November 2000

Draft, comment invited

Thomas G. Rawski⁽¹⁾

University of Pittsburgh

Pittsburgh PA 15260 USA

Tgrawski+@pitt.edu

INTRODUCTION

During the last four decades of the twentieth century, China's economy produced a truly remarkable sequence of events. The Great Leap Forward of 1958-60 initiated a twenty-year interlude of widespread hunger and deprivation. Twenty years later, the reform policies of the late 1970s triggered a massive and unexpected economic boom that catapulted hundreds of millions from absolute poverty. This experience raises profound questions about links between culture, institutions and economy, a central focus of C.K. Yang's distinguished research career.

Recent studies document the scale and impact of China's 1959-61 famine. The persistence of hunger and under-nutrition throughout the 1960s and 1970s is less widely recognized. A Fujian village leader's pithy observation effectively summarizes the rural situation: "By the fall of 1959, hunger suddenly emerged without warning. . . . For the next twenty years, the problem of hunger was part of our lives" (Huang 1989, p. 61).

Table 1 substantiates this observation by showing that the average rural diet fell short of widely-recognized standards of nutritional adequacy for twenty consecutive years. The Chinese government has established 2,100 calories as a dietary threshold for absolute poverty (Kang 1995, p. 39). Calculations summarized in Table 1, based on Piazza's estimate of nationwide calorie availability and information about urban-rural dietary differentials, show that average rural diets fell short of this standard in every year between 1959 and 1972. Average rural calorie supply failed to reach Piazza's estimated standard of safe nutrition in every year between 1959 and 1977. Chinese sources describe annual consumption of less than 150 kg. of grain as "semi-starvation" and associate annual cereal consumption of under 150 kg. (or 200 kg. in southern rice-growing regions) with deprivation (Lardy 1983, p. 166). Data in Table 1 show that average grain consumption for rural Chinese remained below 200 kilograms throughout the period 1959-1977. These data leave no room to doubt that as of the mid-1970s, the income and consumption levels of typical Chinese farm households fit any plausible criteria for "absolute impoverishment."

Chinese sources provide a rural poverty headcount of 250 million for 1978; the World Bank suggests a somewhat higher figure of 260.5 million for the same year (Fu Min 1996, p. 35; World Bank 1992, p. 23). Collective distributions to rural households climbed steeply in 1978, reaching a level 16 percent higher than the average for 1970-77 (Agriculture Yearbook 1980, p. 41). Since the increase in earnings from private economic activity was probably even larger, rural incomes in 1978 may have surpassed the average for 1970-77 by 20 or 25 percent. If 250 million lacked basic necessities in 1978, the comparable figure for 1970, 1972, or 1975 could be as high as 400 million, or more than half of China's agricultural population.

A quarter-century later, the hunger and deprivation that formerly afflicted most villagers is effectively confined to a much smaller segment of the population. Figures for 1998 place the poverty headcount at 48 million (using the Chinese government's austere poverty line) or 106 million (based on the World Bank's considerable higher international poverty standard), i.e. 5.5-12.2 percent of the rural populace.⁽²⁾ Whatever the exact numbers, it is evident that several hundred million rural Chinese have escaped absolute poverty since 1975. Villagers who formerly struggled to feed their families now ride bicycles, watch television, and maintain savings accounts. Whether we focus on sheer numbers or on the share of rural people lifted from poverty, the historical record contains no precedent for the scale or the rapidity of this transformation.

Economists have learned that extricating populations from absolute poverty is an agonizingly slow process that typically requires multiple policy interventions to provide poor communities with education, information, credit, sanitation, health care, tax relief, market access, and employment opportunities (World Bank 1990). China's remaining pockets of rural poverty, concentrated in a handful of northwestern and southwestern provinces, exemplify the persistence of absolute impoverishment.

This consensus underscores the remarkable achievement of China's economic reforms in liberating several hundred million villagers from absolute poverty without the policy support that is widely regarded as essential to the success of anti-poverty efforts. If anything, the mass escape from rural poverty coincided with a reduction in the scope and intensity of public-sector support for poor villagers, as collective assistance deteriorated or vanished amid the rush to reinstate the household economy.

