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## Poverty and Development (3rd edn)

Tim Allen and Alan Thomas
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# p. 34116. Socialist Models of Development and the Rise of China

• Guoer Liu
•  and Andrew Kilmister

### Abstract

This chapter situates examples of socialist development within wider historical contexts, and discusses their evolution, consequences, and potentials. The state socialist model of development emerged out of a particular historical experience, that of the USSR following the Bolshevik revolution. However, the problems faced by the Bolsheviks were of a general nature, and the industrialization achieved in the USSR thus appeared to offer lessons for other countries attempting to develop and industrialize. But the model proved to be of more limited applicability than had been hoped when applied elsewhere. The rise of China may present an alternative path to many, but the extent to which it is unique and whether it could be characterized as a 'socialist development model' remain controversial. In addition, the reforms in China have been accompanied by many challenges. As the world economy has become more interdependent, the concept of a nationally based socialist road to development has been called into question.

### 16.1 Introduction

A socialist path to development was adopted by the Soviet government following the Russian Revolution, and was taken up in a variety of forms by many other countries, especially in the years before and after the Second World War. When the concept of the Third World became widely used in the 1960s, it highlighted the idea that there was a Second World, made up of these socialist, or communist, states. At the end of the Cold War, great claims were made about the triumph of capitalism and liberal democracy, and the expected demise of other approaches. State socialism would become a thing of the past, abandoned as a series of failed experiments. However, matters have not worked out like that. Several governments have retained a socialist orientation and some are still governed by communist parties. Also the continued rise of China has stimulated discussions of both the legacies and the prospects of socialist models. Recently, the apparent relative success of China, Vietnam, and Cuba in initially controlling COVID-19 has highlighted the possibility that state socialism may have more of a future than was anticipated. This chapter situates examples of socialist development within wider historical contexts, and discusses their evolution, consequences, and potentials.

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What were the basic tenets of socialist development in practice?

What are the challenges which socialist models of development have faced in the USSR, in China, and in other countries?

What explains the rise of China after 1978? In what ways does China’s development trajectory set aside or sustain a socialist model?

What are the prospects for socialist models of development?

### 16.2 Key features of a socialist model of development

Socialism is a political philosophy based on ideals of equality, solidarity, and freedom from oppression. It advocates workers’ self-management and common ownership of the means of production. In Marxist theory it is a social state which occurs after the overthrow of capitalism, but is regarded as transitional towards the eventual realisation of communism.

Socialism has taken on many forms, linked to political movements with divergent agendas. Both the nature of a ‘truly socialist’ society and the path to attain it have been hotly debated by socialists themselves. There are some political parties that have socialist ideologies working within liberal democracies, and promote socialist policies within a capitalist framework. However, those socialists working towards more radical social transformations, often inspired by Marxist thinkers, imagine or try to create a completely different world order. That too is a matter of serious disagreement. For some, it can only occur when, as the 1848 Communist Manifesto by Marx and Engels put it: ‘Workers of the world unite!’ For others, it is possible to achieve a genuine form of socialism, in particular communities, or in particular countries. This was a view that was espoused by Leon Trotsky and by Vladimir Lenin in the years before the Russian Revolution, and it could be argued that what Lenin tried to achieve as head of the Soviet government was state socialism, or what his successor, Stalin, promoted as ‘socialism in one country’.

Lenin himself may have never abandoned the expectation that a wordwide communist revolution was inevitable, but he set aside openly fostering it in the early 1920s in favour of formal recognition by the major powers, open trade, and diplomatic relations. His successor, Joseph Stalin, took the process a stage further. He claimed that communism had been achieved in his country, and offered it up as a model to be emulated by others. He also concentrated power in his own hands, and arranged for the exiled Trotsky to be assassinated in Mexico in 1940. Although Trotsky’s more inclusive version of Marxism remained influential, it now seemed to many that if worldwide revolution was to occur, it would probably happen one state at a time under the influence, or even direction, of the Union of Soviet Socialist Republics (USSR).

A prime example of a communist political movement taking up the approach occurred in China, where Mao Zedong’s forces seized control of most of the country in 1949. Relations with the USSR were initially very close, although they deteriorated after Stalin died and his personality cult and violent excesses were denounced by the new Soviet Premier, Nikita Krushchev. The USSR and China even ended up fighting a border conflict in 1969.

By that time, state socialism had been taken up by others states too, including Cuba and countries in Eastern Europe. A few years later, they were joined by many more, including Vietnam and several African countries, while in Latin America socialist factions tried to replicate what had happened in Cuba, with Nicaragua adopting a form of state socialism in 1979 after the Sandinistas forcibly took power.

Despite considerable variation, these and other countries following a socialist road to development have in practice demonstrated the following five economic and one political characteristics.

Economic

1.

Ownership: state ownership of large- and medium-scale industry, with relationships between individual enterprises governed by plans set from the centre rather than operating through the market. In particular, investment projects and the level of investment carried out in the economy are centrally planned.

2.

3.

Labour market: state intervention in the labour market and in the hiring and firing of labour of individual enterprises, often leading to virtually full employment in the economy.

4.

Price: state control over retail and wholesale prices, often associated with shortages of consumer goods at subsidised prices.

5.

Agricultural production: state intervention in agriculture and in the relationship between town and country, often taking the form of collectivisation of farms and delivery of collective farm produce to state marketing agencies at fixed prices.

Political

6.

One-party state: in general, socialist societies are ruled by a single party, claiming to be a Marxist–Leninist party ruling in the name of the working class and peasantry and occupying a ‘leading role’ p. 343in the society. Organised political opposition is not tolerated.

Clearly, the tenets outlined above diverge in several ways from the ideals of equality, solidarity, and freedom from oppression, around which the socialist tradition was formed. Some argue that the divergence is so sharp that these countries are not really socialist at all and should instead be described as ‘centrally planned’. They could even be described as national socialist in that central planning has often been linked to nationalist sentiment and strategy. National socialism is a term linked to fascism, a political ideology that is bitterly opposed to Marxism. Nonetheless, Hitler’s Germany and Stalin’s USSR certainly had characteristics in common. This chapter does not enter into these debates. Instead it focuses on analysing state socialist development policies as they have developed without assessing whether the results live up to any particular Marxist goals. However, as you read this account it will be useful to consider which elements of socialism have not been attained by these societies, and how failure to attain these elements has affected their patterns of development.

