Contract responsibility system
Encyclopedia
Responsibility system was a practice in the People's Republic of China
, first adopted in agriculture
in 1981 and later extended to other sectors of the economy, by which local managers are held responsible for the profits and losses of the enterprise. This system partially supplanted the egalitarian distribution method, whereby the state assumed all profits and losses.
In traditional Maoist organization of the rural economy, and that of other collectivised programs, farmers are given a quota of goods to produce. They were compensated for meeting the quota. Going beyond the quota rarely produced a sizeable economic reward. In the early 1980s peasants were given drastically reduced quotas. What food they grew beyond the quota was sold in free market at unregulated prices. This was an instant success, quickly causing one of the largest increases in standard of living
for such a large number of people in such a short time. This system maintained quotas, and thus, the element of socialist societies termed in China, the Iron rice bowl
(in which food and employment was ensured by the state).
Allocating farmlands to individuals or to families rated as a crime during the Mao era in China, but the low-level productivity under collective farming
and drought forced villagers of Xiaogang
, Fengyang to do so in 1978. They implemented this system secretly, and signed a contract, "if any one of us is put to prison as a result, others shall be responsible for taking care of his children until they reach 18 years of age".
The secret experiment proved very successful. In 1979 similar experiments began in Sichuan
and Anhui
provinces, both seeing dramatic increases in agricultural productivity. Deng Xiaoping
openly praised these experiments in 1980, and the system has been adopted nationwide since 1981.
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
, first adopted in agriculture
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
in 1981 and later extended to other sectors of the economy, by which local managers are held responsible for the profits and losses of the enterprise. This system partially supplanted the egalitarian distribution method, whereby the state assumed all profits and losses.
In traditional Maoist organization of the rural economy, and that of other collectivised programs, farmers are given a quota of goods to produce. They were compensated for meeting the quota. Going beyond the quota rarely produced a sizeable economic reward. In the early 1980s peasants were given drastically reduced quotas. What food they grew beyond the quota was sold in free market at unregulated prices. This was an instant success, quickly causing one of the largest increases in standard of living
Standard of living
Standard of living is generally measured by standards such as real income per person and poverty rate. Other measures such as access and quality of health care, income growth inequality and educational standards are also used. Examples are access to certain goods , or measures of health such as...
for such a large number of people in such a short time. This system maintained quotas, and thus, the element of socialist societies termed in China, the Iron rice bowl
Iron rice bowl
"Iron rice bowl" is a Chinese term used to refer to an occupation with guaranteed job security, as well as steady income and benefits. The Chinese term can be compared to the similar English concept of a breadwinner with cradle to grave socialism...
(in which food and employment was ensured by the state).
History
Politicians did not initiate the household-responsibility system: local villagers developed it as an experiment later applied nationwide.Allocating farmlands to individuals or to families rated as a crime during the Mao era in China, but the low-level productivity under collective farming
Collective farming
Collective farming and communal farming are types of agricultural production in which the holdings of several farmers are run as a joint enterprise...
and drought forced villagers of Xiaogang
Xiaogang Village
Xiaogang Village is a small village in Anhui province in China, not far from Nanking. China's move toward capitalism has been traced to an agreement among farmers in Xiaogang to illicitly subdivide their common farmland in December 1978, after which production of food increased dramatically....
, Fengyang to do so in 1978. They implemented this system secretly, and signed a contract, "if any one of us is put to prison as a result, others shall be responsible for taking care of his children until they reach 18 years of age".
The secret experiment proved very successful. In 1979 similar experiments began in Sichuan
Sichuan
' , known formerly in the West by its postal map spellings of Szechwan or Szechuan is a province in Southwest China with its capital in Chengdu...
and Anhui
Anhui
Anhui is a province in the People's Republic of China. Located in eastern China across the basins of the Yangtze River and the Huai River, it borders Jiangsu to the east, Zhejiang to the southeast, Jiangxi to the south, Hubei to the southwest, Henan to the northwest, and Shandong for a tiny...
provinces, both seeing dramatic increases in agricultural productivity. Deng Xiaoping
Deng Xiaoping
Deng Xiaoping was a Chinese politician, statesman, and diplomat. As leader of the Communist Party of China, Deng was a reformer who led China towards a market economy...
openly praised these experiments in 1980, and the system has been adopted nationwide since 1981.
See also
- Township and Village Enterprises (TVE)
- Economy of the People's Republic of ChinaEconomy of the People's Republic of ChinaThe People's Republic of China ranks since 2010 as the world's second largest economy after the United States. It has been the world's fastest-growing major economy, with consistent growth rates of around 10% over the past 30 years. China is also the largest exporter and second largest importer of...