By Nicholas R. Lardy
Explores the connection among the chinese language peasantry, who're the basic base of help for the progressive chinese language Communist occasion, and the state-led economic climate verified by way of the celebration after 1949.
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Extra resources for Agriculture in China's Modern Economic Development
T'an Chen-lin (1957, 106), member of the Party Secretariat, provided a series for rural resales in 1953-56 that was measured in fine grains, excluding soybeans, and on a calendar year rather than a grain year basis. It, too, after appropriate adjustment, is consistent with the first series. It has usually been assumed that these resales were primarily to peasants. But all three sources specify resales as being to "rural areas" (kung-ying nung-ts'un or hsiao-hui nungts'un) and contrast them with "sales to urban areas and the military" (kung-ying ch'eng-shih ho chun-tui).
Third, the pressure for larger producing units has reduced the connection between individual effort and reward, magnifying the shirking problem characteristic of agricultural cooperatives. Finally, the longest period of production planning coincided with an explicit policy goal that all regions or even localities achieve self-sufficiency in the supply of basic cereals, regardless of whether that coincided with the region's natural comparative advantage. When local self-sufficiency in cereals is a policy objective, many production units are forced to move along their transforma- The theory of price and quantity control 21 tion surfaces between grain and nongrain crops away from the point at which the marginal rate of transformation in production is equal to the relative price of grain and nongrain crops.
For an open economy in which the initial domestic and world grain price are equal at pi, the cost of self-sufficiency is simply the area ABC. From a national point of view allocative inefficiency is introduced because the domestic cost of producing beyond qi exceeds the world price px. Thus allocative inefficiency arises regardless of whether the state uses quantity or price control to achieve its goal. An extension of this argument can be made when self-sufficiency is attempted on a subnational basis.