New York: Oxford University Press, 2019. xii, 302 pp. (Figure.) US$29.95, paper. ISBN 978-0-19-005261-4.
This book is an ambitious and remarkably successful analysis of the rise and fall of Chinese “industrial citizenship” between 1949 and the early 2000s. Industrial citizenship here is meant as a system of workplace (primarily industrial) organization that offers permanent employment and a variety of welfare benefits, including pensions and housing. This is the danwei system that was developed in the 1950s, and then struggled and was adapted during the Great Leap Forward, the 1960s, and 1970s.
To be effective, such a system requires that the stakeholder workers enjoy real participation in decision making and retain a degree of personal autonomy—principally the ability to “quit” seeking alternative employment. This, in the Chinese case, workers did not have: the price of permanent employment was permanent commitment. Indeed, Joel Andreas illustrates that neither party control nor the planning system allowed enterprises and their workers to exercise their citizenship properly. After taking us through the history of the danwei system, Andreas then explains how the post-1978 reforms undermined the old system, leaving unskilled workers in particular open to unemployment and exploitation in an atomized labour market.
As an economist who spent his first 10 years of research on labour and management problems in the context of China’s economic development, and the last 10 on revisiting all these matters in an attempt to explain Chinese science and technology, two thoughts spring immediately to mind: one is how vast the materials for these subjects really are; the other is how differently these materials can be understood in the light of different disciplines. Against this background, editorial controls require me to limit my reservations about this important work to four heads: statistics, strategic intent, Manchuria, and missing names.
To set the scene and explain the evolution of employing institutions, a sound and comprehensive statistical framework would seem to be essential. This is only partially offered here, although valuable sources for such a framework are listed in the bibliography. Among all such aspects, of particular importance is what happened to the real incomes of the danwei workers and staff, both over the long run and through the dramatic changes described in the narrative.
Andreas sums up his interpretation of this question as follows: “Between 1950 and 1957, real wages increased by over 60%” (35), and “Although wages increased steadily in the 1950s, there were few adjustments after that and these were largely limited to those with the lowest wages. As a result, while prices were also stable, living standards—which had grown considerably in the 1950s—stagnated” (58).
For Covid-19 reasons I have been unable to access the Charles Hoffman book from which these statements seem to be drawn, but other more recent material suggests that the propositions embedded here are incorrect. First, there are no reliable wage/price data for 1950/1951. This is not surprising, because at that time everyone, from shop floor workers to professors in the Academy of Sciences, was paid in kind, according to complex and changing formulas that depended on regional and other factors. Then, according to a comprehensive source whose data are corroborated by a number of State Statistical Bureau yearbooks, between 1952 and 1957 the real wages of workers and staff in state-owned units increased by just 30 percent, half of which increase was a result of the Wage Reform of 1956. In other words, growth occurred but at half the suggested rate and could certainly not be described as “steady” (Li Jianli et al. Xin Zhongguo gongzi shigao [An outline history of wages in New China], Beijing: China Finance and Economic Publishing House, 1986, chaps. 3–6 and tables).
Turning to the long run after 1957, between the years 1957 and 1977, the nominal wage fell by five percent, while price rises ultimately reduced real wages by 17 percent. In the intervening years the real wage had declined sharply during the leap and post-leap crash, had risen during Zhou Enlai’s “Readjustment,” then fell and stabilized at the lower level. This long-run real wage decline after 1957 was confirmed to me in April 1980, in Beijing, by the party’s senior professional economist at the time, Professor Xu Dixin.
Turning now to the problem of “strategic intent,” the question is this: What were the underlying purposes of the danwei and industrial citizenship? Andreas’s arguments seem to focus mainly on ideology, control, and later on attempts to maintain the system but limit cadre bureaucratism. These arguments ring true, but having reviewed this literature again in recent years, the overriding point that comes across to me is the emphasis on devising systems that would ensure the efficient absorption of modern technologies and stimulate waves of shop floor adaptation, innovation, and invention. This view holds true whether you consider the detailed implementation of the Stalinist system, or Mao’s campaigns to undermine this. The objectives of the Soviet Magnitogorsk system into the northeast, and Mao’s Anshan Constitution were substantially the same: the bitter two-line struggle was about the means.
This leads me to the point about Manchuria. The northeast was the dominant regional economy in the 1950s. It mopped up 50 percent of all Soviet projects and was so important that at one time a quarter of the Central Committee was located in the northeast bureau to handle the region’s development. The materials on the northeastern economy are extraordinary—not only in terms of data, reports, and regulations, but also of qualitative description—being especially fascinating on the complexities of social, cultural, authority, and skill differences within enterprises. The late Bill Brugger did a great job in understanding all this, but he only took the project so far. It needs far more attention.
Finally, there is the problem of missing names. Zhou Enlai and Mao apart, the names that recur constantly in the development of the Chinese industrial enterprise are Chairman Gao Gang (who established the Soviet system in the northeast), Li Fuchun, and Chen Yun (both of whom started in the northeast and then struggled for decades to solve the problems of China’s industrial systems as they unfolded nationwide). None of these remarkable men rate a single entry in the index.
Christopher Howe
School of Oriental and African Studies, London