Mechanisms and performance of the Maoist economy: a holistic approach, 1950-1980

Kent Deng, Jim Huangnan Shen and Jingyuan Guo

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This article probes the performance and mechanisms of the Maoist economy from 1950 to 1980, a period commonly regarded as a turning point that ushered in a new path for China's industrialisation and modernisation. Commonly, however, the welfare effect of this new path has been overlooked. The present research aims to fill this gap. Methodologically, this article re-conceptualises, re-examines, and re-assesses the Maoist economy with qualitative and quantitative evidence. This study applies a holistic two-pronged approach with (1) capital accumulation and re-investment, material production and consumption, and (2) mathematical conceptualisation and empirical modelling. The key findings suggest that the Maoist economy was a closed one with industrial dependence on agriculture in an urban-rural zero-sum game with inevitable constraints on workers' incentives for growth to continue. In the end of the Mao's era, agriculture declined, the size of industrial workforce stagnated, and the population was poor. This was not the end of the story, however. This failed industrial transition was itself highly influential as a subsequent point of reference used to justify the post-Mao reforms and opening up as a radical game changer that put China on a very different trajectory of growth and development.

Keywords: consumption austerity; economic policies; economic zero-sum game; growth stagnation; Quesnay-Mao closed economy; scissors-pricing arbitrage (search for similar items in EconPapers)
JEL-codes: D31 E61 N15 O53 P21 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2024-12-05
New Economics Papers: this item is included in nep-cna, nep-his, nep-hme and nep-inv
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Published in Journal of the Economic and Social History of the Orient, 5, December, 2024, 67(7), pp. 646-701. ISSN: 0022-4995

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