### 16.3 The historical evolution of state socialist models

The concept of a socialist model of development being adopted by particular governments would have probably seemed surprising to Marx, Engels, and their immediate followers. The majority of socialists in the nineteenth century thought that large-scale social transition would happen in countries with a high level of industrialisation and a sizeable working class, and that the anticipated socialist revolution would be international. The idea of relatively poor countries undergoing a socialist revolution and then attempting to institute development policies within the framework of the nation state was not one which was widely considered. That began to change in the early twentieth century.

Strikes by workers, mutinies in the armed forces, and peasant protests were all aspects of the revolution that occurred in Russia in 1905. The Tsar remained in power, but was forced to accept constitutional reforms. For socialists, like Trotsky, it additionally showed that there was a possibility of taking political change much further. Trotsky argued that this was necessary, because in countries dominated by imperialism, the working class were the only group in society that could carry out even basic democratic reforms and lay the basis for industrialisation. For this to happen revolution in such countries had to be ‘permanent’ in two senses. First, each country’s democratic revolution (the equivalent to the Civil War of the 1640s in England or the 1789 French Revolution) would have to be transformed into a socialist revolution. Second, that nationally based socialist revolution would have to become international. Trotsky’s analysis was combined by the Bolsheviks with Lenin’s account of a world economy in which imperialism distorted and suppressed national economic development in the non-imperialist and colonial countries.

#### The rise and fall of the USSR

The second Russian revolution in 1917 appeared to offer confirmation of this analysis. The responsibility for industrialising and developing Russia USSR was now placed with the Soviet working class and the Bolshevik Party. However, the revolution never became permanent in the second sense. It remained a national revolution and Lenin’s government was forced to forge a new model of development in extremely beleaguered circumstances of civil war, foreign intervention, and low levels of economic development in most of the country. The challenges encountered by the Soviet state have marked all subsequent attempts at socialist development strategies (see Box 16.1).

#### Box 16.1 Crucial problems in state socialist models of development

There were four interlinked problems faced by the Bolsheviks in Russia, and later by other ostensibly state socialist governments.

1.

International political economy: what relationship should a socialist country have with a generally hostile and more developed capitalist outside world?

2.

Resources: where would the resources for industrialisation and development come from?

3.

Class relationships: what would be the relationship between the (mainly urban) working class (in theory the main beneficiaries and leaders of a socialist revolution) and the most numerous group in the population, the peasantry?

4.

The role of the state: what roles should the state, the socialist political movement, and the government play in building a socialist society?

The dilemma was that it was taken as a theoretical precondition for socialism that industrialisation should take place, yet it was not clear who should finance this industrialisation. In the absence of any significant group of capitalists or landowners in the USSR (these had all been expropriated), only three possibilities suggested themselves: resources could come from abroad via foreign investment; from the working class; or from the peasantry. Foreign investment was unlikely to be forthcoming for political reasons. The working class was too small to provide the necessary resources, and the contradiction of a workers’ party financing industrialisation on the backs of workers was too acute. This implied that the finance for industrialisation would have to come from the peasantry. But this strategy carried the risk that the Bolsheviks would alienate the peasantry, on which they depended for food and other agricultural p. 344products. The question remained: to what extent could a party based on the minority working class intervene shape the process of industrialisation without undemocratic consequences.

The initial policies of the Bolsheviks after 1917 were formulated in response to pressures from outside the party. Large-scale industry was nationalised following factory occupations by workers, and, after land occupations, land was distributed to the peasants. Then in the civil war of 1918–21, the government established a system of total control over the economy as part of the resource mobilisation for ‘war communism’. However, by 1921 it became clear that the system was not viable in the long term, primarily because of severe peasant unrest over the requisitioning of grain. In 1921 Lenin instituted what was known as the New Economic Policy (NEP), the main features of which were state control of large- and medium-scale industry, finance and foreign trade, together with the restoration of market relations between town and country. After paying a tax in kind, peasants could sell the rest of their output relatively freely. Politically, the Bolsheviks emphasised the alliance (or smychka) between the working class and the peasantry.

The immediate effects of the NEP were positive, as it allowed rebuilding of the economy which had been shattered by the civil war. Yet the model was not sustainable and debates over how to achieve further industrialisation raged throughout the party. The key difference revolved around the state’s relationship with the peasants (Erlich 2013; Day 1977). One side argued that industrialisation was not possible without the consent of the peasantry, and therefore that the state should not interfere with the equilibrium between town and country and the USSR could maintain relatively self-sufficient development. But others maintained that taxing the peasantry was necessary to provide resources for industrial production, insisting that the state and party were entitled to shape the path of industrialisation. Therefore, they argued that the agricultural sector should support industrialisation, which would in turn benefit the countryside by increasing the flow of goods from town to country. Additionally, they saw the outside world, despite its capitalist nature, as a possible source of resources and hoped for socialist revolution elsewhere. By 1928, the debate had to be settled: there were not enough incentives for the peasantry to produce enough grain to feed the towns and industrial development was faltering. If the peasantry were to be taxed, they would be even less likely to support the industrialisation effort. Yet without more resources industrialisation could not proceed fast enough to modernise agriculture.

Stalin’s policy in the early 1930s represented an exceptionally brutal response to the problems. The difficulty of obtaining grain from the peasantry was met by forcible collectivisation and grain extraction. The destruction of resources and peasant resistance to collectivisation in the countryside were so great that the agricultural sector was not able to provide a surplus which would finance industrial growth. In fact, in the early 1930s the reconstruction of agriculture was more of a drain on the towns than before. What collectivisation did provide was a massive flow of labour from the countryside to the towns as the rural society shattered. Abundant labour supply limited industrial wages even as the economy grew quickly. The high inflation resulting from printing money restrained the real wage further. In this way Stalinist industrialisation was financed not just by the peasantry, but also, ironically, by the working class in whose name Stalin claimed to rule (Ellman 1975; Morrison 1982; Rakovsky 1982).

p. 345Collectivisation in the countryside was matched by the growth of industrial planning, particularly the famous ‘Five Year Plans’, in the urban areas. The two together acted as a powerful means of cementing control by the party and state over the rest of society. The planning system also acted as a means of mobilising resources and directing them into priority areas for industrial growth. As the planning system became institutionalised, the role of money lessened to become purely a means of accounting for transactions, and goods were allocated to firms through the planning mechanism rather than the market. The planners gradually extended their control to the prices of final consumer goods, as well as industrial goods, and the distinctive model of socialist development became complete. Under the banner of the doctrine of ‘Socialism in One Country’, foreign trade dwindled sharply. This model answered the questions faced by the Bolsheviks in the 1920s clearly (recall Box 16.1): the relationship of the USSR to the rest of the world was essentially hostile, and independence was a priority; the state and the party were to shape the industrialisation process in the name of the working class; workers and poor peasants were in alliance against rich peasants (or kulaks); and the working class and peasantry together were to provide the resources for industrial development (see Figure 16.1).

