YSI – Economic History Graduate Webinar: Adam Frost

Adam Frost, PhD student at Harvard University, will present his work: Entrepreneurial transformation of socialist China

Abstract:
China’s socialist era (1957–1980) is often described as having been void of entrepreneurial activity. Generations of scholars argued that beginning with the Communist’s victory over the Nationalists in 1949 and culminating until the establishment of collective economic institutions in 1957, private entrepreneurship was effectively purged from the Chinese economy. It was only with the introduction of market-oriented reforms in the early 1980s, that Chinese entrepreneurs began to reemerge.
This paper combines novel historical and statistical methods to challenge such characterizations, demonstrating that capitalist entrepreneurship was an enduring feature of the modern Chinese economy. Specifically, the paper develops and analyzes an original dataset of more than 2,600 cases of “speculation and profiteering” that were prosecuted by local government agencies in the 1960s and 1970s. Using this data, in conjunction with state statistical aggregates, it shows that private entrepreneurial activity not only persisted throughout the entire socialist era, but that it was far greater in scale and scope than previous scholarship leads us to believe. Of the millions of entrepreneurs who were prosecuted by the socialist state, the mean individual was engaged in the production and exchange of goods whose value represented years’ of income for the median worker.
Moreover, this paper reveals that the socialist state was not unified in its suppression of private entrepreneurial activity. A statistical analysis of the punishments in “speculation and profiteering” case demonstrates that local government officials did not faithfully execute central directives. Rather, they adopted overtly protectionist
strategies, sheltering entrepreneurs who were engaged in large-scale pursuits or activities that they viewed as more productive in the local economy. Collectively, these findings overturn longstanding ideas about the evolution of the modern Chinese economy and the historical antecedents of China’s market-oriented reforms.