The Revival of Capital and the Left Turn of the Mental Laborer
Translated by Kevin Li
Originally anonymously published on Zuoyi23’s WeChat and Zhihu pages, the following article explores the rise and fall of the capitalist class in China. Employing a sharp, dialectical lens, the author takes a critical look at how the relationship between the state and capital continues to shape the relationship between the capitalist and working classes in China—and how young workers are returning to Marxist critique to shape the future.
The original text on Zhihu can be found here: 资本的复兴和脑力无产者的左转 (zhihu.com)
Editor’s Note: The following piece was originally published on December 18th, 2020, shortly after the halt of Alibaba’s IPO and months before the Chinese government instituted a series of new regulations throughout the private sector. It was then subsequently re-published on leftist sites such as Utopia (乌有之乡).
The author details but a small fraction of the previously long-unseen contradictions in Chinese society resulting from the Reform and Opening Up period. During the 1990s and 2000s, changes in labor relations, political economy, and the flow of capital seemed to spell the end of socialist construction in China—indeed convincing many Western scholars and leftists that China had sold out to the capitalist class.
However, China’s recent sharp turn in state regulation of key industries such as education, tech, and housing—decried as a “crackdown” on capitalism in Western media—reflects the long-term strategy of capital accumulation. In recent months, the Chinese government has kneecapped multiple multibillion-dollar industries, massively devalued the assets of billionaires, and has begun one of the largest transfers of wealth from monopoly capital to the public, all while eliminating extreme poverty in the country.
In light of the author’s concise description of the Chinese capitalist’s rise and fall, we are reminded that Marx and Engels had theorized that socialism, and subsequently communism, could only be realized under an abundance of capital. Using the market as a means of capital accumulation rather than an end in and of itself, the Communist Party of China’s ongoing project of socialist construction has lifted the living standards of over 1 billion people. Despite difficulties faced by the Chinese people, we share the author’s call to look forward to what the future brings.
2020 was a special year. It was a year where unpropertied mental laborers (脑力无产者) took a left turn (to a critical viewpoint of capitalism). It was also the first year where unpropertied physical laborers felt a clear crisis.
Since 1978, China’s capital development has gone through three significant stages. Linked with these three stages of development, the social status of capitalists and the consciousness of laborers have also gone through three different stages.
1978 - 1992
This period is the first stage of China’s capital development. In this stage, capital was summoned from nonexistence and created a nationwide unified commodities market, labor market, and financial system.
Before 1978, to be an exploitative capitalist was not only shameful, it was illegal. After Reform and Opening Up, it was under these conditions where the first cohort of capitalists (initially individuals in the city and countryside) came of age.
In 1981, discussions within the Party revolved around a particular question: whether private employment of labor constituted exploitation under a socialist system. The debate dragged on, and ultimately concluded that under 8 employees did not qualify as exploitation, while over 8 employees did. However, capital development proceeds at a breakneck pace, and this 8-person restriction was broken in no time.
In January of 1983, the central government issued the “Three No’s” regarding employment of over 8 persons: do not promote, do not publicize, and do not be too quick to ban. Under such an ambiguously supportive environment, capital developed rapidly, and as a class, capitalists in China re-emerged on a land of worker-peasants.
While capitalists were busy enriching their families, they lacked any sort of associated social prestige. They couldn’t enter the National People’s Congress, join the Chinese People’s Political Consultative Conference, or join the Party. They weren’t even sure if they could keep their homes built on exploited labor, since 10 years prior, our Party had confiscated all capitalist property.
In cities, the working class had their iron rice bowls. But the capitalists, before all this they were just unemployed educated youth, good-for-nothing loafers, and all sorts of miscellaneous vagrants looked down upon by the proletariat. To these nouveau-riche capitalists, the proletariat were backhanded in their praise, “So you’ve got some stinkin’ money now—in two days the country will take it away anyway.”
In the countryside, migrant workers began to appear. The cooperative enterprises formed in the socialist period broke up to become “township enterprises” and were given away to all sorts of “skilled persons,” ushering in the start of capitalist development. Local farmers became the reserve force of the employed workforce in these township enterprises. Besides agricultural production, they worked part-time in both township enterprises. Working both fields simultaneously, this remarkable phenomenon was known as “leaving the land but not the hometown.”
