This article originally appeared in Monthly Review 39, no. 10 (March 1988).

Dazhai is a mountain village in Shanxi province that Mao Zedong chose as a model of rural development, primarily because it practiced cooperation and self-reliance. This small community of eighty families turned a barren, gully-scarred mountainside into rich, terraced farmland with irrigated yields that rivaled Iowa's. Dazhai peasants planted apple, walnut, and mulberry trees, raised silkworms, honey bees, chickens, and fat pigs, built a brick kiln, a bean noodle plant, a bauxite mine, and used the income from their crops and shops to build solid, stone housing for every family, educate both children and adults, and provide medical care for all.

    After Mao's death Deng Xiaoping and his colleagues repudiated Dazhai, denounced its accomplishments as fraudulent and finally, in 1983, carried out from above the complete reorganization of the village. Newly appointed leaders drawing salaries from the state contracted its collectively built and collectively worked fields to individual families for private operation. Since then, the reformers claim, Dazhai residents have prospered mightily. They have increased crop yields, opened flourishing new sidelines, raised per capita incomes, and raised living standards. Dazhai, according to a recent story in Xinhua News (September 17, 1987), now demonstrates the superiority of the "responsibility system" over the cooperative egalitarianism of the past.

    All this sounds plausible.

    Unfortunately for the credibility of Xinhua News, on-the-spot investigations fail to support the main thrust of the story. I have been to Dazhai many times in the last fifteen years, five times while the village still served as a collective model and four times after it suffered repudiation and underwent various stages of reform. Several of these visits were prolonged and intensive. The last was a one-day stopover in June 1987. My sister, Joan Hinton, followed this up with a longer stay in August.

    Conclusion: since 1979 the Chinese media have consistently misrepresented Dazhai, disparaging collective achievements on the one hand and idolizing reform achievements on the other, with equal disregard for facts in both cases.

Biased Comparisons

    Today's reports credit reform at Dazhai with:

    -- A sharp rise in gross income. Overall returns of 185,000 yuan in 1978 grew to 650,000 yuan in 1986.

    -- A sharp rise in per capita income. The average disposable income per person grew from 186 yuan in 1978 to 650 yuan in 1985. (However, disposable income fell to 608 in 1986 due to heavy investment in a second coal mine.)

    -- The creation of new money-earning enterprises and industries. Together they brought in over 490,000 yuan in 1986.

    Close examination of these claims is revealing -- and more for what they leave out than for what they include.

    First, none of the yuan figures given are corrected for inflation.

    The Chinese yuan has depreciated greatly since 1978. If one takes the official rate of exchange between the yuan and the U.S. dollar, the figures show a sharp decline in relative value from 1.6 yuan to the dollar in 1978 to 3.7 yuan to the dollar today. These official rates probably do not reflect the real decline of the yuan vis-à-vis the dollar. The black market rate is now closer to 6 or 7 than to 3.7. Nor do the figures take into account the decline of the dollar itself.

    If one rates the yuan against a representative list of commodities on sale in China, the deterioration is also substantial. The yuan today will buy less than half the goods it bought in 1978. In Shanxi province a few years ago, corn sold for 9 cents a jin. Today it sells for 24 cents. Official figures from the November 9 China Daily describe a 27 percent jump in prices between 1985 and 1987 alone. To make figures comparable across the board, all 1978 figures ought to be at least doubled or all 1986 figures halved.

Second, prereform and postreform figures cannot be directly compared. They describe different things.

    Whereas in the postreform period money income represents most of the income received, in the prereform period money income (paid out as cash or as grain with a fixed cash value) made up only 60 to 75 percent of total income. Brigade members, as shareholders in the collective, received most or all of their housing, medical care, fuel, electricity, and other goods and services free. The total value of these fringe benefits is hard to estimate, but figured at prereform prices it must be counted as worth at least 50 yuan per capita per annum. While today's contracting members still enjoy some fringe benefits, the relative contribution of the latter to total income is far less.