While it was tremendously harsh and wasteful, this model did allow for dramatic industrialisation in the USSR, and the economy was able to withstand and help defeat Nazi Germany. Following the Second World War, this particular form of socialist development which had emerged from Stalinist industrialisation became attractive, not only to communist parties outside Europe, but also to nationalist movements, which saw it as the only feasible path to industrial development and economic independence in a world dominated by imperialism (see Chapter 13).

However, from 1975 onwards there was a decisive slowdown in the growth rate in the USSR. The reasons for this were complex, but one central factor was that, while the Stalinist model of industrialisation had proved effective for ‘extensive’ industrialisation, which was dependent on drawing new resources of both capital and labour into industry, it was less well suited to ‘intensive’ industrialisation that relied on technological development, increasing levels of skill and using existing resources more efficiently. By the mid-1970s, there were few unused resources in the USSR for further extensive development, and intensive development had now become crucial. Further, as the population became urbanised and educated, the mechanisms of labour control and political repression became ineffective. Productivity ceased to grow. Finally, technological development appeared to require openness to the West in investment and technology. These issues provided the background for the changes which occurred in the USSR after the election of Mikhail Gorbachev as General Secretary of the Communist Party in 1985. The dual programme of ‘restructuring’ p. 346(or perestroika) and ‘openness’ (or glasnost) proposed by Gorbachev was intended to renew socialist development in the USSR through a combination of increased democracy and market mechanisms. However, the result of the policy was the breakdown of the socialist model. Politically, demands for democratic reform increasingly challenged the ‘leading role’ of the party and revived the nationalist movements in several Soviet Republics. Economically, the combination of increased enterprise autonomy and the election of managers led to increases in prices and wages, as well as enterprise tax avoidance. The government budget deficit rose dramatically, which was followed by printing money. The high inflation rate accelerated the collapse of what remained of the planning system.

From 1989 onwards, the USSR became ever more polarised between those within the party who wished to halt the reform process and those reformers and nationalists who argued for further changes. Gorbachev oscillated fruitlessly between these two positions. The failed August 1991 coup by hardliners within the Communist Party provided a context for the latter group to gain ascendancy, which led to the breakdown of the USSR and the explicit adoption of a market economy in the vast majority of the resulting independent republics, including the largest, the Russian Federation (Aslund 1991; Kotz and Weir 1997). The Post-Soviet Russia presented a mixed development track record. While the initial radical economic reforms (i.e. ‘shock therapy’) generated little success, renationalisation since 2000 and oil revenues led to relatively stable growth until 2014 (Shleifer and Treisman 2005; Cooper 2013; Ledeneva 2006; Kottasova 2014). The rise of Vladmir Putin in 2000 changed the political landscape: the super-rich oligarchs were gradually driven out of politics and power has been concentrated at the centre. While the boom in oil price helped Putin deliver social welfare benefits to the population, the government made little progress in diversifying the economy (Gaddy and Ickes 2010). Meanwhile, underneath the high approval rate of Putin is the growing concern over the suffocating political control and personalised rule in Russia (Hille 2016).

#### The Chinese path to development under Mao

Beyond the USSR, the first, and most important, test of the socialist model of development came with the Chinese revolution of 1949. Initially, the Chinese Communist Party followed a path very similar to the Soviet model. The first Chinese Five Year Plan was instituted in 1952, and collectivisation was carried out in 1955–56. It is important to recognise the sheer scale of what the Chinese achieved in these years, including the largest land reform in history (Hinton 1966). However, it quickly became clear that the Chinese case was significantly different from that of the USSR, so the Soviet model of development could not simply be transposed to China: the economy was less industrialised than that inherited by Bolsheviks in 1917 (Riskin 1987); the Chinese revolution was essentially a peasant revolution in a way that the Russian revolution was not; to a large extent China was still not unified after decades of struggle against imperialism and the nationalists; and while the Chinese Communist Party came to power as a military organisation with few formal democratic structures, long dependence on the rural population during wartime made it sensitive to changes in the mood of its supporters (Selden 1971; Snow 2017). Further, rural society and the countryside carried even more weight in terms of population and contribution to the economy than in the USSR. Industrialisation based upon the break-up of rural society was not a feasible project in China.

These differences made it difficult for the Chinese to execute a similar process of industrialisation to what had occurred in the USSR. The Sino-Soviet split in the late 1950s meant that the USSR would no longer provide support to China. In this context, development in China under Mao tended to take the form of mass campaigns as a way to overcome the resource shortage. The most important of these was the ‘Great Leap Forward’ of 1958–61 (Li and Yang 2005), which represented a distinctively different approach to socialist development from the Stalinist path: responsibility for production was to be decentralised radically to more or less self-sufficient territorial units (‘people’s communes’); agricultural produce was diverted to industrialisation; and massive government propaganda mobilised the Chinese people to speed up development almost as an act of will.

However, the Great Leap Forward campaign was unsuccessful. The quality of the industrial goods produced in the rural areas was very poor, and much of the backyard steel production was unusable (see Figure 16.2). Industrial output figures were hugely exaggerated. Agricultural disruption led to a calamitous famine in 1959–61, with an estimated 16.5–30 million lives lost as a result (ibid: 841).

p. 347

Following the abandonment of the Great Leap Forward, the Chinese reverted to a model of development which resembled much more closely the Soviet model. However, a lot more attention was paid to providing resources for the countryside and ensuring balanced growth between town and country than was the case in the USSR under Stalin. Despite the violent political upheavals of the late 1960s and the Cultural Revolution which followed, economic policies remained constant until the mid-1970s as Mao attempted to regain absolute control. The Maoist faction which attained dominance in the Cultural Revolution did not succeed in implementing any significantly different model of development.

#### Socialist development in a wider context

China was by no means the only country in the post-war world where socialist development provided a powerful appeal. There are three main groups of countries where socialist models were adopted in one form or another.

First, and least numerous, were those countries with traditional authorities which had escaped formal colonisation and remained largely separated from the world economy. In these societies, there was no indigenous capitalist class which could initiate development and no sign of development occurring as a result of foreign penetration. The only agency that appeared capable of bringing about any development was the state. Consequently, socialist ideas of state-sponsored industrialisation attracted the local intelligentsia and the army. Examples here are Afghanistan (Halliday 1978, 1980) and Ethiopia (Halliday and Molyneux 1981). However, the record of such revolutions was not good. The elites that carried out the socialist projects had insufficient social backing due to the extensive social and cultural resistance to the idea of a unified interventionist state in these societies. These problems led to the downfall of both regimes.

