Table 1 Comparison between the household...

Table 1

Comparison between the household responsibility system and the commune system

Category	Commune system	Household responsibility system
1. Production unit	Production team	Household
2. Goals	Meeting production quotas Maintaining a stable government	Meeting quotas for purchase under state monopoly Maximizing profits after meeting quotas
3. Economic decisions – What and how to produce – Income distribution	Planned by government Work-based distribution (i.e. work point system)	Meeting quotas, product mix determined by the objective of profit maximization Based on the value of production results
4. Land use	Controlled by the government	Limited right for a family to transfer the right to use land
5. Workforce	Workforce migration restricted by the government	Families are allowed to allocate their labor resources. They are free to choose when and where they work, but their moving to cities is restricted
6. Capital	Capital flow controlled by the government	Families have the right to make their own investment decisions, such as purchasing tractors and durable goods, building houses and investing in rural industries
7. Specialization	Self-sufficiency highlighted by national plans	Partial specialization, the principles of comparative advantage available
8. Market	Market places were shut down	Market places are allowed to open. The government is the largest buyer of grains and vegetable oils

Category	Commune system	Household responsibility system
1. Production unit	Production team	Household
2. Goals	Meeting production quotas Maintaining a stable government	Meeting quotas for purchase under state monopoly Maximizing profits after meeting quotas
3. Economic decisions – What and how to produce – Income distribution	Planned by governmentWork-based distribution (i.e. work point system)	Meeting quotas, product mix determined by the objective of profit maximizationBased on the value of production results
4. Land use	Controlled by the government	Limited right for a family to transfer the right to use land
5. Workforce	Workforce migration restricted by the government	Families are allowed to allocate their labor resources. They are free to choose when and where they work, but their moving to cities is restricted
6. Capital	Capital flow controlled by the government	Families have the right to make their own investment decisions, such as purchasing tractors and durable goods, building houses and investing in rural industries
7. Specialization	Self-sufficiency highlighted by national plans	Partial specialization, the principles of comparative advantage available
8. Market	Market places were shut down	Market places are allowed to open. The government is the largest buyer of grains and vegetable oils