ABSTRACT
This chapter contrasts the logic of shock therapy with reform thinking of young intellectuals and older officials who formed an alliance as a result of their shared concern for rural reform. This alliance played a key role in researching, theorizing, and defending the gradual marketization from the margins that emerged in China from on-the-ground experimentations. The approach employed an interdisciplinary, institutionalist, and inductive kind of economics that utilized methods from a range of social sciences. The first part of Chapter 6 shows how a group of young researchers who had spent their formative years in the countryside (上山下乡) moved to the heart of Chinese economic policy-making as rural reforms were successfully implemented. The second part of the chapter delineates how this community of young intellectuals debunked the idea of wholesale liberalization and devised a theoretical justification for a dual-track price system (双轨制). Admirers of Eastern European reform economics had described the dual-track price system as inconsistent and chaotic. Recasting the dual-track price system as a coherent reform approach helped it to become national policy in 1985. This consolidated China’s path of experimentalist reform.