    In assessing prereform incomes, furthermore, one must take into account the value of the newly created liquid assets added annually to the accumulation fund and the value of the fixed assets created by joint labor in capital construction, which occupied the labor force for many months every year. These assets were mainly high-yield, terraced fields and solid, calamity-proof stone caves for family homes. The fields brought no immediate return but ensured a higher level of earned income in the future. While it is difficult to give a monetary value to such assets, from the labor expended per mu and from the cash value per mu of fertile crop land and the cash value of cave homes, one can estimate that they were worth at least an additional 50 yuan per capita per annum.

    To make a valid comparison one would have to add all these figures together: 186 + 50 + 50 = 286, then double the sum to correct for inflation. The answer, 572, approaches the current per capita figure of 650.[1]

    To be fair, the increased collective assets of present-day Dazhai should also be figured into the current per capita income figures. They would surely raise them by a significant amount. The figures, however, would not rise as high as one might expect because in the past winter labor done for workpoints created the new assets. Today all community work such as fixing roads, repairing terraces, building new fields, extending irrigation, and adding new enterprises must be paid for with money wages.

    1. Many peasants of course prefer cash in hand and the possibility of television sets tape recorders, and washing machines to increased fixed assets in land or houses Nevertheless these assets cannot be ignored.

    Workpoints entitle a participant only to a proportionate share of that part of community income that is set aside for distribution as individual earnings. The more workpoints the labor force as a whole expends on capital construction, the less each point is worth because the work yields no income in the current year. By working on capital construction all winter an individual peasant can increase his or her share of the total fund distributed, as compared to the share of someone who does not join the work. But the work done will not increase the overall size of the fund, for that is determined by the value of the crops harvested and also by the income of sideline enterprises minus production expenses and funds set aside for welfare and for future expenses and investments. These latter two categories usually are combined in an accumulation fund.

    Money wages, on the other hand, must be paid out of the accumulation fund, thus transferring wealth from the community to the individual. As the value of the fixed assets goes up, the liquid assets held in the accumulation fund go down. Furthermore, the wages earned should already be figured into the per capita income figure. None of this was true in the past.

    In the past, also, all production expenses were clearly defined and accounted for. They were deducted from net income before the village set aside the welfare fund, the accumulation fund, and the distribution fund. Today, with almost all production in private hands, it is impossible to get a breakdown of production expenses. No one will volunteer any information. Of the 630,000 yuan of gross income in 1986, 306,000 went to individuals and it is this figure, divided by 504, that gives the per capita average earning of 608 for that year. However, it stands to reason that a certain amount of production expenses have to come out of this 306,000. The village pays for seed, fertilizer, insecticides, water, electricity, and plowing, if the latter is done by village tractor. Peasants still own their own tools, many own implements and draft animals, while eight own four-wheeled tractors and six own trucks. These privately owned tools, draft animals, tractors, and trucks all run up depreciation, repair (or veterinary) upkeep, and operations costs.

While some of these, such as fuel, may already be accounted for, others, such as fodder, certainly have not been. They must be deducted from the net income figures of the families involved, thus shrinking the per capita income averages reported for postreform Dazhai.

    An additional small but significant difference between pre and post 1983 village accounts arises from the unprecendented addition of the village party secretary to the state payroll, thus relieving the village of the burden of supporting him. Since no Dazhai resident would agree to carry out privatization policy, the government, in December 1982, sent a state cadre in to implement the decisions of a county reform work team. Since then the township has paid the salary of the Communist Party secretary. The man who currently holds the job gets 700 yuan per year, plus 3 yuan per day when talking to visitors. By August 1987 he had earned over 270 yuan from this source alone. Since he also has the use of a plot of land he earns something from the crops as well.

    In the minds of Dazhai people any salary from the state places a person on the far side of a great divide that separates peasants, who live off their own hard physical labor, from those who do other kinds of work. The latter are always outsiders. The fact that someone on the state payroll runs their village upsets them deeply and throws a disturbing light on the reforms.

