Enough for stay: Chinese peasant household margin, 1600-1850
In the 18th and 19th centuries of China, both commerce and handicrafts actively compete
with agriculture, and higher wages were offered in the non-agricultural sector. Besides, people can change jobs through social mobility without legal limitation. It has been proved that Jiangnan, the most advanced region in China, emerged division of labor, technological progress and increased output. Why such prospect hasn’t produced China the same industrial reformation as Europe?
The classic question has received plenty of answers. Most answers comes by considering peasants as the suppliers of factor markets. Intensive labor led to the substitution of
mechanization, low wages and phagotrophy of surplus. However, the research subject ignores the peasants’ identity as producers. The signature of industrialization was labors transfer to industrial department from agriculture department. Therefore, why didn’t China transfer? My answer is direct and simple: the margin of peasants household is enough to stay, which means marginal revenue was greater than marginal cost. Therefore, they have no driving force to change the current market structure.
I choose the peasants household (tenant farmers, yeomen and semi-owner peasants) during 1700-1850 in Jiangnan as empirical evidence. With the increase of commercialization and production, there was a family-oriented rural production in the Jiangnan area of the Qing dynasty, with women and children sharing the production activities of farmers increasingly. In this way, the production mode of peasants household existed. Peasants household was not only the suppliers in the factor markets as labor, but also the demanders in the factor markets and suppliers in product markets. Therefore, as producers, peasants household need to consider about the marginal cost (MC) and marginal revenue (MR). Why household rather than individual peasants? Because individual surplus would be absorbed by the family while women and children costed as labor.
Peasants household had no choice but went to town when MC＞ MR. Therefore, by drawing the MC-MR curve can I prove the hypothesis.
The significance of my research is that first, It fills the missing perspective of peasants as suppliers of product market and demanders of factor market. Second, I draw the actual line rather than theoretical line of the margin to answer the question. Third, I complements the logic of the previous step in discussing surplus. Only when MR＞MC can surplus exist.
