Version: 4 (current) | Updated: 12/2/2025, 9:28:00 PM
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@adam_tooze:person {occupation:"historian, author"}
@chartbook:organization {description:"Chartbook Newsletter series"}
@file_pinax:document {title:"Chartbook Newsletter #26: China's Hyperinflation", creator:@adam_tooze, created:@date_2021_07_11, language:"en", description:"Explores China’s hyperinflation during the Nationalist and Communist periods."}
@file_38608988_chartbook_newsletter_26 -> documents -> @chartbook_newsletter_26:event {title:"Chartbook Newsletter #26: China's Hyperinflation", date:@date_2021_07_11, creator:@adam_tooze}
@chartbook_newsletter_26:event -> part_of -> @chartbook
@chartbook_newsletter_26:event -> discusses -> @china_hyperinflation:event {description:"Severe inflation in China during the Nationalist government and early Communist era", period:"1930s‑1940s and 1950s‑1960s"}
@china_hyperinflation:event -> linked_to -> @world_war_ii:event
@china_hyperinflation:event -> linked_to -> @chinese_civil_war:event
@china_hyperinflation:event -> involved -> @nationalist_government:organization
@china_hyperinflation:event -> involved -> @communist_party_of_china:organization
@china_hyperinflation:event -> resulted_in -> @gold_yuan:currency {introduction_date:@date_1948_08_19, exchange_rate:"3 million CNC = 1 GY", backing:"0.2217 centigram gold per GY", cap:"$200 million"}
@gold_yuan:currency -> price_frozen_on -> @date_1948_08_19
@gold_yuan:currency -> failed_by -> @date_1948_10
@chartbook_newsletter_26:event -> mentions -> @china_aid_act:policy {description:"U.S. China Aid Act of 1948", funding:"$275 million for imports and $125 million military aid"}
@china_aid_act:policy -> passed_on -> @date_1948_01
@china_aid_act:policy -> provided_funds_to -> @china:place
@file_38814232_chartbook_newsletter_27_gilets_jaunes -> documents -> @chartbook_newsletter_27:event {title:"Chartbook Newsletter #27: Gilets Jaunes", date:@date_2021_07_18, creator:@adam_tooze}
@chartbook_newsletter_27:event -> part_of -> @chartbook
@chartbook_newsletter_27:event -> discusses -> @gilet_jaunes:movement {start_date:@date_2018_11_17, location:@france, cause:"fuel tax increase"}
@gilet_jaunes:movement -> sparked_by -> @fuel_tax_increase:policy {effective_date:@date_2019_01_01, previous_rate:"44.60 €/ton", new_rate:"55 €/ton"}
@fuel_tax_increase:policy -> opposed_by -> @pascal_canfin:person
@pascal_canfin:person -> warned_about -> @gilet_jaunes_protest_risk:concept
@chartbook_newsletter_27:event -> mentions -> @fit_for_55:policy {description:"EU climate package extending ETS to transport and heating"}
@fit_for_55:policy -> proposed_by -> @european_commission:organization
@fit_for_55:policy -> includes_extension_of -> @emissions_trading_system:concept
@emissions_trading_system:concept -> extended_to -> @petrol_fuel:concept
@emissions_trading_system:concept -> extended_to -> @diesel_fuel:concept
@emissions_trading_system:concept -> extended_to -> @gas_fuel:concept
@emissions_trading_system:concept -> extended_to -> @oil_heating:concept
@fit_for_55:policy -> includes -> @carbon_border_adjustment:policy {advocate:@frans_timmermans:person}
@frans_timmermans:person -> advocated -> @carbon_border_adjustment:policy
@fit_for_55:policy -> funded_by -> @social_climate_fund:policy {budget:"€72.2 billion", matched_by_member_states:"€144.4 billion"}
@social_climate_fund:policy -> aims_to_offset -> @carbon_tax:concept {regressive_effect:"burdens low‑income households"}
@carbon_tax:concept -> regressive_impact_on -> @low_income_households:group
@low_income_households:group -> mitigated_by -> @redistributive_payments:concept
@redistributive_payments:concept -> financed_by -> @carbon_tax:concept
@chartbook_newsletter_27:event -> cites -> @eurobarometer_poll:document {finding:"climate concern higher among upper‑middle class, lower among low‑income groups"}
@eurobarometer_poll:document -> shows -> @income_based_climate_concern:concept
@file_38873780_chartbooks_new_era_pitching_in -> documents -> @chartbook_newsletter_new_era:event {title:"Chartbook's New Era: Pitching in", date:@date_2021_07_17, creator:@adam_tooze}
@chartbook_newsletter_new_era:event -> part_of -> @chartbook
@chartbook_newsletter_new_era:event -> announces -> @shutdown_book:publication {title:"Shutdown", release_date:@date_2021_09_07}
@shutdown_book:publication -> author -> @adam_tooze
@file_39119749_adam_toozes_chartbook_28_china_in -> documents -> @chartbook_newsletter_28:event {title:"Chartbook #28: China in 1983, a miracle waiting to happen?", date:@date_2021_07_24, creator:@adam_tooze}
@chartbook_newsletter_28:event -> part_of -> @chartbook
@chartbook_newsletter_28:event -> discusses -> @world_bank_report_1983:document {title:"The Economy, Statistical System and Basic Data – China’s Socialist Economic Development", year:1983}
@world_bank_report_1983:document -> authored_by -> @alexander_eckstein:person
@alexander_eckstein:person -> provided_data_for -> @world_bank_report_1983:document
@world_bank_report_1983:document -> compares -> @china:place with @india:place, @pakistan:place, @indonesia:place
@world_bank_report_1983:document -> notes -> @great_leap_forward:event {impact:"massive mortality and fertility swings in late 1950s‑early 1960s"}
@world_bank_report_1983:document -> notes -> @cultural_revolution:event {impact:"university enrollment fell from 685 000 (1964) to 48 000 (1970)"}
@world_bank_report_1983:document -> reports -> @life_expectancy_china_1979:statistic {value:"64 years"}
@life_expectancy_china_1979:statistic -> higher_than -> @life_expectancy_india_1979:statistic
@world_bank_report_1983:document -> reports -> @life_expectancy_shanghai_1979:statistic {value:"72 years"}
@world_bank_report_1983:document -> reports -> @agricultural_productivity_china_1979:statistic {per_capita_production:"27 % higher than India"}
@world_bank_report_1983:document -> highlights -> @urbanization_china_1979:statistic {urban_share:"12‑13 %"}
@world_bank_report_1983:document -> highlights -> @electricity_consumption_china_1979:statistic {per_capita:"3 times that of India"}
@world_bank_report_1983:document -> praises -> @basic_services_china:concept {coverage:"food, health care, education for low‑income groups"}
@basic_services_china:concept -> contributed_to -> @life_expectancy_improvement:concept
@world_bank_report_1983:document -> notes -> @demographic_dividend_china:concept {cause:"population policy reducing birth rate"}
@demographic_dividend_china:concept -> enabled -> @human_capital_development:concept
@world_bank_report_1983:document -> predicts -> @china_future_growth:concept {prediction:"tremendous increase in living standards within a generation"}
@china_future_growth:concept -> realized_by -> @reform_and_opening:policy {start_year:@date_1978}
@bretton_woods_conference:event {date:@date_1944, location:"Bretton Woods, New Hampshire"}
@nationalist_delegation_at_bretton_woods:event -> represented_by -> @hsiang_hsi_kung:person {role:"Governor of Central Bank (1933‑1945)"}
@hsiang_hsi_kung:person -> led -> @nationalist_delegation_at_bretton_woods:event
@china -> rejoined -> @imf:organization {year:@date_1980}
@china -> rejoined -> @world_bank:organization {year:@date_1980}
@fit_for_55:policy -> faces_opposition_from -> @france:place {political_folklore:"gilets jaunes"}
@france:place -> experienced -> @gilet_jaunes:movement
@gilet_jaunes:movement -> received_support_from -> @far_left:group, @far_right:group
@far_left:group -> includes -> @jean_luc_melenchon:person
@far_right:group -> includes -> @marine_le_pen:person
@gilet_jaunes:movement -> highlighted -> @income_inequality_issue:concept
@income_inequality_issue:concept -> prompted -> @redistributive_policy_discussion:concept
@chartbook_newsletter_27:event -> includes_analysis_of -> @carbon_tax_regressivity:concept
@carbon_tax_regressivity:concept -> can_be_mitigated_by -> @social_climate_fund:policy
@chartbook_newsletter_28:event -> references -> @china_aid_act:policy
@china_aid_act:policy -> illustrates -> @post_war_financial_negotiations:concept
@post_war_financial_negotiations:concept -> involved -> @nationalist_government:organization
@nationalist_government:organization -> represented_at -> @bretton_woods_conference:event
@chartbook_newsletter_28:event -> notes -> @urbanization_china_1979:statistic
@chartbook_newsletter_28:event -> notes -> @industrialization_china_1979:concept {evidence:"high electricity consumption"}
@chartbook_newsletter_28:event -> notes -> @education_coverage_china_1970s:statistic {high:"basic school enrollment"}
@chartbook_newsletter_28:event -> notes -> @gini_coefficient_china_cities:statistic {lower_than_countryside}
@gini_coefficient_china_cities:statistic -> lower_than -> @gini_coefficient_india_cities:statistic
@chartbook_newsletter_28:event -> notes -> @population_policy_china:policy {effect:"reduced natural increase to 1.2 %"}
@population_policy_china:policy -> enabled -> @demographic_dividend_china:concept
@chartbook_newsletter_28:event -> notes -> @agricultural_mechanization_china:concept {higher_than:"India"}<!--
{
"post_id": "38608988.chartbook-newsletter-26",
"post_date": "2021-07-11T15:31:17.191Z",
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"email_sent_at": "2021-07-11T15:31:17.729Z",
"inbox_sent_at": "2021-07-11T15:31:17.729Z",
"type": "newsletter",
"audience": "everyone",
"title": "Chartbook Newsletter #26",
"subtitle": "China's Hyperinflation "
}
-->
<div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!8q-i!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe23858a4-063b-4add-bad8-1e2cc5f41be4_1002x856.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!8q-i!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe23858a4-063b-4add-bad8-1e2cc5f41be4_1002x856.png 424w, https://substackcdn.com/image/fetch/$s_!8q-i!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe23858a4-063b-4add-bad8-1e2cc5f41be4_1002x856.png 848w, https://substackcdn.com/image/fetch/$s_!8q-i!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe23858a4-063b-4add-bad8-1e2cc5f41be4_1002x856.png 1272w, https://substackcdn.com/image/fetch/$s_!8q-i!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe23858a4-063b-4add-bad8-1e2cc5f41be4_1002x856.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e23858a4-063b-4add-bad8-1e2cc5f41be4_1002x856.png" width="564" height="481.8203592814371" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e23858a4-063b-4add-bad8-1e2cc5f41be4_1002x856.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":856,"width":1002,"resizeWidth":564,"bytes":835265,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":false,"topImage":true,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!8q-i!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe23858a4-063b-4add-bad8-1e2cc5f41be4_1002x856.png 424w, https://substackcdn.com/image/fetch/$s_!8q-i!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe23858a4-063b-4add-bad8-1e2cc5f41be4_1002x856.png 848w, https://substackcdn.com/image/fetch/$s_!8q-i!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe23858a4-063b-4add-bad8-1e2cc5f41be4_1002x856.png 1272w, https://substackcdn.com/image/fetch/$s_!8q-i!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe23858a4-063b-4add-bad8-1e2cc5f41be4_1002x856.png 1456w" sizes="100vw" fetchpriority="high"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p><strong>You are invited to join the supporters of Chartbook Newsletter. </strong></p><p>Chartbook is a blast to write. But it is quite time-consuming. To see where it should fit in my portfolio of other activities, I am launching a paid subscription model.</p><p>Don’t panic. If you like the newsletter but can’t afford a paid subscription, I get it. You don’t have to do anything. You will continue to receive Chartbook, as before. But, if you can afford it, if you think the content is valuable, if you would like to support the mission, or simply buy me the equivalent of a cup of coffee once a month, there are three options:</p><ol><li><p>The <strong>annual subscription: $50</strong></p></li><li><p>The <strong>standard monthly subscription: $5 monthly -</strong> which gives you a bit more flexibility.</p></li><li><p><strong>Founders club:</strong> If you really love Chartbook Newsletter, or read it in a professional setting in which you regularly pay for subscriptions, please consider signing up for the <strong>Founders Club</strong> with a recommended contribution of $120 annually, or another amount at your discretion. Good karma guaranteed.</p></li></ol><p>To support the project please click here:</p><p class="button-wrapper" data-attrs="{"url":"https://adamtooze.substack.com/subscribe?","text":"Subscribe now","action":null,"class":null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p>One of the remarkable things about China under the rule of the Communist Party is its aversion to inflation. <a href="https://andrewbatson.com/2021/06/27/the-deep-roots-of-chinas-financial-conservatism/">Since 2020 the regime</a> has been making a point of emphasizing its resistance to Western-style monetary experimentation. Fascinating background is provided by <a href="https://www.amazon.com/Escaped-Therapy-Routledge-Studies-Chinese/dp/1032008490/ref=sr_1_2?dchild=1&keywords=weber+shock+therapy&qid=1626015869&sr=8-2">Isabella Weber</a>’s timely book about China’s price reform discussion of the 1980s. </p><p></p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!P9b6!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F79d5b562-3213-478c-bd68-d80ce9405e84_696x1048.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!P9b6!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F79d5b562-3213-478c-bd68-d80ce9405e84_696x1048.png 424w, https://substackcdn.com/image/fetch/$s_!P9b6!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F79d5b562-3213-478c-bd68-d80ce9405e84_696x1048.png 848w, https://substackcdn.com/image/fetch/$s_!P9b6!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F79d5b562-3213-478c-bd68-d80ce9405e84_696x1048.png 1272w, https://substackcdn.com/image/fetch/$s_!P9b6!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F79d5b562-3213-478c-bd68-d80ce9405e84_696x1048.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/79d5b562-3213-478c-bd68-d80ce9405e84_696x1048.png" width="400" height="602.2988505747127" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/79d5b562-3213-478c-bd68-d80ce9405e84_696x1048.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":1048,"width":696,"resizeWidth":400,"bytes":630028,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!P9b6!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F79d5b562-3213-478c-bd68-d80ce9405e84_696x1048.png 424w, https://substackcdn.com/image/fetch/$s_!P9b6!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F79d5b562-3213-478c-bd68-d80ce9405e84_696x1048.png 848w, https://substackcdn.com/image/fetch/$s_!P9b6!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F79d5b562-3213-478c-bd68-d80ce9405e84_696x1048.png 1272w, https://substackcdn.com/image/fetch/$s_!P9b6!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F79d5b562-3213-478c-bd68-d80ce9405e84_696x1048.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p></p><p>Weber argues that the stability of the CCP regime today owes much to the rejection of shock therapy a la Russe, urged on it by Western and East European advisors in the 1980s. Instead China opted for a gradualist program of price liberalization combined with the crackdown of 1989. This more cautious and ultimately far more successful approach was justified in the eyes of CCP experts by concerns about inflation. And that in turn owed much to the lessons learned by the Communists during the period of World War II and the civil war. One of the main forces enabling the CCP’s overthrow of Chiang Kai-shek in 1949 was the economic disaster suffered by the Nationalist regime. The Communists were swept to power on a tidal wave of dissatisfaction over a ruinous hyperinflation. </p><p>Given the focus of Western historical memory of World War II on either Europe (D-Day, Italy, Eastern Front) or the Pacific, it is easy to forget how dramatic was the military struggle between China, led by the nationalist regime, and Japan between 1937 and 1945, followed by the Chinese civil war between Nationalist and Communist forces that followed between 1946 and 1949. The work of <a href="https://www.amazon.com/Chinas-War-Japan-1937-1945-Struggle/dp/014103145X/ref=sr_1_7?dchild=1&keywords=rana+mitter&qid=1626016051&sr=8-7">Rana Mitter</a> and <a href="https://www.amazon.com/War-Nationalism-China-1925-1945-Routledge-ebook/dp/B000SIVXD2/ref=sr_1_6?dchild=1&keywords=china+nationalism+war&qid=1626016111&sr=8-6">Hans van de Ven</a> is an essential corrective. Accounting for casualties is imprecise, but if we reckon with 25 million Soviet casualties in World War II, the figure for China is likely somewhere between 15 and 20 million. As well as intense combat and scorched earth counterinsurgency perpetrated by the Japanese, a large part of that giant death toll is due to famine, disease and environmental disaster. Large parts of China suffered a comprehensive economic and social crisis. And, as is normally the case in market or semi-market societies, comprehensive societal dislocation goes hand in hand with monetary disorder. Think Europe during the 17th century. Think Hobbes, “No arts; no letters; no society; and which is worst of all, continual fear and danger of violent death; and the <em><strong>life</strong></em> of man, solitary, poor, <em><strong>nasty</strong></em>, <em><strong>brutish, and short</strong></em>.” </p><p>Between 1937 and the collapse of the nationalist regime in the spring of 1949 China experienced an inflationary surge that is amongst the worst ever recorded. