Joining the Socialist Camp } 51
Commission was established in Beijing. Specialized agencies were set up to
operate various sectors of the economy. Party committees were established in
factories to ensure that operations complied with plan assignments. China’s
neophyte economic planners also revised the First Five Year Plan in line with
suggestions from Soviet planning experts. Chinese leaders were immensely
excited by the setting up of a copy of Soviet economic planning to guide
China’s economy. In the words of one scholar, “Chinese [leaders] equated
the sacred cause of socialism with the Soviet Stalinist Model, believing that
it represented the material embodiment of Marxism and the truth of social-
ism.”^42 CCP leaders uniformly expected that China’s new socialist economic
system would rapidly industrialize China.
Collectivized agriculture constituted the second pillar of socialism as out-
lined in the Short Course. Collectivized agriculture provided inputs for rapid
industrialization via what was called “primitive socialist accumulation.”^43 Mao
hoped that these two foundations of a socialist economy—state-owned and
-planned industry plus collectivized agriculture—would enable the PRC to ac-
complish industrialization. Extrapolating from Soviet experience as outlined
in the Short Course, Mao concluded that within ten to fifteen years, but perhaps
as quickly as eight years, the PRC would become a highly industrialized social-
ist cou nt r y.^44 This paved the road for the Great Leap Forward a few years later.
The command economy Mao and the CCP imposed on China had grave
defects. In effect, a deeply dysfunctional economic system was being clamped
onto China. A large-scale economy is an extremely complex and dynamic
thing. All the components that are used to produce a particular good must
be delivered with just the right specifications at just the right time to just
the right place. For each good, there may be scores, hundreds, or thousands
of inputs. Goods will often be passed from one to another stage of produc-
tion before arriving at a final consumer. Remote but intimately related output
decisions must be coordinated over time. Requisite amounts of very spe-
cific goods must be produced and delivered so that some other good may
be produced and delivered at some distant time. If everything does not fit
together just right, there will be shortages of some goods, surpluses of others,
and goods that don’t quite meet the specifications required. Moreover, things
change constantly.
In a market economy, all these decisions are handled in an extremely
decentralized fashion by self-interested businessmen pursuing private and
individual plans that they calculate will produce a profit for them. They buy
and sell goods and services they need under terms acceptable to parties to
that contract. The flow of information via a decentralized market system is
far more effective than via a system of comprehensive central planning. But
it would take many years for these and other fundamental drawbacks of eco-
nomic planning to become apparent, and for some CCP leaders to find ways
of removing “planning” from the ideological center of “socialism.”