The second group comprised countries where socialist ideas became dominant in national liberation struggles against colonialism. This was particularly the case where decolonisation was achieved only after fairly protracted guerrilla struggle (South Yemen) or prolonged war (Angola, Mozambique, and the other Portuguese colonies in Africa). It was also the case where the decolonisation process was blocked by foreign intervention and national division (Korea, Vietnam). Related to this group were some countries in the Caribbean and in Central and South America. Socialist ideas were able to gain predominance in popular national movements in several countries at different times. Such a movement succeeded against a weak national capitalist class in Cuba and, in a different way, in Nicaragua. More recently there have been electoral successes for radical nationalist movements in Venezuela and Bolivia, leading to socialist governments with some similar characteristics to that in Cuba, in Venezuela’s case continuing in power to this day (see Box 16.2). While none of these were formally national liberation struggles against colonial regimes, they had many of the characteristics of such struggles because of the overwhelming political and economic dominance of the USA in the region. The ruling groups had a relatively small degree of real independence from the USA, and relatively weak roots in the society. Socialist development in these countries also encountered major problems, although in some cases it was more successful than in the first group. Like China, four of these countries continue to this day as one-party states led by a communist party (Vietnam, Laos, North Korea, Cuba). External hostility took the form of military p. 348intervention (Korea, Vietnam) and denial of aid and investment, illustrated by the US economic embargoes on Cuba and, recently, Venezuela. In some cases (e.g. Cuba and Vietnam), this led to considerable dependence on the USSR for material support and consequent difficulties when the Soviet Union collapsed. Industrial growth and improvement in material living standards were limited. This group of countries followed somewhat divergent trajectories in response to these challenges nevertheless. Vietnam embarked on a reform process which in many ways resembled that in China (see Box 16.4 in Section 16.5). Nicaragua, Angola, and Mozambique were forced to abandon a socialist approach, in large part through economic collapse, and opted for a market system under the pressure and guidance of the IMF and other international institutions. With the partial exceptions of Cuba and Vietnam, none of these countries seems to offer a distinctive approach that might rejuvenate the socialist model of development.

#### Box 16.2 Hugo Chávez and the ‘Bolivarian Revolution’ in Venezuela

In the 1990s and 2000s both Venezuela (1998) and Bolivia (2005) elected radical presidents, partly in response to the failure of neoliberal market reforms to deliver what they promised, as well as high levels of corruption and crime. Hugo Chávez in Venezuela and Evo Morales in Bolivia were both initially political outsiders from the radical left.

In 1992, Chavez was imprisoned after leading a failed revolutionary coup. On his release he moved into electoral politics in the newly formed Movimiento Quinta República (MVR), winning the 1998 election as traditional political parties collapsed. Under his charismatic leadership, it relied heavily on bottom-up mobilisation rather than top-down execution (see Figure 16.3). As a result, he was relatively unconstrained by rules and conventions.

Like Morales in Bolivia, Chávez was helped in adopting a radical position by his country’s rich natural resources. Venezuela’s oil industry blessed its government with quick revenue and eased its fiscal burden. It could afford comprehensive social programmes and call for profound economic restructuring, boosted by soaring commodity prices in the 2000s and limited reliance on global capital.

One important ambition was to eliminate barriers not only across the line of social class, but also across broader categories such as gender, race, ethnicity, and thus all those who have been structurally pushed aside to the political periphery (Hunter, Madrid, and Weyland 2010: 14). A new constitution was adopted in 1999, after which Chávez enacted radical reforms under the rubric of the ‘Bolivarian Revolution’. Economically, this meant pushing for state command over the economy and direct transfer of national resources to cater to popular needs, rather than attempting to negotiate with business interests and improve the economic environment via existing frameworks. Socially, there was a series of ambitious schemes intended to redistribute state assets via reallocation of material benefits, such as cheap access to food and income support for the poor. Politically, innovative means were devised to strengthen direct political participation and direct contact between leaders and the masses at all levels rather than political representation (ibid).

Financed by the revenue from the oil boom, this radical approach achieved rapid success, especially in poverty alleviation and income redistribution. Social spending per capita tripled between 1998 and 2006 (Weisbrot 2008). However, this success should not be exaggerated. In proportion to GDP it was not much greater than in previous administrations (Corrales 2010: 45). Venezuela’s inflation rate and urban unemployment were higher than the average in Latin America during the same time period (ibid: 46). Meanwhile, there was little success in diversifying the economy, and the statist approach was not exempted from the ills of cronyism and clientelism (ibid).

Chávez died in office from cancer shortly after winning a third term as president in the elections of 2012. Since then the country has been suffering worsening economic and humanitarian crisis (Watts 2016). Nicolás Maduro succeeded to the presidency but lacks Chávez’s charisma and has had to contend with a drastic loss of revenue as oil prices have fallen. Since 2014 there have been widespread protests against the high levels of criminal violence, corruption, hyperinflation, and chronic scarcity of basic goods. The opposition claimed that the government’s policies were responsible, although economic sanctions by the USA also had an effect. Opposition parties won a majority in the parliamentary elections of 2015, and claimed that Maduro’s victory in presidential elections in 2018 was fraudulent. The claim of the opposition leader Juan Guaidó to be the legitimate president has been upheld by many Western states led by the USA, and large numbers of economic refugees have begun leaving the country (according to the UNHCR, about 4.6 million by the end of 2019, i.e. about 16 per cent of the population).

In Bolivia, Morales resigned in 2019 following a disputed general election. However, in Venezuela the socialist regime is still in power and, indeed, appears to retain support among the poor who have benefited from its policies, and to have used its network of local community organisations as well as aid from China to attempt to cope with the COVID-19 crisis (Fuentes 2020).

