Part 12 .Origin of Deng’s Reform – the Case of Labor Reform by Pao-yu Ching

History of Market Socialism

Deng Xiaoping seized power after Mao’s death and formally began his Reform after the Third Plenary Session of the Eleventh Congress of the Chinese Communist Party in December of 1978. When Hart-Landsberg and Burkett explain how Deng began the Reform and how the capitalist restoration has continued for the past twenty-five years, they searched for reasons beyond personal greed and explained that the capitalist restoration, once started, generated “structural contradictions” that have kept it going.

We, of course, have to look for reasons other than personal greed to explain the political, economic, and social development in China or in any other countries; however, Hart-Landsberg and Burkett seemed to imply that the Reformers did not have a clear idea about their Reform programs and that they indeed have been “crossing the river by touching the stones” – a famous saying of Deng Xiaoping and – and once the Reform got started it seemed to generate enough contradictions to keep it going.

However, if we look into the history of struggle in China, we would reach a very different conclusion. Deng’s Reform programs--the dismantling of the Commune, the privatizing of state-owned enterprises, the Labor Reform, the opening up of the economy to foreign investment, and many others--all have their origins long before 1979. Deng and his predecessor and mentor, Liu Shaoqi, tried repeatedly to institute these programs since the 1950’s. Therefore, contrary to what Deng openly said, the Reform that began in 1979 not only had a clear direction but also a well-planned road map.

One example of this plan is the history of the post 1979 Labor Reform that Hart-Landsberg and Burkett documented. Contract Labor instituted in 1986 was part of the overall Labor Reform that abolished the permanent employment system in State-owned enterprises, and it has its origin in the 1950’s. My co-author and I wrote the following in “Labor Reform - Mao vs. Liu – Deng” in 1993:


...The Labor Contract System, implemented since the beginning of the Reform, did not originate with the current reformers. As early as the 1950's Liu Shaoqi began advocating the advantages of the Contract Labor System. An essay from the recently published Labor Contract System Handbook revealed the history of Liu's attempts to institute temporary contract workers in state owned factories.[ii]

The essay stated that in 1956, Liu sent a team to the Soviet Union to study their labor system. Upon its return, the team proposed the adoption of the Contract Labor System modeled after what the Soviet Union had adopted. However, when the changes were about to take place, the Great Leap Forward started, thus interrupting its implementation. The essay continued in stating that in the early 1960's Liu again attempted to change the permanent employment status by adopting a "two-track system," enterprises were to employ more temporary and fewer permanent workers, and the mines were to employ peasants as temporary workers.

Then, in 1965, the State Council announced a new regulation on the employment of temporary workers, indicating that, instead of permanent workers, more temporary workers should be hired. The regulation also gave individual enterprises the authority to use allocated wage funds to replace permanent workers with temporary workers. Again, according to the author of this essay, the Cultural Revolution interrupted Liu's effort to reform the labor system, and, in 1971, large numbers of temporary workers were given permanent status. Although Liu could not fully implement his labor reform, he had "experimental projects" going on here and there, and before the Cultural Revolution began, large numbers of temporary workers had been hired.[iii]


The author of Labor Contract System Handbook expressed his regrets that these earlier efforts to institute labor reform failed, and he stated that if there had not been the Great Leap Forward and the Cultural Revolution, it would have been possible to carry out these Labor Reform long before the current time.

In fact, Liu-Deng and their allies had a plan to develop capitalism in China since the 1950’s. The afore-mentioned Labor Reform was only one of the many projects they prepared to carry out. Their plan to develop capitalism in China before 1979 consisted of projects to be implemented in every economic, political, social, and cultural sphere. This short essay only allows a brief discussion of one of many projects. The purpose of this discussion is to show the current class struggle in China so carefully documented by Hart-Landsberg and Burkett has its origin. From what to be discussed below, it is not difficult to understand from this one example of Labor Reform how Deng’s Reform was diametrically opposed to that of Mao’s. That was and is the precise reason for the past and current class struggles in China

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