    No matter how one adds up or balances out the various discrepancies described above, clearly the gap between 1978 earnings and 1986 earnings is not as great as the highly selective figures and dubious accounting procedures behind current reports suggest.

    There remains another big reason why pre and postreform figures cannot be directly compared. The labor pool tapped in the two periods has not only significantly expanded, it has undergone qualitative change. In 1978 there were around 200 people in the village labor force. In 1986 there were more than 250, but the increase was not enough to staff all the enterprises. So the village went outside for help. Whereas prereform Dazhai employed little or no outside labor, postreform Dazhai now employs substantial numbers of nonresident laborers in its most profitable sideline, the coal mines, and probably elsewhere as well. One-third of the miners are from other villages -- something like twenty-five out of seventy-five men. Thus the labor force has grown not only by fifty but by seventy-five and possibly more. Judging by trends elsewhere in China, one must assume that there are outside day laborers employed in Dazhai's other small plants, orchards, and on private trucks and tractors as well. The total increase, conservatively estimated, may well amount to a 40-percent rise in labor power since 1978.  

    This expanded labor force obviously swells the gross income of the village. It also expands the per capita income because even though outside workers take their wages home they leave behind the surplus value created by their labor. This component of gross income swells the accumulation fund owned by all residents and in the long run also pushes up per capita incomes realized as wages earned from new capital investments and as subsidized fringe benefits. One Shandong village that employs outside miners in a local gold mine is building 10,000-yuan houses for all its residents.

    Third, while new enterprises have indeed brought in large amounts of added income, other prereform projects have declined or even collapsed. The truth is, if it were not for the coal mines, Dazhai income, corrected for inflation, could well be below that of 1978.

    The starting date for all current reports is 1978. Dazhai gross income that year was 185,000 yuan. In 1983 the first coal mine came on stream, adding hundreds of thousands of yuan to the gross. By 1986 the coal produced sold for 350,000 yuan. Subtract this from the total income, given as 630,000 yuan, and you get 280,000 yuan from other sources. Cut this in half to correct for inflation and you have 140,000 yuan, 45,000 yuan below the gross figure for 1978. Even if the correction is exaggerated, the reform doesn't look all that good. How can this be?

    It can be because the village abandoned several profitable collective enterprises after 1983 and at the same time failed to maintain the high standards of field and crop care that made Dazhai famous. The list of abandoned enterprises includes a bean noodle factory that earned 10,000 yuan and supplied by-product feed for a pig-raising project that earned 20,000; a blacksmith and welding shop that earned 7,000; a wine plant that earned 5,000; and a horse-raising project making use of rangeland elsewhere that earned 40,000 to 50,000. Altogether these projects produced 92,000 yuan worth of income that no longer comes in. The large building that once housed the bean noodle factory along with all its adjacent pigpens stands vacant on the slope of Tigerhead Mountain.

    Other unused or underused resources on Tigerhead Mountain in clude many mulberry trees that once nourished silkworms and many walnut and persimmon trees that appear to be, if not abandoned, at least neglected.

    Since the official line is that Dazhai, in the past, paid attention only to grain production, village leaders today introduce a number of still-functioning enterprises that were built long ago as if they were new, as if they were another result of the reform. These include the brick kiln which previously earned 20,000 yuan (Hinton family members worked there in 1971), the soysauce and vinegar plant which contributed 10,000, and several tractors which contributed 10,000, earned by hauling freight on the road.

    Legitimate new enterprises, other than the coal mine, include a flour mill, a rock crusher, and additional privately owned trucks and tractors engaged in transportation. The new trucks and tractors bring in around 70,000 yuan, considerably less than the amount lost by closing down old enterprises.

