Another Bold Step

Slowly, slowly China is turning its ideological world upside down. In 1979 its leaders began to allow many of the nation’s 800 million peasants to work individual family plots, and soon the agricultural growth rate doubled. Two years ago its leaders moved to cut back drastically on central economic planning in all but the most major areas, in the process encouraging the re-emergence of private enterprise and free-market activities. Now China has taken change one bold step further. Beginning next month, new entrants into the urban labor force will lose any claim to lifetime job security, but in the process will gain a freedom of movement in employment that has been virtually unknown since the revolution.

The motive force behind these sweeping changes has been the quest for greater efficiency, productivity and capital growth. Success has encouraged the expansion of the process. Suddenly, traditionally food-short China has become a significant agricultural exporter. In the urban area the shift to greater reliance on market forces and the liberation of entrepreneurial skills seems to be steadily improving living standards and leading to a more efficient use of resources.

Now the first steps are to be taken toward treating labor as a commodity, subject to market forces. Under the new plan of short-term contract employment, lazy or incompetent workers can soon be fired, while those who are skilled and productive will presumably be able sell their labor to the highest bidder. It is all most un-Marxian. It is also for now only an experiment, leaving unaffected those who already hold jobs. But China’s other experiments with market forces are working, and the freedom that it is preparing to introduce into the labor marketplace should work as well. That could well provide an example that would accelerate China’s reorientation toward more pragmatic, achievable and beneficial economic goals.