For the third group, external factors have also played a major role. Although socialist or communist parties did not come to power after decolonisation, the nationalist movements appeared to adopt socialist policies. Such movements were often based around state employees: soldiers, teachers, doctors, or associated professionals such as lawyers, who shared the outlook that the state should be the prime motor of development. Emerging out of anti-colonial struggles, state control of the economy appeared to be a guarantee of national independence and unity in a hostile world. These governments adopted tools that are typical of a socialist system (e.g. five-year plans, nationalisation, control over finance and foreign trade) and in return received broad support from national communist parties and from the USSR. Examples include Egypt under Nasser after the later 1950s, Iraq after the revolution of 1958, Indonesia in the 1950s under Sukarno, India under Nehru after independence, and various forms of ‘African socialism’ (Hopfmann 2017). The result, however, was not encouraging. In these cases, almost without exception, the rhetoric of socialism has now been dropped and capitalist principles have been adopted. At best, communists and socialists have been marginalised to bases in regional government, as in India (where there have been some localised successes, as with the Indian State of Kerala’s much-lauded health system and apparently well-judged initial response to COVID-19); at worst, they were massacred and the old nationalist government was replaced by authoritarian government from the Right, as in Indonesia.

In retrospect, many reasons could explain the apparent demise of socialist development as a viable model, but one important factor must be taken into account. As national economies become increasingly interconnected, it is unclear whether the kind of state-centred, nationally independent development which these countries attempted to initiate in the immediate post-war years is still feasible. In particular, this approach has two drawbacks. First, the resources that individual states can put into industrialisation now pale beside those of multinational companies. Second, individual countries’ economic policies are now constrained by a complex international financial system which can direct and redirect monetary flows between countries with exceptional speed. Under these circumstances, state-sponsored socialist models appear increasingly unattractive.

However, the rise of China in recent years has revitalised the debates on socialist models and the state-centred approach.

### 16.4p. 349p. 350 The rise of China after 1978: a political economy history

With an average 8 per cent uninterrupted GDP growth for almost four decades, China has transformed itself from one of the poorest countries in the world into the second-largest economy in one generation. As is illustrated in Figure 16.3, in 1980 China’s GDP per capita was US$193. It was lower than that of Bangladesh, Chad, and Malawi, the present-day ‘bottom-billion’ countries (Ang 2016). By 2018, China’s GDP per capita had risen more than 50 times to$9,771, which is among the league of upper middle-income countries (World Bank 2019; World Bank Data 2019). Rapid economic expansion has been accompanied by improved infrastructure, health care, education, and other public goods provision (see Box 16.3). While challenges remain, the rise of China poses a host of theoretical and empirical questions, especially given its development trajectory under Mao. What explains the rapid growth of China, and to what extent can economic success be ascribed to the socialist development model? This section attempts to answer these questions by sketching out the Chinese post-reform history from a political economy perspective. It will also discuss the socioeconomic problems brought about by the reform.

#### Box 16.3 A case study of poverty reduction in China

Reducing absolute poverty is one of the major accomplishments in China since the economic reform. According to the World Bank, China has lifted more than 800 million people out of poverty (World Bank 2017a) and made major contributions to meeting the MDGs: absolute poverty is declining globally, but when China is excluded, other developing countries in aggregate show little or no sustained progress in poverty reduction (Chen and Ravallion 2010).

Some scholars attribute the success to the government’s targeted efforts, and others emphasise the power of market. Since 1986, the government launched several sophisticated poverty alleviation programmes, including building infrastructure, offering free nine-year compulsory education, targeted food subsidy, and rural medical insurance. The earmarked transfer from central government on poverty alleviation between 1980 to 2016 was about 469 billion yuan (about USD 70 billion) (Wu 2016).

Moreover, some pointed out how collective land ownership in rural areas in fact acted as a social safety net for the peasantry (ibid). That said, the invisible hand of the market cannot be ignored. For instance, an important mechanism in reducing poverty was the reallocation of labour from low value-added sectors, such as agriculture, to higher value-added sectors, such as manufacturing and service (Huang 2010). Rapid industrialisation and urbanisation have turned millions of people into surplus agricultural labour. They sought employment opportunities in Township Village Enterprises (TVEs) in the 1980s, and later migrated to cities and coastal regions for higher income. Between 1978 and 2015, non-farm employment as a percentage of the total labour pool increased from 29 per cent to 70 per cent (Wu 2016). The market mechanism was crucial to the process. It remains unclear how far the success of poverty reduction in China can be attributed to the state, the market, or other factors.

#### China’s changing development strategies

While China’s post-reform episode is often characterised as market-oriented economic reform and single-party dominance, the reality is more complicated than that. Macro-strategies as well as micro-practices have evolved in response to different challenges at different times.

When Mao died in 1976, many Chinese were disillusioned with communism, socialism, and grand experiments, after years of cultural war, destruction, and instability. The industrial growth rate was falling significantly, and agricultural production was barely keeping pace with population growth. It is against this backdrop that Deng Xiaoping returned to power. In December 1978, the policy of ‘reform and opening-up’ (or gaige kaifang) was promulgated, which set China on a different development course.

Between 1978 and the late 1980s, economic and financial liberalisation was the most distinctive feature. A centrally planned economy shifted to a market-oriented economy, where the price mechanism started to affect resource allocation. Initially, the reform was centred in the countryside, including breaking up the communes and moving towards small-scale agricultural production. This ‘production responsibility system’ took several forms, but p. 351increasingly families came to act as de facto private peasant producers, only leasing land and some equipment from the state. Small-scale rural industries in the form of TVEs were supported by the state (Oi 1999), but now on the basis of production for the market. Credit availability to privately owned business and households was high (Lin 1990). From 1984 onwards, the pace of reform quickened in the urban industrial sector, with enterprises becoming linked much more through market relationships, and responsibility for pricing and production decisions being decentralised to individual firms. China began to encourage foreign investment, particularly in ‘Special Economic Zones’ where foreign investors were to be attracted by cheap labour, low taxes, and investment incentives.

Modest political reforms took place during this period too. As a response to problems of authoritarian rule under Mao, collective leadership of the Politburo was institutionalised. Regulations on officials’ retirement age, term limit, and the rotation rule were introduced. Civil service reform emphasised recruiting the younger and better-educated personnel with professional expertise. Meanwhile, direct and competitive elections of representatives in local People’s Congresses up to county level were initiated. These political reforms, albeit limited, established norms of power sharing among elites and broadened formal channels of citizen participation in public affairs. While the party maintained control politically, local governments were granted significant discretion in local economic and social affairs. Power started fragmenting in myriad vertical as well as horizontally structured bureaucracies (Lieberthal and Lampton 1992).

The rapid economic transformations in the 1980s engendered high inflation and corruption (see the next subsection for more details on corruption). Public discontent fuelled the pro-democracy movement, which ultimately led up to the 1989 Tiananmen Square massacre. The event accentuated the factions among top leaders: the conservatives who intended to reverse course; and the pro-reformers who insisted on advancing the reforms. While several key proponents of the reform were ousted as a result of political struggle, Deng re-affirmed his determination to further the economic reform in 1992.

