Xushui’s system of public ownership cannot be regarded as the establishment of socialism. It is small-scale public ownership combined with large collective ownership, where human, financial, and material resources cannot be centrally allocated. This point must be made clear. Confusing the two is detrimental. Many cadres today are unclear on this issue; to say otherwise is labeled “rightist.”

There are two forms of ownership—public and collective—but only one plays the decisive role: that which allows for central allocation. If resources cannot be mobilized under national direction, it cannot be considered true public ownership. Once products under public ownership are subject to such allocation, they cease to be “commodities” in the sense understood by political economy. Without achieving the “two transformations,” there can be no abundance of goods, no direct exchange, and no abolition of commodity exchange.

In addition to the three major distinctions—between workers and peasants, between urban and rural areas, and between manual and mental labor—we must also include the distinction between skilled and unskilled labor.

At present, our relations of production still move from small collectives to larger ones. Mutual-aid teams embody the embryonic form of socialism; these evolve into primary cooperatives, then advanced cooperatives, and finally people’s communes. The practice of keeping private plots was abolished, the scope of operations expanded, and education, communal dining halls, and childcare all became social responsibilities. The patriarchal family system was dismantled, and meals were provided free of charge—these represent significant changes. However, all these transformations occurred within the confines of a single commune or county and had no impact beyond those boundaries. From a national perspective, they do not yet constitute a fundamental change. In this respect, Xushui falls short of Anshan Steel, although its policy of free meals does represent progress over Anshan. Some localities have now abandoned fixed quotas, instead determining work assignments based on labor intensity, technical skill, and attitude. Both quota-setting and wage payment methods have thus been altered.

The people’s commune is the basic unit of a social structure integrating industry, agriculture, the military, education, and commerce. Its primary function is to organize production and daily life, while also retaining certain functions essential to state power. Unfortunately, some people fail to understand that the role of state power lies in supervising and reforming landlords, rich peasants, counter-revolutionaries, and bad elements, as well as in safeguarding socialist construction against external threats—not in resolving internal conflicts among the people. Misuse of state authority to address intra-communal disputes, such as a battalion commander beating a company commander, constitutes coercive commandism. The commune emerged as a product of the Great Leap Forward; it was not an accidental development but rather the optimal form for realizing the two transitions. Large in scale and publicly owned, it facilitates the transition and will serve as the grassroots unit of future communist society.

The law of value is merely a tool for calculation, not for regulating production. Stalin’s writings contain many valuable insights.

True public ownership requires centralized allocation of products.

When you return to convene meetings and solicit opinions, avoid mentioning that a meeting has already taken place in Zhengzhou. Do not rush to declare whether a given arrangement constitutes public ownership or even communism, nor should you hastily assess whether it contains any communist elements. Avoid immediately disseminating resolutions. The family must be abolished; insincere rhetoric—loudly espousing leftist slogans while omitting crucial details and disintegrating familial bonds—is unacceptable.

County-level federations of cooperatives differ from the “one commune per county” model. The latter tends to produce autocratic leaders akin to Qin Shi Huang, whereas federations are less prone to such outcomes. Being a “Qin Shi Huang” is no easy task. Xushui County had effectively become an independent kingdom, making numerous decisions without consulting the provincial or prefectural party committees, leaving those bodies powerless to intervene.

Xushui is inferior to Anguo. Henceforth, we should promote Anguo rather than Xushui. Xushui merely gathered its best pigs to display them to visitors, failing to adhere to factual accuracy. Similarly, reports from some areas regarding the number of “satellite” steel furnaces were often exaggerated. Such practices must be rectified; we should combat exaggeration, uphold truthfulness, and reject falsification. Major policies and guidelines should be carefully deliberated, and leading organs must remain clear-headed.

Poor accountability in field management leads to inefficiency. We should implement a responsibility system to prevent chaos, ensure coordinated planning, and adopt a “three-thirds” approach to future distribution of outputs.

Urban communes should be established, albeit in a phased manner. Beijing and Shanghai might proceed more cautiously. Rushing ahead could create problems like those encountered by Huang Yanpei. A city functioning as a commune would likely resemble a federation, requiring a solid economic foundation of its own. Rogov supports our commune model, noting that Soviet communes in the past focused primarily on consumption, whereas our people’s communes are organized around production. Urban areas fall into two categories: those dominated by large factories, where residents may seek to exploit welfare benefits, necessitating greater openness in this regard. Large factories and universities belong to the state; their employees can join the commune, though managerial personnel and production resources remain under state control. A limited amount of welfare funding may be allocated to help establish satellite enterprises, allowing participants to enjoy communal rights while fulfilling their obligations. This reflects the relationship between state-owned enterprises and the commune, a dynamic mirrored in the military as well.

Stalin’s final letter contains almost entirely erroneous assertions, claiming that handing machinery over to collective farms represented a step backward.

Communes should not be tasked with undertaking various assignments on behalf of factories, enterprises, or schools serving the entire nation or province; such entities generally lack the capacity to be placed under communal administration. Failure to observe this principle can lead to serious problems—for example, a pharmaceutical plant in Shijiazhuang nearly ceased operations when its staff were diverted to deep plowing and steelmaking.

Workers create substantial value and therefore ought to receive slightly higher compensation than farmers. Next year, we should consider compensating for losses incurred by abolishing piece-rate wages while simultaneously providing a modest increase.

Large collectives versus small freedoms. Each household maintains its own cooking facilities. The traditional family, as a historical institution, has been undermined: certain aspects of consumption persist, much of child-rearing remains intact, and reproductive functions continue to exist. However, the patriarchal system and the ties of money and kinship have been broken, giving way to universal social insurance. China’s old-style family embodied a kind of “family communism”: every household enjoyed free meals, yet inequality persisted.

As for rest periods, commune members are entitled to at least two days off per month (five days for women, with particular emphasis on menstrual rest). Ultimately, we aim to achieve a six-hour workday and a four-hour study period. Different standards should apply to capitalists, professors, democrats, actors, and athletes.

Capitalists’ fixed interest income need not be abolished (it can be waived if desired, but this should not be announced), and participation in the commune is entirely voluntary. Matters concerning cadre remuneration require careful consideration. Pilot programs should be conducted first, and announcements should be delayed (for instance, reducing Party members’ salaries need not be publicly proclaimed).