Does it matter what we call China? Does it really make a difference what term we, as outsiders to China’s political and economic system, attach to that system? Certainly it is not going to make much of a difference in terms of what actually happens in China whether foreigners prefer to call it communist, socialist, fascist, state capitalist, or what have you. Arguments about terminology are the classic academic dispute, the kind of thing only pedants can get excited about. Yet despite the low stakes involved, I’ve found myself repeatedly returning to this question, picking away at it like an unfinished home improvement project. The label may not make a difference to China, but it does make a difference to us: for better or worse, we use these simplifying labels to think with, and if the label is wrong then our thinking will be off.

The issue is simply stated: China calls itself a socialist country, and is ruled by a Communist Party. But many people are reluctant to just accept that and call China socialist. The actually existing realities of the Chinese economy and society bear little resemblance to what socialism was generally understood to be in the middle decades of the 20th century. As Jude Blanchette remarked in his excellent talk “What’s ‘Communist’ About The Communist Party Of China?: “It’s patently obvious that China is not a state for workers and the proletariat, and has become one of the most deeply unequal societies in the world. On any measure of what we would want to see from a socialist system, your European welfare state will do better than China.”

China today obviously does not look like much like China in the 1960s, or the Soviet Union in the 1950s, or Yugoslavia in the 1970s: all uncontroversial examples of actually existing socialism. Back in the days when there were a lot of socialist countries, it was pretty clear what being socialist meant. A 1983 article by Stephen White, “What is a Communist System?,” laid out three generally agreed-upon characteristics: a formal commitment to Marxism-Leninism, an economy in which the basic means of production are in state or public ownership, and a vanguard Marxist-Leninist party exercising a leading role in society. Janos Kornai in his classic book The Socialist System offered a similar definition: a socialist system is one which a Marxist-Leninist party exercises undivided power, and uses that power to at least attempt to eliminate private property.

“Socialism,” in other words, is a package deal: it refers to a combination of political and economic structures. There is not just a Communist Party but also an attempt to implement Communism. China in 1978 broke up that package. It preserved the trappings of a socialist political system–Party, propaganda, Politburo–while jettisoning its ideological goals of class struggle and the elimination of private property. Instead its political system is oriented toward the pursuit of economic development and national greatness, and since the 1980s, the majority of its economy has been under private ownership. My own estimate is that the private sector accounts for about 60% of economic output. This was a development that Kornai, for all his insights, never anticipated: he did not think a socialist political system could tolerate a privately owned market economy.

So what should we call this combination of institutions? Insisting that China still “really” Communist or “really” socialist has the virtue of consistency–the Communist Party is still there, after all–but is rather ahistorical. I find that people with first-hand experience of Mao’s China are rarely comfortable calling today’s China “socialist,” as the differences are just too dramatic. I respect their judgment.

There are a number of alternatives. China’s official formulation is that it is a “socialist market economy with Chinese characteristics,” which despite its origins as a compromise political slogan happens to be a fairly accurate description. I’m on record as preferring the term “state capitalism,” which I think does a decent job of conveying to a general audience the basic fact that China has a market economy subject to extensive government intervention. But ultimately I feel that both of these terms are less than satisfactory because they focus only on the nature of the economy, and elide the question of the political system. Economies are enmeshed in social and political institutions, not the other way around, so to describe China’s system only in economic terms is incomplete.

The key to solving this puzzle is to realize that politically China is not unique. This was brought home to me by reading Ken Jowitt’s 1992 book New World Disorder: The Leninist Extinction, a collection of essays comparing the political culture of socialist states. I discovered that the Chinese Communist Party under Deng Xiaoping was not the first Communist Party to abandon the ideological imperative of class struggle and turn to other goals instead; indeed, China was very late to that change. The Soviet Union under Nikita Khrushchev began the shift, starting with his famous secret speech to the 20th Party Congress in 1956 that called out Stalin for his purges and personality cult. In that speech Khrushchev said essentially that Stalin’s purges were worse than a crime, they were a mistake: the violence of class struggle was no longer necessary because the struggle had already been victorious.

