 How Did "Free Markets" Start? |
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| How Did "Free Markets" Start? |
Page 1of 5 |
By 1979, China's government-controlled agricultural sector was in serious trouble and the government finally recognized that something had to be done to revitalize it. It began a series of botched experiments to manipulate the People's Communes into growing things that were in short supply -- first decontrolling government-set prices and later fiddling with production quota levels assigned by the government. But nothing worked to increase the production of fresh produce enough to keep up with China's growing population. The government had clearly lost the ability to stimulate and control the agricultural sector that had been the cornerstone of Maoist China.
So in 1985, the government took a bold step -- it withdrew entirely from trying to control production and distribution of non-staple crops, such as fresh fruits and vegetables, and it dissolved the People's Communes, allowing farmers to decide what to grow and allowing the market to set prices.
What developed from there was a "free market" system that is flourishing in China today and that accounts for the abundance of cheap, fresh produce that's available throughout the country.
Take a tour with me to see how this "free market" system developed!
