Description
Given the near-silence in technological and business history about post-World War II socialist enterprises, this book gives voice to a generation of Communist China’s managers, entrepreneurs, cadres, and workers from the Liberation to the early 1970s. Using recently-opened online archival resources, it details and assesses the course of technical and organizational experimentation at state-owned, cooperative, and private enterprises as the PRC strove to construct a socialist economy through trial-and-error initiatives. Core questions treated are: How did Chinese enterprises operate, evolve, experiment, improvise and adjust during the PRC’s first generation? What technological initiatives were crucial to these processes, necessarily developed with limited expertise and thin financial resources? How could constructing “socialism with Chinese characteristics” have helped lay foundations for the post-1980 “Chinese miracle,” as the PRC confidently entered the 21st century while Soviet and Central European socialisms crumbled? And what might current-day Western managers and entrepreneurs learn from Chinese practice and performance a half-century ago? Readers can anticipate a granular, bottom-up analysis of how businesses worked day-to-day in a planned economy, how enterprise practices and technological strategies shifted during the first postwar generation, how managers and technicians emerged after the capitalist exodus, how organizations experimented and adapted, and how the controversies and convulsions of the PRC’s early decades fashioned durable technical and organizational capabilities. Philip Scranton is Board of Governors Professor Emeritus, History of Industry and Technology, at Rutgers University. His publications include eighteen books and over eighty scholarly articles. Preface. A brief discussion of the project’s origins and its distinctive resource base in recently digitized and as yet little-used archives, closing with acknowledgements. Introduction. This sets the scene for post-1945 China, emphasizing World War II and Civil War destruction (though highly variable regionally), and key challenges facing the nation in 1949. These include dealing with a fragmentary and incomplete infrastructure, repeated cycles of natural disasters, and the legacy of several centuries of foreign interference and manipulation. China prioritized self-management and self-sufficiency to exclude Western incursions, but this hampered addressing the first two challenges. Then follows is a thumbnail sketch of PRC history from 1949 to 1971, with comparisons to Central European efforts at “building socialism.” The remainder locates this study within business history generally and in relation specifically to Chinese business history, which has largely ignored the Maoist decades. It also presents the study’s central argument – that persistent experimentation with novel organizational and technological approaches to problem solving drew on long-standing Chinese enterprise pragmatism and traditions of emulating exemplary practices, while creating durable, flexible capabilities foundational for the PRC’s emergence as a major economic power. Part I: Business Practice and Technology from Liberation through the Great Stumble, 1949-1961 Chapter 1. Agriculture: Organization and Tools for Self-reliance After summarizing socialist land reform and the transition to basic, then advanced cooperatives, the chapter focuses on a key organizational innovation, the supply and marketing co-ops, which served as local intermediaries for goods and information everywhere in rural China. Replacing predatory loan and purchasing practices from Old China, SMCs were charged with demonstrating socialism through fairness; in a sense they were daily evidence that revolutionary change had commenced. Yet SMCs and the communes that followed were imperfect devices. Weakly-trained cadres were consistently overwhelmed by visitors, supervisors, meetings, and the demands of calculating household shares of collective revenues. Situated accounts of missteps and failures and efforts at correction and re-centering will document ongoing experimental practices on the ground, not least the discoveries that mechanization involved better farm tools more than tractors, and that attending to maintenance and repair tasks was fundamental. The chapter closes with the decade’s greatest error, the Great Leap Forward’s rush to rural development through which “rocks for brains” officials triggered China’s last famine. [No subheads.] Chapter 2. Infrastructure as Labor Intensive Development At Liberation, China’s transportation, water management, and power infrastructures were both fragmentary and fragmented, yet the new state was capital poor facing massive repairs and unmet needs. The socialist solution was a two-track construction program, with major railways and dams/reservoirs/power stations directed and funded from Beijing, while thousands of middling to small projects were tasked to counties and towns through provincial authorities. Initially People’s Liberation Army troops worked on repairing and extending railroad (5000 miles of track and 2700 bridges in the early 50s), but in time 20 million peasants spent off-season months moving billions of cubic meters of local earth and stone to keep back floods and assure adequate roadways for getting crops to railheads. Focusing on ground-level actors, the chapter revisits “big