Economic factors also played a role in the peasant-capitalist compromise. First, prereform agriculture was inefficient, so changes in agrarian relations were likely to bring a higher growth rate and national self-sufficiency. Latin America’s hacienda system was a typical example. However, in places like India, where some landlords had already adopted capitalist methods of production, the efficiency factor was not so important.4 Second, it was argued that a more egalitarian distribution of land would increase domestic demand; this obviously fit in with the industrialization objectives of most national governments. In socialist countries, the economic argument for collectivization followed a similar vein: collectivization would generate a higher growth rate, which would facilitate industrialization; and better industrial support would benefit agriculture in the long run.
The political and economic factors did not work in fixed ways across countries, but for the bourgeoisie and bureaucrats in developing countries, progressive agrarian reform was a matter of necessity, not choice. Ironically, TINA—there is no alternative, the slogan promoted later by former British prime minister Margaret Thatcher to justify neoliberalism—was included then as an organic part of the development packages that were accepted by most national governments. However, the capitalist-peasant compromise came to an end during the 1970s. As Table 2.1 shows, all the countries that adopted progressive agrarian reforms stepped back and undid small or large portions of the previous reforms. In 1992, Mexico, the pioneer in agrarian reform, changed its 1917 constitution to allow land sales.5 In 1994, Cuba, as the residualsocialist state, introduced private agricultural markets and divided state farms into smaller cooperative units.6 In 1983, Tanzania, which had instituted the radical collectivization known as Ujamaa in 1974, published a new National Agricultural Policy to encourage commercial farming and land consolidation.7 The demise of the Soviet Union in the early 1990s and the rapid privatization that followed in Russia and eastern Europe needs no elaboration.
It is worthwhile to analyze the global political and economic forces at work during this period. Political factors can be divided into two groups, internal and external. Internally, as the independence revolution faded away and bourgeoisie dictatorship strengthened worldwide, the overall capitalist order survived and more or less stabilized. Such was the case in both Taiwan and South Korea, which both enjoyed rapid growth. In socialist countries the ruling elites gradually became more pro-capitalist.8 Peasants as a revolutionary force were no longer needed. Instead, in both capitalist and socialist countries, the ruling class preferred a depoliticized peasantry. This set the ground for breaking down the previous compromise.
Externally, the once strong communist threat was not there anymore; the Sino-Soviet debate, the collaboration between China and the United States in the post-Mao era, and the eventual demise of the Soviet Union greatly undermined the socialist movement. The capitalist class was largely relieved of the necessity of keeping the previous compromise and soon began to fight back. This was manifested ideologically both in academia—the decline of the Keynesians and the rise of the Milton Friedmanites, for example—and in the policies of such entities as the World Bank and the IMF. It was also enforced militarily if need be, as, for example, in the coup in Chile.
TABLE 2.1: Agrarian Changes: Selected Countries
Sources: El-Ghonemy, 1999; Kay, 1998; Mathijs and Swinnen, 1998; Metz, 1988; Daley, 2005; Barraclough, 1991; de Janvry, Sadoulet, and Wolford, 1998; Bush, 2007; Akram-Lodhi and Haroon, 2007; wa Githinji and Mersha, 2007; Hinnebusch, 1995.
The economic forces were also significant. First and foremost, for a variety of reasons many agrarian reforms failed to deliver the high growth rate the reformers once expected. Governments in Latin America failed to provide financial, technical, and other support to agriculture.9 Instead industrial accumulation often had a negative impact on internal terms of trade (price of agricultural goods relative to industrial output). In collectivization, it was common to have inexperienced leadership and poorly developed plans. In extreme cases, like the Soviet Union, grain production did not reliably exceed pre-revolution level until the 1950s.10 It did not take too long for the ruling classes to conclude that the reforms were not productive enough. Second, the debt crisis broke out in many developing countries after the American interest rate hike in the early 1980s, which left indebted national governments unable to finance agrarian reforms.11 Third, with the so-called green revolution starting in the 1960s marked by usage of high-yield varieties and chemical fertilizers, there seemed to be a technological alternative to the institutional reforms. Finally, global agribusiness also played a significant role. In some cases agribusiness directly demanded the reversal of the agrarian policies (as in Guatemala). On the other hand, after the 1970s, the unprecedented development of agribusiness and globalized food markets meant national capitalists could circumvent through trade and foreign investment the problem of food sufficiency and national industrialization, which marginalized peasants even further, both politically and economically.12
The gradual change in conditions led to a heightening of the inherent contradictions between the capitalist class and the peasantry. The peasantry remained silent and depoliticized, while the capitalist class became aggressive. The capitalist-peasant compromise became unsustainable, and this led to counterrevolution in the latter part of the twentieth century.
The Agrarian Question and China
The agrarian question refers to the transformation of the pre-capitalist countryside into a productive “modern” one: the development of capitalist or socialist relations of production in the countryside; the creation of surplus for national industrialization; and the role of the peasantry in political movements. Historically, this transformation has been accomplished in different ways. For the countries where small producers are prevalent in the countryside, there are three possible directions. The capitalist-oriented model tries to develop capitalism through differentiated peasant households. The socialist-oriented model develops collective production through organizing small peasants. The populist model tries to protect the small subsistence peasant households against commodity relations and capitalism, but without developing collectives. All these solutions agree on the need to abolish pre-capitalist agrarian relations, but they diverge after this very historical conjunction. While the capitalist path implies the development of the capitalist farmer and wage labor in the countryside, the socialist path means a significant degree of public ownership of land and other means of production; the populists in the classical sense reject both capitalist and socialist visions.
Many developing countries started to tackle the agrarian question by choosing noncapitalist paths in the revolutionary phase. Most of them at least tried to guarantee peasants’ access to land, and many had redistributive land reforms or even encouraged collectivization to build socialism. However, these countries started to move to the capitalist path in the second phase. Former small-producer states like Egypt removed their protection of peasants; former socialist states like Soviet Union saw massive privatization and the emergence of capitalist agriculture.
How does this shed light on the agrarian changes in China? It is clear that the change in agrarian relations that we observed in China mirrored the general history of other developing countries. China had land reform and collectivization in the first phase and dismantled the collectives in the second phase. Although collective ownership of land is still preserved in legal terms, China has recreated small-producer agriculture through decollectivization. The rural economy is gradually becoming more oriented toward the market, and there is a clear tendency of further movement along the capitalist path.13 Let us now look at how this change took place.
When the CCP first started the revolution in the 1920s, China was an extremely backward country marked by low productivity and a highly unequal distribution of land. It was widely accepted that 20 percent of the population owned more than 60 percent of the land. Between 50 percent and 70 percent of peasants’ annual output went to the landlord as rent.14 Unlike his peers, Mao did not see the peasants as passive—he saw in them the possibility of a dramatic revolutionary tide. He convinced his comrades of