10.14 class

Econ 274 October 14, 2015

Followup to Li papers

• asked to be devil’s advocate that labor reforms (household responsibility system) was not central to change in agriculture

– that certainly seems to be the case with rice

› you don’t triple output by working harder

= better weeding

= more careful planting

= better soil preparation 

› each give you a few percentage points gain

But HRS did matter

– household allocation of labor

› vegetable plots, hogs, ducks, fish

– other wage labor

– migration (did not mention!)

• TVEs (town & village enterprises), eg in Li:

› brick-making

› transport

› housing construction

– some purely private, some organized by villages and towns as they could provide the funds for up-front plant & equipment in an era when there were no rural banks

• comparative advantage

– Beijing [and the provincial capital] cared about getting food

› as long as you did that, and didn’t stage political protests, you could do what you wanted

› so discretion now that the combination of working the fields and infrastructure weren’t  all that was permitted

= in fact had all along: the factory in Maoping antedated reforms. it was really technical change in agriculture that let peasants spend time as something other than farmers

– could plant crops other than grain

› as grain output rose, that of other crops skyrocketed


• Hessler Lishui: go to June 2007 National Geographic for photos

Hessler in June 2007 National Geographic

Accompanying photos – see in particular the photo of bra rings!!

= what is “technology”?

= watch for personal stories: how did people’s lives evolve

= social infrastructure: how did entrepreneurs garner resources (information, funds, markets, etc)

= growth process of cities

• urban economics

– why cities?

› economies of scale: infrastructure

› economies of scope: specialization

› benefits of density: creativity

– where

› rivers & ports

› more recently railroad junctions and expressway intersections

› Jan de Vries work on European city origins

– structure

› assume all activity in Central Business District CBD

= manhattan & brooklyn used to have a lot of factories, near railheads and docks!

› then clear structure: opportunity cost of time ← → declining rents with distance, and reflect diminishing returns

= rents can be very high in slums near city centers: that paid by a family may not be high, but a lot of families cram into a small building!

= cycling of uses over time: buildings start out luxury, deteriorate over time so higher density / lower rent, eventually gentrify. donuts of use by distance where can trace multiple cycles over time in older European cities, looking at shifting uses of a given building over centuries.

– key conclusion: productivity and incomes are systematically higher in cities