Lecture 04 What Caused China_s Famine_draft2
Transcript of Lecture 04 What Caused China_s Famine_draft2
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Chinas share in the global GDP (at PPP),
18202025 (Source: A. Maddison, World Bank, Virmani)
3 3
17%
8 %4 % 4 %
11.50 12.07 12 .58 1319
2 5
1.50
9 %
18
2 72 1.50
21.25 21.16 2 1.04 2 1.03
2 0
17.50
0%
10%
20%
30%
40%
50%
60%
70%
80%
1 82 0 18 70 1 913 19 50 1 973 2 00 1 20 02 2 00 3 20 04 20 15 20 25
China Ind ia Japan US Big Four W es tern European c ou
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Chinas share in the global GDP (at PPP),
18202025 (Source: A. Maddison, World Bank, Virmani)
3 3
17%
8 %4 % 4 %
11.50 12.07 12 .58 1319
2 5
1.50
9 %
18
2 72 1.50
21.25 21.16 2 1.04 2 1.03
2 0
17.50
0%
10%
20%
30%
40%
50%
60%
70%
80%
1 82 0 18 70 1 913 19 50 1 973 2 00 1 20 02 2 00 3 20 04 20 15 20 25
China Ind ia Japan US Big Four W es tern European c ou
If you watched the second part of the
movie and read the required reading,there were some economics (Brandt,
Rawski, Meyers) that show that industry
is growing some using new technologies
from West investment (FDI) is
growing some trade is growing
BUT, most of work is done in small
pockets of China around Shanghai and
Canton (Guangzhou)
And, growth is shown to happen between
1931 and 1937
What happens before and after: W-A-R
lots of reversals for growth no trade
/ no technology / no investment capital
no growht / negative growth
GROWTH
DURING the
1920s / 1930s /
1940s
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Unsurprising
With such poor performance, a new regime
emerges
SOCIALISM
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A Flurry of Activities in the 1950s
(rural) 1949 Speech in Tiananmen (civil war is over) Rural
1950 Land reform (give land to peasants never take away execute about 1million or so landlords)
1951 begin ag tax [in kind deliveries to state for payment but low prices markets banned]
But never does not mean never 1952 cooperatives (10 families share tools)
1954 early collectives (10 families work together some output sharing)
1955 advance collectives (30 to 50 families output sharing each according to work workpoints)
1957/58 communes (>20,000 people in a single work unit each according to need sometimes will eat together)
1957 Labor movements to urban areas prohibited everyone works on Local SteelMills
1959/60/61 FAMINE30 million people die! (is this good for growth?)
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A Flurry of Activities in the 1950s
(urban) 1949 Speech in Tiananmen (civil war is over) Urban
1950/51/52: nationalization of industry and commerce
Begin to move workers into units compounds through which the state supplies all services housing / education / health / child care / social security also a way to keep track ofeveryone ]
1951/52: Korean War
1953 to 57 love fest with Soviet Union [sort of} Soviet Aid
Loans from Soviet Union
Industry first policy (will talk about on Tuesday)
Research and Development / University restored
First crack down on dissidents
1957 100 flowers campaign be patriotic tell us what you believe is wrong with the system
we will take your suggestions and act of them 1958 Great Leap Forward
Step 1: acting on suggestions means the Gulag for many stifle dissent
Step 2: Huge investment push catch up with England surpass America
Step 3: debate squash debate continue to leap ahead
1959/60/61 Collapse of Industry
1959/60/61 FAMINE
30 million people die! (is this good for growth?)
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What is Famine?
A famine occurs when sizable parts of a
population do not have enough to eat
Prolonged periods of food deprivation leads
to increased morbidity and eventually death
Often in large numbers!
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Great Famines in Historical Perspective
Years Place Cause Deaths(millions)
1928 Mongolia Drought 3
1937 Henan Famine 4
1940 WWII War 40
1965-75
Vietnam War 2
1974 Bangladesh Famine 1
1982 Sudan Famine 0.6
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The causes of a famine
Production declines
Food Availability
Food Entitlement
Food Demand [Consumption Efficiency]
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But most famines are avoidable
A. K. Sen (Nobel Laureate), 1981
Malthus is wrong population growth andproduction failures -- which are a fact of life inthe world for the past 200 years -- have notbeen behind famines
World food production has outpaced
population growth Populations expand slowly, while a famine is
an acute event
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The causes of a famine
Production declines
Food Availability
Food Entitlement
Food Demand NO! [Consumption Efficiency]
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And, famines happen even when food production is not reduced too
much andare avoided when there are severe production shortfalls
0
102030405060
708090
100
Percent of foodavailable
compared to
normal year
Sudan
(FAMINE)
Ethiopia
(FAMINE)
Botswana
(nofamine)
Zimbabwe
(nofamine)
C.Verde
(nofamine)
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The causes of a famine
Production declines NO!
