Agriculture

The development of China’s agrarian economy

For much of its history China’s agrarian economy has experienced involutionary growth due to high population density. However, since the Reform and Opening era, the emergence of a new agricultural model focused on the production of high-value products and the increase of cultivated land per worker has led to a certain degree of de-involution.

Reviewing Philip C. C. Huang 黄宗智 (2020) research on the development of China’s agrarian economy

The Theory of Peasant Economy and “Involution” and “De-involution”

by Philip C. C. Huang黄宗智

Author

Philip C. C. Huang, by his Chinese name Huang Zongzhi 黄宗智, is one of the most renowned Chinese social scholars. His research on rural China, in particular on its agrarian economy, has shaped the academic discourse both within and outside of China. Following a nearly forty-year long career at the University of California Los Angeles UCLA, he is now currently Chiangjiang Chair Professor at the People’s University of China in Beijing.

Summary

For much of its history China’s agrarian economy has experienced involutionary growth – a decrease of output per worker despite an increase of total output – due to high population density. This seems to have changed, however, since the Reform and Opening era, as the emergence of a new agricultural model focused on the small-scale production of high-value products and the increase of cultivated land per worker has led to a certain degree of de-involution, i.e rising output per worker. Huang (2020) argues that while the Neoliberal and Marxist development approaches are unable to explain these changes, Alexander V. Chayanov’s Theory of the Peasant Economy offers both insights into China’s agricultural development and guidance for future agrarian reforms.

In-depth analysis

Involution

For much of its history China’s agrarian economy has been characterized by the double pressure of land scarcity and population growth. This double pressure has been driving changes in agricultural production, in particular the shift from rice to cotton production, as well as greater commercialization of agricultural products and regional specialization. However, even though agricultural output increased over-time, the per-capita income of farming families stagnated or even fell. Huang, building notably upon the work of Clifford Geertz, has termed this phenomenon involution 内卷化 (Huang, 2020a).


Huang’s concept of involution

Huang’s concept of rural involution refers to an agrarian economy in which output per labor unit falls in spite of an expansion of the total output, as the rise of output is exceeded by the increase of labor input. Hence, involutionary growth – simultaneous growth of total output and stagnation or fall of output per labor unit – is a situation of growth without development (Huang, 1990, p.77).

In his work, The Peasant Family and Rural Development in the Yangzi Delta 1350-1988, Huang notably compares the total and per workday incomes of different crop production in a small village in Northern China, Michang (Huang, 1990, p.124-126). He shows that while the shift towards cotton production enabled a significant rise in gross income per land unit (mu 亩) in comparison to sorghum, wheat or maize production, the income per workday for cotton – income realized after one workday minus the production costs – is only minimally higher than for sorghum and even lower than for maize production, as both the necessary labor input (workday per land unit) and capital input (fertilizer cost per land unit) is higher for cotton. [1] [2]


“[…] the objective circumstance of large population and scarce land can easily lead to increasingly higher labor inputs per land unit as well as increasingly lower marginal returns and, hence, result in the emergence of a closed system, which is difficulty changeable.”(translated by author)

Huang, 2020b

De-involution: China’s hidden agricultural revolution and the rise of new high valued added agricultural model

However, the Reform and Opening policy saw the emergence of a new agricultural model focused on small-scale production of high value-added agricultural products, such as small-scale orchards or farms combining small-scale livestock and crop farming. In particular, the income growth experienced in urban areas since the 1980s and the upgrade of food consumption pattern associated with it has prompted a transition of agricultural production toward high value-added agricultural products, such as high-value meat and dairy products as well as high-quality vegetable and fruits. Due to the methodology used to compute China’s agricultural statistics [3], this transition towards the production of high value-added food products has, however, not been reflected in official statistics and occurred largely unnoticed. Therefore, Huang has named it China’s hidden agricultural revolution 中国的隐性农业革命 (Huang, 2016). 

