OUR ECONOMIC POLICY
January 23, 1934
[This report was given by Comrade Mao Tse-tung
at the Second National Congress of Workers' and Peasants' Representatives held
in Juichin, Kiangsi Province in January 1934.]
Only the Kuomintang warlords who have brought the areas under
their own rule to the brink of bankruptcy have the utter shamelessness to
spread the rumour, day in day out, that the Red areas are in a state of total
collapse. The imperialists and the Kuomintang are bent on wrecking the Red
areas, the work of economic construction now in progress there, and the welfare
of the millions of workers and peasants who have achieved liberation. For this
purpose, they have pursued a ruthless policy of economic blockade, in addition
to organizing forces for military campaigns of "encirclement and
suppression". But, leading the broad masses and the Red Army, we have not
only smashed one enemy "encirclement and suppression" campaign after
another, but have also been doing all the essential work of economic
construction within our power in order to defeat this vicious economic
blockade. In this respect, too, we have scored one success after another.
The principle governing our economic policy is to proceed with all
the essential work of economic construction within our power and concentrate
our economic resources on the war effort, and at the same time to improve the
life of the people as much as possible, consolidate the worker-peasant alliance
in the economic field, ensure proletarian leadership of the peasantry, and
strive to secure leadership by the state sector of the economy over the private
sector, thus creating the prerequisites for our future advance to socialism.
The focus of our economic construction is to increase agricultural
and industrial production, expand our trade with the outside, and develop the
co-operatives.
Agriculture in the Red areas is obviously making progress. As
compared with 1932, the 1933 agricultural output was 15 per cent higher in
southern Kiangsi and western Fukien and 20 per cent higher in the
Fukien-Chekiang-Kiangsi border area. The Szechuan-Shensi border area has had a
good harvest. After a Red area is established, farm output often declines in
the first year or two.[1] But it picks up again as the peasant masses
work with greater enthusiasm after the land is redistributed and ownership is
settled, and after we have given encouragement to production. Today in some
places farm output has reached and even exceeded the pre-revolution level. In
others, not only has land that lay waste during the revolutionary uprisings
been reclaimed, but new land has been brought under cultivation. In many places
mutual-aid groups and ploughing teams [2] have been organized to adjust the use of labour power in the
villages, and co-operatives have been organized to overcome the shortage of
draught oxen. Moreover, the women are taking part in production in great
numbers. None of this could have happened in the Kuomintang days. With the land
in the hands of the landlords, the peasants then were neither willing to
improve it nor did they possess the means to do so. Only since we have
distributed the land to the peasants and encouraged and rewarded production has
their labour enthusiasm blossomed forth and great success in production been
achieved. It should be pointed out that in the present conditions agriculture
occupies first place in our economic construction; it is by agriculture that we
solve both the most important problem of food, and the problem of raw materials
such as cotton, hemp, sugar-cane and bamboo, which are needed for the making of
clothes, sugar, paper and other necessities. The care of forests and the
increase of livestock are also an important part of agriculture. Within the
framework of small-scale peasant economy it is permissible and indeed necessary
to draw up suitable plans for the output of certain important agricultural
products and to mobilize the peasants to strive for their fulfilment. We should
pay closer attention and devote greater efforts to this. We must actively lead
the peasants in solving such difficult and essential problems in production as
labour power, draught oxen, fertilizer, seed and irrigation. In this connection
our fundamental task is to adjust the use of labour power in an organized way
and to encourage women to do farm work. The necessary measures to solve the
problem of labour power are organizing mutual-aid groups and ploughing teams
and mobilizing and encouraging the whole rural population to help during the
busy spring and summer ploughing seasons. Another big problem is that quite a
large proportion (about 25 per cent) of the peasants are short of draught oxen.
We must attend to organizing draught oxen co-operatives, encouraging the
peasants without oxen to buy them for their common use through voluntary subscription
to shares. Irrigation, which is the lifeblood of agriculture, also merits close
attention. Of course, we cannot as yet bring up the question of state or
collective farming, but it is urgently necessary to set up small experimental
farms, agricultural research schools and exhibitions of farm produce in various
places to stimulate the development of agriculture.
