Historical Processes

From the perspective of many observers, land sales by indebted smallholders were the major underlying cause for the increasing concentration of landholdings. Farm households borrowed for a variety of reasons: to obtain working capital, to meet consumption needs in times of emergency, and in some cases to help cover major ceremonial expenses, such as weddings and funerals. To secure these loans, land was frequently pledged as collateral. In still other cases, the rights of land use were ceded to the lender, with the income generated from the land serving as the interest. Once the loan was repaid, rights of land use reverted back to the original owner. This land was commonly referred to as diandi .

In many cases, borrowers were unable to service these loans. Han-seng Chen's description is typical: "When a poor peasant in China mortgages his bit of land, he has practically no hope of ever getting it back. Everything conspires against him in his frantic effort to meet the interest charges, and eventually he loses not only the land but also this additional fruit of his

[13] Peter Lindert, "Who Owned Victorian England? The Debate over Landed Wealth and Inequality," Agricultural History 61, no. 4 (1987): 25–51.

[14] I. Z. Bhatty, "Inequality and Poverty in Rural India," in Poverty and Income Distribution in India , ed. T. N. Srinivasan and P. K. Bardhan (Calcutta, 1974).

labor."^[15] These difficulties were invariably attributed to declining economic fortunes caused by high taxes and land rents, local disaster, depressed agricultural conditions, and so forth. If land was used as collateral, it might simply be forfeited; if an asset other than land secured the loan, land still might have to be sold to make repayment. If land-use rights were ceded to the lender, the possibility of redeeming the land in the near future became even more remote.^[16] With the loss of their land, small cultivators were invariably forced either to rent back the same land from the new owners or possibly to hire out as wage laborers. This explains the link implicit in the opening quote from Tawney between rising tenancy (or perhaps wage labor) and a growing concentration of landholdings.

Although some small farm households were unquestionably forced to relinquish ownership of their land during times of economic duress, this analysis suffers from several weaknesses; moreover, there are a number of equally compelling explanations for increasing concentration of landholdings and a rise in tenancy with alternative implications for the secular behavior of incomes.^[17]

For example, in asserting that the loss of land through debt-sales gives rise to an increasing concentration of land ownership, there is an implicit assumption of who the borrowers and lenders were, the lenders typically being larger landowners/landlords, frequently absentee, the borrowers, on the other hand, being primarily poorer, small farm households that had earlier exhausted all personal financial resources. Although larger landowners were usually heavily involved in the credit market, a detailed examination of land and credit arrangements in three diverse villages in North China reveals that lending activity was more diversified among households than previously believed; in other words, lending activity was not limited to a class of big landowners. In fact, in a majority of those cases involving diandi , farm households with less than 30 mu were the creditors. The borrowers were frequently larger landowners themselves in need of capital.^[18] Data compiled by John Lossing Buck on lending activity in 151 localities in 16 provinces are very

[15] Han-seng Chen, Landlord and Peasant in China (New York, 1936), p. 95.

[16] In some cases, the rights of land use were actually rented back to the original owner. According to Madeleine Zelin, failure to fulfill the rental agreement could mean the total alienation of the original owner from the land. See Zelin, "The Rights of Tenants in Mid-Qing Sichuan," Journal of Asian Studies 45, no. 3 (May 1986): 499–526.

[17] Please recall, however, our earlier remarks regarding the uncertainty over the inter-temporal behavior of land distribution.

[18] Based on an examination of contracts involving diandi in the surveys cited in n. 33. In the villages we examined, the amount of land that villagers had obtained the farming rights to through diandi exceeded the amount of land that they had ceded the rights to . The likely explanation for this is that some of the former was owned by absentee landlords or perhaps village members who had migrated yet wanted to retain some claim to village resources should they decide to return.

consistent with the village-level data for North China: for only 8 percent of all loans were landlords and other wealthy households cited as the source of credit. Much more important were relatives and neighbors.^[19]

Observations such as these make generalizations about the relationship between forced land sales and increasing concentration difficult without much more careful examination of credit and land markets in rural China. Moreover, even if it is true that land ownership was increasingly concentrated, this does not necessarily mean that income became more concentrated as well. John R. Shepherd has recently pointed out that there are alternative historical processes capable of simultaneously generating an increasing concentration of landholdings and a rise in tenancy which do not necessarily imply increasing immiseration of the rural poor.^[20] These include an expansion in cultivated area through investment by wealthy households in land reclamation, migration of landless households into such areas because of better economic opportunities, and shifts in forms of landlord farm management. These processes could operate during periods of economic growth and expansion just as well as in times of economic decline. More generally, a rise in real wages and an increase in labor's share of national income could offset the influence on income distribution of any increased concentration of landholdings.