Food Availability
Food Entitlement
Food Demand NO [Consumption Efficiency]
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Famine when food is abundant
Case of Bangladesh (famine of 1974) Massive amounts of food in storage prior to floods of
1974
Case of Sudan (famine of early 1980s) Prior to drought, stocks of food were highest since the
1960s
After flood/drought, traders exported food fromSudan / shipped food to Calcutta (across the
border in Eastern India)
1 million people died in Bangladesh / 0.6 million
in Sudan
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The causes of a famine
Production declines NO
Food Availability NO!
Food Entitlement
Food Demand NO [Consumption Efficiency]
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Sens Policy Contribution: Explaining causes
of famine and devising prevention strategies Looks at why people starve?
It is lack of Entitlement or loss of income and
ability to access food When some event starts a shortfall of food
(e.g., a flood), it also often eliminates theincome earning opportunities of a group of
people (e.g., landless laborers), who also arefrequently the most vulnerable
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Sens Policy Contribution: Poor are caught
between falling incomes and higher prices After some disaster, when large parts of the
population have little or no income (and whenthere is little prospect of earning anymore), the
price of food actually drops (of course, there is noone buying) so, people with food (e.g., tradersand merchants) will ship grain out of famine areas [as they did in Sudan / as they did inBangladesh]
The poor? They are out of a job; they have noearnings most have no savings
The result: no food / no money / starvation
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The solution
Entitlement programs .. Ensure the poor have incomewhen they need it the most
For example: Self-targeting Public Works Programs
After disaster, set up Public Works Program
Set very low wage, so only poor will come
With new sources of income and a high demand for
food, prices rise, grain traders will not leave and newones will come
Famines can be averted by attacking them at theirreal source:
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Summary: The causes of a
famine
Production declines NO
Food Availability NO
Food Entitlement YES!
Food Demand NO [Consumption Efficiency]
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Sens Conclusions There should never be a famine if the proper institutions
are in place Good markets [domestic / international output + labor mkts]
Public works projects, with low, self-targeting wage
Small amounts (at most) of storage for buffer (do not need a lot,
markets will provide new sources of food) also free press ... publicize disasters and shortages
India, for example, a country that Sen has advised fordecades, has not had a serious famine since the nation has
set up its Public Works-based, Famine PreventionNetwork
In sum good governments can always avoid having itspeople starve
Good ideas? Won Sen the Nobel prize!
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Main Question: Why is it that socialist countries
countries that are supposed to have government set
up to serve the peoplehave not only also
suffered droughts, but have suffered the worst inhistory?
Years Place Cause Deaths (millions)
1928 Mongolia Drought/Famine 3
1932 USSR Famine 5
1940 WWII War 40
1959-61 China Famine 29
1965-75 Vietnam War 2
1974 Bangladesh Famine 1
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Todays Specific Questions
What was the magnitude of the famine and
how did it strike the population
What caused it? Was it merely a failure of
entitlement like Sen hypothesized?
What policies might have prevented it? Would
public works projects have been sufficient?
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Historic Background Land Reform (give farmers land, forever they are heros of
revolution1950/1951) Start close cooperation with Soviet Union (early 1950s)
Central Planning replaces Markets (1952)
Nationalization of Enterprises / Housing / Others (1952/53)
Voluntary Cooperative Movement (1953)
Creation of Mandatory Delivery Quotas (1955)
Stalinist-style Heavy Industry first plan (mid-1950s)
100 Flowers Campaign (1956)
Anti-Rightist Campaigns (1956-57)
Collectivization Movement (1956-57) Communization of Farming (1957-58) Great Leap Forward Backyard Steel Mills (1958-61) Break with the Soviet Union (1959-60)
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Figure III-1: China: Investment Rate (GDCF/GDP)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
52
54
56
58
60
62
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1950s!
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State of China in 1959
Best of times / and the start of the worst
Morale is high economy has grown since 1950
But, the mistakes of the Great Leap andCommunization are starting to become apparent
Much of the steel output is useless but at Maos insistence
efforts of forced industrialization are redoubled
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Famine Strikes: What are its
Causes?
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Possible causes of Chinas
famine?
Production ?
Food Availability ?
Food Entitlement ?
Food Demand ?
Consumption Efficiency ?
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Production
YES but why?
In fact, it was a bad weather year (Y.Y. Kueh,
1996) But, Chinas government blamed all of the famine
on bad weather is not supportable.
