Which, there's also would be a question of which, does the plan or the market
mechanism control the flow of resources, people, goods across national boundaries.
So what we get, and what I want you to think about, is really a two by
two table with four outcomes based on the intersection
of these two aspects, the Locus of Power and the allocation of goods.
Now in the Mao era we had a very powerful state,
which could mobilize society, was rarely affected by society's
demands, very little voluntary political participation.
People just didn't get involved in politics,
unless they were forced into politics, expect maybe to join the Communist Party,
or to get involved in political campaigns that the party itself was organizing.
And the economy was basically planned by the bureaucrats.
So what we get then, in the Reform period.
Right? Beginning in the late 1970s is a movement
along this continuum.
Right? We get villagers who are given the right
to decide what crops they want to grow.
The state's no longer telling them, you have to grow wheat or
you have to grow corn or whatever, they have a lot more freedom of choice, so
again there and it's based on their own, what they want to consume and
prices began to pay a bigger role in the 1980s.
And by 1992,
China declared the establishment of a socialist market economy.
So though you may be quite surprised today you would find that
almost 95% of the goods in China, manufactured goods in China
are allocated at market prices which are determined by supply and demand.
Now there are some commodities such as oil for
cars, electricity, water, capital.
You can think of some of them yourself.
But these are not determined by the market.
But, there's a kind of market,
that kind of black market nature to it so in some ways, they even can, people
can still get around the price controls that the state may want to impose.
But what's really important, one really important point is that what doesn't
happen is the society does not move or China does not move from the totalitarian
model up here to the lower level down here.
As you get the movement along the market economy, greater in
role of the market economy, society does not necessarily get empowered, right?
And so you don't move down into what I call sort of civil society or
a democratization process.
Instead China moves across to the upper right-hand quadrant.
Here what I call or Nick Kristof a journalist for
the New York Times used to call Market Leninism.