ABSTRACT
With the collapse of the Empire in 1911, China embarked on a radical modernization programme that has continued up until the present, though with extreme alternations in constellations of political power and the concomitant agendas of modernization. The transitional period between 1911 and 1949 saw the dissolution of the traditional ritual economy and the disruption of the relationship between the central and the local state. As we have seen, this resulted from the erosion of the ritual foundation of the local state, and the following emergence of power structures that rested upon exploiting resources of violence and wealth for private advantage, thus also destroying the institutional foundations of the local and regional market systems. Before the CCP-guided land reforms speeded up and turned violent, one of the hallmarks of CCP policy in the liberated areas was to restore local order and to revive the market system, thus creating legitimacy with the local population. In understanding the unfolding of the Chinese economic style under Communist rule it is essential to look at the many ways in which markets have recurrently been used deliberately as a means to integrate society and improve living conditions, while at the same time recognizing the tensions between the core values of the new political order and the behavioural norms nurtured by market competition.1 So, more recently, the transition from Maoist policies to the reform era was a shift in the moral framework of markets. It is highly significant that Maoism did not approach the question of markets and capitalism from a Marxist viewpoint, namely to see capitalism or capitalist practices as reflections of the material development of economic substructures, but as an ideological and ultimately moral issue. In this sense, socialism was always seen as the dominance of gong over si, of yi over li. In Maoist times, the alleged detrimental effect of markets on moral attitudes was a driving force of recurrent campaigns against ‘petty capitalist’ activities on the local level, especially in the rural areas, where the administrative controls of the planned economy were less tight than in the urban areas.2
