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I posit that in practice self-criticism was just another technique for totalitarian control. Here's just one, relatively tame, example from the USSR. It is well-known that Stalin (officially known as "master of all sciences") actively persecuted psychoanalysts and geneticists. I have very recently found out that he also persecuted mathematical logicians. This is an excerpt (from p. 12) from a paper that deals with this:
There is a striking passage in Philipov where he cites details of the career of Asmus to illustrate the unbearable and humiliating character of the conditions under which Soviet logic was expected to develop. Asmus graduated from Kiev before the Revolution and was retained by Professor A.N.Gilyarov, author of a monograph on the Greek sophists, for training as a professor in the department of Philosophy. After the Soviet regime came into power, professor Gilyarov thoroughly understood the impossibility of continuing his work in philosophy under the Bolsheviks and, although he retained his membership in the Ukrainian Academy of sciences, occupied himself not with philosophy but with the preparation of perfumes. Asmus, however, entered into Soviet philosophy, and, since dialectic was completely in the ascendancy at the time, he began to attack and revile formal logic. Since he had been retained by the University in pre-Soviet days, he certainly understood the absurdity and injustice of his charges. When logic was finally introduced in the Soviet union, he completely forgot his earlier condemnation of logic and, just as if nothing had happened, wrote a textbook on formal logic. All went very smoothly at the beginning: the State Publishing House for Political Literature published his book in an edition of 100,000 copies. But then it turned out that logic was to be \partisan", \political" etc., and since these features were nowhere to be found in his Logic, Asmus forthwith \admitted his errors" and \promised to rectify them," recognizing that logic was a \partisan" and \political" science. Then with Stalin's revelations on language, it again appeared that logic was \non-partisan" and \non-political", and Asmus was compelled to retract his earlier retraction.
China was worse. I recall an episode from Wild Swans where the narrtor's mother had to confess her sins before revolutionary students during the Cultural Revolution. This was done while standing on her knees for half an hour - while the floor was strewn with shard of broken glass.
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You can read about self-criticism during the Cultural Revolution in "Fanshen" by William Howard Hinton. - 1966, Fanshen: A Documentary of Revolution in a Chinese Village
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Itβs worth looking at Robert Liftonβs Thought Reform and the Psychology of Totalism which describes how criticism/self-criticism worked in communist China as well as its origins and shared uses.
Very simply it is a form of indoctrination that trains you to see any individual thought or decision as morally wrong. Usually presented in a double-bind format so no matter which way you think you will always be confused, ashamed and wrong. A way out of this bind is then given - the party line, the doctrine. Works exactly the same way in religious, ufo, mlms and yoga totalist groups as well.
Discussion groups, study groups, self-improvement sessions, audits can all use the same mechanism.
For examples of how these criticism/self-criticisms have been used in more recent political groups see Janja Lalich and Alexandra Stein and lots of online testimonies.
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It should be noted that this kind of self-criticism was not invented in China. In the USSR it worked the same way. The CPSU chater required the members to develop "criticism and self-criticism". The CPSU program said that self-criticism allows the nations of the USSR to spot problems and hardships and to find the best ways for Communist development.
Self-criticism was necessary in one-party states because it allowed for criticism without questioning the ideology. Without admitting mistakes the power would become highly inflexible. Admitting own mistakes also allows an authority to retain the position while changing the course and without looking random and unprincipled. If there are no mistakes, but there are hurdles it means all errors are in the ideology.
Self-criticism is an art in itself for a careerist. One had do be cautious which mistakes to admit. Those should be minor or even confirm the views of the admitter (such as admitting not enough zeal in implementing his own views). Self-criticism of a superior allowed the subordinates to more freely explain their concerns and criticise themselves.
Self-criticism is also instrumental in preventing inter-ethnic and inter-national conflicts. Suppose there are two peoples, say Armenians and Azeri who each claim that they are the right in any disputed questions. By requiring the both sides to self-criticize the central authority can shape the border line better for reconciliation: each side can admit mistakes in the weakest parts of their positions while keeping the most strong and important points.
Self-criticism can be used as an educational tool: in Vietnam army the soldiers were required to admit their mistakes at comrades meetings and this allowed to discuss what they should do better instead of what they did actually, how to behave next time and allowed to share the knowledge about mistakes so that the others also knew how to behave in such situation.
Sometimes criticism of the others can be presented in a form of "self-criticism", either by proposing for the collective to self-criticize themselves for something for which one person was known to be responsible (thus making hint at who was the guilty without pointing directly) or criticizing oneself for "not recognizing in time the mistakes made of the colleague".
A mistake confessed as a self-criticism usually was accepted milder that a mistake discovered by a chance or that lead to a disaster.
This principle is possibly rooted in the idea of "democratic centralism" and may be somewhat borrowed from a Christian concepts of confession and repentance but done not secretly but at public so that the mistakes could be discussed in collective..