Hu Leming: "People First" and the Logical Rationale of Political Economy with Chinese Characteristics
Upholding the principle of "putting the people first" is one of the historical experiences of the Communist Party of China's (CPC) centenary struggle, as well as the fundamental compliance for economic construction in socialism with Chinese characteristics. As an economic theory summarized from the practical experience of Reform and Opening-up, political economy with Chinese characteristics must adhere to this major principle of putting the people first and treat it as the logical main thread through which the theoretical system unfolds. Centering on this thread, I believe that by starting from the life needs of the masses, clarifying the micro and macroeconomic logic of putting the people first, and elucidating how to achieve the ultimate goals of attaining common prosperity for all and promoting well-rounded human development, we can construct a "political economy of the people" that meets the needs of the [New] Era.
Taking Life Needs as the Logical Starting Point of Political Economy with Chinese Characteristics
To persist in putting the people first, one must genuinely attend to the life needs of the masses. Life needs constitute a basic category of historical materialism and Marxist political economy. Although Marx did not provide a crisp definition of "life needs," he discussed in detail from various angles the specific categories and structural systems of life needs—such as natural versus social needs, material versus spiritual needs, as well as needs for subsistence, enjoyment, and development. This allowed the category of life needs to play a "secret leading role" within Marx’s labor theory of value, theory of surplus value, and theory of economic crisis. Marx believed that human social activities could be divided into two basic types: life and production. Life activities are the "first premise of all [human] history," while production activities are the "fundamental condition of all history." Life needs serve as the link connecting life activities with production activities; humanity's infinitely developing life needs are the fundamental driving force for the occurrence and development of human history. Analyzing the production activities of human society deeply by starting from life needs can truly reveal the internal motivations and historical processes of social progress.
Taking life needs as the logical starting point of political economy with Chinese characteristics accords with the theoretical logic of Marxist political economy. Human life activities include various types at different levels, such as the individual, the family (group), and society, thereby generating various life needs—individual needs, family needs, and communal needs—which are satisfied respectively by individual behavior and private products, family behavior and family products, and public behavior and public products. However, relative to the infinite variety of human life needs, the resources used to satisfy them are scarce. Human society must filter life needs and the methods of resource utilization through appropriate institutional arrangements, including determining the structure of public and private products and the boundaries between government action and market functions. In this way, "life needs" as a starting category contains the embryos of all subsequent contradictions, including those between production and consumption, government and market, and public and private products. Taking "life needs" as the logical starting point and following the logical thread of "life process–life needs–production process," a comprehensive analysis of the various life needs of the masses and their corresponding production organizations, activities, and regulatory mechanisms can reveal the laws of operation of the socialist market economy with Chinese characteristics and construct a systematized economic doctrine.
Taking life needs as the logical starting point also accords with the practical logic of economic construction in socialism with Chinese characteristics. The Resolution of the CPC Central Committee on the Major Achievements and Historical Experience of the Party's Centenary Struggle explicitly states that the people’s aspirations for a better life are our goal, that improving people's wellbeing is the essential requirement of our commitment to serving the public good and exercising power for the people, and that ensuring a good life for the people is the starting point and ultimate goal of all our work. That is to say, economic construction in socialism with Chinese characteristics is a great practice centered on the people and seeking happiness for them; it is a process of continuously satisfying the people’s growing needs for a better life. Since Reform and Opening-up, and especially since entering the New Era, an increasingly perfected socialist market economy has given full play to the unique advantages of the market mechanism in processing information and enhancing incentives, effectively organizing various factors for division of labor and cooperation. Simultaneously, it has continuously refined government functions and better leveraged the role of the government, ensuring more social resources are allocated toward the provision of public products and striving to balance the production of public and private products to satisfy the people’s growing needs for a better life. Under the leadership of the CPC, we strive to satisfy not only the material life needs of the masses but also their various needs in political, social, and spiritual life; we strive not only to satisfy basic needs for subsistence—ensuring "childcare for the young, education for the student, pay for the laborer, medical care for the sick, support for the elderly, housing for the dweller, and aid for the vulnerable" [1]—but also to satisfy the developmental needs of the people. This means meeting expectations for "better education, steadier jobs, more satisfactory income, more reliable social security, higher-level medical and health services, more comfortable living conditions, a more beautiful environment, and a richer spiritual and cultural life."