How did China's rural reform elicit such dynamism from communities that began their ascent from income levels that international agencies routinely associate with absolute impoverishment? Economic researchers focus on establishing a strong correlation between the reversion to household farming and growth of farm output (Putterman 1993, chap. 7). Non-economists emphasize the entrepreneurial leadership of local governments in promoting economic development.⁽³⁾ Both approaches seem inadequate.

Unlike most impoverished communities, a large proportion of Chinese villages was somehow poised to achieve sustained growth. Where did this preparation reside? Economic studies confirm the link between incentives, market access, and productivity. But why on this occasion did improved incentives and expanded market access inspire a historic breakthrough to new levels of output, productivity, and income, rather than, as in 1949-52 and in 1962-65, merely allowing a gradual return toward the living standards attained prior to wartime disruption (1937-49) and the Great Leap Forward (1958-60)? And what enabled local leaders to deliver levels of prosperity and rates of growth unknown in Chinese history? More generally, why is it that characteristic persistence of deep poverty emerges at much lower income levels in China than in Egypt, India, or Nigeria?

My proposed answer to these questions revolves around the interaction between long-standing cultural legacies and the developmental consequences of China's commune system. I intend to demonstrate that, dating back to the imperial period, rural Chinese society produced individuals who, despite low levels of income and wealth, were, on average, unusually well-equipped to thrive in a market system. Furthermore, China's commune system, despite its immense costs, enhanced both the material and the human capabilities available to support rural growth. By removing barriers to private economic activity and local entrepreneurship, the agricultural reforms of the late 1970s revealed the developmental capabilities of village economic culture, newly strengthened by the intended and unintended consequences of the commune experience. The result was an unprecedented and completely unexpected rural boom.

Cultural explanations of economic outcomes are rarely convincing. We cannot claim that Chinese individuals are genetically greedier, more mercenary, or quicker to grasp financial opportunity than non-Chinese. Broad appeals to "Confucian values" seem equally implausible, since the exceptional performance that we seek to understand occurs only in specific historical contexts. To be successful, an culturally-linked explanation of economic outcomes must relate individual or group traits to the particular historical and institutional circumstances associated with episodes of rapid growth or structural transformation.

Economics is not devoid of ideas about the origins and economic consequences of individual traits. Beginning with the work of Theodore Schultz (1961), economists have built a parallel between investment in tangible assets (machines, structures, laboratories) and investment in human capabilities, or "human capital." Economists see both as governed by a search for high returns. They imagine that families decide whether to send children to work or to school, and that employers determine the amount of training to offer their workers according to the same principles that govern the allocation of pension funds among cash, stocks, and bonds.⁽⁴⁾ Empirical studies offer considerable support for this sort of theorizing.⁽⁵⁾

Feminist critics attack the tendency for studies of human capital to emphasize the contribution of formal schooling and organized job training programs to the economic capability of individual workers: Most human capital investments are given to children by parents. Yet economic theory focuses on the small amount of human capital that can be obtained by adults able to choose. Because economic theory examines adult behavior, parents' gifts of time, love, and money to infants and children are reconceptualized as "natural endowments" and thus are hidden by a theory that focuses on how people get what they choose. These lost gifts, forgotten or ignored by economic theory, are yet another manifestation of the invisibility of women's work (Strassmann 1993, p. 58)

The omissions resulting from a narrow interpretation of human capital extend far beyond the neglect of women's work. Strassmann's acute critique exposes the implicit expansion of Adam Smith's assumption of a universal human "propensity to truck, barter, and exchange. . . " into the much broader proposition that the economic capabilities of individuals reared in different societies are unlikely to differ substantially as long as the individuals receive similar amounts of formal education and employment training.