Even though the reforms continued in the 1990s, the strategies departed from earlier paths. Economically, the state adopted policies favouring State-Owned Enterprises (SOEs) and tightened control over credits. TVEs were discouraged and gradually died out. Credit flows were restricted and channelled by the state to fund large-scale infrastructure projects in urban areas (Huang 2008). The 1994 tax reforms recentralised fiscal control from local levels to the national government (Oi et al. 2012). Similarly, political reforms were suspended and even revoked. For instance, the National People’s Congress (NPC) was prohibited p. 352from evaluating officials in the executive branch, the courts, and the Prosecutor General’s Office, a power which was granted to the NPC in the 1980s (Huang 2010). As the government exercised scrutiny over civil society groups, the public space between the state, the market, and the ordinary households shrank. Development strategies in the 2000s tilted towards a mixture of liberal policies from the 1980s and the statist approach of the 1990s. SOEs kept enjoying better access to resources than their private counterparts, but policies also promoted the private sector and entrepreneurship. At the same time, the central government initiated policies aiming at redistributing to rural areas. The Chinese economy gradually became embedded in international financial markets and global trade, especially since China’s entry into the WTO in 2001.

The economic reforms restructured the existing social strata, leading to the rise of new elites and potential rivals. A political response to this change was lifting the ban on recruiting private entrepreneurs into the Chinese Communist Party (Chen and Dickson 2010). The party justified the reversal on the grounds of its changing identity: from the vanguard of two working classes, workers and peasants, to the representative of the vast majority of the people, including entrepreneurs, professionals, and high-tech specialists, ‘the outstanding elements from other social strata’ (ibid: 43). The inclusion not only indicated the party’s willingness to embrace the new business elites, but also its intention to prevent organised opposition and to maintain the leadership.

In response to new challenges emerging in the reform process, China’s economic policies keep evolving (Xu 2017; Zaharia 2017; Leutert 2016; Yu 2017). At the same time, Xi Jinping, the General Secretary of the CCP and the President of China, has cemented his grip on political power and society, which is facilitated by the extended surveillance might of the party state. And only recently, China’s NPC has removed the term limits for the Chinese presidency in the constitution, thus allowing for the possibility of Xi’s rule beyond his second term (Campbell 2018; Gallagher 2018).

#### Challenges facing the Chinese reform processes

Rapid economic growth gives rise to a plethora of interconnected economic, political, and social problems. This section discusses five major issues.

##### Inequality

Inequality is a multidimensional problem manifested at the personal, regional, and societal levels. In personal income terms, China has become much more most unequal: the poorest quarter of households owns just 1 per cent of the country’s total wealth (Campbell 2018). Before the reform, Chinese were equally poor. The economic transformation reshuffled the social structure: some who did well during the transition have become exceptionally rich, while those who missed the opportunity stuck in poverty. The sharp contrast in wealth between the coastal areas and the hinterland, between the East region and West region, is pronounced too. For instance, in 2010 Shandong province’s Gross Provincial Product (GPP) was equivalent to Switzerland’s GDP, while Ningxia province’s GPP was similar to that of Ethiopia. In terms of GDP per capita, while Shanghai is comparable to Saudi Arabia, Guizhou province is similar to India (The Economist 2011). The ‘Household Registration System’ imposes multiple classes of citizenship based on birthplaces, as welfare benefits vary tremendously from area to area. This further aggravates inequality, as millions of rural migrant workers reside in cities but cannot claim any of the legal social welfare benefits of urban citizenship for themselves and their children. There is also clear discrimination against ethnic minorities and heavy limitations on internal freedom of movement (see subsection on China’s internal controls and rural to urban forced migration in Section 21.6).

The government has initiated several schemes to mitigate worsening inequality. Since the late 1990s, social welfare programmes have included unemployment benefits, medical insurance, maternal benefits, pension funds, and more recently, universal health care. The ‘China Western Development’ policy was initiated in 1999. It targeted six provinces and five autonomous regions in Western China and focused mainly on infrastructure building, while the effects till now remain limited (Goodman 2004).

##### Low efficiency of the SOEs

In China today, SOEs still account for around 25 per cent of total GDP (Zhang 2019). SOEs enjoy favoured access to land, labour, credit, and electricity. They monopolise tobacco production and dominate sectors such as steel and mineral manufacturing. Furthermore, they are not subject to the p. 353same tax burdens as the privately owned businesses. These privileges make SOEs less efficient in using resources and they continue making substantial losses in money terms.

The Chinese government pledged itself to the first round of drastic reform of SOEs in 1997. The weakest firms were closed and millions of workers were laid off. Consequently, SOEs return on assets, a measurement of productivity, increased from near zero in 1998 to 7 per cent a decade later (The Economist 2014). In recent years, their performance began to fall, even as non-state-owned competitors grow steadily: SOE returns are only about 50 per cent those of the private competitors (ibid). The leadership calls for targeted reform of SOEs, but doubts remain in terms of how far the state can go this time and whether SOEs are allowed to fail.

##### Corruption

Corruption is a widely recognised problem in China. At the onset of the reform, because the state liberalised resource allocation gradually, the planning system and price controls were still in operation in some areas of the economy. This so-called ‘dual-track’ system provided opportunities for speculation and profiteering during the transition period. Those who had privileged access to goods at controlled prices, normally those with close party links or government positions, exploited the price discrepancy for their private gains. Corruption also occurs when those who have power in dispensing licences, loans, and land concessions actively solicit bribes. Similarly, officials who have a say in personnel control are sometimes involved in selling government offices for private gains (Wang 2012: 64). The lack of institutionalised checks and balances on political power amplifies the problem.

The party has been well aware of the destructive potential of corruption. Since the early 1980s, it has launched multiple waves of nationwide anti-corruption campaigns. The effectiveness of these campaigns is controversial, as some academics believe they put a dent in corruption (Wedeman 2012) and others see them as political purges (Jiang and Xu 2015). Under the current leader Xi Jinping, the CCP has implemented the most far-reaching anti-corruption campaign in the history of communist rule in China. It is reported that more than 100 000 officials were convicted of corruption between 2012 and 2015 (The Economist 2015).

