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:
› 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
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
› rivers & ports
› more recently railroad junctions and expressway intersections
› Jan de Vries work on European city origins
› 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