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!SEwF!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fea5a253d-bd8a-4817-bc14-87db079151b3_1108x408.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!SEwF!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fea5a253d-bd8a-4817-bc14-87db079151b3_1108x408.png 424w, https://substackcdn.com/image/fetch/$s_!SEwF!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fea5a253d-bd8a-4817-bc14-87db079151b3_1108x408.png 848w, https://substackcdn.com/image/fetch/$s_!SEwF!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fea5a253d-bd8a-4817-bc14-87db079151b3_1108x408.png 1272w, https://substackcdn.com/image/fetch/$s_!SEwF!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fea5a253d-bd8a-4817-bc14-87db079151b3_1108x408.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ea5a253d-bd8a-4817-bc14-87db079151b3_1108x408.png" width="1108" height="408" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ea5a253d-bd8a-4817-bc14-87db079151b3_1108x408.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":408,"width":1108,"resizeWidth":null,"bytes":155391,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!SEwF!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fea5a253d-bd8a-4817-bc14-87db079151b3_1108x408.png 424w, https://substackcdn.com/image/fetch/$s_!SEwF!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fea5a253d-bd8a-4817-bc14-87db079151b3_1108x408.png 848w, https://substackcdn.com/image/fetch/$s_!SEwF!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fea5a253d-bd8a-4817-bc14-87db079151b3_1108x408.png 1272w, https://substackcdn.com/image/fetch/$s_!SEwF!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fea5a253d-bd8a-4817-bc14-87db079151b3_1108x408.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Source: Chang, <em>The inflationary spiral ; the experience in China, 1939-1950</em>, (1958)</p><p>As measured by the final price index, it was one hundred times worse than that of the Weimar Republic in 1923. Of course, once we are talking about astronomic numbers a factor of a hundred hardly weighs in the balance, but what China experienced was indisputably one of the very worst hyperinflations on record. </p><p class="button-wrapper" data-attrs="{"url":"https://adamtooze.substack.com/subscribe?","text":"Subscribe now","action":null,"class":null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p>There is, as far as I can tell , no recent treatment of the Chinese inflation. Certainly nothing to compare with the work on the Weimar Republic, though the crisis would clearly merit a history on the scale of Gerald Feldman’s biblical <em>The <a href="https://www.amazon.com/Great-Disorder-Economics-Inflation-1914-1924-ebook/dp/B005H0CBFK/ref=sr_1_1?dchild=1&keywords=feldman+great+disorder&qid=1626012707&sr=8-1">Great Disorder</a></em>. For this piece I consulted a variety of sources including <a href="https://clio.columbia.edu/catalog?f%5Bauthor_facet%5D%5B%5D=Chou%2C+Shun-hsin">Chou, Shun-hsin.</a> <em>The Chinese inflation, 1937-1949</em>, Campbell and Tullock’s <a href="https://www.jstor.org/stable/1825834?seq=2#metadata_info_tab_contents">essay of 1953</a> and Arthur N. Young <strong>China's wartime finance and inflation, 1937-1945</strong>. By far the most useful was <a href="https://www.amazon.com/Inflationary-Spiral-Experience-China-1939-1950/dp/0262532182/ref=sr_1_1?dchild=1&keywords=chang+inflationary+spiral&qid=1626016308&sr=8-1">Chang Kia-Ngau, </a><em><a href="https://www.amazon.com/Inflationary-Spiral-Experience-China-1939-1950/dp/0262532182/ref=sr_1_1?dchild=1&keywords=chang+inflationary+spiral&qid=1626016308&sr=8-1">The inflationary spiral: the experience of China, 1939-1950</a></em> (New York: John Wiley & Sons, 1958). Unless otherwise stated, Chang 1958 is the source of the charts in this post. </p><p>In light of recent debates about inflation, this literature from the 1950s and 1960s would merit closer attention. It combines an interesting blend of macroeconomic, macrofinancial and supply-side stories. To my mind at least it adds up to a quite satisfactory synthesis. </p><p>At a first approximation, China’s hyperinflation was the result of the imbalance between the demands of wartime mobilization and the limited ability of the Nationalist regime to raise revenue. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!-wNh!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7749ed92-5215-44da-a172-edabe895e524_744x976.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!-wNh!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7749ed92-5215-44da-a172-edabe895e524_744x976.png 424w, https://substackcdn.com/image/fetch/$s_!-wNh!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7749ed92-5215-44da-a172-edabe895e524_744x976.png 848w, https://substackcdn.com/image/fetch/$s_!-wNh!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7749ed92-5215-44da-a172-edabe895e524_744x976.png 1272w, https://substackcdn.com/image/fetch/$s_!-wNh!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7749ed92-5215-44da-a172-edabe895e524_744x976.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7749ed92-5215-44da-a172-edabe895e524_744x976.png" width="744" height="976" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7749ed92-5215-44da-a172-edabe895e524_744x976.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":976,"width":744,"resizeWidth":null,"bytes":109522,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!-wNh!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7749ed92-5215-44da-a172-edabe895e524_744x976.png 424w, https://substackcdn.com/image/fetch/$s_!-wNh!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7749ed92-5215-44da-a172-edabe895e524_744x976.png 848w, https://substackcdn.com/image/fetch/$s_!-wNh!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7749ed92-5215-44da-a172-edabe895e524_744x976.png 1272w, https://substackcdn.com/image/fetch/$s_!-wNh!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7749ed92-5215-44da-a172-edabe895e524_744x976.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Source: <a href="https://www.sciencedirect.com/science/article/pii/S1043951X04000550">Burdekin 2005</a></p><p>Added to the monetization of deficits, after 1945, as the inflation gathered pace, it was impelled by a spectacular spiral of private credit and a flight out of “bad money” into whatever real value could be saved. </p><p>Since the late 19th century the Chinese state had been in crisis. The fiscal structure of the Republic founded after the revolution of 1911 was fragile. No national budget could be drawn up before 1927 because so much revenue was withheld by regional warlords. Between 1927 and 1937 the nationalists consolidated power. The Central Bank of China was established in 1928. From 1935 a consolidated system of bank note issuance was organized around the Central Bank of China, the Bank of China and the Bank of Communications. The Farmers Bank was added in 1936. </p><p>Governments finances may have been more consolidated than before, but deficits were persistent and large. Despite repeated efforts to cut military spending, it continued to consume 40-50% of the total national budget in the 1930s. Another 30-40 percent of the budget were consumed by debt service to domestic and foreign creditors. The vast majority of revenue came from indirect taxes - customs duties, salt tax and other commodity taxes. At the end of the war, monopoly profits added a key element of revenue. Since 1911, an income tax had been repeatedly discussed. An attempt by the nationalist government was shelved in 1930. Implementation of an income tax was begun in 1936 only to be interrupted by the Japanese attack in 1937. Progress in land taxation was made difficult by the fact that records had not been updated since the Imperial period. The one bright spot was that the nationalist government at first enjoyed considerable domestic credit and was able to float loans. However, successive “debt reorganizations” in 1932 and 1936 left that credit in tatters. </p><p>Between 1937 and 1945, a huge surge in government spending to fight the war, unmatched by new revenue unleashed a tidal wave of liquidity into a fragile economy. Unable to borrow on a large scale, the government resorted to credits from the three main banks, in effect it resorted to printing money. </p><p>It took time for this to feed through to rapid inflation. At first prices and wages responded relatively sluggishly. There was still confidence that the currency would recover and so additional liquidity was hoarded. The initial catastrophes of the nationalist forces drove them back into the interior of China. Fortunately, the territory held by Free China was rich in agricultural output. Japan’s policy of blockade and starvation could be resisted. Food prices did not immediately surge.</p><p>But in 1940 the dam broke. A combination of pressures came together to unleash an inflationary surge. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!Tq3d!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d314179-bb78-4156-b817-7a8b4d823ffc_612x892.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!Tq3d!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d314179-bb78-4156-b817-7a8b4d823ffc_612x892.png 424w, https://substackcdn.com/image/fetch/$s_!Tq3d!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d314179-bb78-4156-b817-7a8b4d823ffc_612x892.png 848w, https://substackcdn.com/image/fetch/$s_!Tq3d!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d314179-bb78-4156-b817-7a8b4d823ffc_612x892.png 1272w, https://substackcdn.com/image/fetch/$s_!Tq3d!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d314179-bb78-4156-b817-7a8b4d823ffc_612x892.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7d314179-bb78-4156-b817-7a8b4d823ffc_612x892.png" width="612" height="892" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7d314179-bb78-4156-b817-7a8b4d823ffc_612x892.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":892,"width":612,"resizeWidth":null,"bytes":218673,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!Tq3d!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d314179-bb78-4156-b817-7a8b4d823ffc_612x892.png 424w, https://substackcdn.com/image/fetch/$s_!Tq3d!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d314179-bb78-4156-b817-7a8b4d823ffc_612x892.png 848w, https://substackcdn.com/image/fetch/$s_!Tq3d!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d314179-bb78-4156-b817-7a8b4d823ffc_612x892.png 1272w, https://substackcdn.com/image/fetch/$s_!Tq3d!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d314179-bb78-4156-b817-7a8b4d823ffc_612x892.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Campbell and Tullock (1953)</p><p>The harvest of 1940 was a failure, delivering a shock to food prices. At the same time, in 1940 Chiang Kai-shek launched an ambitious new program for long-term resistance that required both a dramatic increase in troop strength and significant investment. From 2.5 m in 1940 it is estimated that China’s military strength surged to 4.5 m in 1941. The deficit surged. But drafting troops from Southern areas that had not previously been part of China’s military system also had supply side effects. It led to dramatic dislocation in the countryside. At the same time it concentrated purchasing power around base camps, setting off local wage-price spirals. The rations and clothing allowance of a modern army were lavish by comparison with the standard of living of rural Chinese. All this compounded the effect of the harvest failure. </p><p>Whereas in 1939 the inflation rate had been 68 percent. In 1941 it was twice that rate. Then in December 1941 Japan launched its all-out offensive in Asia. The huge advances of the Japanese armies cut off the Nationalist regime from any source of outside supply other than the arduous route North to the Soviet Union. This shook confidence in the regime and its currency. Relative to 1941 in 1942 the price index tripled. </p><p class="button-wrapper" data-attrs="{"url":"https://adamtooze.substack.com/subscribe?","text":"Subscribe now","action":null,"class":null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p>As is commonly the case in severe inflations, the distributional impacts were highly uneven. The principal victims of China’s wartime inflation were all those who depended on the government for salaries. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!Ovjy!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8c20983c-c69c-430d-a282-48f9e3a77eb9_1402x742.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!Ovjy!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8c20983c-c69c-430d-a282-48f9e3a77eb9_1402x742.png 424w, https://substackcdn.com/image/fetch/$s_!Ovjy!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8c20983c-c69c-430d-a282-48f9e3a77eb9_1402x742.png 848w, https://substackcdn.com/image/fetch/$s_!Ovjy!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8c20983c-c69c-430d-a282-48f9e3a77eb9_1402x742.png 1272w, https://substackcdn.com/image/fetch/$s_!Ovjy!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8c20983c-c69c-430d-a282-48f9e3a77eb9_1402x742.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8c20983c-c69c-430d-a282-48f9e3a77eb9_1402x742.png" width="1402" height="742" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8c20983c-c69c-430d-a282-48f9e3a77eb9_1402x742.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":742,"width":1402,"resizeWidth":null,"bytes":249387,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!Ovjy!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8c20983c-c69c-430d-a282-48f9e3a77eb9_1402x742.png 424w, https://substackcdn.com/image/fetch/$s_!Ovjy!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8c20983c-c69c-430d-a282-48f9e3a77eb9_1402x742.png 848w, https://substackcdn.com/image/fetch/$s_!Ovjy!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8c20983c-c69c-430d-a282-48f9e3a77eb9_1402x742.png 1272w, https://substackcdn.com/image/fetch/$s_!Ovjy!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8c20983c-c69c-430d-a282-48f9e3a77eb9_1402x742.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>There can be little doubt that this contributed to the general demoralization of the nationalist regime. The fact that government employment actually surged across this period, from 8000 staff in central government departments in 1936 to 200,000 by March 1945, is a sign of desperation. It was better to be on the payroll than not, even if one could not survive on a government salary. The incomes of soldiers and civil servants had to be supplemented by special rice rations. Unsurprisingly, corruption was rife, which further contributed to low morale. </p><p>Several attempts were made during the war to implement a price freeze of the type implemented in the United States. But the nationalist regime lacked the wherewithal to make administrative regulation stick. </p><p>The only way to have halted this spiral would have been to raise new sources of revenue. Forced loans were used with modest success 1942-1944 but suffered from same assessment and enforcement problems as income and property tax. They were deeply resented by the peasant population whose land was assessed. Unsurprisingly, given this impasse, bond issuance was a total failure with subscriptions in total not reaching more than 5% of the bonds offered. </p><p>Foreign credits to the nationalist regime flowed regularly but only in modest amounts.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!IpDG!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F42162a48-a37e-4e82-bc61-6be47b2a7fa5_984x1054.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!IpDG!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F42162a48-a37e-4e82-bc61-6be47b2a7fa5_984x1054.png 424w, https://substackcdn.com/image/fetch/$s_!IpDG!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F42162a48-a37e-4e82-bc61-6be47b2a7fa5_984x1054.png 848w, https://substackcdn.com/image/fetch/$s_!IpDG!