Agriculture in Decline

    The deterioration of agriculture since the reform is serious and plainly visible. With the exception of fruit from the expanding orchards, which Chinese class as a sideline, crop yields are falling. This year I saw only a few fields that had the kind of crops that made Dazhai famous in the days of Chen Yonggui -- thick, dark green fast-growing luxuriant corn and sorghum. The plant growth standing in Dazhai fields this June reflected the wide range of management skills and commitment to farming that privatization has brought to the land. I noticed great variations in plant color, stalk height, seeding rates, germination rates, and crop care. I had to conclude that the contracting peasants of today are unlikely to match the collective crops of a decade ago, and the statistics bear this out.

    The reformers like to dwell on the 1983 crop, the harvest collected during the first year of the reform. It was apparently bountiful, with an average yield of 149 bushels to the acre and a record total yield of 500 long tons of grain. The problem is that while this yield was often approached, even surpassed per acre, if not in total crop, in the past, it has not been duplicated since. The weather behaved ideally in 1983, and the soil, under collective care for decades, had reached a high state of fertility. Since then the weather has not been so favorable, and the contracting families have paid indifferent attention to fertility, seed quality, and other crucial inputs. Yields have suffered accordingly:  

    Before the reform Dazhai also suffered drought years. 1982 was one of them. The reformers like to compare the 70 bushels per acre yield of that year with the bumper 149 bushel crop of 1983. However, in 1975 Dazhai, as a collective, harvested 129 bushels per acre; in 1976, 132 bushels per acre; in 1977, 154 bushels per acre; and in 1978, 113 bushels per acre. Even if these figures are exaggerated, as critics now claim, they cannot be reduced by much. I saw the crops in 1977 and 1978. They were the best I ever saw in Shanxi. To be fair, one should match good years against good years and bad years against bad years, not compare the worst with the best.

    From the mid-1970s right through to the reform in the early 1980s the crops in Xiyang county, influenced by Dazhai's example, were excellent on the whole. At various times I saw them, admired them, and even marvelled that mountain terraces could produce so much. Since privatization in 1983 the trend has clearly been downhill, not only in Dazhai village but also in neighboring villages once known for their bountiful crops. Here, for example, are some figures for Shiping and Nannao:

    Not only have yields declined in the last few years but the infrastructure, which includes terraces, access roads to fields, and irrigation systems, has deteriorated. At Dazhai the terraces seemed to be standing well. They are exceptionally well built. But the access road was eroding badly last June. An individual peasant had contracted the road-maintenance job and was clearly not living up to his contract. Over the county as a whole I saw many, many collapsed terraces, in some places as many as one quarter of the total. Each collapse means a reduction in crop area and a reduction in yield.

    Random coal mining at Shiping has so disturbed the ground water that all the wells have run dry. If it were not for "West-Water-East," the local irrigation project so roundly denounced by the central government during the repudiation of Dazhai, the village would be without water.

Coal to the Rescue

    As for Dazhai, with the abandonment of many old projects, declining yields on the land, and much of the infrastructure wearing out, all the reformers really can lay claim to are several new privately owned trucks and tractors running the road, a 25 percent expansion of fruit-orchard acreage, and two coal mines. However, since most of the fruit trees were planted long ago and are only now reaching bearing age, the reforms of 1983 hardly deserve credit. This leaves the question of the mines, by far the most important new source of income. All the trucks and tractors together only bring in 90,000 yuan, the orchards (old and new), 110,000. But the first mine shaft alone yields 350,000, making it the primary factor in the postreform economy. In 1987 coal production began at a second shaft which is supposed to yield more, in the long run, than the first. Coal mining will almost certainly dominate the Dazhai economy in the future.

    But can the reformers legitimately claim credit for these mines? Are they something that would not exist without the reform? The answer, quite obviously, is no.