These high-valued agricultural products necessitate not only higher investment in capital goods, such as fodder for animals as well as plastic arches (plastic tunnels), fertilizer and high-quality seeds for vegetable production, but also in labor. This new agricultural production model is marked by the dual intensification of both labor and capital inputs 劳动与现代投入双密集化. Interestingly, the capitalization of China’s agriculture, i.e the increasingly intensive use of capital goods, has been pushed by small-scale family exploitations rather than large-scale industrial (Huang, Gao, and Peng, 2012). The emergence of large-scale rural workers 农民工working either in the proximity of their hometown or in faraway industrial centers has notably provided rural families with additional cash income needed for such capital investments [4]. Furthermore, in parallel to the upgrade of consumption patterns, the one-child policy as well as the emergence of first rural industrial employment and later large-scale rural migration to coastal industrial centers has led to an increase in the average per-capita land use. Indeed, from 1990 to 2010 cultivated land per worker rose from 2.4 hectares (5.9 mu 亩) to 4 hectares (10 mu 亩). Huang (2020a) explains that this simultaneous increase of production value and per-capita land use has led to the rise of agricultural per-capita income and hence to a certain degree of de-involution 去内卷化.

“[China’s] new small-holder agriculture is a type of agriculture, which can absorb more labor on a small area of land and provide cultivators with a higher daily income. That is, it grants agriculture a certain degree of de-involution. This is an important element of China’s agricultural modernization in recent years.” (translated by author)

(Huang, 2020a, p.130-131)

China’s alternative development path: The Theory of Peasant Economy  

Building upon Europe’s and the US’ historical experience the mainstream Neoclassical and Marxist development approach content that the rise of capitalism is closely associated to a shift from a feudal system of small-scale agriculture to large-scale capitalist agricultural production with a high degree of mechanization. This does not concur with China’s development, as its agriculture remains both small-scale and reliant on a high degree of labor input.

Firstly, China’s new agriculture is founded on the intensive use of both capital goods, such as fertilizer and seeds, and labor. In opposition, the modernization of agriculture in Western countries was focused on the mechanization of agricultural production, that is the substitution for labor input.

“[…] with the development of a modern industrial economy, small-holder farmer will follow a different path than the West by adopting a labor and capital dual-intensification modernization model, which relies upon an increase of fertilizers and seed selection methods, as opposed to the Anglo/Western model of labor-saving and highly-mechanized capitalist agricultural model.” (translated by author)

(Huang, 2020a, p.133)

Moreover, in contrast to the British agricultural revolution in the 18th century, the capitalization of China’s agriculture has not triggered the emergence of a class of agricultural wage earners (landless farmers). From 2000 to 2010 agricultural wage earners only accounted for one to three percent of the total labor agrarian labor force, while the vast majority remained family labor input. Huang, Gao, and Peng (2012) call this process Capitalization without proletarianization 没有无产化的资本化 [5].

Interestingly, the past policies of the PRC seem to have been informed by approaches emphasizing large-scale agricultural production methods, i.e Neoliberal and Marxist approaches. Markedly, since the beginning of the reform and opening era agricultural policy has tended to be biased toward horizontal integration by supporting the formation of large-scale exploitation and neglect small-scale farms (Huang, 2018).

By comparison, Huang (2020a) argues that Alexander V. Chayanov’sTheory of Peasant Economy represents a useful theoretical approach to understand China’s agricultural development. The latter noticed that under important population pressure small-holder agrarian exploitations are forced to continue to increase their labor input – even if the marginal return is falling – so as to secure the survival of their family. Hence, this small-holder (non-capitalist) agricultural model is likely to be perpetuated in regions with a high population density.

In countries with a high population density, in which small-holder agriculture persisted, small-scale farms are still exposed to the pressure of big corporations (‘capitalist forces’), notably retailers, and are at risk of losing a large portion of their return to these [6]. According to Chayanov, to counter this power asymmetry small farmers should form cooperatives so as to exert influence on the further processing and sale of their agricultural products, i.e perform vertical integration. Interestingly, East-Asian countries, such as Japan, Korea and Taiwan, have during their development process successfully established such farming cooperatives and provided small exploitations with modern production materials as well as more generally with a counterweight to market forces.