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F42162a48-a37e-4e82-bc61-6be47b2a7fa5_984x1054.png 1272w, https://substackcdn.com/image/fetch/$s_!IpDG!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F42162a48-a37e-4e82-bc61-6be47b2a7fa5_984x1054.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/42162a48-a37e-4e82-bc61-6be47b2a7fa5_984x1054.png" width="984" height="1054" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/42162a48-a37e-4e82-bc61-6be47b2a7fa5_984x1054.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":1054,"width":984,"resizeWidth":null,"bytes":352091,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!IpDG!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F42162a48-a37e-4e82-bc61-6be47b2a7fa5_984x1054.png 424w, https://substackcdn.com/image/fetch/$s_!IpDG!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F42162a48-a37e-4e82-bc61-6be47b2a7fa5_984x1054.png 848w, https://substackcdn.com/image/fetch/$s_!IpDG!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F42162a48-a37e-4e82-bc61-6be47b2a7fa5_984x1054.png 1272w, https://substackcdn.com/image/fetch/$s_!IpDG!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F42162a48-a37e-4e82-bc61-6be47b2a7fa5_984x1054.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>All in all, the mode of wartime finance was highly inflationary. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!sJo3!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5875f80-f881-4fd2-8912-6f2ebc43bc19_812x338.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!sJo3!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5875f80-f881-4fd2-8912-6f2ebc43bc19_812x338.png 424w, https://substackcdn.com/image/fetch/$s_!sJo3!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5875f80-f881-4fd2-8912-6f2ebc43bc19_812x338.png 848w, https://substackcdn.com/image/fetch/$s_!sJo3!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5875f80-f881-4fd2-8912-6f2ebc43bc19_812x338.png 1272w, https://substackcdn.com/image/fetch/$s_!sJo3!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5875f80-f881-4fd2-8912-6f2ebc43bc19_812x338.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b5875f80-f881-4fd2-8912-6f2ebc43bc19_812x338.png" width="812" height="338" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b5875f80-f881-4fd2-8912-6f2ebc43bc19_812x338.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":338,"width":812,"resizeWidth":null,"bytes":82460,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!sJo3!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5875f80-f881-4fd2-8912-6f2ebc43bc19_812x338.png 424w, https://substackcdn.com/image/fetch/$s_!sJo3!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5875f80-f881-4fd2-8912-6f2ebc43bc19_812x338.png 848w, https://substackcdn.com/image/fetch/$s_!sJo3!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5875f80-f881-4fd2-8912-6f2ebc43bc19_812x338.png 1272w, https://substackcdn.com/image/fetch/$s_!sJo3!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5875f80-f881-4fd2-8912-6f2ebc43bc19_812x338.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Though in 1945 the nationalist ultimately found themselves on the winning side, Free China staggered into the “postwar” period on the brink of economic collapse. At least 50 million people were displaced. </p><p>The Communists, meanwhile, fought their own war in the North. They were far more successful in controlling inflation. But, their influence remained confined to their base areas. More on this in another post. </p><p>Japan’s defeat buoyed the Nationalist regime with false confidence. Rather than continuing their ineffectual system of wartime controls, following the advice of foreign experts, they decided to stake their future on laissez-faire and the confidence of victory. At first this confidence seemed confirmed. As wartime shortages eased, prices fell somewhat over the summer of 1945. It was to prove a false dawn. </p><p>The resumption of hostilities with the Communists in 1946 meant that efforts to reduce NRA troop strength had to be abandoned. The unpopular taxes and forced loans levied on peasants were rolled over into 1946 and 1947. Faced with surging prices for industrial goods the peasants detested the harvest levies. On-going conscription compounded the sense of grievance. </p><p>In May 1946 a new central bank governor was appointed who proposed fiscal consolidation. Rather than take such painful measures, in February 1947 the regime made one last attempt to implement a price freeze. Without the prospect of actual monetary stabilization the result was to trigger hoarding of stocks, a surge in black market activity and a further acceleration in inflation. </p><p>In May 1947 the Central Bank made a final attempt to stabilize the situation. Their proposal was to cut the monthly deficit from CNC $ 1.5 trillion to CNC $ 1 trillion. That was an amount that the bank though it could finance from savings deposits and through the issuance of US dollar bonds and short term bills. In April 1947 the central bank offered for sale $100 million in dollar bonds redeemable in foreign currency and short term bills that was repayable in domestic currency indexed to the official dollar exchange rate. The idea was that after a serious effort at domestic stabilization, China could make an appeal to the US for aid. </p><p>Success depended on the willingness of the government to take painful political decisions. Meetings were held with Chiang Kai-shek, the Prime Minister and Minister of Finance. The Central Bank found itself facing determined opposition from the Finance Ministry which insisted that price stabilization had to come before fiscal consolidation. </p><p>The histories of China’s inflation that I have been able to read offer scant explanation of the underlying political economy. The fundamental point is simply that the regime lacked fiscal capacity and the necessary will to act. One can’t help wondering about the political economy. Extrapolating from the Weimar case one imagines that a coalition of profiteers resisted fiscal consolidation. The hanger on of the regime depended on its handouts to survive. Furthermore the military pressure from the Communists made it hard to justify cutting defense spending. Chiang prevaricated and the Central Bank’s consolidation plan was abandoned. The dollar bonds never raised more than $25 million and was reduced to worthlessness when the government defaulted on its obligation to service them in dollars. </p><p>Instead of fiscal consolidation in the summer of 1947 the authorities attempt to soften the impact of price increases by distributing subsidized rations. It concentrated these rations on the industrial centers of the coast, offering cheap supplies of imported food and cotton to the 11 million inhabitants of Shanghai, Tientsin, Peking, Nanking and Canton. The effect outside the favored urban areas was to induce domestic suppliers to further reduce their deliveries, raising price pressure. </p><p>The Chinese economy was coming apart. Huge differences in prices gaped between interior cities close to rural sources of supply and coastal conurbations.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!TcHP!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F582a526a-d8b6-4528-bca4-855bb10786ae_966x428.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!TcHP!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F582a526a-d8b6-4528-bca4-855bb10786ae_966x428.png 424w, https://substackcdn.com/image/fetch/$s_!TcHP!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F582a526a-d8b6-4528-bca4-855bb10786ae_966x428.png 848w, https://substackcdn.com/image/fetch/$s_!TcHP!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F582a526a-d8b6-4528-bca4-855bb10786ae_966x428.png 1272w, https://substackcdn.com/image/fetch/$s_!TcHP!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F582a526a-d8b6-4528-bca4-855bb10786ae_966x428.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/582a526a-d8b6-4528-bca4-855bb10786ae_966x428.png" width="966" height="428" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/582a526a-d8b6-4528-bca4-855bb10786ae_966x428.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":428,"width":966,"resizeWidth":null,"bytes":135771,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!TcHP!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F582a526a-d8b6-4528-bca4-855bb10786ae_966x428.png 424w, https://substackcdn.com/image/fetch/$s_!TcHP!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F582a526a-d8b6-4528-bca4-855bb10786ae_966x428.png 848w, https://substackcdn.com/image/fetch/$s_!TcHP!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F582a526a-d8b6-4528-bca4-855bb10786ae_966x428.png 1272w, https://substackcdn.com/image/fetch/$s_!TcHP!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F582a526a-d8b6-4528-bca4-855bb10786ae_966x428.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Fearing an imminent collapse, at the end of 1947 the US State Department proposed an Economic Aid Program for China. Even without any realistic prospect of reform on the part of the nationalist regime, the China Aid Act passed in January 1948 providing $275 m for cotton, petroleum, food, construction goods imports and $125 m in military aid. The Nationalists were disappointed that it was not larger. But American experts did not think that the regime could actually transport more aid to the frontline. And the grant of $275 m was twice the foreign exchange reserves on hand in the summer of 1948. </p><p class="button-wrapper" data-attrs="{"url":"https://adamtooze.substack.com/subscribe?","text":"Subscribe now","action":null,"class":null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p>By Jan 1948 with prices doubling every two months Chiang Kai-shek himself was panicking. The Generalissimo ordered an immediate halt to any new bank credits. Though the ban was officially maintained for three months, banking went underground. In June 1948 wholesale price inflation in Shanghai hit a new record at 260 percent in one month. The black market price of gold trebled and the money stock was doubling monthly. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!WsEp!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5004042-a5c3-4f33-b14b-8cd07f2b2f48_958x902.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!WsEp!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5004042-a5c3-4f33-b14b-8cd07f2b2f48_958x902.png 424w, https://substackcdn.com/image/fetch/$s_!WsEp!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5004042-a5c3-4f33-b14b-8cd07f2b2f48_958x902.png 848w, https://substackcdn.com/image/fetch/$s_!WsEp!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5004042-a5c3-4f33-b14b-8cd07f2b2f48_958x902.png 1272w, https://substackcdn.com/image/fetch/$s_!WsEp!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5004042-a5c3-4f33-b14b-8cd07f2b2f48_958x902.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b5004042-a5c3-4f33-b14b-8cd07f2b2f48_958x902.png" width="958" height="902" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b5004042-a5c3-4f33-b14b-8cd07f2b2f48_958x902.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":902,"width":958,"resizeWidth":null,"bytes":321480,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!WsEp!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5004042-a5c3-4f33-b14b-8cd07f2b2f48_958x902.png 424w, https://substackcdn.com/image/fetch/$s_!WsEp!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5004042-a5c3-4f33-b14b-8cd07f2b2f48_958x902.png 848w, https://substackcdn.com/image/fetch/$s_!WsEp!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5004042-a5c3-4f33-b14b-8cd07f2b2f48_958x902.png 1272w, https://substackcdn.com/image/fetch/$s_!WsEp!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb5004042-a5c3-4f33-b14b-8cd07f2b2f48_958x902.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>It was time for desperate measures. On August 19 1948 the regime introduced a new currency. The Gold Yuan notionally backed by 0.2217 centigram of pure gold was to be exchanged for existing currency at rate of $3m CNC to one GY. The total Gold Yuan issuance was to be capped at $200 million with 40 percent backing with gold, silver and forex. Given the shrunken real value of the CNC currency in circulation at the time (the huge surge in inflation meant that a large quantity of money in circulation actually had a shrinking real value), that was not an unreasonable target. To ensure that the new currency retained its purchasing power, all prices were to be frozen at their converted rates as of August 19 1948. To ensure that the Central Bank had enough reserves to back the currency, all private holdings of gold, silver and forex were to be surrendered. The regime’s fearsome secret police were mobilized to enforce the new currency regime and the declaration of all foreign exchange. $170m in assets were surrendered in Shanghai alone. As Chang remarks: “For Six weeks Shanghai was more or less terrorized into a state of monetary equilibrium”. (80)</p><p>But outside Shanghai the regime’s writ no longer ran and the entire exercise was doomed to failure if it could not close its deficit and stop the new issuance of currency. Predictably the effort at stabilization failed. By October the circulation of Gold Yuan was 8 times the prescribed amount. Panic buying ensued and traders refused to sell at fixed prices. In one week at the end of 1948 prices increased elevenfold. </p><p>This Pathe newsreel from the end of 1948 give a sense of the atmosphere of Weimar-style panic. </p><div id="youtube2-3GkdLYAc0Tk" class="youtube-wrap" data-attrs="{"videoId":"3GkdLYAc0Tk","startTime":null,"endTime":null}" data-component-name="Youtube2ToDOM"><div class="youtube-inner"><iframe src="https://www.youtube-nocookie.com/embed/3GkdLYAc0Tk?rel=0&autoplay=0&showinfo=0&enablejsapi=0" frameborder="0" loading="lazy" gesture="media" allow="autoplay; fullscreen" allowautoplay="true" allowfullscreen="true" width="728" height="409"></iframe></div></div><p>In November 1948 in an act of bravado, with foreign reserves of no more than $190 m in hand (compared to $850 m in December 1945), the central bank offered to make the Gold Yuan fully convertible into gold. </p><p>But the population were no longer willing to cooperate. Organized gangs of unemployed workers put in applications to convert. When the government responded by restricting the amount that could be converted, in early December a crowd of 60,000 desperate people mobbed the state banks in Shanghai. There was rioting and dozens were killed. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!RDDF!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1f6147a9-77f7-4468-baa9-e16bcf20fcfc_1454x962.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!RDDF!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1f6147a9-77f7-4468-baa9-e16bcf20fcfc_1454x962.png 424w, https://substackcdn.com/image/fetch/$s_!RDDF!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1f6147a9-77f7-4468-baa9-e16bcf20fcfc_1454x962.png 848w, https://substackcdn.com/image/fetch/$s_!RDDF!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1f6147a9-77f7-4468-baa9-e16bcf20fcfc_1454x962.png 1272w, https://substackcdn.com/image/fetch/$s_!RDDF!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1f6147a9-77f7-4468-baa9-e16bcf20fcfc_1454x962.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1f6147a9-77f7-4468-baa9-e16bcf20fcfc_1454x962.png" width="1454" height="962" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1f6147a9-77f7-4468-baa9-e16bcf20fcfc_1454x962.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":962,"width":1454,"resizeWidth":null,"bytes":1648802,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!RDDF!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1f6147a9-77f7-4468-baa9-e16bcf20fcfc_1454x962.png 424w, https://substackcdn.com/image/fetch/$s_!RDDF!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1f6147a9-77f7-4468-baa9-e16bcf20fcfc_1454x962.png 848w, https://substackcdn.com/image/fetch/$s_!RDDF!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1f6147a9-77f7-4468-baa9-e16bcf20fcfc_1454x962.png 1272w, https://substackcdn.com/image/fetch/$s_!RDDF!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1f6147a9-77f7-4468-baa9-e16bcf20fcfc_1454x962.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Henri Cartier-Bresson captured the chaos in Shanghai in this remarkable image taken in December 1948 https://www.moma.org/collection/works/105310</p><p>In the second week of February 1949 Chiang Kai-shek resigned and went into exile on Formosa and Amoy, taking a large slice of the remaining gold reserves with him. On the eve of the communist entry into Shanghai in May 1949 the exchange rate had depreciated 40 fold since March and the price of rice had risen 451 times in 2 months.</p><p>As one contemporary observer remarked: </p><div class="captioned-image-container"><figure><a class="image-link image2" target="_blank" href="https://substackcdn.com/image/fetch/$s_!oQbJ!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fa437d121-9d08-4841-8447-6b56a278b073_1106x182.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!oQbJ!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fa437d121-9d08-4841-8447-6b56a278b073_1106x182.png 424w, https://substackcdn.com/image/fetch/$s_!oQbJ!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fa437d121-9d08-4841-8447-6b56a278b073_1106x182.png 848w, https://substackcdn.com/image/fetch/$s_!oQbJ!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fa437d121-9d08-4841-8447-6b56a278b073_1106x182.png 1272w, https://substackcdn.com/image/fetch/$s_!oQbJ!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fa437d121-9d08-4841-8447-6b56a278b073_1106x182.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a437d121-9d08-4841-8447-6b56a278b073_1106x182.png" width="1106" height="182" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/a437d121-9d08-4841-8447-6b56a278b073_1106x182.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":182,"width":1106,"resizeWidth":null,"bytes":35874,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!oQbJ!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fa437d121-9d08-4841-8447-6b56a278b073_1106x182.png 424w, https://substackcdn.com/image/fetch/$s_!oQbJ!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fa437d121-9d08-4841-8447-6b56a278b073_1106x182.png 848w, https://substackcdn.com/image/fetch/$s_!oQbJ!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fa437d121-9d08-4841-8447-6b56a278b073_1106x182.png 1272w, https://substackcdn.com/image/fetch/$s_!oQbJ!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fa437d121-9d08-4841-8447-6b56a278b073_1106x182.png 1456w" sizes="100vw" loading="lazy"></picture><div></div></div></a></figure></div><p> </p><p class="button-wrapper" data-attrs="{"url":"https://adamtooze.substack.com/subscribe?","text":"Subscribe now","action":null,"class":null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><!--
