notes econ 469 exam 2 - Forces of production vs relations...

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Forces of production vs relations of production (Riskin) Maoist model – administrative decentralization Can develop forces of production with socialist relations of production simultaneously Local initiative and self-sufficiency Relations of production focus—mass mobilization Rejected Soviet Heirarchy and Markets (inequality and selfishness) but has no macroeconomic alternative 5 Small Industries – Fertilizer, Cement, Iron, Energy (coal or hydro), Farm machinery FFYP: Mao + Massive Soviety Import Loan (large industrial technology) This injection sustains china’s indust growth for 20 yrs thru diffusion Various kinds of industry: 1. High tech : relatively small and insulated- best minds in China focused, tend to be military or high priority projects 2. Soviet Large: Diffusion a. Makes improvements but doesn’t keep up with developed world so by 1978 they’re quite backward b. Diffused through: i. Ministerial sector – there are 8 ministries of machine building; ministries run training institutes, have tech diffusion programs ii. Industrial networks iii. Actual physical movement/relocation of factories iv. Supply networks (informal) can be used for tech as well v. Diffusion of modern PRODUCTS – modern factories provide generators, diffused throughout country, now people can use them for hydroelectric plants c. Improving after the break with Soviets: i. Buying modern imports then reverse-engineering ii. Well-known examples of failure, but many new tech they can copy for upgrades iii. Lots of chinese engineers and technical workers 3. Urban Mechanization: Urban indigenous modern sectors in
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Shanghai, Dongbei, Tianjin, mostly in machine building 4. Rural Small: in the 5 small industries, tend to be small, labor intensive, but modern 5. Backyard: Primitive technology, massive labor 1954-55 The 3 rd Front Program: Relocation of industry to mountainous inland China, partly a defense strategy, but also massive balancing program 1. About 47% of total investment in relocation for a while 2. Retrospectively wasteful, a failure 3. Factories were copied or even physically relocate 5 Small industries – provide missing production inputs for agriculture ii. 600, 000 small industry enterprises (rural iii. Fairly inefficient, low quality, but never intended to be competitive iv. Local recursos, local labor, local markets v. Works well in cement – easily found raw materials, transport of finished materials high, no easy economies of scale (hydroplants – standardized model vi. Works Poorly in fertilizer, machinery (high econ of scale, quality low)’ b. Rural industries small took off as p.o the CultRev- a revised GLF, again backyard furnaces produce badly designed machinese i. Illiteracy still widespread so they cant even read tech instruction ii. Obsolete tech iii. Even if better connected, couldn’t have afforded newer tech 6. Motor Vehicle Production a. Highly localized – as in Detroit – in order to be effective b. 1949: China does not hnave its own auto industry
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c. 1953: “The First Factory”, made in Dongbei
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notes econ 469 exam 2 - Forces of production vs relations...

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