project” work processes, county-level experiments and the shortcomings that both exhibited when urgency trumped attention to detail in construction. With the Great Leap’s collapse, “small and local” schemes to provide electricity, building materials, and chemical fertilizer gained traction, initially clumsy efforts that proved valuable as first steps toward rural industrialization and as capital-saving investments. [No subheads.] Chapter 3. Commerce and Socialist Construction Soviet revolutionaries regarded private merchants and traders as “unproductive” and eliminated them. This wasn’t feasible in the new PRC, even if it were a correct application of Stalinist “theory.” China had no state capacities or personnel to replace 2+ million commercial actors, so instead undertook to harness their wholesale and retail skills through first encouraging, then pressuring them to join private-public partnerships and sales cooperatives. Even then, the state had few facilities to supervise these operations or school their owner-managers in the rudiments of socialism. Yet such merchants proved critical to managing markets and contracts bringing rural foods and handicrafts to cities and delivering industrial goods to farming districts. Enthusiasts for the Great Leap forbade the operation of rural market fairs, some of whose histories stretched back centuries, but once the Leap stumbled, the fairs roared back into prominence, with state commercial and economic publications recounting best practices and pitfalls to be avoided. Wholesalers developed market relations outside official channels and “unlicensed” traders multiplied to the extent that fears of “spontaneous capitalism” mounted among Maoist cadre, revealing fracture points about commercial activity that would crack wide open in the next decade’s Cultural Revolution. [No subheads] Chapter 4. Industry From Trial-and-Error to Technology Reform In 1950, what remained of China’s steel, machinery and metalworking industries had all been constructed by foreigners. The USSR stepped in during the 1950s to sponsor and equip over a hundred new plants, but operating and maintaining them proved a nightmare until sufficient numbers of experienced workers emerged. “Horror stories” will be recounted: of machinery destroyed for want of lubrication, of raw materials and spare parts decomposing in storehouses or of workers’ shop floor short cuts gone dreadfully wrong. “Light” industry (textiles, ceramics) employed antique machinery left over from UK and Japanese mills. With state capital prioritizing “heavy industry,” its managers and workers had to improvise repairs and workarounds that would keep factories going and meet plan quotas. Millions of handicraft workers, urban and rural, faced difficulties in getting raw materials, a problem solved by joining experimental cadre-led co-ops which contracted for marketing and payments while seeking hard-currency-generating fine goods. Both heavy and light industries often met quantity targets by ignoring quality, a deficiency highlighted in the late 50s/early60s Technological Revolution campaign, a drive to reduce waste, upgrade machinery and tools (without state subsidy), and unleash workers’ creativity in cutting bottlenecks, costs, and material inputs. Tales of ingenuity compete with accounts of regrettable pratfalls for attention here, but the larger story concerns cultivating bottom-up innovation through encouraging and rewarding worker initiative. [No subheads.] Part II: Recovery, Reversal, Resilience : Business Practice and Technology, 1961-1971 Chapter 5. Agriculture as the Foundation Post-leap rural recovery entailed reforms pushing responsibility down the organizational structure to production teams and brigades (huge communes had proved unwieldy), prioritizing agriculture requirements over industrial needs, building rural production facilities and free-standing electric stations, and supporting market-responsive activity by farmers and craftsmen. Yet rural cadres and managers were persistently undertrained and overburdened, and often failed to constrain households eagerness to grow, make, and trade – some even abandoning rural life for illegal entry to town and city commercial circles. Controversies arose over everything from prohibiting eating frogs (they consumed kilos of insects) to surging market fairs (handling an estimated 25% of rural production). Self-reliant counties helped co-ops build small plants to make tools, cement, and fertilizer with local, not central resources. Thereby decentralization opened spaces for steps toward greater rural prosperity, but undermined revolutionary values. [Subheads: The Four Modernizations and the Four Magic Wands: Building Rural Socialism; Updating Agriculture Through Refocusing Industry; Intensification and Diversification in Agriculture] Chapter 6. Infrastructure: Reappraisal and Reorientation Shifting capital spending toward agriculture dramatically reduced the flow of infrastructure projects in the early 1960s, a slide intensified by the withdrawal of Soviet experts and the cutoff of construction equipment and spare parts from the USSR. Railway building essentially ceased and water management efforts slowed. Still, the time had come for more systematic organization and management of all infrastructure systems, through drafting a comprehensive manual for freight and passenger train operations or with intensification of worker training through