{
"post_id": "38814232.chartbook-newsletter-27-gilets-jaunes",
"post_date": "2021-07-18T12:51:12.383Z",
"is_published": true,
"email_sent_at": "2021-07-18T12:51:12.513Z",
"inbox_sent_at": "2021-07-18T12:51:12.513Z",
"type": "newsletter",
"audience": "everyone",
"title": "Chartbook Newsletter #27 Gilets Jaunes ",
"subtitle": "A specter haunting Europe"
}
-->
<p><strong>This week’s Newsletter is about the storm brewing over Europe’s environmental policy, carbon prices and the long shadow thrown by the 2018/9 Yellow Vest protests. Who were the protestors and their supporters? What triggered the protests? How is this episode reverberating through climate politics in Europe three years later? … but first, a quick personal note. </strong></p><p><strong>You are invited to become not just a subscriber to Chartbook Newsletter, but a supporter of the project. </strong></p><p>Chartbook Newsletter is a blast to write. But it is also very time-consuming. To see where it should fit in my portfolio of other activities, I am launching a paid subscription model.</p><p>Don’t panic. If you like the newsletter but can’t afford a paid subscription, I get it. You don’t have to do anything. You will continue to receive Chartbook, as before. 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Good karma guaranteed.</p></li></ol><p>To support the project please click here:</p><p class="button-wrapper" data-attrs="{"url":"https://adamtooze.substack.com/subscribe?","text":"Subscribe now","action":null,"class":null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p>What are you contributing to? The continuation of Chartbook Newsletter as you already know it. A bunch of great content c. 40 post per annum. A list of forthcoming projects and a full-length appeal can be found in the <a href="https://adamtooze.substack.com/p/chartbooks-new-era-pitching-in">last mailing</a>.</p><p>A HUGE thank you to everyone who has already hit the subscribe button. Your support is a great encouragement. </p><p>******************************************</p><p>Down to business …. In 2021 a specter is haunting Europe - the specter of the Gilet Jaunes - the Yellow Vest protest movement that disrupted French politics in 2018/9.</p><p>The Gilet Jaunes are not back in person. But their phantom stalks the corridors of power. Their return has been provoked by the announcement on Wednesday 14 July of <a href="https://ec.europa.eu/commission/presscorner/detail/en/ip_21_3541">“Fit for 55”</a>, the EU’s ambitious package of climate policies. A key part of the package is to extend Europe’s Emissions Trading System (ETS) to petrol and diesel fuel as well as to gas and oil for domestic heating. The ETS is a cap and trade system in which permits to emit CO2 are traded between polluters. The idea is to set a cap on the quantity of emissions and then to force emitters to bid up the price. The smaller the “pollution budget” the higher the price and the greater the incentive to find cleaner ways of doing things. The ETS has been operating since 2005. Driven by the expectation that Europe is getting serious about the climate, permit prices have risen above 50 euros per ton of carbon. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!q1V2!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5c6041fe-ba19-4acd-8ad8-a6b9bb78d427_1642x966.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!q1V2!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5c6041fe-ba19-4acd-8ad8-a6b9bb78d427_1642x966.png 424w, https://substackcdn.com/image/fetch/$s_!q1V2!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5c6041fe-ba19-4acd-8ad8-a6b9bb78d427_1642x966.png 848w, https://substackcdn.com/image/fetch/$s_!q1V2!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5c6041fe-ba19-4acd-8ad8-a6b9bb78d427_1642x966.png 1272w, https://substackcdn.com/image/fetch/$s_!q1V2!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5c6041fe-ba19-4acd-8ad8-a6b9bb78d427_1642x966.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5c6041fe-ba19-4acd-8ad8-a6b9bb78d427_1642x966.png" width="1456" height="857" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5c6041fe-ba19-4acd-8ad8-a6b9bb78d427_1642x966.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":857,"width":1456,"resizeWidth":null,"bytes":205612,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!q1V2!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5c6041fe-ba19-4acd-8ad8-a6b9bb78d427_1642x966.png 424w, https://substackcdn.com/image/fetch/$s_!q1V2!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5c6041fe-ba19-4acd-8ad8-a6b9bb78d427_1642x966.png 848w, https://substackcdn.com/image/fetch/$s_!q1V2!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5c6041fe-ba19-4acd-8ad8-a6b9bb78d427_1642x966.png 1272w, https://substackcdn.com/image/fetch/$s_!q1V2!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5c6041fe-ba19-4acd-8ad8-a6b9bb78d427_1642x966.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Source: <a href="https://group.vattenfall.com/press-and-media/newsroom/2021/the-eu-emissions-trading-system-shows-its-muscles">Vattenfal</a>l</p><p>So far, ETS pricing has been applied to electricity generation and industry, sectors that are “behind the scenes”. The drama right now, is that Brussels is proposing to extend a similar system to petrol at the pump and to domestic heating bills. That step was taken in Germany in 2020. So far there have been no major ructions. The German tax is <a href="https://www.cleanenergywire.org/factsheets/germanys-planned-carbon-pricing-system-transport-and-buildings">modest</a> - 25 euros per tonne, which adds 6-7 cents to the price for a liter of petrol or diesel. Exactly how quickly this will escalate is a matter of hot debate in Germany’s election, but the principle is accepted. </p><p>The reason why it is so crucial to raise some kind of tax on petrol and diesel is that since 1990, transport is the one sector of European emissions that has actually risen, by c. 33 percent. If Europe is to reach its target of 55 % emissions reductions by 2030 that has to be reversed. The Fit for 55 package includes measures that will end the sale of new internal combustion engine cars and trucks in Europe by the 2030s. To accelerate the shift and raise fuel economy in the existing fleet, a carbon tax is necessary. Petrol is already very heavily taxed in Europe. The problem is that the demand is inelastic. For many people driving is not a choice. Raising petrol and diesel prices thus disproportionately hurts those on lower incomes in suburban and rural areas. </p><p>A chorus of opposition is gathering against the Commission’s proposal. National governments, parliamentarians, unnamed senior diplomats, national officials do not simply oppose the idea. They are <a href="https://www.ft.com/content/a4e3791b-9d9e-4bf9-ae74-fe1cf1980625">warning</a> that any attempt to raise prices, risks triggering an outbreak of protests like the Yellow Vest protests that rocked France and the government of President Macron in 2018-2019. The message is amplified by journalists recycling unattributed comments from inside the Brussels machine and quotes from politicians such as <a href="https://www.ft.com/content/883a676c-7370-4e42-9b3a-dcf7e898e7bd">Pascal Canfin</a>, chair of the European Parliament’s environment committee, who, it turns out, represent’s Macron’s party. </p><p>To be clear, those making the warnings are not themselves protestors, nor, on the whole do they represent constituencies involved in the protests. The Gilet Jaunes have become <a href="https://www.politico.eu/article/eu-fit-for-55-climate-blowback-green-deal-frans-timmermans/">political folklore</a>. They are the boogyman, a knock down argument against the Commission’s proposals. There are many politicians in Europe in 2021 who fervently wish that the issue of carbon pricing would simply go away. If talking about the Gilet Jaunes serves that purpose, so be it. But to gauge the actual risk of a repeat of 2021 and the motives of those who are summoning the boogyman, it helps to go back to what actually happened in 2018-9. </p><p>In November 2018 Macron’s government announced that it would be raising the tax on fossil fuels from 44,60 euros per tonne to 55 euros as of 1 January 2019. The French carbon levy was first introduced in 2014 under François Hollande’s socialist Presidency. It was France’s big climate policy initiative ahead of the global climate conference hosted in Paris in 2015. It was, from the outset, an escalating tax. Starting at 7 euros per tonne the target was to reach 100 euros per tonne by 2030, within striking distance of the figures discussed by climate economists. Macron’s increase was the latest in the schedule. What was not scheduled was the public reaction. </p><p>Following a facebook appeal on November 17 2018 300,000 demonstrators blockaded traffic across France. Though the overall number of protestors never again reached the November 17 peak, the tone of the protests in Paris over the following weeks became ever more vociferous. On December 1 the capital was convulsed by clashes between protestors and the police. Much of the center of the city was boarded up. It was the lockdown before the lockdown. </p><p>The violence of the street-fighting in Paris defines the memory of the Gilet Jaunes. All in all by the summer of 2019 1,797 police and gendarmes and 2,448 protesters had been injured. The level of force used by the French police against demonstrators was extreme. An armory of <a href="https://www.jacobinmag.com/2021/06/police-brutality-protests-demonstrations-crowd-control-nonlethal-less-lethal-weapons-tear-gas-rubber-bullets-rocher-interview">“non-lethal” weapons</a> acquired since 2000 was put to full use. According to a fact-checked summary by <a href="https://www.newstatesman.com/world/europe/2019/11/year-gilets-jaunes-have-lost-24-eyes-and-five-hands-and-made-deep-mark-french">Mediapart</a>, 24 protestors lost eyes to rubber bullets. 5 lost a hand. 315 sustained head injuries. The violence was so striking that it attracted the attention of the <a href="https://www.france24.com/en/20190306-un-france-investigate-excessive-force-yellow-vests">United Nations</a>. The controversy rumbled into 2020 with tough <a href="https://apnews.com/article/paris-freedom-of-information-united-nations-france-c2459057a35984a81896b2d8f4db7530">new legislation</a> pushed by Macron’s government aiming to protect the French police against the circulation of images designed to “cause harm”. </p><p>Embarrassed by the chaos, Macon’s government backed away from the escalation of the fuel tax. The climate issue, however, would not go away. In 2019 a Citizens Assembly for the Climate was set up, which in June 2020 delivered a report on <a href="https://www.lci.fr/planete/convention-citoyenne-pour-le-climat-le-passage-de-35-a-28-heures-rejete-mais-149-mesures-adoptees-2156956.html">149 measures to address the climate crisis </a>"in the spirit of social justice.” One of these proposals was for a common carbon tax on the border of Europe. In early July 2020 Macron himself took up that call, "If there is to be a carbon tax that is significant from an economic point of view, it must exist first of all at the European level. I will fight for a tax at the borders of Europe, as has been proposed by the citizen’s convention.”</p><p>Paris handed the problem off to Brussels. That is a well-tried practice in European politics. The problem is that Brussels sometimes comes back with real measures. The Commission, with the Dutch social democrat Frans Timmermans forging the way and heavy-weight backing from Berlin, has proposed a carbon border adjustment that will tax polluting imports from the rest of the world. The other side of the coin is the comprehensive extension of the ETS. </p><p>Unsurprisingly, French voices have led the charge against the Commission’s plans. Corinne Le Quéré, the chair of France’s High Council on Climate, believes there is “absolutely” a chance these policies will spark rebellious public responses. Canfin calls the proposal <a href="https://www.euractiv.com/section/energy-environment/news/eus-timmermans-defends-new-ets-in-front-of-sceptical-lawmakers/">“politically suicidal”</a>. “I advise Frans Timmermans”, Canfin remarked, “that rather than playing the firefighter, he doesn't play the pyromaniac”. </p><p>A carbon tax is regressive say its opponents. It will hurt those on modest incomes most. It will feed populism and ultimately trigger mast protests. On the face of it, that has a degree of plausibility. But is that actually what happened in France in 2018? Who lit the fire? Was it the advocates of carbon pricing who were the pyromaniacs? </p><p>Between 2014 and 2018 the effect of the French carbon tax on petrol and diesel was significant. This was particularly so for diesel, the fuel most used by businesses, which had previously enjoyed special tax privileges. The adjustment was made even more painful by the fact that global oil prices were bouncing back from the lows to which they had plunged in 2014/5. In October 2018, a litre of diesel cost more than 1.50 euros, an all time high. In less than three years it had escalated by 50 percent.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!_1gG!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1d61fe3f-294f-4b8e-aa63-aa453146b393_1740x938.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!_1gG!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1d61fe3f-294f-4b8e-aa63-aa453146b393_1740x938.png 424w, https://substackcdn.com/image/fetch/$s_!_1gG!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1d61fe3f-294f-4b8e-aa63-aa453146b393_1740x938.png 848w, https://substackcdn.com/image/fetch/$s_!_1gG!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1d61fe3f-294f-4b8e-aa63-aa453146b393_1740x938.png 1272w, https://substackcdn.com/image/fetch/$s_!_1gG!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1d61fe3f-294f-4b8e-aa63-aa453146b393_1740x938.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1d61fe3f-294f-4b8e-aa63-aa453146b393_1740x938.png" width="1456" height="785" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/1d61fe3f-294f-4b8e-aa63-aa453146b393_1740x938.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":785,"width":1456,"resizeWidth":null,"bytes":220890,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!_1gG!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1d61fe3f-294f-4b8e-aa63-aa453146b393_1740x938.png 424w, https://substackcdn.com/image/fetch/$s_!_1gG!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1d61fe3f-294f-4b8e-aa63-aa453146b393_1740x938.png 848w, https://substackcdn.com/image/fetch/$s_!_1gG!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1d61fe3f-294f-4b8e-aa63-aa453146b393_1740x938.png 1272w, https://substackcdn.com/image/fetch/$s_!