Would the country even confiscate these assets? Were they prepping the capitalists up for slaughter? Not even the capitalists themselves knew. In 1987, to comfort the capitalist class, the Great Architect [Deng Xiaoping] gave a significant, meaningful speech where he said, “Now us in China are discussing the question of employment. I’ve spoken with many comrades, and there’s no need to show that we are ‘moving’ on this issue, and we can wait and see for another few years.” Of course, in order to reduce resistance, the Architect also comforted the traditional old guard cadre by saying, “currently most employers are small businesses and consist of villagers hired by their own village enterprises. Compared to the over 100 million other workers, this represents a tiny number. Looking at the big picture shows us how this is really a small, small point. Moving on this issue is easy, but if we move, it will look as if our entire policy changes. Yes we will have to act, since we do not aim to polarize. However, when and how we move, we must do our research.” However, this research ended up taking tens of years.
1988. Nearly 10 years after the start of capital development; after capitalists had become a rising class; after the reemergence of migrant workers. A year when workers could only dream of a free apartment; when a university student’s highest honor was to earn a spot as a cadre. In 1988, the constitution was revised, and the private economy finally gained legal recognition.
The juncture of two eras: from a planned economy to market economy, from a socialist to a capitalist system; from a house commanded by laborers steered to a church of capitalism.
At this juncture, capitalists lacked the prestige that would typically correspond to all the money they controlled. Not only were they banned from the Chinese People’s Political Consultative Conference, their children had fewer opportunities to enter universities compared to those of worker-peasants, of course a tiny disparity compared to admission to the civil service. The table below describes the rate of college admission of the children of persons of social classes compared to the capitalist class. In 1982, the university admission rate of a laborer’s child was 3.23 times greater compared to a capitalist’s child, while a farmer’s child’s rate of admission was 2.13 times greater compared to a capitalist’s child. In 1990, the children of urban workers had an admission rate that was 10.78 times higher than that of a capitalist’s child and the children of farmers had 6.22 times higher an admission rate.
And after 1992, everything changed.
1992 - 2008
This period marks the second stage of capital development. Deng Xiaoping’s southern tour unveiled the curtain of this stage; clarified the direction of capitalist development; finalized the discussion of whether China was socialist vs. capitalist in character; and cleared any obstacles for capital to roam across China.
This stage was marked by several landmark incidents, including the Zhili fire at the end of 1993, which tragically claimed the lives of 87 women workers. This incident was an announcement that governance over the laborer had reemerged. For tens of years afterwards, labor existed under the foot of capital, where it had to either live or die in humility.
Cheap labor costs; a relaxed merchant sector; a large educated population; complete infrastructure; and the world’s supply chain. These factors enabled China’s rapid capital development and the country’s transformation to a paradise of capital accumulation.
Before 1992, other than a small subset of merchants, most capital was found among “capable people”—individual entities within villages. After 1992, many within the system cashed in, throwing down their iron rice bowls and turning to private enterprise. A large number of state-owned enterprises (SOEs) were bought out by managing cadre, who thus became the owners. A business census between 1997 and 1998 revealed that the greater abundance of social resources led to the cadres who left the system earning 1.9 times greater net profits compared to the average.
At this stage, illegal gray market activity surfaced. According to estimates by Dai Jianzhong [a professor at the Beijing Academy of Social Sciences], between 1992 and 1997, 270 billion RMB was lost to tax evasion by private enterprises, about 5% of all revenue during that period.
Bosses made more and more and enjoyed stability in social status. The July 1, 2001 speech brought up that enterprise heads “through honest labor and work, through legal operations, have made contributions to the development of our socialist society’s predictive forces. United alongside laborers, farmers, intellectuals, cadres, and the People’s Liberation Army, they are the builders of Socialism with Chinese Characteristics.” If these people “recognize the guiding principles of the Party, struggle for and follow the Party’s line, have been thoroughly vetted, and fit the proper requirements and conditions,” they should be “absorbed into the party.” Starting that year, capitalists were let into the Party, and the organization of exploiters was legalized. Not only could the boss enter the party, they could enter all levels of the National People’s Congress and participate in governance.
The more capitalist, the thirstier for political status, and the more eager to enter the party—Party businesspeople at heart. The “Report on An Investigative Analysis of Large-Scale Private Enterprises in the All-China Federation of Industry and Commerce” (2000-2014) reported the following results:
In the city, free housing and healthcare benefits were gone, and changes to SOEs ended the dream of the iron rice bowl. In the midst of the downfall of SOE workers, a new generation of migrant workers emerged as the main body of the working class. After China entered the World Trade Organization (WTO), the number of migrant workers skyrocketed. Between 2003 and 2008, the annual increase of migrant workers increased by 6 to 8 million. These people had no concept of free housing benefits or free healthcare. Growing up in the era of Reform and Opening Up and working in the capitalists’ factories, they thought that the exploitation of their labor was a god-given truth, the law of the land. Amidst a earth-shatteringly significant shift in laboring bodies, memories of the past were wiped in favor of an ideological shift that further entrenched the foundational legitimacy and prestige of capital.
