Communism I

Recap: Asia’s Little Divergence

• The existence of a centralized state can play a crucial role in laying
the foundation for sustained economic growth (Acemoglu and
Robinson, 2012).

• The paper demonstrates how geopolitical threats, interacted with

territory size, can lead to either state centralization or state
fragmentation.

• Related reading: Ko, Chiu Yu, Mark Koyama, and Tuan-Hwee Sng.
"Unified China and divided Europe." Forthcoming, International
Economic Review.
Recap: Asia’s Little Divergence
Recap: Asia’s Little Divergence

• A model:
Recap: Asia’s Little Divergence

• The model explains:

• The political status quo in China and Japan (centralization in China and
decentralization in Japan) before the mid-nineteenth century;

• Why China moved toward decentralization while Japan became

politically centralized upon the arrival of Western powers;

• Why ruling elites in Japan pushed forward with comprehensive reform

while the Chinese leadership displayed ambivalence and was reluctant to
change.
Philip A. Kuhn

• Kuhn was born on September 9, 1933 in London.

• Dissertation advisor was John K. Fairbank (“impact-response” school).
• Kuhn helped re-evaluate the "impact-response" school of Western
scholarship on China.
• Kuhn's dissertation research started with local militarization that put power
in the hands of local gentry at the expense of the central government.
• https://www.nytimes.com/2016/03/02/world/asia/philip-kuhn-china-
harvard.html
The Leiyang Revolt and Its Fiscal Background

• Poor, mountainous county of Leiyang in southern Hunan.

• Corrupt tax collectors.
• Tax collection became a loan business run by the local government.
• Out of career considerations, magistrates prioritized timely tax
collection.
• The crisis of the 1840s: real tax burden soared as silver rose in price.
• The role of “proxy remittance”.
Parallels with Contemporary Politics

Reuters
Fiscal Reform and the Trans-Revolutionary State

• Alexis de Tocqueville’s L’Ancien Regime et la Revolution: the Old

Regime prepared the ground for the new.
• A “Chinese state” that took place during the late empire and survived
the revolution of 1949.
• The state’s long-continued effort to deal with the kind of fiscal
malfunction that surfaced in the Leiyang case.
• Justification for evoking the Tocquevillian paradigm: both Bourbon
France and late imperial China were regimes incompletely centralized
and bureaucratized.
Fiscal Reform and State-Building in the Twentieth Century

• Two urgent tasks after the Boxer Rebellion:

➢ To extract more revenue from rural society to pay indemnities.
➢ To set up a constitutional system in imitation of Japan.
--new approaches to local taxation required--
• The constitutional reforms established a local tax base.
• Merchants and literati obtained the power to tax.
• From the viewpoint of the state, “local self-government” competes for
revenue.
Fiscal Reform and State-Building in the Twentieth Century

• From the first few years of the Republic (1911-1949), the regular
bureaucracy again took over control over local taxes.
• Under the Nanjing government of Chiang Kai-Shek (1927-1949), provincial
authorities drove local elites out of the taxation system (call them “local
bullies and evil gentry”).
• Nanjing pushed local government deeper into the countryside: new
administrative units, townships (xiang), inserted.
• Mao’s government (1949- ) inherited certain innovations of the Republican
period.
• All twentieth-century regimes inherited the old monarchic ambition to drive
unauthorized middlemen out of the tax system.
Collectivization

• Collectivization as an urgent priority of the modern Chinese state.

• Collectivization offered a new method of relating agricultural revenue to
industrialization.
➢ The challenge of accessing the farmers’ surplus production.
➢ The task of raising agricultural production.
• “Land Reform” (1950-1952):
➢ Landlords and rich farmers had their land taken away and distributed among the
landless.
➢ A class of state agents replaced by men drawn from the poorest stratum of farmers.
➢ “Mutual-aid teams”: households that shared tools and labor.
Collectivization

• Inequality, party control and private ownership.

• Can we do away with private ownership?—”No”, from Mao’s top
lieutenants.
• But Mao insisted on expanding collectivization.
• Supplying the cities: Market purchase became too expensive for Beijing.
• Response: A system of compulsory grain purchase.
• The private market in agricultural products was abolished; purchase and
sales was then handled by government agencies (“Unified purchase”).
Collectivization

• Mao (1953): Collectivization as an essential precondition for "raising

productive power and completing the country’s industrialization.”
• Mao (1955): Only rapid collectivization could support industrial growth.
• Collectivization:
➢No more direct relationship between the state and the individual household.
➢Speed of tax collection increased.
➢The chiefs of the collectives became the state’s tax agents.
➢Land and residence linked in “bounded villages”.
➢Market system was obliterated.
The Great Leap Forward

• Highly effective system of extraction; excessive grain procurement

during the Great Leap Forward.
• Mistakes, or malice?
• After the Great Famine, collective agriculture was, in a few cases,
dismantled; in other cases, reduced to the scale of a neighborhood or a
small village.
• Into the 1960s, communes transformed into administrative and social
service units; they effectively became village-level civil government.
• Bureaucratic penetration survived, even as socialism disintegrated.
Fiscal-Historical Roots of Collectivization

• A bit monocausal?
• How an old agenda can express itself in a new context
• Collectivization was an illustration of how that old imperative
operated in a particular context.
• Social engineering to furnish resources for an industrial economy.
• Social engineering fashioned on a revolutionary Marxist-Leninist template of
class struggle and the socialization of agriculture.
• The persistent theme: the state and local agents compete for control of
the farmers and their surplus production.