Running Trusts on an Experimental Basis

Gist of remarks Liu Shaoqi made while being briefed on a forum on experiments with the running of trusts on June 1, 1965. It is included in the Selected Works of Liu Shaoqi (Part II) published by People's Publishing House in 1985.

The main contents are as follows: (1) Ours is a socialist economy, well organized and planned. Although capitalist enterprises were well organized internally and they could indeed reduce costs, improve quality and raise labor productivity, they were not well organized externally or among themselves. That is why trusts were set up later and monopoly was exercised. In fact, since outside the trusts, there still exists anarchy and competition, they cannot monopolize the economy as a whole. A socialist economy should be better organized than the capitalist one. (2) The general purpose of trusts is simply to have the national economy better planned and organized. All economic undertakings at both central and local levels should be organized so as to carry out specialization, standardization and serialization, improve quality, increase variety, reduce production costs and raise labor productivity. This will benefit the country, the localities and all sectors of society. The purpose of running trusts on an experimental basis is to achieve a more planned and organized national economy as a whole. (3) Both capitalist and socialist countries have provided us with reference on how to run trusts, but their experience is not complete, so we have to create our own. Three forms of trusts can be considered: One is to centralize all power with regard to personnel, finance and materials and nationalize all the factories; the second is to unify only planning, prices, the supply of raw and semi-finished materials and the marketing of products; and the third is only to take care of planning, assignment of tasks and exchange of experience. Any one of these forms is not enough. Perhaps all are needed. Anyway, unification is the main thing. As for business accounting in the trusts, it can be done by the general company, its branch, or the enterprise, depending on actual conditions.