_1gG!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1d61fe3f-294f-4b8e-aa63-aa453146b393_1740x938.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Source: <a href="https://static.agora-energiewende.de/fileadmin/Projekte/2018/CO2-Steuer_FR-DE_Paper/Agora-Energiewende_Paper_CO2_Steuer_EN.pdf">Gagnebin, Graichen, Lenck 2019</a></p><p>This was significant, but was it enough to trigger an epic wave of national protest? Hardly! The fuel price was at most the trigger. The increase in the fuel levy took place against the backdrop of a package of “reforms” which amounted to a significant reshuffling of the French welfare and tax system. Macron’s government brought the upheaval on itself. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!7kh3!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fffedeefb-484b-45b7-9743-38e7a5adf6c4_1288x854.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!7kh3!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fffedeefb-484b-45b7-9743-38e7a5adf6c4_1288x854.png 424w, https://substackcdn.com/image/fetch/$s_!7kh3!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fffedeefb-484b-45b7-9743-38e7a5adf6c4_1288x854.png 848w, https://substackcdn.com/image/fetch/$s_!7kh3!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fffedeefb-484b-45b7-9743-38e7a5adf6c4_1288x854.png 1272w, https://substackcdn.com/image/fetch/$s_!7kh3!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fffedeefb-484b-45b7-9743-38e7a5adf6c4_1288x854.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ffedeefb-484b-45b7-9743-38e7a5adf6c4_1288x854.png" width="1288" height="854" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ffedeefb-484b-45b7-9743-38e7a5adf6c4_1288x854.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":854,"width":1288,"resizeWidth":null,"bytes":205403,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!7kh3!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fffedeefb-484b-45b7-9743-38e7a5adf6c4_1288x854.png 424w, https://substackcdn.com/image/fetch/$s_!7kh3!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fffedeefb-484b-45b7-9743-38e7a5adf6c4_1288x854.png 848w, https://substackcdn.com/image/fetch/$s_!7kh3!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fffedeefb-484b-45b7-9743-38e7a5adf6c4_1288x854.png 1272w, https://substackcdn.com/image/fetch/$s_!7kh3!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fffedeefb-484b-45b7-9743-38e7a5adf6c4_1288x854.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Source: <a href="https://static.agora-energiewende.de/fileadmin/Projekte/2018/CO2-Steuer_FR-DE_Paper/Agora-Energiewende_Paper_CO2_Steuer_EN.pdf">Gagnebin, Graichen, Lenck 2019</a></p><p>Taken together the combined effect of Macron’s measure was to depress the incomes of the bottom 25 % of the income distribution and to raise them slightly for those in the middle. A squeeze was applied to those between 75 and 99 percent. The only group that benefited to a significant degree were the top 1 percent of the income distribution. They saw a generous 6% bump in their incomes. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!IcL-!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F951d8541-3726-40b7-85a1-174b84958c1f_1750x1180.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!IcL-!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F951d8541-3726-40b7-85a1-174b84958c1f_1750x1180.png 424w, https://substackcdn.com/image/fetch/$s_!IcL-!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F951d8541-3726-40b7-85a1-174b84958c1f_1750x1180.png 848w, https://substackcdn.com/image/fetch/$s_!IcL-!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F951d8541-3726-40b7-85a1-174b84958c1f_1750x1180.png 1272w, https://substackcdn.com/image/fetch/$s_!IcL-!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F951d8541-3726-40b7-85a1-174b84958c1f_1750x1180.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/951d8541-3726-40b7-85a1-174b84958c1f_1750x1180.png" width="1456" height="982" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/951d8541-3726-40b7-85a1-174b84958c1f_1750x1180.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":982,"width":1456,"resizeWidth":null,"bytes":429127,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!IcL-!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F951d8541-3726-40b7-85a1-174b84958c1f_1750x1180.png 424w, https://substackcdn.com/image/fetch/$s_!IcL-!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F951d8541-3726-40b7-85a1-174b84958c1f_1750x1180.png 848w, https://substackcdn.com/image/fetch/$s_!IcL-!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F951d8541-3726-40b7-85a1-174b84958c1f_1750x1180.png 1272w, https://substackcdn.com/image/fetch/$s_!IcL-!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F951d8541-3726-40b7-85a1-174b84958c1f_1750x1180.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Source: <a href="https://static.agora-energiewende.de/fileadmin/Projekte/2018/CO2-Steuer_FR-DE_Paper/Agora-Energiewende_Paper_CO2_Steuer_EN.pdf">Gagnebin, Graichen, Lenck 2019</a></p><p>The diesel price increase may have been the trigger, but, to interpret the Gilets Jaunes first and foremost as a protest against climate policy is to miss the point. The real target was economic distress, inequality and President Macron. In <a href="https://www.lemonde.fr/idees/article/2018/12/11/gilets-jaunes-une-enquete-pionniere-sur-la-revolte-des-revenus-modestes_5395562_3232.html">polls</a> done amongst the demonstrators in November, the motivations were clear. “The need to raise purchasing power” was mentioned by 53 percent. 41.6% wanted taxes lowered. 19.9 % were motivated by the maldistribution of wealth. And another 18.7 % mentioned opposition to the government and the President. Climate as such did not figure. Of the 61.5 % of the protestors who identified themselves in conventional left v. right terms, two thirds were of the left. National polling showed that the supporters of the Gilets Jaunes favored redistribution from the rich to the poor to a degree that in the 2017 Presidential election would have placed them somewhere between the socialist Benoît Harmon, advised by Thomas Piketty, and the left populist Jean-Luc Mélenchon. </p><p><strong>Question: What is your Position on redistribution? Do you favor taking from the rich to give to the poor?</strong> </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!kTda!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fbc586c26-69de-414a-bf67-e1329cd0bc13_1096x682.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!kTda!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fbc586c26-69de-414a-bf67-e1329cd0bc13_1096x682.png 424w, https://substackcdn.com/image/fetch/$s_!kTda!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fbc586c26-69de-414a-bf67-e1329cd0bc13_1096x682.png 848w, https://substackcdn.com/image/fetch/$s_!kTda!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fbc586c26-69de-414a-bf67-e1329cd0bc13_1096x682.png 1272w, https://substackcdn.com/image/fetch/$s_!kTda!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fbc586c26-69de-414a-bf67-e1329cd0bc13_1096x682.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/bc586c26-69de-414a-bf67-e1329cd0bc13_1096x682.png" width="1096" height="682" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/bc586c26-69de-414a-bf67-e1329cd0bc13_1096x682.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":682,"width":1096,"resizeWidth":null,"bytes":411542,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!kTda!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fbc586c26-69de-414a-bf67-e1329cd0bc13_1096x682.png 424w, https://substackcdn.com/image/fetch/$s_!kTda!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fbc586c26-69de-414a-bf67-e1329cd0bc13_1096x682.png 848w, https://substackcdn.com/image/fetch/$s_!kTda!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fbc586c26-69de-414a-bf67-e1329cd0bc13_1096x682.png 1272w, https://substackcdn.com/image/fetch/$s_!kTda!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fbc586c26-69de-414a-bf67-e1329cd0bc13_1096x682.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Source: <a href="http://sarkoups.free.fr/algangj219.pdf">Note de L’OBE 2019 3</a> </p><p>Amongst the French public at large the Gilets Jaunes enjoyed sympathy from both ends of the political spectrum. Between them the far left and the far right accounted for half the total support for the Gilets Jaunes. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!FUl5!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F55d502a4-94cd-48cb-9ec9-0a78a4645c22_1168x740.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!FUl5!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F55d502a4-94cd-48cb-9ec9-0a78a4645c22_1168x740.png 424w, https://substackcdn.com/image/fetch/$s_!FUl5!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F55d502a4-94cd-48cb-9ec9-0a78a4645c22_1168x740.png 848w, https://substackcdn.com/image/fetch/$s_!FUl5!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F55d502a4-94cd-48cb-9ec9-0a78a4645c22_1168x740.png 1272w, https://substackcdn.com/image/fetch/$s_!FUl5!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F55d502a4-94cd-48cb-9ec9-0a78a4645c22_1168x740.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/55d502a4-94cd-48cb-9ec9-0a78a4645c22_1168x740.png" width="1168" height="740" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/55d502a4-94cd-48cb-9ec9-0a78a4645c22_1168x740.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":740,"width":1168,"resizeWidth":null,"bytes":367288,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!FUl5!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F55d502a4-94cd-48cb-9ec9-0a78a4645c22_1168x740.png 424w, https://substackcdn.com/image/fetch/$s_!FUl5!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F55d502a4-94cd-48cb-9ec9-0a78a4645c22_1168x740.png 848w, https://substackcdn.com/image/fetch/$s_!FUl5!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F55d502a4-94cd-48cb-9ec9-0a78a4645c22_1168x740.png 1272w, https://substackcdn.com/image/fetch/$s_!FUl5!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F55d502a4-94cd-48cb-9ec9-0a78a4645c22_1168x740.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Source: <a href="http://sarkoups.free.fr/algangj219.pdf">Note de L’OBE 2019 3</a></p><p>What the protests exposed was the extreme fragility of Macron’s election success on May 7 2017. At the time, Macron’s victory was hailed as a triumph for a reforming, energetic centrist. But this was a mirage. In the first round of Presidential voting on April 23 2017, the French electorate split into five roughly equal segments, from far left to the far right between Mélenchon, Macron, Fillon, Le Pen and abstentions. Better paid French voters with more education voted for Macron and the reverse was true for Le Pen. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!33TB!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec0af0de-0591-4777-a213-4e0c98bd58e4_1106x668.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!33TB!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec0af0de-0591-4777-a213-4e0c98bd58e4_1106x668.png 424w, https://substackcdn.com/image/fetch/$s_!33TB!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec0af0de-0591-4777-a213-4e0c98bd58e4_1106x668.png 848w, https://substackcdn.com/image/fetch/$s_!33TB!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec0af0de-0591-4777-a213-4e0c98bd58e4_1106x668.png 1272w, https://substackcdn.com/image/fetch/$s_!33TB!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec0af0de-0591-4777-a213-4e0c98bd58e4_1106x668.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ec0af0de-0591-4777-a213-4e0c98bd58e4_1106x668.png" width="1106" height="668" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ec0af0de-0591-4777-a213-4e0c98bd58e4_1106x668.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":668,"width":1106,"resizeWidth":null,"bytes":443310,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!33TB!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec0af0de-0591-4777-a213-4e0c98bd58e4_1106x668.png 424w, https://substackcdn.com/image/fetch/$s_!33TB!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec0af0de-0591-4777-a213-4e0c98bd58e4_1106x668.png 848w, https://substackcdn.com/image/fetch/$s_!33TB!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec0af0de-0591-4777-a213-4e0c98bd58e4_1106x668.png 1272w, https://substackcdn.com/image/fetch/$s_!33TB!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec0af0de-0591-4777-a213-4e0c98bd58e4_1106x668.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Source: <a href="http://sarkoups.free.fr/algangj219.pdf">Note de L’OBE 2019 3</a></p><p>What handed Macron the Presidency were not the 24 percent of the vote he scored in the first round, but the anti-Le Pen rally in the second round. Macron’s final tally of 66 percent was deceiving. And this is what the Gilets Jaunes protests exposed. The street protests mobilized an anti-establishment groundswell that in the voting booth was split between left and right. Mapped in terms of income and education, support and opposition to the Gilet Jaunes were polarized, just as the Le Pen and Macron blocs had been in 2017. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!dyH6!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffd7436df-2887-4676-9b8e-3a46aa9ef7c1_1166x752.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!dyH6!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffd7436df-2887-4676-9b8e-3a46aa9ef7c1_1166x752.png 424w, https://substackcdn.com/image/fetch/$s_!dyH6!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffd7436df-2887-4676-9b8e-3a46aa9ef7c1_1166x752.png 848w, https://substackcdn.com/image/fetch/$s_!dyH6!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffd7436df-2887-4676-9b8e-3a46aa9ef7c1_1166x752.png 1272w, https://substackcdn.com/image/fetch/$s_!dyH6!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffd7436df-2887-4676-9b8e-3a46aa9ef7c1_1166x752.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/fd7436df-2887-4676-9b8e-3a46aa9ef7c1_1166x752.png" width="632" height="407.60205831903943" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/fd7436df-2887-4676-9b8e-3a46aa9ef7c1_1166x752.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":752,"width":1166,"resizeWidth":632,"bytes":421060,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!dyH6!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffd7436df-2887-4676-9b8e-3a46aa9ef7c1_1166x752.png 424w, https://substackcdn.com/image/fetch/$s_!dyH6!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffd7436df-2887-4676-9b8e-3a46aa9ef7c1_1166x752.png 848w, https://substackcdn.com/image/fetch/$s_!dyH6!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffd7436df-2887-4676-9b8e-3a46aa9ef7c1_1166x752.png 1272w, https://substackcdn.com/image/fetch/$s_!dyH6!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffd7436df-2887-4676-9b8e-3a46aa9ef7c1_1166x752.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Source: <a href="http://sarkoups.free.fr/algangj219.pdf">Note de L’OBE 2019 3</a></p><p>There is no doubt that the price of diesel was the spark, but what was more broadly at stake was a sense of the unfairness of French society, frustration with the political system and indignation at Macron’s policies. This is not to say that a rapid increase in prices for diesel were not a real issue for working-class families struggling on modest incomes. There are real trade offs between climate policy and social justice that have to be carefully managed. The latest <em>Eurobarometer</em> polling of Europe-wide public opinion is eloquent on this point. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!QZ9I!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F2137aaa2-e5f1-4403-aee5-92d579237a73_996x994.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!QZ9I!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F2137aaa2-e5f1-4403-aee5-92d579237a73_996x994.png 424w, https://substackcdn.com/image/fetch/$s_!QZ9I!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F2137aaa2-e5f1-4403-aee5-92d579237a73_996x994.png 848w, https://substackcdn.com/image/fetch/$s_!QZ9I!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F2137aaa2-e5f1-4403-aee5-92d579237a73_996x994.png 1272w, https://substackcdn.com/image/fetch/$s_!QZ9I!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F2137aaa2-e5f1-4403-aee5-92d579237a73_996x994.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2137aaa2-e5f1-4403-aee5-92d579237a73_996x994.png" width="650" height="648.6947791164658" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/2137aaa2-e5f1-4403-aee5-92d579237a73_996x994.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":994,"width":996,"resizeWidth":650,"bytes":213688,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!QZ9I!