4 - A tentative study of socialist ownership structure (1987)

Summary

Ownership reform stems, in the final analysis, from the requirement for developing a commodity economy in this nation. It also arises from the unchangeable position of companies as commodity producers. Whatever its form, ownership structure should contribute to the promotion of production. A monomorphic ownership structure is detrimental to the growth of the commodity economy, to the motivation of firms as commodity producers, and to the effort to make the most of the superiority of socialism. All this gives rise to the mission of hammering out a post-reform ownership structure.

Will the post-reform ownership structure include public ownership? The answer is in the affirmative: Public ownership will be included. However, the reformed public ownership will no longer be the same as it is today. There will be differences between the two.

Under the influence of the traditional economic mode, people believed that the only workable way to run public companies was to put them directly into the hands of government institutions. In the reality of socialist economic development, however, the drawbacks of this practice were becoming pronounced. Companies became appendages of the government, which held all the power over human resources, finance and materials, and kept a tight rein on them. A company's performance thus had no direct bearing on its economic gains, nor was it held accountable for its own economic losses. Such was the inevitable outcome of the direct government intervention of business management, in which public ownership was synonymous with the direct involvement of government institutions in corporate activity.