Promoting the Formation of Harmonious and Stable Cooperation Between Labor and Capital is the Micro-logic of Political Economy with Chinese Characteristics
To satisfy the life needs of the masses, one must first engage in the production of the material means of subsistence. Under modern market economy conditions, the production of many material means of subsistence is a process of cooperation among factors of production such as labor, capital, land, knowledge, technology, management, and data. Whether a harmonious and stable cooperative relationship can be constructed between various factors—especially between labor and capital—is key to the cooperative and productive efficiency between various behavioral subjects. Marx pointed out that labor is the true soul of production. Subordinated to the principle of putting the people first and the value pursuits of the socialist market economy, the socialist market economy with Chinese characteristics should, by rights, more fully protect the rights and interests of laborers. At the same time, the greatest reality—that we are in and will long remain in the primary stage of socialism [2]—requires that the developmental and cooperative potential of capital and other factors must be fully released to promote "joint construction, joint creation, and joint struggle." The microeconomic analysis of political economy with Chinese characteristics must both implement the concept of being "laborer-centered" and take into account the rights and interests of the owners of other factors, promoting a harmonious and stable cooperative relationship between labor and capital based on the reasonable protection of laborers' rights.
To promote such harmony, we must actively explore corporate systems and governance structures that adapt to the needs of the socialist market economy. First, we must promote the shared participation of owners of labor, capital, and other factors in the process of corporate development, breaking the monopoly of capital owners over corporate management rights. Laborer participation in management is not only a requirement for protecting and enhancing their rights but also an objective requirement of modern corporate governance. We should actively promote reforms in corporate systems and governance, enabling various factors to participate in development through reasonable sharing. Specifically, we must improve the democratic management system of enterprises, centered on the congress of workers and staff [3], and actively explore effective ways for employees to participate in management. Second, we must promote the sharing of corporate development fruits among all factor owners. The economic surplus obtained from production and operation is the result of the cooperative process of all factors; thus, all owners should share in the corporate surplus and profits. In particular, emphasis should be placed on protecting labor income, striving to achieve synchronicity between labor compensation growth and productivity increases, and steadily raising the income levels of laborers to truly ensure that the fruits of corporate development are shared by the employees. Political economy with Chinese characteristics must deeply study corporate production activities, the general labor process, and their institutional structures under socialist market economy conditions to seek the microeconomic foundations of putting the people first.
Furthermore, we must leverage the active role of the government and social organizations in the microeconomic sphere. To promote labor-capital harmony based on the protection of rights, the government must play its role while guiding social organizations such as trade unions and industry associations. The government should strengthen the fundamental status of competition policy, regulate corporate monopolistic behavior according to the law, and prevent the disruption of production order and distortion of labor relations caused by monopolies and the "unorderly expansion of capital." Adapting to the changes in labor relations brought by the new economy and new business forms, the government should expand its regulatory scope and innovate regulatory tools to cover the protection of rights for various flexible employment personnel, issuing new standards for the identification of labor relations. We should standardize and guide the construction of trade unions, industry associations, and employer organizations, reasonably defining the boundaries of their roles in corporate governance. Political economy with Chinese characteristics must not only focus on the enterprise as a micro-market subject but also deeply study the roles of the government and social organizations in the micro-sphere.
Unfolding the Macro-logic of Political Economy with Chinese Characteristics Around Employment Priority
Satisfying the life needs of the masses also requires clarifying the priority goals of the society's macroeconomic operation. China is a developing country with a massive population, currently in and long remaining in the primary stage of socialism, where labor remains and will long remain the means of making a living. Therefore, the report to the 19th CPC National Congress explicitly stated that employment is the greatest livelihood issue; we must adhere to the employment-first strategy and active employment policies to achieve higher-quality and more full employment. The macroeconomic analysis of political economist with Chinese characteristics must center on this goal-orientation of employment priority, discarding the macro-logic of mainstream Western economics that onesidedly emphasizes GDP growth, and establishing a people-centered orientation for technology and industrial development. It must explore economic development modes, institutional arrangements, and policy choices that promote higher-quality and more full employment.
First, we must explore and construct economic development modes that achieve employment priority. The industrial revolution currently characterized by digitalization and intelligence is profoundly changing the way human society develops. Digital and intelligent technologies change both the organization of social production and the input ratios of production factors; they create many new jobs while substituting for many forms of manual and mental labor. Marx’s macroeconomic analysis showed that if the logic of capital and the market is allowed to dominate the choice of technological progress and development modes, economic development will inevitably lead to a massive "relative surplus population." Facing the severe challenges of the digital economy, we must firmly establish the people-centered development philosophy, balancing the application of digital technology with the promotion of employment, encouraging labor-biased technological innovation and industrial upgrading, and amplifying the job-creation effects of digital technology. At the same time, we must strive to promote the coordinated development of all sectors and industries, expanding the capacity of traditional industries to absorb labor. Based on achieving a higher level of self-reliance and self-strengthening, we should focus on constructing the new development pattern and safeguarding the security of industrial chains to provide more opportunities and positions for the broad masses of laborers, protecting their rights to employment and promoting self-determined employment and decent work, truly ensuring that "development relies on the people."
