As an industrial control strategy, Leninism imposed extensive state-party apparatuses in the workplace. After its defeat in China, the émigré Kuomintang instituted party-state infrastructure in the vast public sector inherited from Japanese colonialism to consolidate its grasp on Taiwan. This article traces the rise and fall of Leninist control in Taiwan's state-owned enterprises. Taiwan's Leninist penetration was deployed after the suppression of the 1947 uprising, and hence failed to overcome the pre-existing ethnic divide between Taiwanese and mainlanders. Further, since the 1960s, widespread moonlinghting has enabled Taiwanese workers to be more psychologically and economically detached from the clientelist network of redistribution. As the political environment turned favourable in the late 1980s, a strong current of workers's movements surged and succeeded in dismantling party-state control in nationalized industry. Taiwan's case reveals the importance of societal embeddedness as a variable that explains the trajectory of Leninist control.