Lenin taught that the application of revolutionary violence is necessitated by the resistance of the exploiting classes, and this referred to the era when the exploiting classes existed and were powerful. … Stalin deviated from these clear and plain precepts of Lenin. Stalin put the Party and the NKVD up to the use of mass terror when the exploiting classes had been liquidated in our country and when there were no serious reasons for the use of extraordinary mass terror.

Khrushchev’s shift away from class struggle became even more overt in the 3rd Program of the Communist Party of the Soviet Union, passed at the 22nd Party Congress in 1961. The long document includes this famous passage declaring the class struggle over:

Having brought about the complete and final victory of socialism–the first phase of communism–and the transition of society to the full-scale construction of communism, the dictatorship of the proletariat has fulfilled its historical mission and has ceased to be indispensable in the USSR from the point of view of the tasks of internal development. The state, which arose as a state of the dictatorship of the proletariat, has, in the new, contemporary stage, become a state of the entire people, an organ expressing the interests and will of the people as a whole.

This was not a minor shift in wording, but a dramatic ideological change that caused turmoil in other socialist countries. In particular, Mao Zedong thought the Soviet Union was betraying socialism, and therefore that China would have to increasingly go it alone. Relations between the two countries rapidly fell apart. As Jowitt explains:

The Sino-Soviet conflict was more than anything one between regimes with opposing developmental-institutional interpretations of Leninism. It was not primarily a clash between nations with “ancient enmities.” …According to the Chinese, their differences with the Soviet Union began with Khrushchev’s de-Stalinization speech at the Soviet 20th Congress in 1956. It was not Khrushchev’s attack on Stalin per se but rather Khrushchev’s rejection of class struggle as the central tenet of Party rule that became the pivot of a widening, issue-filled dispute.

While Deng Xiaoping did not exactly come out and say, in so many words, that Khrushchev was right after all, the political changes that he pushed through in China in 1978 and afterward were clearly parallel to those that Khrushchev had implemented earlier in the Soviet Union (and which were also pursued by many eastern European countries). Both attempted to keep the political system intact while reorienting it toward more popular and less destructive goals. The 1961 Program even laid out a series of ambitious economic objectives, including calling for the Soviet Union to “surpass the strongest and richest capitalist country, the United States, in production per head of population.” Of course, in economic terms China’s reforms were much more successful than the Soviet Union’s, but the way those changes of direction were articulated in the political system was quite similar.

Political scientists studying socialism thus early on had to face the problem of what to call a political system that is no longer pursuing the actual ideological goals of socialism, but still has significant organizational continuities with socialism. Their solution: call it Leninism. This term puts the focus on the structural features of the political system independent of the particular details of its policies, economic and otherwise. David Shambaugh offered a very good and clear summary of the political characteristics of Leninism in this recent podcast:

• a “hegemonic” or all-dominant ruling Party
• the Party’s total penetration of all institutions in society
• a nomenklatura system in which the Party appoints top leadership positions throughout society
• the use of United Front or co-optation strategies with non-Party elements in society
• the use of repression, terror and coercion when co-optation fails
• state censorship and information controls

All of these features were present in China before 1978, and are still present in China today despite many other changes. For Lenin himself, the designer of the system, politics was always the most important thing. He was the first to experiment with the combination of Communist Party rule and a market economy, in his New Economic Policy of the 1920s. The NEP was an important reference point for Deng and other leaders in the early years of reform, and it’s not unreasonable to see China’s entire reform era as a “long NEP.”

Lenin used the term “state capitalism” to refer to that system: while admitting that Germany also practiced state capitalism, he insisted that state capitalism in Soviet Union would be different because the Communist Party was in charge. That is not too different an approach from Xi Jinping’s more recent insistence that Communist Party leadership is the most important feature of Chinese socialism. Ultimately, what makes China’s economy operate differently from those of Western countries are not technical differences in monetary or fiscal policy, but the fact that it is governed by a Leninist political system.

For a one-word description of China’s system that is both analytically precise and historically accurate, “Leninism” does the trick.