    Dazhai, as a collective, went in for mining long ago. In the early 1960s under Chen Yonggui's leadership, work began on a coal pit. A bad accident held up the work. The village, preoccupied with capital construction on the land and reluctant to divert labor elsewhere gave up the effort for the time being. In the 1970s prospectors discovered bauxite in Xiyang county. Dazhai then opened a bauxite mine. Brigade members worked the ore successfully for several years, then abandoned the project when the market for local bauxite collapsed. Why the market collapsed is not clear to me, but it affected many mines in many villages. It was not something peculiar to Dazhai. According to reports made to me by Dazhai leaders in 1987, work began on the first new coal shaft in 1980, several years before the reform, but the mine came on stream in 1983, the year that the village parceled out the land. Coal began to flow just in time to give the reform a great boost. The peasants, however, began work on the mine while still organized as a collective. They created it as a community project, rooted in the collective tradition of the past and only contracted it out to an individual entrepreneur, one Liang Bingliang, when two years later they had privatized everything else. So how can the reform claim credit for the coal mine today?

    Reformers may argue that under the collective system Dazhai could not hire miners from outside to work in the pit and thus could not mine on the scale that makes the mine profitable today. That may be true, but as a cooperative they could achieve the same scale by setting up a joint enterprise with one or more neighboring villages.

    Reformers may argue that prior to 1979 the state claimed ownership over all mineral resources and discouraged local efforts to exploit them. This may also be true, yet long before 1979 many communes and villages in Xiyang county opened coal mines and bauxite mines, rock quarries, and lime pits. If state policy discouraged this, it was singularly ineffective. With the reform, state policy changed. It could have changed on this issue without any overall reform. The state did not have to carry out the privatization of farming in order to encourage, facilitate, and finance the collective exploitation of local resources.

    Two contrasting experiences -- failure to pursue coal mining in the 1960s and the success of Dazhai's mine today -- are linked not so much  to reform policy as to the history of off-farm resource development and infrastructural progress in Xiyang county as a whole. In the 1960s lots of coal lay underground in and around Yangquan City, the railroad town on the main trunk line from Shijiazhuang to Taiyuan. While the state opened huge mines there, supplying coal to burgeoning industries all over north and central China, the road south to Xiyang remained narrow, tortuous, and rough. High transportation costs discouraged aspiring miners in Xiyang's hills.

    Today the situation is entirely different. Big units have all but mined out Yangquan coal. Buyers are looking for new sources of supply. The state has built a modern, hard-surface highway all the way into Xiyang and is now constructing a railroad to and through the town. Xiyang coal is both very much in demand and relatively easy to ship out. These favorable factors have done far more than reform policy, it seems to me, to induce Dazhai peasants to mine coal.

Behind the Defamation

    One is impelled to ask: Why does the media in China so persistently distort the truth about Dazhai?

    Deng and his group surged to power with the slogan "Seek Truth from Facts." Yet it seems that facts still carry little weight whenever they conflict with the demands of policy. Today's policy requires cadres to challenge Mao's model; better yet, overthrow it. Reports must show that the "responsibility system" works better than the collective system not only in some previously stagnant Sichuan or Anhui village, but above all right in Mao's chosen community in the Shanxi highlands.

    Warping Dazhai's story in this way hardly squares with a serious commitment to "Seek Truth from Facts." Dazhai was a very successful example of "revolutionary politics in command," of "the socialist road," of "self-reliance in the main," and of "public first, self second" as the guiding principles of life. Dazhai owed its success, not to state subsidies and army manpower as the reformers now claim, but to the consistent hard work and cooperative spirit of Dazhai's citizens and to the genius of Chen Yonggui. If the cooperative movement had worked as well over China as a whole as it did at Dazhai, the whole question of rural reform would never have come up.

    In the 1970s some 30 percent of China's villages, following the Dazhai model, were doing well. Another 40 percent, in the middle, showed potential but also confronted many problems. Thirty percent at the bottom, either misapplying or ignoring the Dazhai model, were stagnating. They were doing very poorly indeed. The responsibility system arose as an answer for that bottom 30 percent. Applied there, it quickly solved many problems. The party and government then spread it to the whole country, fanning up a reform wind that swept all of the intermediate villages and finally most of the leading villages along the same path regardless of the wishes of the inhabitants. To clear the way, to make privatization irresistible, the reformers evidently felt they had to discredit, undermine, and transform all leading examples of the collective period, either that or ignore them, by-pass them, and leave them in political, social, and economic limbo. This latter method worked with communities that were not very well known, but it would hardly do for famous brigades like Dazhai or Long Bow. Thus the bizarre contradiction between the slogan "Seek Truth from Facts" and the practice of the reform whenever it came face to face with a thriving, well-known cooperative village. Truth, as had so often been the case in prior periods of upheaval and change in China, became the first casualty of the reform.