Each process can be adduced for many parts of China. Between the seventeenth and nineteenth centuries, for example, the increase in the demand for rice in the Lower Yangzi drew the capital of wealthy landowners into land reclamation projects in the Dongting Lake area of Hunan. Immigrant households supplied much of the labor for reclaiming and later for tenanting this land.^[21] This process contributed to a relatively high degree of land concentration and tenancy in the area, which persisted into the 1930s.^[22] Similar kinds of investments occurred in the Jiangnan area and in some of the more commercialized areas of the North China Plain. During the last half of the Qing, cultivated area increased by roughly half, much of it through investments such as these.^[23]

[19] John L. Buck, Land Utilization in China: Statistical Volume (Chicago, 1937), p. 404. If the loans extended by landlords and other wealthy households were larger than average, they may have been more important than their percentage of the total number of loans otherwise suggests.

[20] John R. Shepherd, "Rethinking Tenancy: Spatial and Temporal Variation in Land Ownership Concentration in Late Imperial and Republican China," Comparative Studies in Society and History 30.3 (July 1988): 403–31.

[21] See Peter C. Perdue, Exhausting the Earth (Cambridge, Mass., 1987).

[22] According to the National Land Commission survey, 47.8 percent of cultivated area in Hunan was rented. The high degree of land rental and estimates of the concentration of cultivated holdings provided in Table 6.3 suggest a highly concentrated land ownership.

[23] By the early twentieth century, if not before, much of the potential for expanding cultivated area in China proper (excluding Manchuria) had been exhausted. In eastern Jiangsu, however, an estimated 5 million to 6 million mu of land in abandoned salt farms (or a 25 percent increase over existing cultivated area in eastern Jiangsu) was reclaimed for agricultural use. In these counties we typically find a relatively high degree of tenancy. Information on tenancy and the landholdings of land reclamation companies in the area can be found in the Ministry of Industry survey of Jiangsu for 1933. See Zhongguo Shiyebu, Guoji Maoyiju, Zhongguo shiye zhi: Jiangsu sheng (Shanghai, 1933), pp. 231–32.

There was also migration, most notably in the eighteenth century into Sichuan, in the mid-to-late nineteenth century into highly fertile areas of the Lower Yangzi depopulated by the Taiping Rebellion, and in the twentieth century into Manchuria.^[24] In each case, individuals or entire households moved into these areas to take advantage of better economic opportunities. Even without land exchanging hands, migration under these conditions can lead to an increasing concentration of landholdings (because of an increase in the number of landless households) and a rise in tenancy in the area experiencing the in-migration.^[25] In fact, one observes a higher degree of concentration of land ownership in Manchuria for the early twentieth century than in other parts of China.^[26]

The historical role of these alternative processes throughout much of China points to the shortcomings in many earlier interpretations of land concentration and tenancy in the early twentieth century. The concentration of landholdings cannot simply be viewed as the cumulative product of a single process. Rather, the degree of concentration observed in a locality at any given time needs to be seen as the legacy of several, possibly interrelated, economic/historical processes including migration, reclamation, and commercialization as well as forced land sales that may or may not have been weakened over time by other forces operating on the rural economy.^[27]

[24] On the migration to Manchuria, see Thomas R. Gottschang, "Economic Change, Disasters, and Migration: The Historical Case of Manchuria," Economic Development and Cultural Change 35.3 (Apr. 1987): 461–90.

[25] A possible reduction in concentration in the area experiencing the out-migration may have kept inequality, in the aggregate, from worsening.

[26] For a sample of villages settled after the turn of the century, Myers has found an average Gini coefficient for landholdings equal to 0.86. This is 15–20 percent higher than the average for the 47 villages cited in n. 7. See Ramon H. Myers, "Socioeconomic Change in Villages of Manchuria during the Qing and Republican Periods: Some Preliminary Findings," Modern Asian Studies 10, no. 4 (1976): 591–620. Interestingly, the Gini coefficient for villages settled before the turn of the century is not markedly less than for those settled afterward, thus suggesting the legacy of the initial pattern of settlement.

[27] One of these other forces we have in mind here is family division. Since Adam Smith, there has been a presumption that over the course of several generations family division helps to reduce the inequality of landholdings. Lavely and Wong argue that this need not be the case and demonstrate how the impact of partible succession on land concentration is influenced by both inter- and intra-landclass differences in reproductivity. See William Lavely and R. Bin Wong, "Family Division, Reproductivity, and Landholding in North China," Research Report no. 84–65, Population Studies Center, University of Michigan, Nov. 1984.