Problem with this argument?
no correlation between places where famine hit worse
and the places where there was bad weather
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Excessive Mortality during Early 1960s
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Abnormal Weather and Death Rates
Province Weather was
abnormal?
Higher than average
death rates?
AnhuiBad weather yes
Shaanxi Bad weather no
Hubei Good weather no
Sichuan Normal weather yes
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Other Production Factors
All able bodies men and women were working in thesteel mills, cutting down trees to make charcoal, andsearching for iron ore
MOST IMPORTANT: real incentive problem inChinas communes output not tied to effort noway to monitor laborers free rider problemprevails no one works hard and output falls For each extra unit of grain produced by each additional
increment of labor, how much does villager get: On own farm: 100%
On cooperative: to 1/3 of unit
On collective: 1/n, where n = 10 families or so
On commune: 1/N, where N = 20,000
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Possible causes of Chinas
famine?
Production YES!
Food Availability ?
Food Entitlement ?
Food Demand ?
Consumption Efficiency ?
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Ever increasing quotas and food
availability and the disappearance of
Chinas food supply During Great Leap Forward, communes (like steel mills) were pressured toincrease production
Much evidence of falsifying reports Pictures in Peoples Daily of children dancing on top of wheat in the field
The corn will grow higher, the harder one wills low output = bad political
attitude Fear of a repeat of political reprisal like were used in the mid-1950s With the over reporting of grain output, the state began extracting ever
increasing amounts of grain Despite falling stocks, extraction continues communes report phantom
increases in output
The big question: Did Mao know?
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China was still exporting grain in 1960 and 1961
even as the nation was starving!
Grain Exports
0
0.51
1.5
2
2.5
3
3.54
4.5
1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962
M
illionsofTons
G i P b f d i
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Grain Procurementbefore, during,
and after the famine
Year Net Procurement
(Million Tons)
Percent of Output
(%)
1956 28 14
1957 33 17
1958 41 21
1959 47 28
1960 31 22
1961 26 17
1962 26 16
1963
1964
29
32
17
17
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Possible causes of Chinas
famine?
Production YES
Food Availability YES!
Food Entitlement ?
Food Demand ?
Consumption Efficiency ?
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Possible causes of Chinas
famine?
Production YES
Food Availability YES
Food Entitlement ?
Food Demand YES! (small)
Consumption Efficiency ?
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How much would you eat?
You live in a commune
Your commune has a fixed amount of food
You eat in a common dining hall
just like a dorm the price is free
Even when facing a shortage, how much would youeat?
If you cut back, what might your neighbor do?
Your neighbor thinks, if he cuts back what will you do
He might eat/ so you eat He thinks you might eat, so heeats and more rapidly than would happen if the stocks
were held privately, the food is eaten up
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Many doubt the consumption
efficiency story (did China
really eat itself to death?)
There are some reasons to doubt:
Villagers and their leaders are not so dumb asto let an institution exist that will allow them to
eat themselves into starvation
Dining halls in many areas disbanded quickly
Many adopted rules and started rationing
Institutional response to scarcity
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Possible causes of Chinas
famine?
Production YES
Food Availability YES
Food Entitlement ?
Food Demand YES (small)
Consumption Efficiency YES! (maybe)
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The Causes of the Famine
First: It is NOT a traditional Sen-like famine Most communes had money and access to funds [it was food they lacked
and since no markets, grain did not flow in]
Grain was not flowing out the countryside because of a lack of entitlements[there were no profit-seeking grain traders]
Exports happening through State Trader (not Cargill)
Migration restrictions no labor market option
WORSE: Policy restrictions kept people who needed food even those who had the means to purchase it from buying it
Hence: Sens advice would not have worked
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Irony of Chinas famine?
Reverse of famine in a market economy
Production YES
Food Availability YES
Food Entitlement NO
Food Demand YES (small) Consumption Efficiency YES (maybe)
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Final Summary of Answers to the Specific Questions?
What was the magnitude of the famine? And how did it strike the
population? Huge with 30 million dead, largest human-made disaster in history
It struck all parts of the populationincluding women/children/elderly
What caused it? Was it merely a failure of entitlement like Sen
hypothesized? It is not a traditional famine Multiple causes some natural but most the result of policy unlike
the USSR famine in the Ukraine that was probably a policy of purposefulgenocide, this was BAD POLICY but, people just as dead
What policies might have prevented it? Would public worksprojects have been sufficient? Sens solutions would not have worked
Sen, in fact, in Poverty and Famine says it is precisely because of thenature of Central Planning that this could happen need markets / free