The enemy blockade has made it difficult for us to market goods
outside our areas. There has been a decline in production in many handicraft industries
in the Red areas, notably tobacco-curing and paper-making. But the difficulties
of sending goods out are not entirely insurmountable. We have an extensive
market of our own because of the mass demand in our areas. We should
systematically restore and develop handicrafts and also certain industries,
firstly to supply our own needs and secondly for trade with the outside. In the
last two years, and especially since the first half of 1933, many handicrafts
and a few industries have begun to look up because of the attention we have
begun to devote to them and the gradual development of producers' co-operatives
by the people. The most significant fields are tobacco, paper, wolfram,
camphor, farm implements and fertilizers (such as lime). Moreover, in our
present circumstances we should not neglect the manufacture of our own cotton
cloth, medicines and sugar. In the Fukien-Chekiang-Kiangsi border area, some
industries have been set up which were previously non-existent, such as
paper-making, cloth-making and sugar-refining, and they are doing well. To
relieve the shortage of salt, people have begun to extract it from nitre. It
requires proper planning to keep industry going. With a scattered handicraft
industry, detailed and comprehensive planning is of course impossible. But
fairly detailed production plans are absolutely essential for certain important
enterprises, and first and foremost for state and co-operative enterprises.
Every one of our state and co-operative industrial enterprises must pay attention
from the very beginning to making accurate estimates of raw material output and
marketing prospects in both the enemy areas and our own.
At the present time, it is particularly necessary for us to
organize private external trading according to plan and for the state to handle
certain essential commodities directly, for instance, the import of salt and
cotton cloth, the export of grain and wolfram, and the adjustment of grain
supply within our own areas. Such work was first undertaken in the Fukien-Chekiang-Kiangsi
border area and was started in the Central Area in the spring of 1933. With the
establishment of the Bureau of External Trade and other agencies, initial
successes have been achieved in this connection.
Our economy is made up of three sectors, state enterprise,
cooperative enterprise and private enterprise.
At present, state enterprise is limited to what is possible and
essential. State-operated industry and commerce have begun to grow and they
have boundless prospects.
As regards the private sector of the economy, we shall not hamper
it, indeed we shall promote and encourage it, so long as it does not transgress
the legal limits set by our government. For the development of private
enterprise is essential to the interests of the state and the people at the
present stage. Needless to say, private enterprise is now preponderant and will
inevitably continue to occupy a dominant position for a considerable time.
Today, private undertakings in the Red areas are small in scale.
Co-operative enterprise is growing rapidly. There are altogether
1,423 co-operatives of various kinds, with a total capital of over 300,000
yuan, according to the September 1933 figures for seventeen counties in Kiangsi
and Fukien. Consumers' co-operatives and grain co-operatives head the list,
with producers' co-operatives coming next. Credit co-operatives have just
started functioning. When the co-operative and the state enterprises become
co-ordinated and grow over a long period of time, they will become a tremendous
force in our economy and will gradually prevail and assume leadership over the
private sector. Therefore, the greatest possible development of state
enterprise and the extensive development of co-operative enterprise must go
hand in hand with encouraging the development of private enterprise.
With the support of the masses, we have issued economic
construction bonds to the value of three million yuan in order to develop state
enterprise and assist the co-operatives. Such reliance on the strength of the
masses is the only possible way to solve the problem of funds for economic
construction at this time.
To increase our revenue by developing the economy is a basic
principle of our financial policy; it has already brought tangible results in
the Fukien-Chekiang-Kiangsi border area and is beginning to do so in the
Central Area, too. It is the duty of our financial and economic organizations
to apply this principle conscientiously. In this connection, we should make
quite sure that the issuing of notes by the state bank is based primarily on
the needs of economic development, and only secondarily on purely fiscal needs.
Thrift should be the guiding principle in our government
expenditure. It should be made clear to all government workers that corruption
and waste are very great crimes. Our campaigns against corruption and waste
have already achieved some results, but further efforts are required. Our
system of accounting must be guided by the principle of saving every copper for
the war effort, for the revolutionary cause and for our economic construction.
Our methods of spending state revenue must be strictly different from those of
the Kuomintang.
At a time when the country is plunged in economic disaster, when
hundreds of millions of people are suffering the terrible hardships of hunger
and cold, the people's government in our areas is staunchly pressing ahead with
economic construction for the sake of the revolutionary war and in the
interests of the nation, regardless of all the difficulties. The situation is
perfectly clear--only by defeating imperialism and the Kuomintang and by
undertaking planned, organized economic construction can we deliver the people
of the whole of China from unprecedented disaster.
NOTES
1. There was usually a decline in farm output in the
first year or two after the establishment of a Red area, chiefly because
landownership was not yet settled and the new economic order was not fully
established during land redistribution, so that the peasants could not yet set
their minds fully on production.
2. Mutual-aid groups and ploughing teams, based on individual
farming, were formed by peasants in the Red areas to facilitate production
through a better organization of labour power. On the principle of voluntary
participation and mutual benefit, the members did an equal amount of work for
each other, or if one could not give another as much help as he received he
made up the difference in cash. Apart from helping each other, the teams gave
preferential treatment to the families of Red Army soldiers and worked for
bereaved old folk without any pay except for meals during the work. As these
measures of mutual aid were of great help to production and were carried out on
a reasonable basis they won the warm support of the masses.
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