Paul R. Gregory and Kate Zhou: How China Won and Russia Lost
On a dark November night in 1978, 18 Chinese peasants from Xiaogang village in Anhui province secretly divided communal land to be farmed by individual families, who would keep what was left over after meeting state quotas. Such a division was illegal and highly dangerous, but the peasants felt the risks were worth it. The timing is significant for our story. The peasants took action one month before the “reform” congress of the party was announced. Thus, without fanfare, began economic reform, as spontaneous land division spread to other villages. One farmer said, “When one family’s chicken catches the pest, the whole village catches it. When one village has it, the whole county will be infected.”
Ten years later, in August of 1988, Mikhail Gorbachev lifted his nation’s 50-year-old prohibition against private farming, offering 50-year leases to farm families who would subsequently work off of contracts with the state. Few accepted the offer; Russian farmers were too accustomed to the dreary but steady life on the state or collective farm. Thus began reform of agriculture in Soviet Russia.
The results in each country could not have been more different. Chronically depressed Chinese agriculture began to blossom, not only for grain but for all crops. As farmers brought their crops to the city by bicycle or bus, long food lines began to dwindle and then disappear. The state grocery monopoly ended in less than one year. Soviet Russian agriculture continued to stagnate despite massive state subsidies. Citizens of a superpower again had to bear the indignity of sugar rations.
These two examples point to the proper narrative of reform in Gorbachev’s Russia and Deng Xiaoping’s China. Our narrative contradicts much received doctrine. The standard account is that China succeeded because a wise party leadership deliberately chose gradualism, retained the monopoly of the Communist Party after rebuffing democracy at Tiananmen Square, and carefully guided the process over the years. The narrative says that Russia failed because the tempestuous Gorbachev ignored the Chinese reform model, moved too quickly, and allowed the party monopoly to fall apart. This standard account is incorrect. Deng Xiaoping and his supporters, contrary to popular legend, did not agree on a reform program at the Third Plenum of the Eighth Party Congress in 1978, which installed him in power. A Chinese reform official by the name of Bao Tong later admitted as much: “In fact, reform wasn’t discussed. Reform wasn’t listed on the agenda, nor was it mentioned in the work reports.”