Was Chairman Mao Really Necessary?
Chapter 4: The Rise of Agricultural Dengonomics
4. The rise of agricultural Dengonomics* THE ISSUE There are two major aspects to Deng Xiaoping’s economic reform in Chinese agriculture. The ﬁrst is the drastic increases in state farm procurement prices as promulgated immediately upon his return to power at the famous Third Plenum of the Eleventh National Party Congress (NPC) held in November 1978. The second is accelerated dismantling of the agricultural collectives, more precisely the entire people’s commune system, as triggered by the price and income incentives oﬀered in 1979 (what may be considered as a ‘less harsh consumption policy’). By early 1984, the process had already culminated in a de facto ‘redistribution’ of collective farmlands to the individual peasant households throughout the Chinese countryside. There is no doubt that the changes threaten to tear apart the very raison d’être of Mao’s economics of collectivism. That is, to maximize farm surplus extraction to support the massive industrialization drive through the familiar ‘scissors-price’ instrument and to facilitate Nurksian-type accumulation by way of non-quid pro quo labour mobilization, as a means of hedging against natural calamities and exploiting scale economies. Thus, what could be the economic consequences of Deng’s approach? This chapter discusses the impact on national and farm savings, rural investment priorities, overall production stability, and implications for farm procurements and supplies to the urban–industrial sector, and attempts to shed some light on possible future trends. Chapters 5 and 6 look at the decollectivization process and the eﬀect on peasant incomes and consumption. To...
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