What Did the "Market" Reform Do? Rethinking the Neo-Smithian Paradigm on China's Transition from Socialism to Capitalism

Yueran Zhang, University of Chicago

This paper challenges the conventional understanding that China's transition from state socialism to capitalism was primarily a process of "market reform". This conventional understanding, which I term the "neo-Smithian" paradigm, presumes that the emergence of capitalism is an unproblematic process of market growth: market mechanisms beget more market mechanisms, and finally "grow into" capitalism when the whole economy is marketized. Against this paradigm, I argue that it is the decisive rupture in class dynamics and property relations, rather than the market reform per se, that underpins the transition from socialism to capitalism. Nor can such rupture in class dynamics and property relations be explained in terms of the expansion of market mechanisms. I further argue that market mechanisms can be compatible with socialist property relations, but the violent transformation of socialist property relations into capitalist property relations, itself a consequence of high-stakes class struggle, changes the scope and nature of market mechanisms. Building on these arguments, I attempt a new historical periodization of China's post-1978 transformation and a rethinking of the nature of the "market" under socialism and capitalism. I also put my arguments in conversation with the literature on the transition from feudalism to capitalism.

No extended abstract or paper available

 Presented in Session 79. Historical Social Sciences and China (II): Socialism, Capitalism, and Transitions in Between