The article below was submitted by Dan Farhat, an author and researcher based in Beirut, Lebanon.
Dan responds to the critique made of China by some of the (particularly Western) left, that the introduction of market mechanisms from 1978 onwards was a betrayal of socialism and that China has become – or is on its way to becoming – a capitalist country.
Comparing China’s Reform and Opening Up with the New Economic Policy in the Soviet Union in the 1920s, and drawing inspiration from the writings of the Italian Marxist philosopher Domenico Losurdo, Dan argues that China’s reforms constituted a creative and successful response to the conditions faced by the country at the time, and indeed have been a key factor in China’s successes in eradicating extreme poverty and raising living standards beyond recognition.
The article further notes that, while the spread of market forces introduces contradictions, risks and challenges, the Chinese leadership has been able to manage these by maintaining the leading role of the CPC and the state sector, and “preventing the bourgeoisie from becoming a cohesive and politically powerful class”.
The following story was shared by the former deputy editor-in-chief of China Daily, Kang Bing:
Growing up in the 1960s and 1970s, my childhood memory is closely tied to hunger. In my home city of Xi’an, the monthly quota for one urban resident was 100 grams of cooking oil, half a kg of meat, half a dozen eggs, and 100 grams of sugar. As for milk, it was given only to families with newborns. Many families today consume the entire monthly quota of oil, meat, eggs, and sugar in one day.
Although the ration system ensured everybody had a share of the available food and prevented starvation deaths, it led to malnutrition among children, adolescents, adults, and the elderly alike. Not a single boy among my 100 male classmates who graduated from high school with me in 1977 crossed 1.8 meters in height thanks to malnutrition.
Today’s picture is very different, with the country emerging as the world’s second-largest economy. Millions of people have been lifted out of poverty, and the quality of life in China has improved significantly – indeed, at a rate never seen before in human history. This incredible transformation is in no small part testament to the profound impact of Deng Xiaoping’s economic reforms.
Deng himself famously said that “to build socialism it is necessary to develop the productive forces. Poverty is not socialism. To uphold socialism, a socialism that is to be superior to capitalism, it is imperative first and foremost to eliminate poverty.” For Deng, true socialism was not about keeping everyone equally poor; it was about lifting people out of poverty. Deng saw a socialism that, through the utilization of market mechanisms, and by focusing on development and economic growth, could transform the lives of ordinary people and elevate China’s position in the global economy.
This vision however had its critics. When China embarked on the path of economic reforms, the adoption of market forces, and allowing foreign investment, some viewed this as a departure from socialism. But were the reforms a betrayal of the revolution? Or was it a strategic and pragmatic decision for a nation that had suffered from decades of imperialist-forced isolation and economic disruptions?
Challenging the Purists: The Marxist Debate Over China’s Path
History makes it clear: market elements are not inherently incompatible with socialism. Lenin in the 1920s had to creatively respond to the disastrous reality faced by Russia after the war of intervention (waged by an imperialist alliance of Britain, France, the United States, Japan and ten other countries) by introducing private enterprise and foreign expertise to rebuild the Soviet economy (New Economic Policy). Similarly, Deng Xiaoping’s reforms utilized market mechanisms to address the pressing challenges after years of economic blockade and the turmoil of the Cultural Revolution, while still maintaining a socialist framework. Both cases highlight how important adaptability is over strict adherence to ideological purity. In both instances, pragmatic policies were a necessity for economic recovery, despite the opposition from ideological purists. As was well explained by Deng:
“It is necessary to emancipate the mind, seek truth from facts, and unite as one to face the future. We must learn to emancipate the mind, to rid ourselves of old thoughts, and to recognize that new ideas are the driving force for the progress of society.”