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F2137aaa2-e5f1-4403-aee5-92d579237a73_996x994.png 424w, https://substackcdn.com/image/fetch/$s_!QZ9I!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F2137aaa2-e5f1-4403-aee5-92d579237a73_996x994.png 848w, https://substackcdn.com/image/fetch/$s_!QZ9I!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F2137aaa2-e5f1-4403-aee5-92d579237a73_996x994.png 1272w, https://substackcdn.com/image/fetch/$s_!QZ9I!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F2137aaa2-e5f1-4403-aee5-92d579237a73_996x994.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Source: <a href="https://ec.europa.eu/clima/sites/default/files/support/docs/report_2021_en.pdf">Eurobarometer</a></p><p>Europeans of all backgrounds recognize the climate problem. Climate-skepticism is a fringe position. But whereas for 30 percent of the self-identified “upper middle class” climate is the top concern and another 10 percent name global population, for the self-identified working class those numbers are 12 and 4 percent respectively. For those on lower incomes, poverty and the economic situation come top of the list. The obvious conclusion - it really isn’t rocket science - is that the energy transition must be founded on a social bargain. As Timmermans has <a href="https://www.politico.eu/article/eu-fit-for-55-climate-blowback-green-deal-frans-timmermans/">put it</a>: ““Very simple, the European Green Deal is going to be just, or there is just not going to be a European Green Deal,” The lesson of the Gilet Jaunes crisis is not that carbon pricing is impossible, but that it has to be done with an awareness of the distributional effects. If you want to adjust energy prices you have to offset the higher costs with redistributive payments to those whose incomes are squeezed most severely. And you have to ensure that those welfare payments are as visible as is the increased costs of driving. </p><p>The regressive bias of carbon pricing and taxes is pronounced. But that is not the same as saying that the overall effect is large. Modest redistributive payments financed by the carbon levy itself can even generate a progressive effect. The Commission’s Fit for 55 package is based on a <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52020SC0176">comprehensive modeling exercise </a>that demonstrates precisely this possibility. An energy transition driven by uncompensated carbon levies depresses the incomes of the bottom decile, not by a huge amount, but by a noticeable 3 %. With a suitably designed redistributive system, their incomes can actually be increased. </p><p>The Commission proposes a 72.2 billion euro Social Climate Fund to address the regressive impact of energy price increases. Matched by member state contributions that would mobilize 144.4 billion euros to address the issue. That message, however, is being drowned out by Gilet Jaunes fear-mongering. This warping of the discursive field is itself one of the effects of the 2018-9 crisis. “Doing stupid shit", as Obama might have put it, spoils the pitch. Implementing a bad carbon pricing policy as part of an inequitable package of tax and welfare changes makes it harder subsequently to make the positive case for a well-designed policy. The folks who objected to the original bad policy will be harder to convince of the merits of a better policy and neutrals will change their mind. Risk-averse politicians turn cautious. Anyone who opposes carbon pricing for other reasons has all the rhetorical ammunition they need. </p><p>This shows up with depressing force in the French opinion <a href="http://www.cepremap.fr/depot/2019/11/docweb1906.pdf">polling evidence</a>. In early 2018 when a representative sample of French people were offered the proposal of a carbon tax combined with an offsetting carbon bonus, 49 percent approved. After the Gilets Jaunes crisis, support fell to 10 percent. Not only had the balance shifted, but the sample were now resistant to new information. Despite evidence to the contrary, the respondents continued to insist the idea was unfair. They had lost trust in the entire proposition. </p><p>There are no do-overs in politics. Screwing up does lasting damage. It is nevertheless ironic that the Commission for all its pains now faces a chorus of Macronites accusing them of pyromania and shouting: “How could you propose such a thing? Don’t you know it’s regressive! Remember the Gilets Jaunes …”. The idea that one might learn from history and might in fact have taken appropriate precautions, does not get a hearing. Best not even to try. Nor can the Commission alone take forceful action. Welfare policy remains the jealousy guarded prerogative of Europe’s nation states. And the revenue generated by the carbon trading system is being eagerly eyed by them. There is no guarantee that they will actually return the payments to their citizens who need it most. </p><p>The case for progressive redistribution through carbon levies and offsets can be made. But it will take conviction and political courage. And as luck has it, who will be presiding over the European Council when the proposals have to be argued for? France, with Emmanuel Macron facing an election year! The spring of 2022 is going to be interesting in European politics. </p><p class="button-wrapper" data-attrs="{"url":"https://adamtooze.substack.com/p/chartbook-newsletter-27-gilets-jaunes?utm_source=substack&utm_medium=email&utm_content=share&action=share","text":"Share","action":null,"class":null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/p/chartbook-newsletter-27-gilets-jaunes?utm_source=substack&utm_medium=email&utm_content=share&action=share"><span>Share</span></a></p><p></p><!--
{
"post_id": "38873780.chartbooks-new-era-pitching-in",
"post_date": "2021-07-17T18:50:22.739Z",
"is_published": true,
"email_sent_at": "2021-07-17T18:50:22.794Z",
"inbox_sent_at": "2021-07-17T18:50:22.794Z",
"type": "newsletter",
"audience": "everyone",
"title": "Chartbook's New Era: Pitching in ",
"subtitle": "An invitation to the next phase. "
}
-->
<p>Dear friends,</p><p>Thank you for reading the Chartbook Newsletter. </p><p>Over the last 8 months I’ve managed to put together 26 issues of Chartbook and I have an itch to do more. The audience response has convinced me that I am not just talking to myself. I’m really grateful for all the positive feedback and the serious-minded engagement. </p><p>For me the newsletter is freeing. It’s a space to write about things I wouldn’t write about elsewhere. It’s a space to write in ways I don’t in other places. </p><p>I’m committed to the format, but it is also seriously time-consuming. 40 newsletters a year, at c. 3000 words each is 120,000 words. Along with books I’m writing - my climate political economy manuscript is due February 2023 - and regular journalism, I have to take that volume of work seriously. </p><p>To see where Chartbook should fit in my portfolio of other activities, as of this week, I am transitioning to a paid subscriber model. </p><p>Don’t panic. If you like the newsletter but can’t afford a paid subscription, or read the newsletter in a professional setting in which it is not appropriate to be paying a subscription, e.g. public service, NGO etc, I get it. You don’t have to do anything. You will continue to receive Chartbook, as before. </p><p>But, if you can afford it, if you are enjoying the content, if you would like to support the mission and you would like to buy me the equivalent of a cup of coffee every month, there are three options: </p><ol><li><p>The <strong>annual subscription: $50</strong> </p></li><li><p>The <strong>standard monthly subscription: $5 monthly -</strong> which gives you a bit more flexibility.</p></li><li><p><strong>Founders club:</strong> If you really love Chartbook Newsletter, or read it in a professional setting in which you regularly pay for subscriptions, data services or consultancy, please consider the option of signing up for the <strong>Founders Club</strong> with a recommended contribution of $120 annually, or another amount at your discretion. Good karma guaranteed.</p></li></ol><p>To show your support for the mission, hit the button here:</p><p class="button-wrapper" data-attrs="{"url":"https://adamtooze.substack.com/subscribe?","text":"Subscribe now","action":null,"class":null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p>What are you signing up for? The Chartbook Newsletter as you already know it. </p><p>It will not be metronomic, but it will be pretty regular. I am aiming for about 40 or so posts per year - 3-4 per month, depending on the press of other commitments. The writing will be relatively informal and sometimes a little associative. One of the things I like about writing the newsletter is the chance to let my mind wander a bit. </p><p>I don’t promise that the copy-editing will be immaculate. This stuff is straight out of the kitchen. It’s all about the chance to think out loud about the issues. </p><p>What to expect for the coming months? </p><p>For me the big news of the fall is the release of <em>Shutdown</em> on September 7th. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!lJYx!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffddc3dd6-e3a9-4345-ba54-c6a0e172d59d_698x1060.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!lJYx!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffddc3dd6-e3a9-4345-ba54-c6a0e172d59d_698x1060.png 424w, https://substackcdn.com/image/fetch/$s_!lJYx!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffddc3dd6-e3a9-4345-ba54-c6a0e172d59d_698x1060.png 848w, https://substackcdn.com/image/fetch/$s_!lJYx!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffddc3dd6-e3a9-4345-ba54-c6a0e172d59d_698x1060.png 1272w, https://substackcdn.com/image/fetch/$s_!lJYx!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffddc3dd6-e3a9-4345-ba54-c6a0e172d59d_698x1060.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/fddc3dd6-e3a9-4345-ba54-c6a0e172d59d_698x1060.png" width="372" height="564.9283667621777" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/fddc3dd6-e3a9-4345-ba54-c6a0e172d59d_698x1060.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":1060,"width":698,"resizeWidth":372,"bytes":719915,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!lJYx!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffddc3dd6-e3a9-4345-ba54-c6a0e172d59d_698x1060.png 424w, https://substackcdn.com/image/fetch/$s_!lJYx!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffddc3dd6-e3a9-4345-ba54-c6a0e172d59d_698x1060.png 848w, https://substackcdn.com/image/fetch/$s_!lJYx!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffddc3dd6-e3a9-4345-ba54-c6a0e172d59d_698x1060.png 1272w, https://substackcdn.com/image/fetch/$s_!lJYx!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ffddc3dd6-e3a9-4345-ba54-c6a0e172d59d_698x1060.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>I’m going to be using the newsletter to frame <em>Shutdown</em>, reflecting on how the book was written, decisions that were made in putting it together and exploring angles that emerge from debate.</p><p>In addition to <em>Shutdown</em>, I’m lining up posts on:</p><ul><li><p>Key issues from the “Crashed universe” such as US China policy, the progress of the Eurozone, US Treasury market reform debate </p></li><li><p>European climate politics and the myth of the Gilets Jaunes</p></li><li><p>The World Bank’s first ever report on China in 1983</p></li><li><p>Why Hitler’s Germany turned down Bretton Woods</p></li><li><p>The economy legacy of state-building in Afghanistan</p></li><li><p>The economic crisis in war-torn Syria</p></li><li><p>Running commentary on the various net zero by 2050 trajectories </p></li><li><p>The PBOC: the most important central bank we don’t know much about. </p></li><li><p>How did deflation and inflation contribute to the rise of Hitler?</p></li><li><p>The 1990s Euro debate. </p></li><li><p>How the Treaty of Versailles gave birth to GDP statistics in Weimar Germany</p></li><li><p>Bitcoin and digital central bank currency.</p></li><li><p>Albert Speer’s telephone book and what it tells us about German business.</p></li><li><p>The twenty-first century gold rush in the Sahel</p></li><li><p>Curzio Malaparte and the Eastern front: the anti Grossman? </p></li><li><p>The interwar agrarian crisis as prelude to the Cold War</p></li><li><p>Thoughts about uneven and combined development and a pluralist view of capitalism</p></li><li><p>A series of posts on pandemics, 2020 and the state we are in, to accompany the release of <em>Shutdown</em> in the fall.</p></li></ul><p>I look forward to sharing many more posts with you. It will be fun! </p><p>Thank you again for your attention.</p><p>Once again, if you would like to support the Chartbook project, klick here. </p><p class="button-wrapper" data-attrs="{"url":"https://adamtooze.substack.com/subscribe?","text":"Subscribe now","action":null,"class":null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p>Adam </p><p></p><p class="button-wrapper" data-attrs="{"url":"https://adamtooze.substack.com/p/chartbooks-new-era-pitching-in?utm_source=substack&utm_medium=email&utm_content=share&action=share","text":"Share","action":null,"class":null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/p/chartbooks-new-era-pitching-in?utm_source=substack&utm_medium=email&utm_content=share&action=share"><span>Share</span></a></p><p></p><!--
{
"post_id": "39119749.adam-toozes-chartbook-28-china-in",
"post_date": "2021-07-24T14:37:51.311Z",
"is_published": true,
"email_sent_at": "2021-07-24T14:37:51.339Z",
"inbox_sent_at": "2021-07-24T14:37:51.339Z",
"type": "newsletter",
"audience": "everyone",
"title": "Adam Tooze's Chartbook #28: China in 1983, a miracle waiting to happen?",
"subtitle": "The World Bank's first report on Socialist Economic Development "
}
-->
<p class="button-wrapper" data-attrs="{"url":"https://adamtooze.substack.com/subscribe?","text":"Subscribe now","action":null,"class":null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p>Chartbook #28 accompanies the cover story I did for the latest issue of the <em>New Statesman </em>on China’s twentieth century history. The New Statesman piece is a bit of a high-wire act suspended btw J.A Hobson and Larry Summers. Check it out <a href="https://www.newstatesman.com/international/places/2021/07/why-there-no-solution-our-age-crisis-without-china">here</a>. </p><p>One of the most intriguing things I read whilst researching the piece, was the World Bank’s report on <a href="https://documents.worldbank.org/en/publication/documents-reports/documentdetail/192611468769173749/the-economy-statistical-system-and-basic-data">China’s </a><em><a href="https://documents.worldbank.org/en/publication/documents-reports/documentdetail/192611468769173749/the-economy-statistical-system-and-basic-data">Socialist Economic Development </a></em><a href="https://documents.worldbank.org/en/publication/documents-reports/documentdetail/192611468769173749/the-economy-statistical-system-and-basic-data">from 1983</a>. What is so fascinating is that this was the first time that the World Bank had the chance to do an in-depth analysis of China’s development under Communism. The report asks all the questions one might be tempted to ask at that point. Where was China at after the end of Maoism? What distinguished it from other low-income Asian giants like India or Pakistan or Indonesia. Was China about to take off? </p><p>Before we get into that, a brief note on <em>Chartbook</em> and how you can contribute to its future.</p><p>**********</p><p><em>Chartbook</em> started as a free newsletter and I want very much to keep it that way. If you need to read <em>Chartbook Newsletter</em> for free, you are welcome to do so. If you can’t afford a paid subscription, or if you read it in a context where paying subscriptions is inappropriate, I get it. You don’t have to do anything. You will continue to receive the newsletter as before. </p><p>But, writing the newsletter takes a lot of time and effort. I have to juggle it with all sorts of other commitments. So, if you can afford to, if you think the <em>Chartbook </em>content is valuable, if you would like to support the mission, or, simply, to buy me the equivalent of a cup of coffee once a month, please click here:</p><p class="button-wrapper" data-attrs="{"url":"https://adamtooze.substack.com/subscribe?","text":"Subscribe now","action":null,"class":null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p>There are three options:</p><ol><li><p>The <strong>annual subscription: $50 annually</strong></p></li><li><p>The <strong>standard monthly subscription: $5 monthly -</strong> which gives you a bit more flexibility.