In the countryside, after a small economic renaissance problems emerged. The anxiety brought on by the ”Three Rural Issues” [agriculture, rural areas, and farmers] carved itself into the collective memory of the end of the century. However, after China’s entry into the WTO, outstanding problems magnified in intensity. The youngest and strongest farmers flowed into cities, leaving the countryside to wither. Slowly but surely, the rural issue entered the spotlight.
At this time, be it in terms of wealth, status, or prestige, the space between capitalists and migrant workers widened. Capital had been completely legitimized; nobody talked of how many employees constituted exploitation. Exploit? If you don’t, someone else will. Being exploited means getting a job opportunity, and you best be thankful. After 2005, there were incidents where people attempted to attack the capitalists by exposing their dark, inhumane management buyout of SOEs—to reveal their original sin. However, public opinion barely batted an eye, with some even suggesting forgiving the capitalists, for if we investigate further, we would find that most capitalists had sinned.
Capitalists were progressing forward, while migrant workers groveled. Between these lines, a new group emerged. This group emerged and flourished following China’s urbanization, global capitalism, and the birth of the information technology industry. As lawyers, accountants, finance professionals, managers, scientific researchers, this group was defined by their technical and managerial skills. Perhaps due to their position in the workplace as managers—specific skills that render them irreplaceable or position in monopolies industries—some of them had better work environments, stronger capacity to organize, and thus higher salaries. These people were the emergent petit-bourgeois: professors, high-level teachers, department managers, some workers in the financial sector, engineers at large companies, workers in the IT industry, etc. Others in this group who worked in lower-level skilled worker or managerial positions, earned a slightly higher salary compared to their physically laboring counterparts. This group formed the unpropertied mental laboring class, including programmers, low-level finance employees, departmental clerks, elementary and middle school teachers, company technicians, etc.
Under the age of rapid capital development, the emergent petit bourgeois’ voices roared loud and clear. They cursed the planned economy period, siding with the mainstream, singing of praise of a gradual emergence. Every advance of capital left them beyond excited, with their plump capital bosses dripping oil to feed their meager ambitions.
Mental laborers held onto their petit bourgeois dreams. They shared office spaces, ate at the same table, held similar backgrounds, and spoke the same language. Consequently, they held similar ideologies as the petit bourgeois. The mental laborers upheld the competition and believed that they too could change their destinies through their own blood, sweat, and tears. They drank their boss’s kool-aid while watching ‘successology’ videos, listening to Jack Ma’s lectures, and daydreaming of a brighter future.
Aligned in interest and spirit with the capitalists, the emergent petit bourgeois and the mental laborers seduced by middle-class life made up the earliest users of Zhihu and other new media. Of course, on these platforms, this group of people spoke for the interests of capital while answering and discussing all sorts of questions.
2008 - Present
This is the third stage of capital development, the stage where capital falls from its own success.
During the early period of this stage, capital grew stronger. Chinese capital relied on upholding the national system and Keynesianism to speed past the rest of the world to become the world’s second largest economy. Upholding this system, Chinese monopoly capital blew past England, Germany, Japan, and France to become number two. In 2007, 30 of the Global 500 companies were Chinese, a figure that increased to 106 in 2015.
At this stage, as a class, farmers declined rapidly. The movement of young and able-bodied workers into the cities left behind what became known as the “Unit 993861”—99 referring to the elderly (Double Ninth Festival), 38 referring to women (International Women’s Day), and 61 referring to children (Children’s Day). Currently, in the countryside, due to a plethora of reasons, many have returned to either part time or full time farming after years away, unable to continue laboring in the cities. According to a series of reports in Changes in Social Stratification and Class Division in Contemporary China, 67.91% of full time farmers “were once employees or salaried workers, in other words they were once laborers who later on returned to farm in the countryside. Most returned after reaching a certain age.” The small-scale farmer, as a group, will inevitably die out in the market economy.
At this stage, there are two important contradictions that are developing rapidly that are leaving a deep mark on China.