Marx himself acknowledged that the remnants of capitalism cannot be completely done away with all at once, especially given the realities of the world still dominated by capitalist imperialism. In Critique of the Gotha Program, he argued that socialism must emerge from existing conditions (far from conforming to an idealized blueprint). Early socialist societies, Marx noted, would still bear the “birthmarks of the old society,” reflecting the ongoing influence of capitalism even within emerging socialist structures. Marx also made a clear distinction between the ‘lower’ and ‘higher’ stages of socialism. The lower stage represents a transitional phase where productive forces are still developing, and society operates under the principle of “to each according to their work.” The higher stage, however, represents a society of material abundance in which the principle of “from each according to his ability, to each according to his needs” can be fully realized.
In this context, John Ross, in his book China’s Great Road: Lessons for Marxist Theory and Socialist Practices provides a solid theoretical framework for understanding how markets can be incorporated into the socialist system. Referring to Marx’s analysis in Volume One of Capital, published in 1867, Ross argues that economic distribution based on labor (a core principle of commodity production) must involve the existence of a market. He also emphasizes that markets are an integral part of the economy during the socialist period and this is consistent with China’s vision of a ‘socialist market economy’. Deng Xiaoping and his successors applied this Marxist idea in an empirically sound manner, showing how market systems can be compatible with, and even facilitate, the development of socialism.
China’s reforms align with this pragmatic approach, which (rightfully) treats socialism as an ongoing process that requires continual adaptation to the conditions in which it exists in. Deng Xiaoping emphasized this perspective, stating:
“We have said that socialism is the primary stage of communism and that at the advanced stage the principle of ‘from each according to his ability and to each according to his needs’ will be applied. This calls for highly developed productive forces and an overwhelming abundance of material wealth. Therefore, the fundamental task for the socialist stage is to develop the productive forces. The superiority of the socialist system is demonstrated, in the final analysis, by faster and greater development of those forces than under the capitalist system.”
Critical leftists often argue that China’s adoption of market mechanisms undermines its socialist identity, since a growing private sector can lead to a reemergence of a bourgeois class that would be capable of threatening the socialist system. However, as Domenico Losurdo points out, this critique fails to consider the crucial distinction between the ‘economic’ and ‘political’ expropriation of the bourgeoisie. While market mechanisms were introduced, the Communist Party of China (CPC) maintained its strict political control, preventing the bourgeoisie from becoming a cohesive and politically powerful class.
Deng Xiaoping addressed this issue when he stated, “We shall not allow a new bourgeoisie to take shape.” Private enterprises contributed to economic growth while the Party’s dominance was protected. Deng’s 1985 remark to Zimbabwean Prime Minister Robert Mugabe that “perhaps Lenin had a good idea when he adopted the New Economic Policy” highlights the parallel between Lenin’s NEP and China’s reforms; both constituted a pragmatic approach, allowing limited private enterprise to revitalize the economy while still preserving full political authority for the working class and its allies.
Domenico Losurdo’s understanding of the NEP is consistent with that of the prominent German philosopher Walter Benjamin. During his 1927 visit to Moscow, Benjamin noted that the NEP created a separation between economic wealth and political power, with the Soviet state maintaining full political control while still allowing private economic activity. Benjamin saw that this exact separation created a ‘terrible social isolation’ of the ‘NEP man,’ as their wealth did not translate into political influence. Losurdo uses Benjamin’s insight to argue that although market reforms were introduced it did not bring back the capitalist system, as the Communist Party still held on to power.
By only focusing on theoretical ideals, critics overlook and often fail to consider the dialectical nature of Socialism, which cannot be reduced to static definitions; but rather, its relevance and survival depend on its ability to reform and adapt. Lenin’s New Economic Policy and China’s reforms show the need for flexibility rather than rigidity, in order to advance the higher cause of socialism in the modern world.
This blog post was inspired by the following works:
- The Purity Fetish and the Crisis of Western Marxism by Carlos L. Garrido
- China’s Great Road: Lessons for Marxist Theory and Socialist Practices by John Ross
- Has China Turned to Capitalism?—Reflections on the Transition from Capitalism to Socialism by Domenico Losurdo
- The East is Still Red: Socialism in the 21st Century by Carlos Martinez
- Kang Bing’s Chinese People’s Journey from Malnutrition to Over-Nutrition
