The Third Plenary Session of the Chinese Communist Party's Central Committee reiterated that China remains "at the primary stage of socialism." The fundamental economic principle remains unswerving adherence to the dominant role of public ownership in the economy. However, markets are to be allotted "a decisive role" in the allocation of goods and resources.

How is this to be understood in a world-historical context? Marx and Engels believed that socialist revolutions would begin in the most advanced capitalist countries: France, Germany and England. They thought that most important enterprises and means of production would be taken into public ownership; and the combined technical, scientific, and material wealth of these nations would provide the basis for a society of abundance. Socialism would end the fundamental class antagonism in society -- between the workers and capitalists -- laying the basis for harmonious social relations and a world of plenty for all. Consequently, the state -- as an instrument for repression -- would be replaced by popular participation and control, and begin to wither away.

However, socialist revolutions in the 20th century broke out in countries where capitalism was not fully developed, such as Russia, China, Cuba and Ethiopia. In Eastern Europe, revolutions came about as a consequence of the victory of the Soviet Union in the Second World War. The fundamental task for socialist governments was to try to catch up with advanced capitalism, in order to establish the material foundations for a socialist society. Experience revealed the tortuous contradictions inherent in this task.

The struggle to develop the state economy required inequality, i.e. that some get rich first. But if some are richer than others, the state becomes a defender of this inequity. The need to protect the revolution against invasion also required military and industrial might, but this focus came at the expense of the living standards of the masses. Such contradictory pressures gave rise to a new bureaucratic state apparatus, which emerged spontaneously and automatically in these societies. Therefore, in the eyes of the world, this system appeared to be the inevitable form of socialism.

Nevertheless, the economies of the socialist camp probably could have caught up with the USA, between 1960 and 1980, had they functioned as a unified and combined economic system. But instead of concentrating on planning the commanding heights of their economies -- they tried to plan every tiny detail of production and consumer demand. This inevitably failed. The complexity, subtlety and flexibility of human activity, always confounds bureaucratic decision-making. Bureaucratic planning displays its greatest advantages where the systems concerned can be easily modelled and commanded within a constrained set of variables. China avoided collapse after 1989 by combining state ownership, of fewer, but more powerful state enterprises, with various subordinate forms of private ownership.

The rate of urbanisation forecast for the next 15 years will see China's cities and towns swell by over 250 million. The new urbanites will be predominantly working class -- producers by hand or by brain. The ever-increasing social weight of the working class will profoundly transform China's class relations. They will hold fiercely egalitarian sentiments, will distain corruption, and will constitute the mainstay of the All China Federation of Trade Unions and the Communist party. The new working classes will inevitably take their socialist constitutional and legal rights more and more seriously and demand that officials work honestly to serve the workers they are supposed to represent. One can draw some analogies to the way workers in Europe demanded democratic representation and greater rights at the turn of the 20th century. But there will also be similarities to the position of workers in Europe in the late 1960s and early 1970s.

For example, since 2003 labour shortages in China have led to rapid wage rises and increasing worker militancy. Over the next decades the balance of forces between capital and labour will shift so decisively in favour of the working class that their demands will appear to sweep the board. The state will be able to introduce a universal welfare with: free healthcare; free education; low cost housing for the people; and a dignified pension system for all -- like that in Britain, Germany, France or Sweden between the 1950s and 1970s. Workers will also consistently be able to win above inflation wage rises. This will give impetus to invigorate and democratise the trade unions, and breathe real life into China's workers' congress democratic management system. Indeed, when China's Premier Li Kejiang spoke to the All China Federation of Trade Union's 16th Congress last week he said: "We should promote democratic management in companies and fully exploit the role of workers' congresses." The realization of democratic management of enterprises by the workers is ultimately one of the defining characteristics of socialist as distinct from bureaucratic and capitalist management systems.

The theory of the primary stage of socialism adopted by the CPC in 1987 projected it would last for 100 years from 1949. By 2049 workers will constitute a crushing majority of China's population. They will be highly skilled and educated, and will be connected with workers around the world. China will be the richest country in the world and its workers will have high per capita incomes. If, at that time, the workers democratically control production and are the real masters of the state; and if society is based on egalitarian principles -- then socialism will surely conquer the world.

The author is a columnist with China.org.cn. For more information please visit:

http://china.org.cn/opinion/heikokhoo.htm

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