While China established agricultural collectives during the Mao era, and subsequently since the Reform and Opening a system of cooperatives, these have lacked in effectiveness. Huang (2020a) argues that in future reforms China should not abide by the Neoclassical and Marxist approach favoring large-scale industrial agriculture but follow Chayanov’s recommendations and East-Asian countries’ experience by supporting small-scale farms through the vertical integration of agricultural cooperatives. In the end, such reforms should aim at raising the income of small-scale farmers (Huang, 2018).

The rise of the informal economy

Furthermore, according to Huang, the spectacular rise of an informal economy in developing countries, which often possess a small-scale agricultural system like China, is linked to the phenomenon of involution and de-involution. Indeed, the surplus rural labor force, which is accumulated in the course of agricultural involution, is eventually transferred during de-involution (in particular caused through the emergence of a rural migrant workforce) to industrial sectors. Due in part to the lack of protection accorded to rural migrants in China, the latter have fueled the rise of the informal economy.


[1] For an in-depth discussion on the concept of involution see. Dietrich Vollrath, 2018, Involution and growth, https://growthecon.com/blog/Involution/

[2] While Huang’s concept of involution refers to the increasing of labor inputs, due to high population density and subsequent decrease of marginal returns, the term ‘involution’ (内卷or 内卷化) has in recent years been widely used to describe reinforcing cycles of unhealthy competition. For instance, due to swiftly growing competition within China’s education system, schools require students to further increase their study time so as to improve their individual as well as the establishment’s average test score. By this, the competitiveness of the education system is further worsened.

[3] In particular, China’s agricultural statistics tend to have a quantitative bias. Qualitative production changes, such as the transition to high value-added food products, are thus not sufficiently reflected.

[4] According to Huang, the generalization of rural work migration has led rural families to be “half in industry and half in agriculture” 半工半耕.

[5] The term capitalization refers to the increasing usage of capital goods.

[6] This in part concurs with China’s experience, as small farmers lose a sizeable part of their profits to large-scale wholesalers (Huang, 2018).

The Paper

Huang, Philip C. C.  (2020a), The Theory of Peasant Economy and “Involution” and “De-involution” [English title], Open Times, 04/2020.

黄宗智. 小农经济理论与“内卷化”及“去内卷化”[J]. 开放时代, 2020(04):126-139. Chinese version available here.

Sources

Huang, Philip C. C.  (2016), China’s Hidden Agricultural Revolution – A historical and comparative perspective [transl. by author], 开放时代 Open Times, 02/2016, p.11-35. 黄宗智.中国的隐性农业革命(1980—2010)——一个历史和比较的视野[J].开放时代,2016(02):11-35+5. Chinese Version.

Huang, Philip C. C. (2018), China’s New Age Peasant Economy:Reality and Theory [English title], 黄宗智.中国新时代小农经济的实际与理论[J].开放时代,2018(03):62-75+8-9.

Huang, Philip C. C.  (2020a), The Theory of Peasant Economy and “Involution” and “De-involution” [English title], 开放时代 Open Times, 04/2020. 黄宗智.小农经济理论与“内卷化”及“去内卷化”[J].开放时代,2020(04):126-139+9.

Huang, Philip C. C.  (2020b), When involution engulfs China? Huang Zongzhi responds to the development of the concept of involution and de-involution [Transl. by author], YaliDushu Official Wechat Account, https://mp.weixin.qq.com/s/s5wk2fRKv11RfDk9_zgG6g , 当“内卷”席卷中国?!黄宗智回应“内卷化”概念与“去内卷化”发展

Huang, Philip C. C., Gao, Yuan and Peng, Yusheng (2012), Capitalization without proletarianization [Transl. by author], 开放时代 Open Times, 05/2012, p.10-30. 黄宗智,高原,彭玉生.没有无产化的资本化:中国的农业发展[J].开放时代,2012(03):10-30. Chinese version.

Huang, P. (1990). The peasant family and rural development in the Yangzi Delta, 1350-1988. Stanford, Calif.: Stanford University Press.

Zhou, L.-A. (2019). Understanding China: A Dialogue with Philip Huang. Modern China, 45(4), 392–432. https://doi.org/10.1177/0097700419845316.