This expansive and ahistorical interpretation of "natural endowments" seems unwarranted. The understandable pursuit of a parsimonious theoretical framework unwittingly excludes culturally-rooted social practices - what Douglass North (1990, chap. 5) calls "informal constraints" - from the analysis of economic phenomena. China's recent achievements in poverty alleviation highlight the potential significance of cultural differences in the human factor, differences arising from historically embedded informal institutions, as determinants of economic outcomes.

This essay focuses on one dimension of these issues, that of cultural legacy. The following pages review evidence suggesting that what I propose to call the village economic culture of imperial and republican China produced individuals who were well-prepared to make their way in a modern market system.

Japan's post-1989 stagnation and the financial crash of the late 1990s have focused world attention on Asian realities rather than Asian miracles. For East Asia, the realities include massive long-term economic gains without convergence to socio-cultural patterns observed in North America or Western Europe. Recent historical experience permits us to reject the once-popular notions that Chinese family structures stifle development or that Japanese personnel management practices cannot support new technologies. We can also see that, despite the importance of opportunities to expand trade, a dynamic home economy is the basic ingredient in East Asian economic success. This is particularly clear for China, whose share of global trade has only recently surpassed comparable figures from the 1920s.

The richness of domestic entrepreneurial resources is especially striking in China, which has recently emerged from a socialist era in which, for three decades, the authorities sought to eradicate opportunities for private enterprise and to vilify profit-seeking behavior. Despite this massive regulatory and propaganda effort, relaxation of controls following the agricultural reforms of the late 1970s brought an immediate and far-reaching response. What is the source of this responsiveness to market opportunities, which seems inherent even in Chinese villagers with little or no personal experience of a market economy? The following pages offer a sketch of rural China's traditional economic culture in the areas of market experience, the institutional setting of commercial activity, complex organizations, popular religion, and family and personal life. The evidence comes from studies of the imperial period as well as the twentieth century.

MARKET EXPERIENCE

Commerce has a long history in China. Farmers as well as urban residents encountered the opportunities as well as the dangers inherent in a market economy. The volume of trade was large in relation to total output and, at least since the mid-19th century, growing ahead of population. We find village communities integrated into national markets for grain as far back as the 18th century. By the twentieth century, prices of a wide range of farm crops, handicraft products and manufactures reflected national or even international market forces. Markets were generally competitive, with many buyers and sellers, easy entry and exit for both small and large participants, and wide circulation of commercial information. Men and women with the wit to anticipate the needs of their neighbors and the skill to act on such insights could use the market to improve their income and status starting from any position on the social ladder. Rapid downward mobility threatened the fortunes of all who failed to grasp the logic of market behavior.

Even in localities beyond the reach of interregional trade, people participated in active markets for land, labor and funds. The market for land, the principal asset in a traditional agrarian economy, was enormously complex. Buyers and sellers included kinship groups, business partnerships, schools, temples and voluntary associations as well as individuals. Land ownership was no simple thing. In some regions, ownership rights could be divided into two or even three separate segments, with different persons holding transferable claims to a single plot. Tenancy was equally intricate, including a variety of rental arrangements with differing degrees of responsibility and security for tenants. Land could be pledged, mortgaged and sold. Labor markets were similarly complex, involving arrangements for short- and long-term labor service, apprenticeship, temporary or permanent servitude and sale or exchange of persons among households, including betrothals and adoptions. Money markets existed everywhere, ranging from simple personal loans to complex transactions involving interregional remittances, spot or future currency exchanges, and mobilization of substantial sums by business groups. Bidding and auctions were common, for example in selecting the managers of local security forces (R. Watson 1990, p. 253).

It is important to note that women as well as men participated in market exchanges and other aspects of economic life. We have many reports indicating the commercial acumen of women who served as managers of family enterprises nominally controlled by their husbands or sons. Women also entered the marketplace on their own behalf, using funds obtained from their natal families at the time of their marriage or from the sale of their own produce or labor.