    Truth has long been a casualty on the wage-labor front. Having defined socialism as "public ownership" plus "distribution according to work performed," reform leaders have consistently denied that some peasants were hiring others and getting rich by expropriating the surplus value thus generated. By the same token they have long ignored the kind of productive relations set up since the reform at the coal mines in Dazhai, whereby one community expropriates the surplus value created by the labor force of another. Such arrangements raise serious problems for the transition to socialism and should be high on the agenda in any discussion of the future of Chinese society. Yet month after month, year after year, official spokesmen for rural policy have reiterated only the oft-heard proposition that it is perfectly all right for some people to get rich first since they are getting rich by working hard. Others need only apply themselves to catch up.

    Now finally, at the Thirteenth Party Congress, China's leaders have done an about-face. Henceforth, the documents state, no limits will be placed on the hiring of wage labor whether by individuals, stock companies, or cooperative communities. The practice is a legitimate one at the current stage of development. All this is given theoretical justification by the sudden creation of a new stage of socialism -- "the primary stage" -- and of a new category of enterprises -- "private" as distinct from "individual." This latter term now turns out to refer only to self-employed craftsmen and "mom-and-pop" store-type ventures which can graduate to "private" status as the number of employees grows.

    This is refreshing. No more denials, no more evasions, just open support for the kind of primitive accumulation through exploitation of wage labor that has been spreading across the country for a long time.

    But the implications for socialism are no less serious than they were before the admission. Justifying anything and everything that promotes the development of productive forces on the grounds that this is the primary stage of socialism is neither adequate as theory nor reassuring as practice. Mixed economies are inherently unstable. That's why Mao pushed cooperation in the first place. It is by no means self-evident that public ownership of land, resources, and major productive equipment will lead to socialism under a system where the bulk of these resources are contracted out to individuals with full managerial privileges, including the right to hire and fire, buy and sell, build up or liquidate. What is emerging side-by-side with a rapidly expanding private sector of the economy is a universal, multilayered concession system that lavishly rewards those who control productive resources, and most lavishly rewards those who control the most.

    Under these new arrangements all sectors of the economy generate social polarization on a massive scale and simultaneously build up vested interests in a reform status quo that tilts precariously toward capitalism -- all this at a time when capitalism, on a world scale, is entering upon unprecedented crisis.

    Since the reforms carried out in 1983, polarization has been no stranger to Dazhai. While those who contract enterprises or purchase trucks and tractors with cheap government credit can parlay their control over means of production into family incomes in excess of 10,000 yuan per year, others who lack labor power, capital or credit have sunk to bare subsistence levels. A former women's leader tills three mu (all she can handle). She sold 600 jin of grain in 1986 for 100 yuan and in addition received a pension of 72 yuan for herself and 72 yuan for her aging husband. However, she never saw a substantial part of this pension money. The township checked it off as payment on the color TV which she now owns but in which she enjoys little equity. While boasting of the number of TVs and appliances owned by Dazhai citizens, the newspapers fail to tell how many are actually paid for.

    So what used to be a community of relatively equal laboring people who shared their collective income on the basis of work performed is rapidly turning into a stratified community consisting of a well-to-do minority moving into position to realize unearned incomes, a middle income majority (many of them primarily wage workers), and a sub-strata of the poor, handicapped primarily by the lack of labor power. Capital assets including means of production held or controlled now have more to do with income levels than work done.

