NATIONALIZATION, PRICE CONTROL, AND RATIONING OF KEY AGRICULTURAL GOODS IN CHINA: AN ECONOMIC HISTORY OF THE PERIOD, 1949-57 (CENTRALLY-PLANNED, AGENCY, MONOPOLY).

摘要

In most economic analyses, the state is assumed to play a passive role in the economy: providing public goods and national defense; and, enforcing contracts and property rights. Government bureaucracies, however, are composed of individuals who have their own objectives, thus making the classical economic model of the state of limited value. Agency theory suggests that government bureaucracies, like firms, must devise ways of motivating and monitoring state agents. This study describes the problems encountered as key agricultural commodities were nationalized in the People's Republic of China in the early 1950s. Competition with private merchants impeded the government's monopolization of the grain and cotton trades, particularly in the area of pricing. With a general lack of worker incentives, the state marketing system was plagued with internal problems, necessitating the need for systems to monitor the actions of state agents. Communist Party cadres have played a key role in monitoring enterprises in China, particularly when material incentives were discouraged for government personnel. Following the virtual elimination of private merchants dealing in key agricultural goods in 1954, the state marketing system was alone responsible for supplying cities and grain-deficient regions. Inflexible pricing for state-controlled goods provided a means of monitoring state agents and reduced the possibility of corruption on the part of state personnel in government marketing institutions. Inflexible pricing, however, produced serious supply difficulties, necessitating the adoption of per capita rationing in both the cities and in rural areas. Coupon rationing was intended to reduce the "stated demand" in China's cities by tying commodity sales to urban populations. Coupon rationing has also been used in China to control migration. State-controlled prices for food and clothing at below market-clearing levels have primarily benefitted China's urban population. Recent economic reforms, while increasing individual incentives, and therefore production, are in direct conflict to the maintenance of the government monopoly in key agricultural commodities.