The Only Path for the Transformation of Capitalist Industry and Commerce

Outline of Mao Zedong's talk to representative personages from the democratic parties and industrial and commercial circles on September 7, 1953. It was included in the Collected Works of Mao Zedong, Volume 6.

By the end of 1952, the task of restoring the national economy was basically completed, and the task of socialist transformation and construction was about to begin. From June to August in 1953, Mao Zedong put forward the basic contents of the Party's general line in the transitional period in his many speeches. One of the important contents is the socialist transformation of capitalist industry and commerce.

In this talk, Mao Zedong systematically explained the form, method, time and profit distribution of socialist transformation of private industry and commerce through state capitalism.

(1) With more than three years of experience behind us, we can say with certainty that accomplishing the socialist transformation of private industry and commerce by means of state capitalism is a relatively sound policy and method.

(2) To develop state capitalism, we should adhere to the principle of "Make steady progress and avoid being too hasty."

"It will take at least three to five years to lead the country's private industry and commerce basically onto the path of state capitalism, so there should be no cause for alarm or uneasiness." The people of all ethnic groups, democratic classes, democratic parties and people's organizations should believe that it is possible to basically put the private industry and Commerce on the track of state capitalism in three to five years.

(3) Joint state-private management; orders placed by the state with private enterprises to process materials or manufacture goods, with the state providing all the raw materials and taking all the finished products; and similarly placed orders, with the state taking not all but most of the finished products: these are the three forms of state capitalism to be adopted in the case of private industry.

(4) With approximately 3,800,000 workers and shop assistants, private industry and commerce are a big asset to the state and play a large part in the nation's economy and the people's livelihood. Not only do they provide the state with goods, but they can also accumulate capital and train cadres for the state.

Not only must the implementation of state capitalism be based on what is necessary and feasible, but it must also be voluntary on the part of the capitalists, because it is a co-operative undertaking and co-operation admits of no coercion. This is different from the way we dealt with the landlords.

(5) It is necessary to educate some capitalists to change the idea of profit seeking and persuade workers that capitalists should be allowed to make profits.

The following table shows the distribution of profits in state-capitalist enterprises: Income tax 34.5%, welfare fund 15.0%, accumulation fund 30.0%, dividends to capitalists 20.5%

(6) It will take at least three to five years to lead most of the private industry and Commerce onto the road of state capitalism. However, it will take several five-year plans to complete the whole transitional period, which includes basically completing the industrialization of the country and basically completing the socialist transformation of agriculture, rival industries and capitalist industry and commerce.

On this question it is necessary to oppose both the idea of leaving things to the indefinite future and the idea of rushing things through. Mao Zedong's speech has enabled the democratic parties and people in the industrial and commercial circles to better understand the Party's line, principles and policies, eliminate worries about socialist transformation, and persuade most capitalists to voluntarily accept state capitalism through them, which has played an important role in ensuring the steady progress of socialist transformation of capitalist industry and commerce.