Members of China's "democracy movement" held their first large rally in several months in Tienanmen Square today signifying relaxed government controls and new confidence among dissidents.

One man was taken away by soldiers after a small scuffle at the beginning of the morning rally but several speakers calling for free elections and an end to Communist Party privileges continued on for two more hours without incident.

One young speaker chided Vice Premier Deng Xiaoping, the man usually credited with lifting some recent restraints on free speech. He said Deng told American journalsist that their notion of democracy was a capitalist concept.

"It's not capitalist, it's not feudalist, it's a concept devoid of class content," the speaker said.

"People who come to Peding with a problem are told if they have enough money it might be solved. otherwise forget it," said the young bespectacled speaker. He held the rapt attention of a crowd of about 1,000 while he stood in a hands-on-hips posture identical to that used by the late chairman Mao in his youth.

The speaker made an unusual argument for an advocate of a more democratic China. He praised Mao, at least the Mao who tried to clean up an overprivileged and corrupt bureaucracy during the Cultureal Revolution.

"The Chinese people just didn't have enough experience with Cultural Revolutions," said the speaker who later declined to identify himself. He decried the political turmoil of the late 1960s that Mao's efforts produced.

The rally was organized at the square's Martyrs Memorial by a group calling itself the Democratic Scientific and Socialist Study Association. It is one of the many small organizations that have been putting up wallposters and publishing underground journals since last November.

Last winter, democracy advocates held several rallies in Tienanmen Square, the huge area where thousands of Chinese tired of Maoist political turmoil rioted in April, 1976. A government verdict pardoning and praising the rioters in late 1978 led to the outpouring of pro-democracy sentiments but in March of this year Peking leaders began to discourage demonstrations and no more rallies were held.

Since then the national legislature has passed a new law code and the offical press had begun again to encourage dissent apparently viewing it as a useful social safety valve.

Today's rally was delayed slightly, organizers said, because of some difficulty placing a wreath in remembrance of Mao. When some organizers threw out leaflets to people in the crowd, one man and a soldier scuffled over some leaflets and the soldier led the man away.

The speakers at the rally mostly refrained from attacking the current Chinese leadership. Recent pro-democracy advocates have tried to avoid the fate of about 20 dissidents arrested in March and April for particularly harsh statements.

"We are following Chariman Hua Guofeng's urging to be bold and speak out," said an organizer who began the rally. The next speaker asked for direct election of local officials and other speakers brought up personal complaints.

One speaker, a man who appeared to be in his 50s, said he had fought in both World War II and the Korean War and displayed several medals on his army-green jacket. After the crowd applauded, he complained he had great difficulty finding a job after be was demobilized in 1963.