Deng Xiaoping, the architect of the
Chinese economic reforms, did not believe that the market economy was synonymous with capitalism or that
planning was synonymous with socialism.
Ideological justification In the 1980s, it became evident to Chinese economists that the Marxist theory of the
law of value—understood as the expression of the
labor theory of value—could not serve as the basis of China's pricing system. They concluded that Marx never intended his theory of law of value to work "as an expression of 'concretized labor time. Marx's notion of "prices of production" was meaningless to the
Soviet-styled planned economies since price formations were according to Marx established by markets. Soviet planners had used the law of value as a basis to rationalize prices in the planned economy. According to Soviet sources, prices were "planned with an eye to the [...] basic requirements of the law of value". However, the primary fault with the Soviet interpretation was that they tried to calibrate prices without a
competitive market since according to Marx competitive markets allowed for an
equilibrium of
profit rates which led to an increase in the
prices of production. The rejection of the Soviet interpretation of the law of value led to the acceptance of the idea that China was still in the primary stage of socialism. The basic argument was that conditions envisaged by Marx for reaching the
socialist stage of development did not yet exist in China. Mao said that the imposition of "progressive
relations of production" would revolutionize production. His successor's rejection of this view according to
A. James Gregor has thwarted the ideological continuity of
Maoism—officially Mao Zedong Thought.
Classical Marxism had argued that a
socialist revolution would only take place in advanced
capitalist societies and its success would signal the transition from a capitalist
commodity-based economy to a "product economy" in which goods would be distributed for people's need and not for profit. If because of a lack of a coherent explanation in the chance of failure this revolution did not occur, the revolutionaries would be forced to take over the responsibilities of the
bourgeoisie. Chinese communists are thus looking for a new Marxist theory of development. CCP theorist Luo Rongqu recognized that the founders of
Marxism had never "formulated any systematic theory on the development of the non-Western world" and said that the CCP should "establish their own synthesized theoretical framework to study the problem of modern development". According to A. James Gregor, the implication of this stance is that "Chinese Marxism is currently in a state of profound theoretical discontinuity". According to academics Xinru Ma and David C. Kang, socialism with Chinese characteristics is restricted to China itself and focuses on China's own ideology and practices. Ma and Kang write that in its foreign relations with other
Global South countries, China does not attempt to export the ideology of Socialism with Chinese characteristics.
Private ownership The Chinese government's understanding of
private ownership is claimed to be rooted in classical Marxism. According to party theorists, since China adopted state ownership when it was a
semi-feudal and
semi-colonial country, it is claimed to be in the primary stage of socialism. Because of this, certain policies and system characteristicssuch as commodity production for the market, the existence of a
private sector and the reliance of the
profit motive in enterprise management—were changed. These changes were allowed as long as they improved productivity and modernized the
means of production, thus furthering the development of socialism. The CCP still considers private ownership to be non-socialist. However, according to party theorists, the existence and growth of private ownership does not necessarily undermine socialism or promote capitalism in China. They argue that
Karl Marx and
Friedrich Engels never proposed the immediate abolishment of private ownership. According to Engels' book
Principles of Communism, the
proletariat can only abolish private ownership when the necessary conditions have been met. In the phase before the abolishment of private ownership, Engels proposed progressive taxation, high inheritance taxes and compulsory bond purchases to restrict private property, while using the competitive powers of state-owned enterprises to expand the
public sector. Marx and Engels proposed similar measures in
The Communist Manifesto with regard to advanced countries, but since China was economically undeveloped, party theorists called for flexibility regarding the party's handling of private property. According to party theorist Liu Shuiyuan, the
New Economic Policy program initiated by Soviet authorities in the aftermath of the
war communism program is a good example of flexibility by socialist authorities. Party theorist Li Xuai said that private ownership inevitably involved
capitalist exploitation. However, Li regards private property and exploitation as necessary in the primary stage of socialism, stating that capitalism in its primary stage uses remnants of the old society to build itself. Sun Liancheng and Lin Huiyong said that Marx and Engels—in their interpretation of
The Communist Manifesto—criticized private ownership when it was owned solely by the bourgeoisie, but not individual ownership in which everyone owns the means of production, hence this cannot be exploited by others. Individual ownership is considered consistent with socialism, since Marx wrote that a
post-capitalist society would entail the rebuilding of "associated social individual ownership". == See also ==