First, the rapid development of Chinese capital has left the domestic market more and more narrow as surplus capital flowed outwards. After 2012, there was an instance where such outflow increased, where starting in 2014, China became a net capital exporter. There are limits to the world market, and Chinese exports necessitates competition with counterparts from the UK, France, US, Germany, Italy, Japan, and other old imperialist countries. This led some of the monopoly capital of some of these countries to lose profits, not something the US monopoly capital class wants to see. In reality, since Obama’s Pivot to Asia in 2012, the US solidified its China containment strategy, publicized further under Trump.
Second, working class rebellions are more and more commonplace. Thanks to their continued resistance, their real wages experienced a phase of fast growth between 2003 and 2015. Wage growth peaked in 2010; capitalists would refer to this as “increasing labor costs” and subsequent decreasing profits in the low-end manufacturing sector.
The basic contradictions of capitalism accelerated even more quickly under the above two contradictions. Large scale excess manufacturing capacity led to a decline in China's GDP growth rate beginning in 2013, and the economy entered a new period, the “new normal.” To protect the economy, China initiated two large scale stimulus policies in 2009 and 2014. After continued economic stimulus, housing prices skyrocketed.
The home owning petit bourgeois are still living in their golden age, while petit bourgeois who aren’t homeowners, alongside the large mental laboring class sigh as they even consider the prospect. Following a decline in profits, the pressure exerted by capital on the unpropertied grew. Following an increase in housing costs, the hope they placed on capital became uncertain.
Since 2018, the contradiction between foreign and domestic interests have increased. People who ordinarily pay no attention to political matters have begun discussing social issues. Be it due to “bride prices,” salaries, housing prices, or having been made redundant, people have felt the pressure from living in a society burdened by capital.
These people continue to browse Zhihu and other new media platforms. Before, they acted as mouthpieces for capital. Now, they spontaneously curse it.
This group of people, unlike any other group in the world, possesses a unique trait: they grew up learning about historical materialism. No matter whether or not they dismissed concepts like “class”, “exploitation,” or “surplus value” in the classroom, such consciousness was widely instilled in these people. When capital grows, these people disregard these concepts. But when capital disappoints and heartlessly squeezes them, Marxist concepts come rushing back into their minds. They begin calling entrepreneurs “capitalists,” describe their actions as “exploitation,” and use “class” to look down on them.
Some of them have taken quite a left turn, and post online the knowledge they once learned in their textbooks: exploitation, class, capitalist, surplus value. Some of them go beyond, studying books beyond what was once required: Selected Works of Mao Zedong, Marx & Engels Collected Works, Lenin’s books, and histories left ignored or covered up.
They engage in heated online debates, fighting off against xiaofenhong of varying degrees of purity, capitalists, and a large sector of the lumpenproletariat. Of course, some will disguise their chauvinism in Marxist language.
The sudden onset of the pandemic in 2020 magnified everything. Oppression felt heavier, housing prices remained high, and work felt seemingly less stable. A beautiful life felt less and less certain.
The arrogance and cruelty of the capitalists, built up over decades of rapid development went too far to their heads. “996” is a blessing, businesses are pro bono, and entrepreneurs even gave themselves a holiday. They even proposed that businesses shouldn’t have to respect labor law for two years after their founding.
All this has led to a sharp turn in how Zhihu users viewed capitalists in 2020.
However, this group represents a fairly small proportion of laborers, a group dominated by physical laborers who have yet to experience such a strong awakening. Their wages were already low, and they weren't working to buy homes in big cities. They lived at the lower rungs of society, and had even more limited access to information and were a little worse at abstract thinking. As a group they remained unchanged.
That isn’t to say that the physical laboring proletariat are not changing. Salaries haven’t caught up with the cost of living. “In 2017, a room was 300 yuan, now it’s 550,” “I go to my second job after getting off of work, where do I have time to rest?” Their complaints increased in number. Not only this, but with the economic downturn, many laborers returned to their ancestral homes, losing their incomes—an economic crisis just waiting to happen.
2020 has been a special year. A year where the mental laborer took a left turn—to be critical of capitalism—and where the physical laborer felt a clear crisis.
The storm is far far away, but the mental laborers’ left turn has sent a clear signal. Clouds are coming together and the sound of thunder is looming. Those sharp enough flashes of lightning in the dark night, signs of historical dialectics approaching. And the minority of youth have already opened their arms in embrace.
[1] Per the National Bureau of Statistics’ related standards, small-sized capital was defined as businesses whose turnover was lower than 30 million RMB in industrial sections and lower than 10 million RMB in other sectors.
[2] Defined as those that fall outside of the confines of small or large capitalist.
[3] Designated as owners of private enterprise larger than a designated size.