Economic development and welfare in China

Abstract

For most people in China, and particularly for the poorest, the revolution brought an unmistakable improvement in living standards. Despite the ample empirical evidence which supports this view, many prominent scholars in the field of Chinese economic studies have chosen to close their eyes to it, relying instead on theoretical arguments of dubious validity to maintain that the Chinese people have been the victims of their own revolution rather than its beneficiaries. The characteristic argument used by the proponents of this view points to the high levels of investment in the 1950s and claims that this can have come about in a poor country only at the expense of essential consumption. Their hegemony in the field was so complete prior to America’s Great Bourgeois Cultural Revolution of the 1960s that it is appropriate to term their position the orthodox one. It still prevails, despite the increasing challenge to which it has been subject. It is my purpose here to show the theoretical deficiency of this argument and then to indicate some of the empirical evidence which controverts it.