</p></li><li><p><strong>Founders club:</strong> <strong>$ 120 annua</strong>lly, or another amount at your discretion - for those who really love Chartbook Newsletter, or read it in a professional setting in which you regularly pay for subscriptions, please consider signing up for the <strong>Founders Club</strong>. </p></li></ol><p>What do you get in return? First and foremost, good karma. In addition, for paying subscribers I have started a series of regular emails featuring the most interesting, engaging or simply weird links I have come across over the previous few days. Check out Top Links <a href="https://adamtooze.substack.com/p/chartbook-top-links-1">#1</a> and <a href="https://adamtooze.substack.com/p/top-links-2-reading-suggestions-from">#2</a>. More to come. </p><p>With the release of <em>Shutdown</em> on September 7, there are more goodies on the way. The highlight will be Shutdown reading group sessions for paying subscribers. Details tba. To be on the invite list, sign up for one of the subscription options here:</p><p class="button-wrapper" data-attrs="{"url":"https://adamtooze.substack.com/subscribe?","text":"Subscribe now","action":null,"class":null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p>Now, down to business.</p><p>********</p><p>In 1980 China joined, or in Beijing’s words, “resumed its lawful seats” at the IMF and the World Bank, aka “the Bretton Woods institutions”. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!kGQo!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a62f360-de33-4266-a607-1a5094ab6352_1236x796.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!kGQo!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a62f360-de33-4266-a607-1a5094ab6352_1236x796.png 424w, https://substackcdn.com/image/fetch/$s_!kGQo!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a62f360-de33-4266-a607-1a5094ab6352_1236x796.png 848w, https://substackcdn.com/image/fetch/$s_!kGQo!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a62f360-de33-4266-a607-1a5094ab6352_1236x796.png 1272w, https://substackcdn.com/image/fetch/$s_!kGQo!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a62f360-de33-4266-a607-1a5094ab6352_1236x796.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0a62f360-de33-4266-a607-1a5094ab6352_1236x796.png" width="586" height="377.3915857605178" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0a62f360-de33-4266-a607-1a5094ab6352_1236x796.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":796,"width":1236,"resizeWidth":586,"bytes":439466,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!kGQo!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a62f360-de33-4266-a607-1a5094ab6352_1236x796.png 424w, https://substackcdn.com/image/fetch/$s_!kGQo!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a62f360-de33-4266-a607-1a5094ab6352_1236x796.png 848w, https://substackcdn.com/image/fetch/$s_!kGQo!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a62f360-de33-4266-a607-1a5094ab6352_1236x796.png 1272w, https://substackcdn.com/image/fetch/$s_!kGQo!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a62f360-de33-4266-a607-1a5094ab6352_1236x796.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Source: <a href="https://www.boc.cn/en/aboutboc/ab7/200809/t20080926_1601847.html">BOC</a></p><p>It is too easily forgotten but as a major contributor to the World War II alliance, China’s nationalist government was very much part of the postwar financial negotiations that took place in the summer of 1944 at the Bretton Woods hotel in New Hampshire. The Nationalist regime was represented at the conference by a large and expert <a href="http://www.centerforfinancialstability.org/bw/Who_Was_at_Bretton_Woods.pdf">delegation</a> headed by Hsiang-Hsi “H.H.” “Daddy” K’ung (1881-1967) governor of the central bank between 1933 and 1945.</p><p>When contacts resumed in the late 1970s the going was surprisingly easy. The politics of the encounter were fascinating. To read more about that check out Julian Gewirtz’s <a href="https://www.hup.harvard.edu/catalog.php?isbn=9780674971134">Unlikely Partners</a>, a fascinating history of Western economics in reform-era China. I want to focus here on the report itself and the picture it gives us of China’s situation before the growth explosion.</p><p>To start the story what was needed was a benchmark. What state was China in, when the Communists took over? The data used by the World Bank were produced by Michigan scholar <a href="https://en.wikipedia.org/wiki/Alexander_Eckstein">Alexander Eckstein</a>. The answer was stark. In the early 1950s, Communist China and India at independence were in a broadly similar place. Both were barely above subsistence. India’s per capita GDP was slightly ahead, as was its level of industrialization. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!_SDo!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F957a1d1d-7e33-4a2d-9ea3-ef92bcc84f10_1484x726.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!_SDo!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F957a1d1d-7e33-4a2d-9ea3-ef92bcc84f10_1484x726.png 424w, https://substackcdn.com/image/fetch/$s_!_SDo!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F957a1d1d-7e33-4a2d-9ea3-ef92bcc84f10_1484x726.png 848w, https://substackcdn.com/image/fetch/$s_!_SDo!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F957a1d1d-7e33-4a2d-9ea3-ef92bcc84f10_1484x726.png 1272w, https://substackcdn.com/image/fetch/$s_!_SDo!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F957a1d1d-7e33-4a2d-9ea3-ef92bcc84f10_1484x726.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/957a1d1d-7e33-4a2d-9ea3-ef92bcc84f10_1484x726.png" width="1456" height="712" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/957a1d1d-7e33-4a2d-9ea3-ef92bcc84f10_1484x726.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":712,"width":1456,"resizeWidth":null,"bytes":140392,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!_SDo!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F957a1d1d-7e33-4a2d-9ea3-ef92bcc84f10_1484x726.png 424w, https://substackcdn.com/image/fetch/$s_!_SDo!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F957a1d1d-7e33-4a2d-9ea3-ef92bcc84f10_1484x726.png 848w, https://substackcdn.com/image/fetch/$s_!_SDo!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F957a1d1d-7e33-4a2d-9ea3-ef92bcc84f10_1484x726.png 1272w, https://substackcdn.com/image/fetch/$s_!_SDo!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F957a1d1d-7e33-4a2d-9ea3-ef92bcc84f10_1484x726.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>The authoritative estimates of PPP GDP per capita compiled by Angus Maddison decades later agree with Eckstein’s as far as India and China are concerned. </p><p>If the starting point in the early 1950s, was one of poverty and underdevelopment. Three decades later, what kind of society had the Communist regime made? </p><p>The World Bank did not hide the fact that there had been disasters. The terrible impact of the Great Leap Forward screamed out of the demographic data. Huge swings in mortality and fertility were visible in the late 1950s and early 1960s. In a society of China’s scale, such fluctuations can only be the result of epic catastrophe. </p><p>Visible too was the impact of the cultural revolution. In 1964 685,000 young people were enrolled at Universities in China. In 1968 that plunged to 259,000 and in 1970 to 48,000. As the World Bank noted in a fascinating annexe on the history of China’s statistical infrastructure, in 1968 China’s statistical offices were shut down. The office reopened in 1971 but ten years later it was still chronically understaffed. </p><p>What was clear from the basic GDP data were two things. First, China in 1979 was still a very poor society ($1039 1990s dollars per capita per annum according to Maddison). Second, it had pulled ahead of India. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!VReM!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb8d1ada7-e670-4bda-b9eb-6a493138edac_956x590.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!VReM!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb8d1ada7-e670-4bda-b9eb-6a493138edac_956x590.png 424w, https://substackcdn.com/image/fetch/$s_!VReM!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb8d1ada7-e670-4bda-b9eb-6a493138edac_956x590.png 848w, https://substackcdn.com/image/fetch/$s_!VReM!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb8d1ada7-e670-4bda-b9eb-6a493138edac_956x590.png 1272w, https://substackcdn.com/image/fetch/$s_!VReM!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb8d1ada7-e670-4bda-b9eb-6a493138edac_956x590.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b8d1ada7-e670-4bda-b9eb-6a493138edac_956x590.png" width="560" height="345.60669456066944" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b8d1ada7-e670-4bda-b9eb-6a493138edac_956x590.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":590,"width":956,"resizeWidth":560,"bytes":99474,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!VReM!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb8d1ada7-e670-4bda-b9eb-6a493138edac_956x590.png 424w, https://substackcdn.com/image/fetch/$s_!VReM!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb8d1ada7-e670-4bda-b9eb-6a493138edac_956x590.png 848w, https://substackcdn.com/image/fetch/$s_!VReM!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb8d1ada7-e670-4bda-b9eb-6a493138edac_956x590.png 1272w, https://substackcdn.com/image/fetch/$s_!VReM!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb8d1ada7-e670-4bda-b9eb-6a493138edac_956x590.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Strikingly, though income had doubled relative to 1950 and though population had practically doubled too, China had not urbanized. In 1949 the city and town population had accounted for 10.6% of the population. The urban share peaked at 15.4% in 1957. After that the share declined to 12 and 13 percent in the 1970s. That compared to more than 20 percent in India. The low urban share was all the more striking because in terms of the weight of its economy, China was considerably more industrialized than its low income peers. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!4cxf!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F138f6200-c942-4bac-b289-a21055152b09_1244x508.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!4cxf!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F138f6200-c942-4bac-b289-a21055152b09_1244x508.png 424w, https://substackcdn.com/image/fetch/$s_!4cxf!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F138f6200-c942-4bac-b289-a21055152b09_1244x508.png 848w, https://substackcdn.com/image/fetch/$s_!4cxf!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F138f6200-c942-4bac-b289-a21055152b09_1244x508.png 1272w, https://substackcdn.com/image/fetch/$s_!4cxf!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F138f6200-c942-4bac-b289-a21055152b09_1244x508.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/138f6200-c942-4bac-b289-a21055152b09_1244x508.png" width="1244" height="508" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/138f6200-c942-4bac-b289-a21055152b09_1244x508.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":508,"width":1244,"resizeWidth":null,"bytes":88954,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!4cxf!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F138f6200-c942-4bac-b289-a21055152b09_1244x508.png 424w, https://substackcdn.com/image/fetch/$s_!4cxf!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F138f6200-c942-4bac-b289-a21055152b09_1244x508.png 848w, https://substackcdn.com/image/fetch/$s_!4cxf!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F138f6200-c942-4bac-b289-a21055152b09_1244x508.png 1272w, https://substackcdn.com/image/fetch/$s_!4cxf!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F138f6200-c942-4bac-b289-a21055152b09_1244x508.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>China had industrialized without urbanizing. This is confirmed by other material indicators such as China’s electricity consumption, which surged. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!k9hg!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F94dd1fd0-338d-4dc1-a1a3-5de49a67926b_942x716.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!k9hg!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F94dd1fd0-338d-4dc1-a1a3-5de49a67926b_942x716.png 424w, https://substackcdn.com/image/fetch/$s_!k9hg!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F94dd1fd0-338d-4dc1-a1a3-5de49a67926b_942x716.png 848w, https://substackcdn.com/image/fetch/$s_!k9hg!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F94dd1fd0-338d-4dc1-a1a3-5de49a67926b_942x716.png 1272w, https://substackcdn.com/image/fetch/$s_!k9hg!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F94dd1fd0-338d-4dc1-a1a3-5de49a67926b_942x716.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/94dd1fd0-338d-4dc1-a1a3-5de49a67926b_942x716.png" width="616" height="468.2123142250531" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/94dd1fd0-338d-4dc1-a1a3-5de49a67926b_942x716.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":716,"width":942,"resizeWidth":616,"bytes":108345,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!k9hg!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F94dd1fd0-338d-4dc1-a1a3-5de49a67926b_942x716.png 424w, https://substackcdn.com/image/fetch/$s_!k9hg!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F94dd1fd0-338d-4dc1-a1a3-5de49a67926b_942x716.png 848w, https://substackcdn.com/image/fetch/$s_!k9hg!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F94dd1fd0-338d-4dc1-a1a3-5de49a67926b_942x716.png 1272w, https://substackcdn.com/image/fetch/$s_!k9hg!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F94dd1fd0-338d-4dc1-a1a3-5de49a67926b_942x716.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p> In terms of per capita energy consumption, by the 1970s China was already well ahead of other low-income countries. In 1979, per capita its energy consumption in China was three times that India. China had a huge coal industry. It was also, it is all too easily forgotten, a major producer and exporter of oil. More on this in another post. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!rju4!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F20f01b7a-b3e6-4c2e-948b-1cfa8a692d8b_1210x598.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!rju4!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F20f01b7a-b3e6-4c2e-948b-1cfa8a692d8b_1210x598.png 424w, https://substackcdn.com/image/fetch/$s_!rju4!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F20f01b7a-b3e6-4c2e-948b-1cfa8a692d8b_1210x598.png 848w, https://substackcdn.com/image/fetch/$s_!rju4!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F20f01b7a-b3e6-4c2e-948b-1cfa8a692d8b_1210x598.png 1272w, https://substackcdn.com/image/fetch/$s_!rju4!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F20f01b7a-b3e6-4c2e-948b-1cfa8a692d8b_1210x598.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/20f01b7a-b3e6-4c2e-948b-1cfa8a692d8b_1210x598.png" width="1210" height="598" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/20f01b7a-b3e6-4c2e-948b-1cfa8a692d8b_1210x598.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":598,"width":1210,"resizeWidth":null,"bytes":94075,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!rju4!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F20f01b7a-b3e6-4c2e-948b-1cfa8a692d8b_1210x598.png 424w, https://substackcdn.com/image/fetch/$s_!rju4!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F20f01b7a-b3e6-4c2e-948b-1cfa8a692d8b_1210x598.png 848w, https://substackcdn.com/image/fetch/$s_!rju4!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F20f01b7a-b3e6-4c2e-948b-1cfa8a692d8b_1210x598.png 1272w, https://substackcdn.com/image/fetch/$s_!rju4!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F20f01b7a-b3e6-4c2e-948b-1cfa8a692d8b_1210x598.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Industrializing without urbanizing was remarkable, but it was not the unevenness of China’s development that most impressed the World Bank investigators. What struck them was that the Communist regime had laid the foundations for growth by delivering basic services to its population. </p><p>"China's most remarkable achievement during the past three decades", the Bank remarked, was to have made "low-income groups far better off in terms of basic needs than their counterparts in most other poor countries". As a result, the most basic indicator of human well-being, life expectancy had surged in China from 36 in 1950 to 64 in 1979. In 1979 China, the most populous country on the planet and one of the poorest, had an average life expectancy that put in the higher tier of middle-income countries. In Shanghai China’s richest province, average life expectancy in the late 1970s was 72 years, no more than a year behind that in the UK at the time. Overall life expectancy, at 64 years was in the words of the World Bank "outstandingly high for a country at China's per capita income level". </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!O7M0!