THE INSTITUTIONAL SETTING FOR MARKET ACTIVITY

Market transactions in China's traditional economy were conducted under institutional arrangements that placed a high premium on behavior patterns that seem essential to successful functioning in a modern market economy. We briefly consider monetization, brokerage, shareholding, agency functions, business associations and customary law.

Monetization. Extensive monetization has characterized China's economy at least since the days of Marco Polo. Monetary arrangements were highly complex, with prices and wages in even the smallest markets feeling the influence of fluctuations in the exchange between copper and silver. In the twentieth century, a monetary revolution in the private sector brought banknotes and deposits to the fore, displacing metal coin and bullion as the principal medium of exchange even before the currency reform of 1935. When Communist revolutionaries set up Soviet republics during the 1930s, they found banknotes circulating in even remote and isolated localities. With government unable to support the banking system or to stabilize exchange rates between copper and silver or between the currencies prevalent in various trades and localities, participation in the money economy meant exposure to the risk of sudden shifts in the value of the particular money in which one's wealth or income was denominated.

Brokerage. Market participants often employed brokers who earned commissions by seeking out potential buyers and sellers, facilitating business negotiations, mediating disputes, and recruiting scribes and money-changers. In addition to commodity transactions, brokers often participated in the sale or rental of land or real estate, family division of wealth, and marriage or adoption arrangements. Since integrity and diligence rather than wealth were the main requirements, brokerage offered an entry-point to the business world for men (and some women) with few tangible assets.

Shareholding. Division of ownership rights into shares was common in China's traditional economy. Kinship groups, local associations and business partnerships apportioned property and claims to resources into shares. When shares were transferable, the passage of time, bringing with it the rise and decline in the fortunes of households or lineage branches, led to complex ownership structures. Individuals might own shares in one enterprise that in turn shared ownership of a second venture with another set of persons, families or even corporate groups. The phenomenon of fenjia or division of family assets among brothers brought the concept of shared ownership of corporate assets into even the humblest household.

Agency Functions. The prevalence of shareholding necessitated the use of agents to undertake a wide range of tasks. Family members often acted as agents for the kinship group, with one member attending to one enterprise or activity while relatives took responsibility for other tasks. Frequently, however, managerial duties were assigned to persons lacking close blood ties to the principals in an enterprise. Collection agents employed by large estates (landlord bursaries); managers of stores, workshops or business branches; teachers in clan schools; business partners or correspondents in distant places - all might be recruited from outside the family, necessitating complex arrangements for specifying tasks, assessing candidates, formulating agreements, maintaining incentives and evaluating performance.

Business Associations. Business associations, some based on common occupations (bankers, beggars, rice merchants) others on place of origin (Landsmannschaften) or business location, figured prominently in Chinese commercial life. These organizations maintained public services (standard weights and measures, fire brigades), lobbied for favorable government action, entered into negotiations with representatives of other interest groups, mediated commercial disputes, maintained charitable institutions (schools, soup-kitchens) and enforced business ethics. Here again we find the need to formulate rules and policies that will command the allegiance of a large group of unrelated individuals with diverse backgrounds and interests.

Customary Law. Even today, China has no official system of dispute resolution comparable to Western commercial law. Yet the frequency of complex economic transactions and business structures necessitated the development of viable substitutes. Decisions about such matters as liability for the destruction of goods in transit or sanctions against fraudulent business practice cannot be left to chance. Transactions in China's traditional economy took place within a framework of customary law, reflected in written contracts, deeds and agreements, adjudicated by village elders, guild directors and other respected individuals, and enforced by public support for the norms embodied in written agreements and accepted business practice and for the values articulated by community leaders in their quasi-judicial role. Since the justice dispensed by government officials was remote, expensive and unpredictable, most disputes were settled informally on the basis of customary law by men who, despite their lack of official position, wielded sufficient power to levy substantial fines or even to exclude offenders from the marketplace.⁽⁶⁾ The same tradition of informal justice prevailed in overseas Chinese communities, where disputes were settled and (often severe) punishments decreed and accepted without reference to official legal codes or procedures.