campaigns contrasting local work routines with best practices elsewhere in the PRC. By 1964, major dam and reservoir projects re-started, with “thousands of computations” replacing the mass urgency of their 1950s predecessors. Comparably widespread efforts undertook to repair and renovate hastily-built or pre-Liberation power stations, railways, and irrigation systems, with Chairman Mao’s Thought empowering veteran workers and cadres to convene discussion sessions that determined priorities and tabled plausible innovations. Formalized in the Design Reform Movement, “red” pressures mounted on construction “experts” to get out of their offices, go to sites to design “on the spot,” and learn how best to proceed from local cadres and workers. [Subhead: Design Reform: Confronting Bureaucracy, Building Collaborations] Chapter 7. Commerce and the Market Surge During the post-Leap “adjustment period,” commercial organizations stressed meeting demand with supply, displacing prevailing 1950s “just ship it” practices which resulted in warehouses crowded with unwanted tools, fabrics, or straw mats. SMCs became central to quality assessments, to two-way information transfers, and to rebuilding traditional channels for inter-regional trade, disrupted by administrative interventions and the Leap’s disarray. Extending trade connections increasingly meant ignoring regulations that aimed to control market activity, pricing, and goods transportation, as multiple examples show. Yet with state policies and state managers focused on reorienting industry to support agriculture, enforcing such strictures was impossible. SMCs and wholesalers now experimented with commissioning production outside the plan, contracting for deliveries at negotiated prices, and privately arranging inspection and transport. So too did urban retailers being contacting, for example, shoe factories to design, fabricate and deliver footwear to order, while at the same time striving to improve customer service through staff classes studying Mao’s essays. To leading Maoists, the market surge threatened to repave the “capitalist road.” [Subheads: Rural Commerce in the Adjustment Period, Urban Commerce during the Adjustment Period] Chapter 8. Consolidating Industry Central to early 1960s industrial development was conserving resources and achieving a fresh balance between allocations for and expectations from heavy, light, and handicraft/rural manufacturing. Avoiding waste and generating consumer products that met peasants’ needs and stimulated their commitments to collective and household production became touchstones for enterprise practice during the post-Leap “adjustment period,” once the 1950s emphasis on steel and machinery sectors eroded. The principle of “self-generation” which underlay Leap enthusiasms was not abandoned, but rechanneled into guidelines for the next phase of building socialism. As before, conflicts and errors proved unavoidable, but experimentation continued with interfirm technical cooperation, loaning work teams from “advanced” plants to “backward” or beginner enterprises, and using traditional tools and practices to undertake large projects, such as the 12,000 forging press built at Shanghai’s leading shipyard. By mid-decade, tensions between permanent and temporary workers and between political cadres and practical managers escalated into expert-vs-red struggles, as in the Design Reform Movement, just ahead of the Cultural Revolution. [Subheads: Machinery and Heavy Industry; Rethinking Metal Trades’ Management and Practice; Specialization and Coordination; Workforce Education; Light Industry; Handicrafts] Chapter 9. Business Practice and the Cultural Revolution The Cultural Revolution was not planned to address economic issues, but it did have sharp, if fleeting impacts on enterprises, disrupting managerial practices that at times resembled Old China clientelism combined with New China opportunism. While bitter and often violent struggles exploded at major urban plants in Shanghai, Wuhan, and elsewhere, and while Red Guard travels disrupted railway traffic for a time, the realms of commerce and agriculture were less affected. Indeed, a massive “Third Front” capital construction campaign in the west surged in 1965, was interrupted at the height of disturbances and resumed “heroically” in 1968, staffed by hundreds of thousands of construction workers, among whom were many defeated Red Guards. As well, drives to strengthen rural small industry, especially the repair and maintenance of agricultural, irrigation, and transport technologies, presaged national “industrialize the countryside” efforts in the 1970s. As the CR waned, CIA analysts judged China’s communist enterprise networks were stronger than at any time since Liberation, even if its politics remained chaotic. [No subheads.] Conclusion. Issues and Implications Here, following a thumbnail sketch of China’s business progress from the early 1970s into the 21 century, a review of key characteristics of enterprise practice (experimentation, pilot projects, collaborations, resource and capital conservation, emphasis on maintenance, learning by doing) will suggest deep continuities between the Maoist decades and the Deng’s market-opening era. Though these resonances are not currently valued or validated, given China’s political climate, engaging them is a worthwhile strategy for contemporary business actors, within or beyond the PRC.
