Was Chairman Mao Really Necessary?
Chapter 6: Peasant Consumption and Incomes in Critical Turn
* AGGREGATE TRENDS AND STRUCTURAL CHANGE The pace with which the new Dengonomics has helped to boost peasant incomes and consumption since 1978 is truly amazing. By a large measure, the increases in farm procurement prices since 1979 have immediately translated into disposable income for the peasant households and improvement in consumption standards. As shown in Figure 6.1, per capita peasant consumption has accelerated most markedly relative to that of the urban residents since 1978, narrowing the gap from 1:3.2 in 1978 to 1:2.6 in 1986. Note also that the growth in urban consumption has slowed down equally remarkably in the early 1980s, as a result of drastic curtailment in urban investment, in heavy industry in particular. Undoubtedly, by the advent of the Deng era, the decades-long industrialization drive was considered basically mature enough to aﬀord a relaxation in rural control. However, Figure 6.1 also reveals that, once the ‘Economic Readjustment’ was completed, from 1983 onwards, there has been a marked equalizing trend in growth rates between urban and rural consumption; and the trends are indeed underscored by the parallel decline in 1985–86. As a matter of fact, the absolute ﬁgures given in Figure 6.1 show that the relative diﬀerence in per capita consumption in 1986 between the peasants (191.02 yuan) and non-peasants (496.50 yuan), is exactly at par with that prevailing in 1957 (respectively 72.6 and 186.9 yuan), with both years bearing the same 1:2.6 ratio. This seems to imply that any prospective growth...
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