COMPLEX ORGANIZATIONS

Complex organizations and institutions played a significant role in the daily life of Chinese of all social ranks. Making the best of one's circumstances required an ability to understand the structure and operation of these arrangements in order to manipulate them in directions favorable to one's own interests. The search for loopholes or ambiguities offering possible advantage or, contrarily, the framing of regulations in ways that prevent others from such maneuvers, have long been familiar to ambitious Chinese at every level of wealth, status and power. We refer briefly to family, government, village associations and the educational system.

Kinship groups. Chinese families range from isolated nuclear households to the multi-generational Confucian ideal. Kinship ties provided the foundation for corporate arrangements that had the potential to accumulate great wealth and extensive political power. Lineage trusts controlled substantial proportions of land in parts of south China (R. Watson 1990). In Sichuan, salt merchants "skillfully adapted the institutions of the traditional charitable estate to the needs of early modern industrial development. . . . They, in effect, turned the lineage trust into an analogue of the business corporation" (Zelin 1990, p. 91).

Government. Although the formal structure of the imperial state terminated at the county seat, where a magistrate presided over as many as several hundred thousand citizens, government regulations and systems affected the daily lives of many Chinese. Landowners, including small owner-farmers, were liable for land taxes. Tenants, though exempt from the land tax, might be obliged to deal with official personnel involved with land records or administration of justice.⁽⁷⁾

Government systems for mutual surveillance (baojia), labor service and household records theoretically involved all families. The presence of government systems and their agents even in rural villages placed a premium on literacy and numeracy, on the possession of basic information about the regulations for the land tax and other official systems, and on the ability to counter demands by persons claiming superior knowledge of these matters.

Village Associations. Rural villages often supported voluntary groups whose operations required substantial managerial, financial and diplomatic skills. Irrigation associations offer an excellent example. Management of an irrigation network serving several hamlets or villages calls for careful allotment of rights and responsibilities among landowners whose plots will benefit from improved access to water. As Chen and Myers observe, the varying fortunes of different landowners require periodic adjustments lest the imbalance of benefit and cost encourage some members to abandon their responsibilities, leading to a gradual crumbling of both physical facilities and community support (1978, pp. 12-15). Village associations organized to promote education, security, local festivals and other activities required similar skills. The prevalence of such undertakings in rural China, many of which were managed in turn by different households, offers eloquent testimony to the wide dispersion of talent in management, accounting and related skills.

Education. China's traditional system of education was built on an impersonal, merit-oriented structure that attracted widespread attention and imitation in Europe. Academic advancement was possible for any male who could master widely-known texts and skills. Although the highest rewards, while theoretically open to all, were in reality accessible only to candidates with both talent and financial backing, scholarship opportunities created openings for poor but bright students, and even the poorest families could aspire to academic success through several generations of human capital accumulation.

POPULAR RELIGION

It might be objected that the foregoing examples apply with particular force to elite individuals and households and tell us little about the experience of ordinary villagers. But Chinese society cohered through strong vertical ties of shared knowledge, institutions and behavior among elite and masses. Peasant proverbs, for example, mirror the entrepreneurial values of the commercial classes (Arkush 1974). This cultural unity is nowhere more evident than in the practice of popular religion, which reveals villagers' widespread familiarity with and imitation of elite activities.

Chinese folk religion conceives of heaven as a bureaucracy in which different levels of deities maintain files containing dossiers on individual citizens, whose good and bad deeds are tallied in "Ledgers of Merit and Demerit." Mortals submit petitions and await celestial edicts, all cast in the form of communications between the terrestrial emperor and his servants.

Ties between religion and commerce have a long history: pawnshops, mutual financing associations, auctions and lotteries "either originated in or had close connections with Buddhist temples and monasteries" (Yang 1961, p. 198). With this background, it is perhaps not surprising to find that religious observance is filled with imagery of the marketplace.⁽⁸⁾ Taoist scripture conceives of life as a financial loan that must be repaid. The practice of burning money to propitiate the gods dates back nearly 1500 years. The evolution of religious currencies "has generally followed the changes of the real currencies in use," with imitations of banknotes, bank statements, letters of credit and even foreign currency gradually spreading from the temporal to the spiritual marketplace.