Ironic Lessons, Past and Present

    In summing up the lessons of Dazhai, past and present, one can hardly avoid being overwhelmed by the irony of its current situation. The village that was once China's primary symbol of cooperation has now turned into its opposite. Today's Dazhai can easily stand as a symbol of the pitfalls that, with the maturing of reform, confront all agriculture. While new policies have undoubtedly stimulated a considerable upsurge in rural sideline production, particularly in areas such as Xiyang county where there are nonfarm resources like coal, it is increasingly clear that on the land, in crop production and especially in grain production, the reforms lack "staying power." Following a year of peak production in 1984, grain output dropped back 30 million tons in 1985 and has virtually stagnated since. Many signs indicate that the 1987 crop, not yet reported, may well be sharply down.[2]

    The China Daily of October 31, 1987, quotes Deng Xiaoping as saying he expects development in all other fields to go well during all of the 1990s but that he is deeply concerned about agricultural production. Other leaders recently quoted in the same paper complain about the negative results of the reform -- the damage done to water conservancy projects, the shrinking area of cultivated land, the drop in soil fertility, the lowered resistance of soils to disaster, and the weakening of institutions that provide technical services to rural people. The China Daily reports that the root cause of all these problems is "the imperfect mechanism for rural accumulation fund. . . . We used to think that farmers would tackle the problem of expanding production by themselves . . . but we failed to see how much ability farmers have for accumulation. . . . Farmers in recent years have used their income mainly for nonproductive purposes, such as buying consumer goods and building houses."

    2. The latest claim (China Daily, February 2, 1988), is a grain output of 401. 2 million tons in 1987. But this figure is suspect. It is almost exactly the figure that the plan called for. Chinese officials, when making up annual reports and given a choice between planned figures and real ones, will almost always report the plan as an accomplishment. Who wants to rock the boat by taking responsibility for anything else?

     Dazhai today vividly illustrates every one of these problems. While nonfarm enterprises -- coal mines, trucks, tractors for transport -- flourish, agriculture slowly declines, infrastructure washes out, fertility drops, yields fall, technical support fades. Most shocking is the realization that Dazhai, the village that once sold a higher proportion of its crop to the state than the big mechanized state farms on the virgin lands of the northeast, this year (according to figures given to us) raised too little grain to feed its own population.

    In 1987 the village planted 83.3 acres of corn that yielded an estimated 35 bushels per acre for a total of over 2,900 bushels. Since no one eats corn any more, Dazhai peasants swap the corn for wheat at the rate of two pounds of corn to one pound of wheat flour. 2,900 bushels of corn amounts to 82 tons of dry shelled corn which can be swapped for 41 tons of wheat flour. Since, on the average, each person consumes 0.7 Ibs of wheat flour a day, the 504 people of Dazhai consume 128,772 pounds a year, or a little more than 64 tons. Thus, according to official figures, they are 23 tons short in 1987. Will they go hungry? No. Because every year they under-report the crop, hold grain in reserve, and have something to tide them over a bad year. This year many families are still eating grain left over from the bumper crop of 1983.

    That being the case, how does the government know how much grain is harvested each year? The answer is the government doesn't know. Nobody knows. What is known, nevertheless, is that crops are getting smaller. To Dazhai people it doesn't matter. Almost every family has members engaged in sideline production. In the mines people make 9 yuan a day. Grain that miners don't raise they can buy. But if these declining yields are extrapolated out to cover the country as a whole, the gravity of the situation becomes obvious. .

    If too many villages fail to raise enough grain to feed themselves, the shortages will eventually reach a point where they cannot be made up from any alternative source. That is the spectre that haunts the reformers. That is the soft underbelly of the responsibility system. In China grain production is no sideline. It is, as Mao so often said, the key link. When you are concerned, as Deng is, about agricultural production and especially grain production in the 1990s, you are concerned about the main activity, the bedrock livelihood, of some 800,000,000 people, and about food supplies for over 1 billion. You are concerned about the heart of the economy. On this front the peasants of China have yet to be heard from. So far they have been voting with their feet.