##### Environmental degradation and new infectious diseases

The rapid pace of growth in China has led to serious environmental problems. It was estimated in 2008 that about 3.3 million km2, or 34 per cent of China’s total land area, had been affected by desertification (Cao 2008: 1827). The Agricultural Ministry reported that rural industrialisation had polluted around 10 million hectares of farmland since the 1980s. The annual per capita renewable freshwater supply is only 2300 m3, which is about 25 per cent of the world’s average (Cheng, Hu, and Zhao 2009). It has also been reported that nearly 60 per cent of China’s underground water was polluted (Kaiman 2014). Air pollution is probably the most visible environmental problem of all. A recent study research shows that about 1.6 million deaths per year in China can be attributed to air pollution under the WHO standards (Rohde and Muller 2015). Furthermore, air pollution cut three years from life spans in Northern China, where coal-fuelled home heating in winter contributed to higher pollution than Southern China (Ebenstein et al. 2017). As a response to the public outcry, the government began to develop a national Air Reporting System in 2012, taking several regulatory measures to tackle the environmental challenges. It will take some time for positive results to emerge.

A related problem concerns the increased prevalence of new infectious diseases. China is generally credited with having made rapid improvements to communicable disease control in the 30 years following the 1949 revolution (Hipgrave 2011), with a big increase in life expectancy and the general health of the population. However, the reform process undermined the community-based public health system which had been built up, replacing it with a new, marketised, and centralised system initially of uncertain effectiveness. There have been several outbreaks of new infectious diseases, some with serious global implications, notably SARS in 2003, the H7N9 strain of bird flu in 2013, and COVID-19 from late 2019, such that some have labelled China a global ‘hotspot’ for novel zoonotic viral diseases (i.e. those caused by viruses which pass to human beings from other species). Commentators link the increasing frequency of such outbreaks to the encroachment of human settlement onto wilderness areas, so that it is another aspect of environmental degradation. The need to impose restrictions on movement, quarantines, and other severely disruptive measures in order to control p. 354these outbreaks runs against the overwhelming imperative for China to maintain economic growth and so they have caused not only public health but also political crises (Huang 2004).

##### Demographics

The falling fertility rate and increasing longevity in the past four decades indicate that China is becoming an ageing society. While the ‘one child’ policy may have capped the rapidly growing population at the beginning of the reform, it generated many socio-economic problems. First of all, the policy accentuated the traditional ‘son preference’, especially in rural China. In 2000, the sex ratio in China was 119.9 boys born for every 100 girls, while the biological norm ranges between 103 and 107 (Li, Yi, and Zhang 2011). Second, the labour pool is shrinking. The proportion of working-age, those between 15 and 59, fell to below 40 per cent of the total population in 2014 while the global average was 61 per cent (Nardelli and Swann 2015; Evans 2011). The skewed population means a high dependency ratio (i.e. the number of pensioners relative to the number of working population) and a heavy burden on the state’s social welfare system (The Economist 2017). Against this background, the ‘one-child policy’ was replaced by a ‘two-child policy’ in 2015, which allows a couple to have two children. So far, the effect of this policy change has been ambivalent. Many young couples are reluctant to have more than one child due to the high cost of living. Besides, declining birth rate often follows economic growth and increasing education levels worldwide. It is unclear if the more relaxed family planning policy will increase the fertility rate.

### 16.5 The end of big ideas?

What are the lessons from the rise of China for other developing countries? This question is given renewed importance since it appears to have coped relatively well with the COVID-19 outbreak, at least up to mid-2020 (see Box 17.4 in Chapter 17), and has been emboldened to try to take on a global leadership role. More particularly, what is the prospect for the socialist model of development moving forward? There are no short answers to these questions but these final two sections try to engage with them.

#### The ‘China model’ and beyond

There are disagreements among scholars and policy analysts in terms of why and how China has industrialised and grown so fast, and what other developing countries could learn from its experience. Contrary to what was prescribed in the Washington Consensus, which underscores private property rights, trade liberalisation, fiscal reform, and privatisation, China thrived with a state-dominated market economy. While market mechanisms are in action, the state always has the upper hand in resource allocation, property ownership, and regulatory power. The state’s capacity in macro-economic control and resource mobilisation is hailed as a key ingredient of the economic miracle. Besides, experimentation based on local conditions is proposed as another major contributor to China’s success. Dani Rodrik (2007) endorses this ‘diagnostic approach’, arguing that policymakers should identify priorities and recognise the specific constraints first, and then come up with context-specific institutions to remove these binding constraints. On the political side, Yuen Yuen Ang identifies the process as ‘directed improvisation’ (2016: 48–69), whereby the state sets parametric development goals and local officials are granted the discretion, implicitly or explicitly, to improvise within the boundaries.

These are valuable insights, but is the Chinese development experience coherent and special enough that they can be put under the umbrella term ‘the China model’? Section 16.4 showed that China had different phases of reform, and the overall development strategies changed course under different leaderships. While the strategies in the 1980s showed a clear neoliberal orientation, the approaches since the 1990s may be characterised as a ‘state-dominated market economy’ model. The closest other examples to that of China are Vietnam and Cuba, where market-oriented reforms have also taken place with their own local characteristics, leading to further examples of hybrid economies with robust institutions, sufficient to allow them both to implement enforced behavioural change policies in response to COVID-19. Box 16.4 gives more detail on the Vietnamese case. By comparison, in newly industrialised countries such as South Korea and Taiwan, the state also played crucial roles during their economic take-off and now also in their response to COVID-19. Chalmers Johnson (1995) coined the term ‘developmental state’ to describe this model (see Chapters 4 and 17).

p. 355

#### Box 16.4 Vietnam—political and economic reforms and a co-ordinated response to COVID-19

Like China, Vietnam is a one-party socialist state. However, there has always been a degree of meaningful grassroots participation through mass organisations and their local branches such as the Peasant Union, the Trades Unions, the Women’s Union, and others, despite their being tied into the decision-making structures of the party. In a remarkable study of Vietnam’s political economy in the early 1980s, Kathleen Gough recorded vigorous policy debate in such organisations and concluded that on such national issues as ‘farm policies, welfare institutions, social security, family legislation and the rights of women, it seems that ordinary Vietnamese influence their government more than do Americans’ (Gough 1990: 292).

In the late 1980s, through reforms known as Doi Moi, Vietnam introduced a mixed economy, blending free-market elements with aspects of planned economy or state interventionism. The reforms encouraged the establishment of private businesses and foreign investments, abolished the central management system dependent on state subsidies, and created competition between the private sector and the state. They also included initiatives under the heading ‘grassroots democracy’ aimed at reinvigorating people’s participation at the local level in the face of growing social unrest and dissatisfaction at the unresponsiveness of national officials in the centralised system. An extensive study of the implementation of these reforms in three provinces found them to be real reforms and a ‘mutually empowering process’ (Hai Hong Nguyen 2016: 39) rather than mere propaganda.

