Markets under Mao: Measuring Underground Activity in the Early PRC

Abstract

In this article we develop and analyse novel datasets to retrace the persistence and scale of underground market activity in Maoist China. We show that, contrary to received wisdom, Chinese citizens continued to engage in market-based transactions long after “socialist transformation” was ostensibly complete, and that this activity constituted a substantial proportion of local economic output throughout the Maoist era. This helps to explain, in part, why, when markets were officially reopened in China, private economic activity took off. We arrive at these findings through the development and analysis of novel datasets based on unconventional historical sources – namely, a collection of 2,690 cases of “speculation and profiteering” that were recovered from flea markets in eastern China. We show how these grassroots sources can be systematically analysed and used, in lieu of official statistical aggregates, to develop new insights into the macro workings of the Maoist economy.

New views on price-making markets and the capitalist impulse: beyond Polanyi

“…Any person who has lived and worked for long periods in Mexico, Turkey, and China, and many other countries, as we have, grows to understand the importance of the marketplaces, especially for lower-income rural households but also to urban dwellers for whom marketplaces provide a ready source of affordable and fresh food, among other frequently consumed goods. For example, when anti-market Maoists completely closed marketplaces or endeavored to shutter market exchanges in China, even though some underground marketing persisted (Frost and Li, 2023), urban dwellers, in particular, faced difficult challenges with food access (Skinner, 1985, p. 30). And marketplaces have played an important role even in the recent urban history of the United States, where they have shown their "resilience and adaptability" (Tangires, 2003, p. 205; see also Hart, 2019).…”