I got this from video by a libertarian Spanish-Chinese businessman. He claimed that, while mao-era policies impoverished China, he purged the rich. This meant that once liberalization happened, unlike the rest of the third world, there were no oligarchies holding the country back. This theory is congruent with politics-based explanations of economic growth like those given by the book Why Nations Fail.
I'm not aware of any specific literature on this topic.
Off the top of my head:
Didn't the rich families mainly escape to Taiwan and Hong Kong, two countries that industrialised significantly before China? (Though different political contexts of course).
By the various accounts I've read, the Chinese Communist Party (CCP) during Mao's time seems like it was pretty oligarchist to me. (Also, how many CCP members were from wealthy families themselves? Revolutionaries don't tend to be working class.
Vietnam presumably also did such similar purging, and liberalised the economy, but has not had similar economic success (it has had some economic success of course).
I don't think that's the case because, given the nature of the CCP, the country was already an oligarchy in everything but name. I see similarities with Russia, with the difference being that Chinese oligarchs maintained their ties to the Party and were kept under much stricter state control.
This is why I find 'Forbes-style' analyses of 'self-made' billionaires in these two nations so misleading; they seem to imply these are among the most meritocratic nations on earth. It’s quite hilarious when you think about it.
I may be misinterpreting it, however, I believe the opposite is true.
The book actually reinforces the idea that in China, the old oligarchs were simply replaced by a new elite (the Nomenklatura). Consequently, China remains trapped under a glass ceiling.
Additionally, many families that were rich before Mao have gradually become rich again
The primary places Chinese elites fled to during these purges were Hong Kong and Taiwan. Hong Kong today has a median household income of around $59k (PPP). Taiwan‘a is hard to find, but estimates place median household income around $70k. China’s median household income (PPP) is closer to $25-30k.
There are many factors that could be contributing to that gap, so you can’t necessarily conclude that it’s a direct result of purging the entrepreneurial and professional classes, but if you asked an development economist to help you set up an economy for long-term success they’d generally advise you to do the exact opposite of Mao’s strategy.
Further, today China has an economy that’s heavily concentrated in large businesses with close ties to the ruling party. The State and Industry operate as one the way you see in oligarchies like Russia, though it’s less of a kleptocracy and more a state-embedded oligarchy. Oligarchy with Chinese characteristics, if you will.
So, what we do know is they neither achieved higher incomes long-term than the countries their elites fled to, nor did they achieve some egalitarian utopia where wealth and power are broadly distributed and corruption is unheard of.
There are much more economically effective ways to build a country’s economy than to force the death or exile of much of its financial and human capital amidst the compulsory redistribution of production to the state. The Great Leap Forward might be the worst policy from an economic or humanitarian or utilitarian standpoint ever tried in human history, since it likely resulted in 20-50 million deaths.
It’s also not historically accurate to suggest that China lacked elites with oligarchic power when Deng Xiopeng began to liberalize China’s economy. Instead of the elites from the Mandarin or Nationalist periods, the Communist party leadership were effectively the oligarchs. The results of that are observable in China today, where many companies are primarily owned or run by family members of current or former senior government officials.
NOTE: Top-level comments by non-approved users must be manually approved by a mod before they appear.
This is part of our policy to maintain a high quality of content and minimize misinformation. Approval can take 24-48 hours depending on the time zone and the availability of the moderators. If your comment does not appear after this time, it is possible that it did not meet our quality standards. Please refer to the subreddit rules in the sidebar and our answer guidelines if you are in doubt.
Please do not message us about missing comments in general. If you have a concern about a specific comment that is still not approved after 48 hours, then feel free to message the moderators for clarification.
Consider Clicking Here for RemindMeBot as it takes time for quality answers to be written.
Want to read answers while you wait? Consider our weekly roundup or look for the approved answer flair.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.
Not exactly. Moreso the regime under Mao centralized wealth and control to the state and lead campaigns in seizing assets from the richer families that fled either to the west or to Taiwan. The output of China at this point was still poor and it wouldn't be until Deng Xiaoping (and maybe Jiang Zemin) came into the picture to focus on economic development and industrialization rather than political centralization despite political persecution from Mao. Even to this day, most of the economic development is credited to Deng.