Comments on the Article “Party Groups of Various Financial and Economic Ministries Discuss ‘Economic Problems of Socialism in the USSR’” (November 24, 1958)

Comrade Shang Kun [1]: The first piece [2] is to be circulated to all comrades.
Mao Zedong November 24 Return after use.
Printed from the manuscript.
Notes [ ] Shang Kun refers to Yang Shangkun, who at that time served as an alternate member of the Secretariat of the CPC Central Committee and Director of the General Office of the CPC Central Committee. [2] Refers to the article “Party Groups of Various Financial and Economic Ministries Discuss ‘Economic Problems of Socialism in the USSR’,” published in No. 36 of Economic News.

During the discussion, several points were raised: ( ) On the laws of socialist economy.
Some comrades pointed out that Stalin had formulated a basic economic law and a law of planned, proportional development.
The former—“to satisfy the people’s needs to the greatest possible extent”—was put forward as the antithesis of capitalism’s pursuit of maximum profit, while the latter—“planned development”—was presented as the opposite of capitalism’s anarchic mode of production.
However, there was a lack of coherence and internal connection between these two laws.
Subsequently, Soviet textbooks on political economy added two more principles: the law of distribution according to work and the law of continuously rising labor productivity.
Far from remedying Stalin’s shortcomings, this only further muddled the issue.

Other comrades argued that the essence of the basic economic law lies in “developing production and satisfying needs.”
To maximize the satisfaction of the people’s living requirements, it is imperative to expand production at the highest possible rate.
Therefore, it follows logically from the basic economic law that the national economy should first and foremost pursue rapid development, with planned, proportional growth coming second.
Simply emphasizing proportional relationships without stressing speed fails to capture the distinctive features and fundamental demands of a socialist economy.
The Soviets regarded equilibrium as the fundamental method of planning; they overemphasized balance and planned, proportional development while neglecting to prioritize the pace of growth.
As a result, their plans tended to be drawn up in a cautious, steady manner.
Although the rate of development was not slow, it certainly did not qualify as rapid.
Planning and proportional relations must serve to ensure rapid production, never to constrain it.
What we need is not static proportionality but dynamic proportionality—one that evolves alongside rapid development.

Some comrades noted that Stalin’s basic economic law, when explaining how to achieve continuous growth in socialist production, focused solely on “advanced technology” while ignoring the role of human agency.
In his essay “The Great Beginning,” Lenin wrote: “Communism is a higher level of labor productivity than capitalism, brought about by workers who are voluntarily and consciously united and employing advanced technology.”
Lenin not only emphasized “advanced technology” but also “voluntarily and consciously united workers,” making his formulation clearly more comprehensive than Stalin’s. Stalin’s assertion that technology determines everything shares the same deficiency as his overall conception of the basic economic law.
Guided by such a technocentric, depoliticized, object-oriented mindset that disregards the human factor, one tends to calculate only the potential of machinery and equipment, failing to fully appreciate the immense power unleashed by the enthusiasm and creativity of the working masses.
In doing so, the crucial dimension of striving for rapid development is effectively abandoned.
The Soviet Union also advocated harnessing the initiative of the working people, yet its approach consisted solely of material incentives, without supplementing these with political and ideological education.
Consequently, this to some extent hindered the rapid development of the national economy.

(2) On proportional relations.
What exactly are proportional relations?
Some comrades suggested that, in essence, they refer to the interrelationships among the various sectors of the national economy under socialism.
It is important not to confuse the law of planned, proportional development with specific proportional relationships within economic activity or planning.
While the law remains constant, proportional relations are ever-changing.
The task of planners is not to maintain pre-existing proportions but rather to continually establish new, more appropriate ones.
Based on this understanding, participants concluded that proportional relations are neither fixed nor something that must always proceed “in proportion” across the board.
Instead, they should be regularly disrupted during the course of production, replaced with new arrangements, moving through phases of imbalance toward fresh equilibria.
Mechanistic conceptions of balance and proportionality must be discarded, as they tend to stifle the vibrant, mass-driven momentum of the movement.
At the same time, it is equally necessary to reject the view that one should simply act without regard for proportion or equilibrium, leaving matters to chance and thereby fundamentally negating the very idea of planning.

(3) On planning methods.
Some comrades observed that, under the influence of the aforementioned Soviet thinking, our own planning work has also exhibited certain shortcomings, such as an excessive emphasis on achieving balance at all costs, often by accommodating weaker links; reliance on so-called “average advanced norms,” leading to an underestimation of production potential—particularly the untapped potential of the working people following the liberation of their minds.
In the course of the discussion, several key lessons were distilled from our planning experience: First, adopt unified planning combined with tiered management, with regional units taking the lead and sectoral departments playing a supporting role.
Second, place politics at the helm and follow the mass line.
Third, employ a dual-accounting system, aiming for rough overall balance while actively overcoming, rather than accommodating, weak links, thus attaining a positive equilibrium.
Fourth, conduct several major reviews and adjustments each year, making ongoing fine-tuning through practical implementation.
Fifth, when executing the plan, guide the national economy to develop in a wave-like pattern: focus on a central task, highlight a priority area, and use it as a driving force to propel other sectors forward.
This article was distributed at the Wuchang Conference as an official document.