When China under Deng Xiaoping began to discard the socialist legacy after Mao’s death in 1976, the economist Xue Muqiao, who has died aged 100, played a leading role in formulating theory for the new era, but never lost touch with everyday life. His essays gave outsiders a clue to the pace of change, and Xue also called for the return of street stalls and snack bars in the capital — banned for a decade as ”remnants of capitalism”.
And he travelled to small provincial towns to check prices in the local markets.
In the first edition of his standard work, Socialist Economics (1979), Xue had envisaged a future for China in which state and collective ownership would rise ”to a higher form”.
Two years later he added that the market should be given more freedom and that private enterprise could have a share. By 1987, as the reforms moved into higher gear, he was arguing that ”capitalism need not become extinct”.
Xue had long believed that China should embrace market economics, but was unwilling to say so publicly until the top leaders had agreed. The underlying conflict between observing party discipline and exercising his own judgement was, according to his daughter Xiaohe, ”the cause of great unhappiness”.
At an internal party conference in 1981, Xue first told the audience that his views were ”faulty” and should be criticised — and then set them out for discussion. This caution was shared by many intellectuals of his generation, who had helped to build the ”new China” in the 1950s and were then punished in the 1960s and 1970s.
Born in Wuxi, a prosperous agricultural centre in the lower Yangtze valley, Xue took part as a school student in the patriotic demonstrations of the May 4 1919 movement that sprang up in protest against the decisions of the post-World War I Versailles peace conference which adversely affected China. A year later he had to interrupt his studies when his father committed suicide after falling into debt.
Forced to support his family, he became a clerk on the Shanghai-Hangzhou railway, and by 1926 was the youngest station-master on the line. In the militant atmosphere of the time, he was active in the railway workers’ union and joined the Communist party.
He was arrested in Chiang Kai-shek’s bloody crackdown against the left in 1927, and spent three years in jail. Another inmate introduced him to a Soviet textbook on political economy: Xue liked to say later that he had ”graduated from prison”.
Released from jail, the self-taught Xue found an intellectual soulmate in the older and more experienced fellow-Marxist Chen Han-seng, the pioneer of modern Chinese social science.
Chen encouraged Xue to investigate the harsh realities of rural life in south-west Guangxi province. In 1934, Xue joined Chen’s Rural Studies Institute in Shanghai and secretly rejoined the party.
After the Sino-Japanese war broke out, Xue moved to the guerrilla areas, teaching simple economics in the communist-led New Fourth Army. After the army was treacherously wiped out by Chiang’s forces, Xue moved, via the communist capital of Yan’an, to a new base area in Shandong province. Here he devised a scheme to undermine the currency used in adjacent Japanese-controlled areas, and to stabilise prices in the guerrilla-held zone.
After the 1949 communist victory, Xue was drafted to tackle inflation at the national level and served on so many committees that at one point he collapsed from exhaustion. Later, as head of the state statistical bureau, he promoted the moderate policies of the party leader Chen Yun, arguing that a rational pricing policy was still essential under socialism.
Attempts by Chen and Xue to decentralise economic decision-making and to give the market a greater role were condemned in the cultural revolution (1966 to 1976) as ”economism”.
Xue was denounced by red guards as a ”capitalist-roader” and spent 18 months in detention before being sent to a rural reform school for erring officials. He was brought back to work in Beijing, sent down again, and brought back once more in 1975. His talents were too rare to be wasted, even in the ultra-left climate of the time.
After the 1989 crackdown which followed the Tiananmen Square massacre, Xue again found himself unable to speak out freely. Within two years he had been diagnosed with Parkinson’s disease and finally retired.
When Xue reached his 100th birthday last year he was widely praised as the architect of China’s ”market transformation” and was visited by premier Wen Jiabao. He had come on a very long journey from the booking office on the Hangzhou line. – Guardian Unlimited Â