) Mechanization, though not solely through tractors. New machinery must be developed to free up agricultural labor for industrial pursuits, focusing primarily on the integration of workers, peasants, students, and soldiers.

Workers must be guaranteed six hours of sleep during busy periods and eight hours during slack times. Such provisions should be enforced to ensure adequate nutrition and rest. Six hours for sleep, one and a half hours for meals, leaving fourteen and a half hours for work and recuperation. These requirements must be formally mandated; otherwise, tasks will not be completed. Proper nutrition and sufficient rest lead to better outcomes. The eight-hour workday was debated in the British Parliament, where one capitalist argued that it benefited employers by enhancing productivity, after which it was adopted. To promote sound sleep, a midday rest period should be instituted.

Meals must be substantial, nutritious, varied, and served hot. A special feast should be arranged once a month. Breakfast fuels morning labor, while lunch sustains afternoon activity; these matters deserve serious attention. As we currently endure such grueling efforts, adverse consequences may only become apparent years later.

There is another crucial aspect: the proper care of young children. Children account for 25 percent of the population. No one wishes to work in nurseries, nor does the canteen assign capable personnel to manage them—this reflects a focus on material things to the exclusion of human needs (“seeing steel but not babies”). Ensuring high-quality childcare is even more important than family-based care. Issues related to feeding and sleeping are fundamentally human concerns; failure to address them properly can lead to collapse. Therefore, competent individuals must be assigned to these tasks.

Over the past two months, since the Beidaihe Conference, we have employed mass mobilization campaigns to rapidly boost steel production, organizing workforces and initially acquiring technical skills. Converting tens of millions of agricultural workers into industrial labor represents a major shift—a new social division of labor (albeit not entirely rational). Next year, we will establish fixed sites for integrated enterprises combining coal and steel production, upgrading technology along lines such as “small-scale local methods,” “medium-scale local methods,” and collective approaches. Mining, coal extraction, smelting, and transportation must be organized more rationally. Many workers will also be reassigned to other “small-scale collectives” focused on aluminum, coal, petroleum, and machinery, thereby freeing up additional agricultural labor. In the future, agriculture will increasingly rely on women and children, with men playing a supporting role, while steel production will be dominated by men, supported by women.

Communes should intensify commodity production. Presently, self-sufficiency is often regarded as prestigious, whereas producing goods for sale carries a negative connotation—this is undesirable. We must expand commodity production and broaden social exchanges.

Fertilizers should primarily consist of human and animal manure, pond sediment, ditch mud, wall soil, stable manure, green manure, and other organic sources. We should use far less chemical fertilizer and rely more heavily on locally sourced, soil-based alternatives. Achieving yields of several thousand jin per mu does not depend on ammonium sulfate. A small amount may be used, but it should not constitute the main component. Tractors should play a limited role, again not serving as the primary tool.

Operating on a commune- or joint-commune basis, we should pursue both agricultural and industrial activities concurrently, developing both use-value and exchange-value in tandem. To support this dual approach, extensive improvements to the transportation network are imperative.

Based on population figures, Britain has 50 million people and produces 25 million tons of steel. China, with a population of 700 million, aims to produce 300 million tons. But what purpose would such a massive steel output serve? One viable solution lies in constructing and repairing bridges and roads.