Under New Democracy—patterned roughly after Lenin’s New Economic Policy in Soviet Russia in the 1920s (see Chapter 4)—the capitalist system of ownership was retained in the industrial and commercial sectors. A program of land redistribution was adopted, but the collectivization of agriculture was postponed. Only after the party had consolidated its rule and brought a degree of prosperity to the national economy would the difficult transformation to a socialist society begin. In following Soviet precedent, Chinese leaders tacitly recognized that time and extensive indoctrination would be needed to convince the Chinese people of the superiority of socialism. In the meantime, the party would rely on capitalist profit incentives to spur productivity. Manufacturing and commercial firms were permitted to remain in private hands, but they were placed under stringent government regulations and were encouraged to form “joint enterprises” with the government. To win the support of the poorer peasants, who made up the majority of the population, the land reform program that had long been in operation in “liberated areas” was now expanded throughout the country. This strategy was designed not only to win the gratitude of the rural masses but also to undermine the political and economic influence of counterrevolutionary elements still loyal to Chiang Kai-shek. In some ways, New Democracy was a success. About two-thirds of the peasant households in the country received property under the land reform program and thus had reason to be grateful to the new regime. Spurred by official tolerance for capitalist activities and the end of the civil war, the national economy began to rebound, although agricultural production still lagged behind both official targets and the growing population, which was increasing at an annual rate of more than 2 percent. But there were a number of blemishes in the picture. In the course of carrying out land redistribution, thousands if not millions of landlords and rich farmers lost their lands, their personal property, their freedom, and sometimes their lives. Many of those who died had been tried and convicted of “crimes against the people” in tribunals set up in towns and villages around the country. As Mao himself later conceded, many were innocent of any crime, but in the eyes of the party, their deaths were necessary to destroy the power of the landed gentry in the countryside (see the box on p. 217).