Second, we must explore and improve institutional arrangements and policy systems that achieve employment priority. Adhering to the employment-first strategy requires the government to uphold the principle that employment is the foundation of livelihood, break free from the shackles of "GDP first," and formulate institutional arrangements and policies guided by employment priority. Adapting to technological progress and industrial upgrading, we should improve public employment services and the system of lifelong vocational skills training to realize the "resonance at the same frequency" between the enhancement of human capital and technological progress. We should formulate social security policies covering those in flexible employment, design social insurance projects decoupled from traditional labor relations, and strengthen the protection of rights for emerging employment groups such as platform laborers. To meet the mobility needs and employment aspirations of the rural migrant workforce, we should improve the education, medical, and social security systems for migrant workers, enhancing their ability to withstand unemployment and transition between jobs, and perfecting the employment support system for key groups. We must adhere to the "two unswervinglys" [4], encouraging entrepreneurship to drive employment and the development of small and medium-sized enterprises, thus creating an institutional environment of fair employment.
Treating Common Prosperity for All and the Promotion of Well-Rounded Human Development as the Logical Destination of Political Economy with Chinese Characteristics
Upholding "putting the people first" aims to enhance people's wellbeing, realize common prosperity for all, and promote well-rounded human development. General Secretary Xi Jinping has pointed out that the Communist Party of China (CPC) always represents the fundamental interests of the broadest possible majority of the people; it shares weal and woe [5] with the people, is inextricably linked to them, and has no special interests of its own. It has never represented the interests of any interest group, any power bloc, or any privileged stratum. The interests of the people must always be placed in the supreme position, ensuring that the fruits of reform and development benefit all the people more equitably and more extensively, while continuously advancing toward the realization of common prosperity for all. Therefore, the realization of common prosperity for all and the promotion of well-rounded human development constitute the inevitable logical destination of Chinese-path socialist political economy, with "putting the people first" serving as its logical main thread. This represents the evaluative orientation of a Chinese-path socialist political economy that develops its micro- and macro-level analyses by proceeding from the living needs of the masses.
Satisfying the living needs of the masses is the basic prerequisite for realizing common prosperity and promoting well-rounded human development. The degree to which common prosperity is realized depends primarily on the degree to which the living needs of the masses are satisfied. Common prosperity in the primary stage of socialism [6] clearly cannot reach the level of affluence envisioned by Marx for the future society—where material products are in great abundance and the means of subsistence are distributed according to need. Rather, it involves maximizing the satisfaction of people’s developmental needs on the basis of meeting their basic living needs; maximizing the satisfaction of political, social, and cultural needs on the basis of meeting material needs; and maximizing the satisfaction of individuals’ differentiated needs on the basis of meeting the common needs of life. Consequently, Chinese-path socialist political economy must first elucidate the living needs of the masses and the corresponding productive activities and institutional arrangements.
A harmonious and stable cooperative relationship between labor and capital is the micro-foundation for realizing common prosperity and promoting well-rounded human development. Based in the primary stage of socialism, whether in terms of satisfying the living needs of the masses or realizing common prosperity and well-rounded human development, we must fully release the creative vitality and developmental potential of all factors of production, and particularly must promote harmonious cooperation between labor and capital. The history of global economic development shows that whether the relationship between labor and capital is harmonious and stable is a key factor affecting economic growth, wealth accumulation, and distributive equality. Therefore, the micro-level analysis of Chinese-path socialist political economy must center on the axis of the cooperative relationship between labor and capital, directly facing the various problems and challenges that affect their harmony and stability, so as to provide theoretical support for promoting a stable cooperative relationship and consolidating the micro-foundations of common prosperity.
An employment-first [7] approach is the macro-level safeguard for realizing common prosperity and promoting well-rounded human development. Common prosperity for all is an affluence where not a single member of society is left behind; it is an affluence realized through the joint participation of all people in socialist modernization; and it is an affluence created through the diligent labor and collective struggle of all people. We must use institutional arrangements and policy designs to maximize the enthusiasm, initiative, and creativity of all people in participating in economic construction and the modernization process, and maximize the provision of fuller and higher-quality employment and decent work for everyone, thereby building a firm macro-level safeguard for common prosperity. The macro-level analysis of Chinese-path socialist political economy must clearly define the goal-orientation of employment-first macro-economic operations and explore developmental modes and policy choices that achieve fuller and higher-quality employment.