MULT10018 Lecture Notes - Lecture 7: Competition Law, Class Conflict, Household-Responsibility System
Poverty and Capitalism in China
(political) economics is powerful.
“It is understandable that they (C Comm) view econ matters as vital interest and econ control as
they key to all control” - Walker 1955 p.101
1. Making socialism
Socialism is a pol philosophy that has equality as its basic goal.
● Accepts that coercion may be necessary to achieve equality
● The means of production are controlled in order to advance welfare
● Who coerces and controls the means of production is central to power
To create socialism, you might actually have to use violence as you have to physically change
an economy - Chairman Mao Zedong
1949-78:
● The CCP has undivided power
● The state owns the means of production
● The econ is centrally planned through the Five YEar Plans which set targets for
production
● Maoism a guiding ideology: peasantry is the force of the revolution, revolution is militant,
capitalism must be constantly resisted
Up to 1960, there was a strong Soviet influence, in planning and industry.
Establishing the preconditions for the planned econ involved:
1. Massive land transfer from private landowners to peasants
2. Private sector brought under CCP control through restrictions on freedom to sell, and
creating price controls
3. Nationalisation of industry
4. Rural enterprises turned into people's cooperatives
In the first decades, the goal was national independence though the development of heavy
industry and the war industry which:
● Required imports of tech and resources
● Exports of food to pay for imports
So, food production was nationalised, high targets set for production from rural areas, and food
was rationed
“Great Leap Forward” - 1958-6 Famine caused by:
● Pre-existing levels of undernutrition + natural disasters reducing yields + policies to
increase yields that effectively reduced yields further + diversion of rural labour to small
scale steel production + few incentives for farmers to increase yields and then, failure to
respond due to:
● misreporting of yields due to penalties for not reaching targets + communal kitchens
inefficient in allocation of food + breaking of trade relations with Soviet Union in 1960 (so
no imports)
2. Capitalism
Document Summary
Poverty and capitalism in china (political) economics is powerful. It is understandable that they (c comm) view econ matters as vital interest and econ control as they key to all control - walker 1955 p. 101: making socialism. Socialism is a pol philosophy that has equality as its basic goal. Accepts that coercion may be necessary to achieve equality. The means of production are controlled in order to advance welfare. Who coerces and controls the means of production is central to power. To create socialism, you might actually have to use violence as you have to physically change an economy - chairman mao zedong. The state owns the means of production. The econ is centrally planned through the five year plans which set targets for production. Maoism a guiding ideology: peasantry is the force of the revolution, revolution is militant, capitalism must be constantly resisted. Up to 1960, there was a strong soviet influence, in planning and industry.