These observations illustrate the pervasive influence of bureaucratic and commercial practice on the mentality of Chinese at every level of society. Even humble farmers who might never see a district magistrate or visit a market larger than a village trade fair could, through religious practice, popular literature, theater and other forms of popular culture, acquire accurate, though stylized, information about the broader economic and political world.

FAMILY AND PERSONAL LIFE

Many writers note the propensity of Chinese-run business enterprises to adopt structures based on kinship ties. I propose to stand this observation on its head by emphasizing the resemblance between the position of individual families in Chinese society and that of individual enterprises in a market economy. Like a business firm, the family seeks to expand its wealth in order to ensure its capacity to survive unexpected shocks. The practice of ancestor worship places a high value on perpetuating the descent line lest family extinction (equivalent to bankruptcy) disrupt the tending of graves and other forms of honoring one's forebears.

Just as the threat of insolvency leads to mergers in the world of business, failure to produce sons leads to adoption or uxorilocal marriage, practices that amount to mergers between families. Families, like businesses, pursue strategies of specialization or diversification. Like businesses, families may partition their assets into separate entities to obtain greater efficiency or more harmonious management. For families, as for businesses, the time horizon over which returns are maximized is influenced by technology. In China, the economics of wet-rice culture, a basic form of farming since the Han dynasty if not earlier, encourage a long time horizon, for yields in paddy culture rise gradually from initially low levels and reach peak levels that can, with careful husbandry, be maintained and indeed increased almost indefinitely, as is evident from the historic yield curves for both China and Java.⁽⁹⁾

The analogy between the Chinese family and the atomistic business firm extends to encompass the insecurity surrounding the existence of family or firm. Mobility is possible in either direction. Illness, incapacity or death of key personnel can send even a prosperous family into headlong decline. A family can expect support and assistance from friends and especially relatives, but such assistance is not without its component of self-interest. Households that appear incapable of reciprocity may find friends and even relatives melting away as a crisis deepens. Blood ties are no guarantee of mutual support, for competition among households does not stop outside the extended family.⁽¹⁰⁾

Our analogy between families and business stretches into the realm of personal relations. From an American perspective, social interaction in a Chinese setting seems to involve close calculation of favors given and received. Chinese seem keenly aware of the current balance with their acquaintances. They readily use ties of personal friendship or shared experience to request and offer favors that, from an American perspective, require extraordinary effort.

In contrast to earlier literature portraying Chinese society as inhospitable to modern forms of economic progress, village economic culture seems well-suited as a training ground for would-be participants in modern economic growth. Successful pursuit of individual and family self-interest in traditional Chinese communities requires the same attitudes and behavior patterns that lead to entrepreneurial success in industrial societies. Accumulation of varied portfolios of physical, financial and human capital; drawing on networks of mutual support to mobilize resources for purposes of economic gain; creation and manipulation of large organizations with written regulations and complex management systems; disciplined compilation of information to search for opportunity in markets influenced by the actions of disparate interest groups and surrounded by systems of quasi-legal regulations -- all these represent skills enabling individuals or households to improve their position and bolster their defense against insecurity in the face of vigorous competition from a larger community that is fundamentally indifferent to their fate. And all these skills seem equally relevant to the requirements of social and economic life in a Chinese farming village of the 1880s, a Chinese urban community of the 1930s, or the local or international marketplace of the 1990s.

Beginning with the specific example of rural poverty alleviation, this essay attempts to establish the foundations for a culturally-linked explanation of China's recent economic boom. My analysis emphasizes individual capabilities that are nurtured outside the formal education system, an area that conventional economic theory tends to overlook.

Discussion of public policy in the United States has focused considerable attention on just these elements. Youngsters who lack a suitable family background are said to be unprepared for school or even "uneducable." Contrary to the predictions of economic theory, such children are thought to derive little benefit from schooling unless they receive special guidance and mentoring. Without such support, attending school may fail to enhance these children's human capital. They may emerge from the classroom as anti-social or unemployable.