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a41147f-c578-42df-b194-a43e80b2247f_944x492.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!O7M0!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a41147f-c578-42df-b194-a43e80b2247f_944x492.png 424w, https://substackcdn.com/image/fetch/$s_!O7M0!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a41147f-c578-42df-b194-a43e80b2247f_944x492.png 848w, https://substackcdn.com/image/fetch/$s_!O7M0!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a41147f-c578-42df-b194-a43e80b2247f_944x492.png 1272w, https://substackcdn.com/image/fetch/$s_!O7M0!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a41147f-c578-42df-b194-a43e80b2247f_944x492.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0a41147f-c578-42df-b194-a43e80b2247f_944x492.png" width="632" height="329.3898305084746" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0a41147f-c578-42df-b194-a43e80b2247f_944x492.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":492,"width":944,"resizeWidth":632,"bytes":70537,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!O7M0!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a41147f-c578-42df-b194-a43e80b2247f_944x492.png 424w, https://substackcdn.com/image/fetch/$s_!O7M0!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a41147f-c578-42df-b194-a43e80b2247f_944x492.png 848w, https://substackcdn.com/image/fetch/$s_!O7M0!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a41147f-c578-42df-b194-a43e80b2247f_944x492.png 1272w, https://substackcdn.com/image/fetch/$s_!O7M0!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0a41147f-c578-42df-b194-a43e80b2247f_944x492.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>NB: The figure for China was chosen as 1957, presumably because the demographic data for 1960 were under the shadow of the Great Leap Forward. </p><p>Life expectancy reflects an entire complex of factors, but the World Bank did not hesitate in its interpretation. In its view it was due to the fact that unlike other low-income countries - notably India since independence - the Communist regime in China had secured a basic provision of food, health care and education for practically everyone. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!C_Sx!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d8f0ca7-c0f5-46ec-85e8-a996e83b9d84_1868x522.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!C_Sx!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d8f0ca7-c0f5-46ec-85e8-a996e83b9d84_1868x522.png 424w, https://substackcdn.com/image/fetch/$s_!C_Sx!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d8f0ca7-c0f5-46ec-85e8-a996e83b9d84_1868x522.png 848w, https://substackcdn.com/image/fetch/$s_!C_Sx!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d8f0ca7-c0f5-46ec-85e8-a996e83b9d84_1868x522.png 1272w, https://substackcdn.com/image/fetch/$s_!C_Sx!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d8f0ca7-c0f5-46ec-85e8-a996e83b9d84_1868x522.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7d8f0ca7-c0f5-46ec-85e8-a996e83b9d84_1868x522.png" width="1456" height="407" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/7d8f0ca7-c0f5-46ec-85e8-a996e83b9d84_1868x522.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":407,"width":1456,"resizeWidth":null,"bytes":122013,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!C_Sx!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d8f0ca7-c0f5-46ec-85e8-a996e83b9d84_1868x522.png 424w, https://substackcdn.com/image/fetch/$s_!C_Sx!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d8f0ca7-c0f5-46ec-85e8-a996e83b9d84_1868x522.png 848w, https://substackcdn.com/image/fetch/$s_!C_Sx!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d8f0ca7-c0f5-46ec-85e8-a996e83b9d84_1868x522.png 1272w, https://substackcdn.com/image/fetch/$s_!C_Sx!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7d8f0ca7-c0f5-46ec-85e8-a996e83b9d84_1868x522.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>China’s superior nutritional level reflected the more advanced state of its agriculture. Reduced to a common denominator of grain-equivalents the World Bank estimated that China’s agricultural production per capita was 27 percent higher than that of India in 1979. The endowment of Chinese agriculture with farm machinery and the use of fertilizer was far greater than in India. Yields per hectare were higher, as was historically the case. </p><p>The World Bank’s statistics painted the picture of a Chinese agricultural economy that used a high intensity of industrial inputs to produce superior yields per hectare compared to most low-income countries. It was clearly not optimal - the entire complex history of agriculture under Communism said otherwise - but, it was enough to ensure adequate food availability.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!dqpV!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F30b25e67-79f4-4d2e-9371-3beaf8aadef6_1892x612.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!dqpV!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F30b25e67-79f4-4d2e-9371-3beaf8aadef6_1892x612.png 424w, https://substackcdn.com/image/fetch/$s_!dqpV!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F30b25e67-79f4-4d2e-9371-3beaf8aadef6_1892x612.png 848w, https://substackcdn.com/image/fetch/$s_!dqpV!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F30b25e67-79f4-4d2e-9371-3beaf8aadef6_1892x612.png 1272w, https://substackcdn.com/image/fetch/$s_!dqpV!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F30b25e67-79f4-4d2e-9371-3beaf8aadef6_1892x612.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/30b25e67-79f4-4d2e-9371-3beaf8aadef6_1892x612.png" width="1456" height="471" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/30b25e67-79f4-4d2e-9371-3beaf8aadef6_1892x612.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":471,"width":1456,"resizeWidth":null,"bytes":131785,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!dqpV!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F30b25e67-79f4-4d2e-9371-3beaf8aadef6_1892x612.png 424w, https://substackcdn.com/image/fetch/$s_!dqpV!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F30b25e67-79f4-4d2e-9371-3beaf8aadef6_1892x612.png 848w, https://substackcdn.com/image/fetch/$s_!dqpV!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F30b25e67-79f4-4d2e-9371-3beaf8aadef6_1892x612.png 1272w, https://substackcdn.com/image/fetch/$s_!dqpV!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F30b25e67-79f4-4d2e-9371-3beaf8aadef6_1892x612.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Though Chinese farms were equipped with more modern equipment than their Indian counterparts, that did not reflect any special priority accorded to agricultural investment. On the contrary, given agriculture’s share of production and employment, it was drastically starved of new investment. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!wdNq!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F333621c8-ac86-490a-a2e2-870f75c7b642_1250x488.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!wdNq!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F333621c8-ac86-490a-a2e2-870f75c7b642_1250x488.png 424w, https://substackcdn.com/image/fetch/$s_!wdNq!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F333621c8-ac86-490a-a2e2-870f75c7b642_1250x488.png 848w, https://substackcdn.com/image/fetch/$s_!wdNq!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F333621c8-ac86-490a-a2e2-870f75c7b642_1250x488.png 1272w, https://substackcdn.com/image/fetch/$s_!wdNq!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F333621c8-ac86-490a-a2e2-870f75c7b642_1250x488.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/333621c8-ac86-490a-a2e2-870f75c7b642_1250x488.png" width="1250" height="488" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/333621c8-ac86-490a-a2e2-870f75c7b642_1250x488.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":488,"width":1250,"resizeWidth":null,"bytes":96762,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!wdNq!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F333621c8-ac86-490a-a2e2-870f75c7b642_1250x488.png 424w, https://substackcdn.com/image/fetch/$s_!wdNq!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F333621c8-ac86-490a-a2e2-870f75c7b642_1250x488.png 848w, https://substackcdn.com/image/fetch/$s_!wdNq!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F333621c8-ac86-490a-a2e2-870f75c7b642_1250x488.png 1272w, https://substackcdn.com/image/fetch/$s_!wdNq!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F333621c8-ac86-490a-a2e2-870f75c7b642_1250x488.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>It was not high spending on rural development, that secured the far better outcomes for the mass of China’s population but the comprehensive organization of social services and the priority given to food distribution, education and health . </p><p>Mao’s Marxism was distinctive in its focus on the peasantry. But viewed in terms of income distribution it was in the city rather than the countryside that the redistributive quality of China’s regime was most evident. Whereas the cities of other poor countries were places of extreme inequality, China’s cities in the Mao and immediate post-Mao era were places of relative equality. In China, the gini measure of inequality was lower in the city than in the countryside, in India the reverse was true. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!G-nx!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F67a57f81-1322-4f28-973d-f5e849140d99_1040x560.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!G-nx!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F67a57f81-1322-4f28-973d-f5e849140d99_1040x560.png 424w, https://substackcdn.com/image/fetch/$s_!G-nx!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F67a57f81-1322-4f28-973d-f5e849140d99_1040x560.png 848w, https://substackcdn.com/image/fetch/$s_!G-nx!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F67a57f81-1322-4f28-973d-f5e849140d99_1040x560.png 1272w, https://substackcdn.com/image/fetch/$s_!G-nx!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F67a57f81-1322-4f28-973d-f5e849140d99_1040x560.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/67a57f81-1322-4f28-973d-f5e849140d99_1040x560.png" width="1040" height="560" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/67a57f81-1322-4f28-973d-f5e849140d99_1040x560.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":560,"width":1040,"resizeWidth":null,"bytes":87777,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!G-nx!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F67a57f81-1322-4f28-973d-f5e849140d99_1040x560.png 424w, https://substackcdn.com/image/fetch/$s_!G-nx!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F67a57f81-1322-4f28-973d-f5e849140d99_1040x560.png 848w, https://substackcdn.com/image/fetch/$s_!G-nx!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F67a57f81-1322-4f28-973d-f5e849140d99_1040x560.png 1272w, https://substackcdn.com/image/fetch/$s_!G-nx!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F67a57f81-1322-4f28-973d-f5e849140d99_1040x560.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Meanwhile, China’s fiercely invasive demographic policy had arrested population growth and was delivering a huge demographic dividend. In the 1960s China had faced a run away population explosion. In 1965 the growth rate hit 2.8 percent per annum. The regime’s demographic policy brought that to an abrupt halt. The rate of natural increase (the difference between the crude birth and death rates) plunged to 1.2 percent. As a result, China had a demographic profile more like that of an industrialized country than a low-income country. Both its crude birth and death rates were like those of industrialized countries. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!CuZg!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ff34ac84a-56bf-40f8-b8ff-977eed4deb24_994x592.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!CuZg!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ff34ac84a-56bf-40f8-b8ff-977eed4deb24_994x592.png 424w, https://substackcdn.com/image/fetch/$s_!CuZg!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ff34ac84a-56bf-40f8-b8ff-977eed4deb24_994x592.png 848w, https://substackcdn.com/image/fetch/$s_!CuZg!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ff34ac84a-56bf-40f8-b8ff-977eed4deb24_994x592.png 1272w, https://substackcdn.com/image/fetch/$s_!CuZg!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ff34ac84a-56bf-40f8-b8ff-977eed4deb24_994x592.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f34ac84a-56bf-40f8-b8ff-977eed4deb24_994x592.png" width="994" height="592" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/f34ac84a-56bf-40f8-b8ff-977eed4deb24_994x592.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":592,"width":994,"resizeWidth":null,"bytes":83769,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!CuZg!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ff34ac84a-56bf-40f8-b8ff-977eed4deb24_994x592.png 424w, https://substackcdn.com/image/fetch/$s_!CuZg!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ff34ac84a-56bf-40f8-b8ff-977eed4deb24_994x592.png 848w, https://substackcdn.com/image/fetch/$s_!CuZg!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ff34ac84a-56bf-40f8-b8ff-977eed4deb24_994x592.png 1272w, https://substackcdn.com/image/fetch/$s_!CuZg!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ff34ac84a-56bf-40f8-b8ff-977eed4deb24_994x592.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>The basic logic of the demographic policy was to enable resources to be concentrated in educating children. By 1970s China’s advantage in terms of basic school education relative to other low income countries was already very striking. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!Jcwi!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd1bf411d-5b9b-4e58-a744-87eb935ed9a5_966x662.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!Jcwi!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd1bf411d-5b9b-4e58-a744-87eb935ed9a5_966x662.png 424w, https://substackcdn.com/image/fetch/$s_!Jcwi!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd1bf411d-5b9b-4e58-a744-87eb935ed9a5_966x662.png 848w, https://substackcdn.com/image/fetch/$s_!Jcwi!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd1bf411d-5b9b-4e58-a744-87eb935ed9a5_966x662.png 1272w, https://substackcdn.com/image/fetch/$s_!Jcwi!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd1bf411d-5b9b-4e58-a744-87eb935ed9a5_966x662.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d1bf411d-5b9b-4e58-a744-87eb935ed9a5_966x662.png" width="966" height="662" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d1bf411d-5b9b-4e58-a744-87eb935ed9a5_966x662.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":662,"width":966,"resizeWidth":null,"bytes":93268,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!Jcwi!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd1bf411d-5b9b-4e58-a744-87eb935ed9a5_966x662.png 424w, https://substackcdn.com/image/fetch/$s_!Jcwi!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd1bf411d-5b9b-4e58-a744-87eb935ed9a5_966x662.png 848w, https://substackcdn.com/image/fetch/$s_!Jcwi!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd1bf411d-5b9b-4e58-a744-87eb935ed9a5_966x662.png 1272w, https://substackcdn.com/image/fetch/$s_!Jcwi!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd1bf411d-5b9b-4e58-a744-87eb935ed9a5_966x662.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>All in all, the World Bank’s report was glowing. It is perhaps surprising, but in the heyday of neoliberalism, the World Bank, soon to become notorious as an agent of the Washington consensus, had little but praise not just for the new phase of reform, but for the legacy of the Maoist period. One might be tempted to dismiss this simply as kowtowing to an important new member state. Beijing would hardly react well to a more critical report. But there is every sign that the World Bank economists believed in their basic diagnosis. Indeed, they gave hostages to fortune with their predictive summary. Provided the right policies could be put in place, the World Bank was convinced on the basis of its findings in the early 1980s that China's "immense wealth of human talent, effort and discipline" would enable it "within a generation or so, to achieve a tremendous increase in the living standards of its people". If there was ever a prediction born out by history, this is it. </p><p class="button-wrapper" data-attrs="{"url":"https://adamtooze.substack.com/subscribe?","text":"Subscribe now","action":null,"class":null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p>No children (leaf entity)