When in early January 2020 the first two COVID-19 deaths were reported in China, with which Vietnam shares a long border, the Vietnamese state immediately began planning drastic preventative measures. In doing so, it was able to rely on citizen participation and good national–local linkages as well as readiness of its institutions at all levels and understanding among the general population due to its recent experience of other outbreaks of infectious diseases, including measles and dengue fever, as well as SARS and bird flu. As soon as the first case was recorded in the country, travel restrictions and close monitoring and health checks on incomers were put in place, followed by closing borders. This was followed up with strict quarantine measures on a huge scale, covering all who entered the country as well as everyone who had contact with a confirmed case. On the few occasions when a cluster of cases emerged, whole local communities were sealed off, including a hospital and two areas with more than 10 000 populations. This strategy of localised containment has been possible with strong public support, maintained by effective public health communication. It also relied on a widespread network of local party cadres, already in place, to assist with an extensive, labour-intensive programme of contact tracing, and enforce compliance with social distancing and quarantine regulations, which may have involved could be regarded as involving human rights violations but also demonstrated the effectiveness of state institutions at all levels. Vietnam has claimed the best initial outcomes in the world for its response to the virus, with just over 300 cases up to the end of May for a population of almost 100 million, and not a single reported death (Gan 2020).

Although local experimentation to some extent differentiates China from its East Asian neighbours, it is not unique to China. Trade in late medieval Europe, taxation in nineteenth-century United States, and even the emergence of Nollywood all follow the gradual trial-and-error development process to some extent (Ang 2016). If the ultimate lesson for other developing countries is simply ‘experiment according to local conditions’, what can be learned from China? And realistically speaking, can other developing countries afford to experiment and pursue their own paths today when they carry less economic might than China?

### 16.6 Conclusion: the socialist model moving forward

The upheavals of the early 1990s stimulated a wide-ranging theoretical debate on the future of the socialist model of development. Two distinct, but not necessarily exclusive, viewpoints have emerged.

First, some academics see the main relevance of socialism as having shifted from the provision of a path for development in poor countries back towards the criticism and overthrow of developed capitalist systems. According to this view, socialist movements will once more have to become international in character, and focus on transcending industrial capitalism (Arrighi 1990; Halliday 1990). The main support for such movements will thus come from the working class and other oppressed groups in the advanced capitalist countries. In some ways this approach represents a return to the ‘classical’ conception of socialism in the works of Marx, Engels, and their successors (as outlined in Section 16.2). But it leaves relatively little room for a distinctive socialist model of development for two reasons. First, it is claimed that this view is both Eurocentric and excessively mechanistic, in that it sees all countries as necessarily passing through a common p. 356set of stages of development. Second, this view remains vulnerable to the critique that in a world ruled by imperialism, or global capital, the possibility of socialist development in a particular country will continue to confront the problems outlined in Box 16.1.

The second school of thought starts from recognising the interdependent nature of the world economy, but does not restrict the desired consequences of this to autonomous national development. Rather, it seeks to explore the possibilities for common political action around socialist ideals, linking the industrialised and developing countries. An upsurge in militant trade unionism in countries like Brazil and South Korea somehow echoed this view. The growth of social movements around a wide range of issues since the 1990s continued the trend. In Mexico, the ‘Zapatista’ movement, the EZLN, has based itself largely on the struggles of the indigenous population. It attempted to combine a recovery of their political traditions with opposition to free-market policies on a world scale. In north-east Syria, or Rojava, Kurdish militias have established an administration based on a decentralised form of libertarian socialism which has enjoyed effective autonomy since 2012 (see also Direct Democracy subsection of 17.3). In Brazil, the movements of the landless have led to new alliances between the urban population and the rural poor. In a number of countries, notably in Latin America and Asia, environmental movements have been prominent, taking up issues like deforestation and water rights. A common feature in all these movements is the role of international solidarity between certain actors in the industrialised world and those campaigning in the developing countries. This springs directly from a recognition that the situation in the developing world requires change both there and in the richer countries. The problems cannot be solved simply either by policies handed down from above or by action from below. Coalitions of unions, NGOs, political organisations, churches, and others share the aim of limiting the operation of the free market in some way. Examples include international movements for the cancellation of ‘Third World’ debt, for labour and environmental standards as a precondition for ‘fair trade’, for taxes on international financial speculation, for income equality of the 99 per cent in the ‘Occupy movement’ after the 2008 financial crisis, and most recently the environmental movements of Extinction Rebellion and the Youth Strike for Climate (see Chapter 26).

Despite these initiatives, the ability of such movements to alter the dominance of market-based policies in the global economy remains limited. Neither trade unionism and social movements in the developing world, nor networks centred around local or global campaigns, have been able to achieve decisive breakthroughs. One reason for this is that, despite having advanced beyond the traditional socialist model of development in a number of areas, notably those involving democracy and participation, contemporary socialist movements have not yet developed a coherent view of socialist models of development against the backdrop of globalisation, decentralisation, and democratisation.

Further development of socialist practice will require reconceptualisation in these areas. It is unlikely, however, that such a reconceptualisation will reinstate pre-existing socialist models of development. Rather, the success of such a renewal of socialist ideas appears to depend upon the ability to articulate a convincing conception of the limits and possibilities for nationally based movements in the global economy. This conception, if it arises, is likely to depend on solidarity between oppressed groups and the emerging community of interests between workers in an interdependent world.

### Summary

The state socialist model of development emerged out of a particular historical experience, that of the USSR following the Bolshevik revolution. However, the problems faced by the Bolsheviks were of a general nature, and the industrialisation achieved in the USSR thus appeared to offer lessons for other countries attempting to develop and industrialise. But the model proved to be of more limited applicability than had been hoped when applied elsewhere.

The rise of China may present an alternative path to many, but the extent to which it is unique and whether it could be characterised as a ‘socialist development model’ remain controversial. In addition, the reforms in China have been accompanied by many challenges.

As the world economy has become more interdependent, the concept of a nationally based socialist road to development has been called into question. That interdependence nevertheless has provided p. 357the basis for movements which seek to renew the socialist model, both through new movements in the industrialising world and through networks linking activists in the industrialised and developing countries. In order to succeed in such renewal, such movements will have to develop a convincing conception of the role of the state in socialist development, which avoids the problems of the traditional state socialist model, but offers a basis for a distinct alternative to market-based policies.

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