[MUSIC] In this last clip, I really want to talk about the policy failures and policy successes. The first one I want to talk about is a policy failure, in fact, the great policy failure of the communist period, since 1949. And really a massive failure in the Mao Era, which was the great famine of 1959 and 1961. And the question really is, how could a party came to power with the support of the peasantry, introduce a policy that we believe killed somewhere between 30 to 40 million people in what is the largest man-made famine in world history? Now, how did that happen? So let's think back to some of the issues we've been talking about, about how policies got on agendas, non decisions, implementation, political pressure, local responses, all those kinds of things. Let's use that as our framework to look at what in fact happened. Now, from my understanding is really, you get a radicalism, a tide of radicalism, really beginning in the spring of 1957 with the Anti-Rightist Campaign. And lots of people are being arrested and being criticized for being rightist, this is in spring of 57. By fall of 1957, we really get the beginnings of the Great Leap Forward. And by summer of 1958, the establishment of communist style or communistic, people's communes are established. And this is really a time of high tide of ideological fervor. Where the central leadership, and local peasants, and local officials, they're all predicting an imminent transition, an imminent movement into the communist utopia. It's kind of almost that they've drugged themselves into believing that if you mobilize the peasants, if the peasants have high levels of political consciousness, then you can get larger, larger outputs of food. And so they exaggerate the grain outputs that they report by about 10 times. Local officials are reporting up the next level, that level's reporting up even higher, and so the party has this huge expectation of how much grain is going to be put away. How much they can take out of the countryside. And so, to meet these quotas, local officials have to turn over large amounts of grain, or risk criticism of rightism, of dragging their feet, of not being In step with this high tide of euphoria and radicalism. Also, there is a strong belief within the communist party, and particularly within Mao, that there were class enemies all around. And that the former wealthier peasants would be hiding grain in a kind of mass conspiracy to try and undermine this policy. And in fact, back in the Soviet Union in the 1920s, there was a time when the rich peasants were accused of hoarding grain. And it's because of that that Stalin sent out 25,000 workers into the countryside and basically, killed close to 3 million people. So they're already was a history within the minds of Mao, and other top leaders, that there would be, could be, this kind of conspiracy to hide grain. Now, the word started to come up that the reports were false. That the amount of grain that had been predicted was not being met. Even though they they knew that, they still tried to convince themselves that high ideological fervor of the peasants. If they could be really excited for production, production would shoot forward. Now, by the summer of 59, it became known that people were dying. And there was a challenge to the policy at a meeting called the Lushan Plenum in August of 1959. But rather than respond to those concerns, Mao decides that there is a conspiracy against him. He launches a new anti-Rghtism campaign and arrests several top leaders, and farmers, the local officials go down and take out more grain. And people are criticized for attacking the great leap. And because of that, there really is no feedback, right? There's no ability for the real numbers of deaths to be reported back to the center. So it takes at least a year after the deaths become reported, begin to be reported, for the party to be able to change its direction. And this is a table that shows the mortality rates in China between 1956 and 1962 in per 1,000 people. And I've highlighted some of the localities where there were massive amounts of death. And you can see that in a place like Sichuan, here, already 47 people per 1,000 had already begun to die. And you can see that it's gone up from 25 to 47, so it almost doubles, right? Here in Guizhou in southwest China, goes from 15.3 to 20.3, all right? But the big jump really happens between 1959 and 1960. And that's after they know that people are starting to die. But the new anti-Rightist campaign begins and there's even more grain extraction. More grain being extracted from the countryside, people are being accused of hiding grain. And so, you can see here in provinces like Gansu, Henan, Sichuan, Qinghai, Guizhou and Anhui, the percentage, the number of people who die is very, very great. And all of this could have been avoided if the policy, if the party had been willing to make the concessions back in the spring of 1959, when it already became known that there was famine. Now, let's flip it, let's talk about policy success. And what is it that seems to make reforms successful? And I would argue that, I have this concept that I call waves of reform, and I would argue that since the reform movement began back in 1978, we have seen six waves of reform, six times. 78 79, 84 85, 87 88, 92 93, 1997 2000, and then we are currently in the midst of a wave of reform, even though we see some kind of slow down in this sixth wave of reform. Now, how do these waves occur? One of things is that there has to be a consolidation of factional power due to some kind of elite rotation. Leadership changes, so a lot of these occur around the time of a party congress, where some leaders will retire. New people will move on to the politburo or the politburo standing committee and a particular leader will then have much greater strength. Because he's moved these people on and he may purge previous leaders or their allies. What we also may see was some kind of failure of a previous conservative restriction. That we had a liberalization, then we had a tightening, and that tightening seems to fail. And when people are not happy about the tightening and it leads to a consensus among the population and among the leadership that there needs to be a new reform. We also may find that the economy is doing very well, which gives the party the room to take some risks, or there may be a crisis. And so the party really has very little choice and needs to carry out this reform. And overall, we find that in these periods, there's popular support for this policy shift. Other characteristics might include a positive international environment. Often not all six reforms, but not all six waves, but for several of them, good ties with the US. So there's a relaxed international environment again, which allows for this kind of experimentation. The unintended consequences, which can really kill a policy, they're not visible yet. So if there are problems from the policy, we don't know about them yet, the center doesn't know about them yet, so they can continue to push forward. And then there's this entire package, this context, national context. A very positive context which really says that implementation should go forward. The bureaucrats get weaker. There's a sense that what we're doing is good, and bureaucrats have a hard time fighting back. And this actually may involve even cuts streamlining, bureaucratic streamlining, cuts to the size of the bureaucracy, leaving fewer bureaucrats or a weaker bureaucracy in position. Which makes it harder for them to resist the policy and, moreover, there is some policy that buys off the bureaucrats. That those who lose their jobs are given opportunities to go out into some new economic sector and start a job, start a company, and still feel that they can do all right. So for example, in the 1980s, when the decision was taken to deregulate foreign trade, and allow more foreign trade companies, and open up China's market, internal market, to the outside world, and to let the farmers or let manufacturers export more and more. You needed less bureaucrats. So they let the bureaucrats set up these kind of foreign trade companies. But 6,000 new foreign trade companies were established in the mid 1980s and these people could act as intermediaries between the enterprise and oversees. And so they were able to charge a small fee for transferring those goods and be able to continue to make a living and do quite well. And so they felt no need to fight the reforms. So let's look at one case of reform, 1997 1998, the Wave of Reform, the Fifth Wave of Reform. And what do we see? We see the 15th Party Congress, Jiang Zemin consolidates his power. Deng Xiaoping has died, and two leaders, Qiao Shi and Li Ruihuan, step down. He's able to bring in Zhu Rongji and several other people from Shanghai. He really creates at that moment what eventually will be known as the Shanghai faction within the Politburo Standing Committee. So he is in the dominant position. He controls the key posts within the party. He even goes and is able to purge the party's Secretary of Beijing, who may have opposed him, but he's able to get rid of him. So he's showing other people that, don't mess with me, I'm strong enough, I can take down this big guy. And if I can take him down, I can take you down, so you better go along with my policies. He also has a very successful trip to the US. He's cutting tariffs because he's preparing to join the WTO. So there's a positive attitude towards foreign trade and towards the opening to the outside world. And then we see several policies take place at the same time. We get the major housing reform, which will drive the economy for the next 15 to 20 years. The privatization of the state owned enterprises that I've mentioned. We get a major cut in the number of bureaucrats. In fact, Zhu Rongji may have cut the bureaucracy in half. And we also get China preparing to join the WTO. And this is a very, very, very successful program and successful campaign through the summer of 1998. And this is really the fifth wave of reform.