My analysis emphasizes the same connection between family or community life and economic capabilities, but in the opposite direction. I suggest that China's traditional village culture harbors specific cultural legacies, behavioral routines, and social practices that equip ordinary individuals endowed with no special degree of intelligence or greed with unusual ability to take advantage of market opportunities. The argument is a statistical one. Take two populations of children with similar distributions of intelligence and access to schooling. One population is reared in Chinese villages; the other, in some other cultural venue (medieval Europe, contemporary Bihar or Bangladesh) at a similar level of economic development. The hypothesis is that, upon maturity, the former population will display a stronger array of market skills and accomplishments than the latter.

This paper seeks establish the plausibility of such an argument. It concentrates on concrete and specific aspects of Chinese society and avoids the romantic and mysterious imagery that often surrounds the discussion of Asian economic matters. This essay argues that the legacy of traditional social practice equips Chinese farm communities with a culturally-based repertoire of effective responses to market opportunity that surpasses what one would expect to observe among non-Chinese villagers at comparable levels of income, productivity, and wealth.

The intended and unintended consequences of two decades of collective farming strengthened this legacy of village economic culture. As a result, the rural reforms of the late 1970s triggered an unprecedented and completely unexpected rural boom that propelled hundreds of millions of Chinese villagers from absolute poverty with astonishing rapidity. This interpretation, which I hope to establish in future work, is steeped in irony, for it attributes contemporary China's most remarkable economic success to the combined impact of collective institutions with a cultural legacy that the collectives were designed to obliterate.

Table 1

n.a. = data not available

Sources: Rural grain consumption from Chinese sources compiled in Sicular 1989, p. 252. Rural calorie availability: author's calculations based on national figures from Piazza 1986, p. 92 and data for urban and rural consumption of grain (weight 87%) and four subsidiary foods (edible oil, meat, sugar, eggs - weight 13%) shown in Trade Statistics 1984, pp. 27-31. Safe calorie level: national figures calculated in Piazza 1986, p. 92.

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NOTES

1. The author gratefully acknowledges financial and institutional support from the American Council of Learned Societies, Harvard University's John K. Fairbank Center for East Asian Studies, the National Endowment for Humanities, and the University of Pittsburgh's University Center for International Studies, as well as informative discussions with Cho-yun Hsu, Evelyn Rawski, James and Rubie Watson, and participants at a 1994 symposium sponsored by the University of Toronto-York University Joint Centre on Modern East Asia.

2. Chinese sources give a rural population total of 868.7 million for 1998 (Yearbook 1998, p. 111).

3. Thus Jean C. Oi identifies "the local corporate state" as being "directly responsible for the dramatic growth of rural enterprises" (1999, p. 99).

4. This perspective does not deny that education can be undertaken purely for its own satisfaction, in which case a student's expenditure of time, effort, and money becomes an element of consumption rather than investment. The assumption of human capital studies that investment motives predominate is well supported by empirical studies.

5. Evidence that female children have higher survival rates in districts of India with relatively high wage rates for adult females offers a particularly striking validation of the human capital perspective (Rosenzweig and Schultz 1982).

6. Chen and Myers (1976, 1978) offer many examples, including guild regulations specifying that "we will prohibit further commercial dealings" with violators (1978, p. 23).

7. Chen and Myers (1976, p. 11) translate a land contract dating from 1770 that requires tenants to "submit a report to the government requesting a survey for the farmland they have irrigated."

8. Material in the remainder of this paragraph comes from Hou (1975) as reviewed by Seidel (1978).

9. On Han agriculture, see Hsü (1980); on rice yields, see Perkins (1969) and Geertz (1966).

10. Potter (1968, p. 129) reports that kinsmen may be "so jealous of another villager's rise in wealth and prestige that they purposely do not patronize his store" and direct their business to outsiders instead.