Set amid dusty sandstone-colored hills in northern Shaanxi, Yan'an is a hallowed place. Taken over by Communists at the end of the Long March in 1936, it served as the temporary Red Capital during the Second World War. Decades later, Yan'an had become the symbolic home of the ideal Communist man, one who merged with the collective in war and work alike. The "Yan'an spirit" heralded selfless dedication to the greater good, as people fused into a force powerful enough to move mountains.

But when a team of propaganda officials arrived in Yan'an in December 1974, they were shocked to find a thriving and sophisticated black market. The country was eight years into the Cultural Revolution, a massive effort to purge Chinese society of bourgeois influences and move it closer to communist purity. But beneath the surface, something rather different was underway.

One village had abandoned any attempt to wrest food from the arid soil, opting to specialize in selling pork instead. In order to fulfill their quota of grain deliveries to the state, the villagers used the profit from their meat business to buy back corn from the market. Local cadres, instead of enforcing the planned economy as they were supposed to, sided with the villagers and supervised the entire operation.

Yan'an was not alone in taking to the market. Entire communes in Luonan had divided up all collective assets and handed responsibility for production back to individual families. Many villagers abandoned two decades of monoculture, imposed by a state keen on grain to feed the cities and to barter on the international market, and cultivated crops that performed well on the black market. Some rented out their plots and went to the city instead, working in underground factories and sending back remittances to the village.

In parts of Pucheng, propitious couplets in traditional calligraphy largely displaced loud slogans in brash red; officials expressed little interest in reading newspapers, let alone keeping up with the party line. "Not one party meeting has been called, and not one of the prescribed works of Marx, Lenin, and Chairman Mao has been studied," complained one report. In some production brigades, telephone conferences were not a realistic prospect, since the lines had been cut down and were used by the villagers to dry sweet potatoes. Instead of working for the collectives, people with any kind of expertise offered their services to the highest bidder. There were doctors who gave private consultations for a fee. There were self-employed artisans.

Meanwhile, millions of people were going hungry, some of them eating mud or tree bark. In Ziyang, where one inspector had come across a starving family of seven surviving in a shed in the midst of winter, the local authorities had shrugged their shoulders. But elsewhere in the province, some cadres preferred to hand out the land to the villagers and let them try to survive by their own means rather than watch them die of hunger or steal the grain directly from the fields.

Such disobedience had a long history, but it became especially widespread after the mysterious 1971 death of Lin Biao, formerly Mao's heir apparent, and the man in charge of the army that had transformed the country into a garrison state after 1968. In some cases, local cadres took the lead, distributing the land to the farmers. Sometimes a deal was struck between representatives of the state and those who tilled the land, as the fiction of collective ownership was preserved by turning over a percentage of the crop to party officials. Bribery often greased the wheels of free enterprise, as villagers paid cadres to look the other way.

The Cultural Revolution had badly damaged the Communist Party. Now, in a silent revolution, millions upon millions of villagers surreptitiously opened black markets, shared out collective assets, divided the land, and opened underground factories. Cadres were defenseless against myriad daily acts of quiet defiance and endless subterfuge, as people tried to sap the dominance of the state and replace it with their own initiative and ingenuity. These were the unintended outcomes of the Cultural Revolution.

A Socialist World Turned Upside Down

The return to market principles was facilitated by divisions at the top. Partisan wrangling and factional infighting among the leadership had resulted in constant changes in government policy. Cadres started deliberately twisting and bending various state directives, taking them far beyond what the leadership intended. Some opened up every portion of collective property to negotiation, from control over the pigsty, the fish pond, and the forest to the exact dimensions of individual plots. They allowed a black market to thrive, realizing that their own livelihoods, including the food they ate, depended on free trade. They encouraged the villagers to leave the collectives and strike out on their own.

A good example comes from Fenghuang, an ancient town in Hunan where giant wooden wheels scooped up water from the river to irrigate the terraced rice fields. As elsewhere, the villagers seized three opportunities to expand their private plots. They did so first during Mao's Great Famine—the "Great Leap Forward" of 1958–61—trying to escape from starvation as best they could. Then they used the initial chaos of the Cultural Revolution to reclaim more land from the state. They had to retreat after that, surrendering their gains, but in 1972 they pushed forward again, expanding their plots by more than 50 percent.

Officially, private plots were not to constitute more than 5 percent of the land, and people were allowed to cultivate them only once their daily duties to the collective had been fulfilled. But in Fenghuang, as in many other places, some villagers, with the consent of the cadres, interpreted the loosening of agricultural policy as a license to withdraw from the people's communes and work all day on their own. Many went private, growing vegetables or fishing for shrimps. Wu Tingzhong, for instance, declined the basic food ration he was entitled to as a member of his production team and relied instead on his own plot to grow potatoes, vegetables, and tobacco in sufficient quantities to feed himself and sell a surplus worth 400 yuan a year. The entire production team soon followed his lead, pooling their resources to focus on cash crops.

It was a socialist world turned upside down, as those who answered the call of the market thrived while members of the collective remained mired in poverty. Wu Qinghua, a loyal follower who obeyed every order from the people's commune, earned barely enough work points to get by. He dressed in rags and lived in a converted latrine, borrowing money from the collective to help tide him over a bad season. Fenghuang was divided. The cadres leaned toward Wu Tingzhong.

Even when local officials and team leaders decided to close their eyes or bend the regulations, people like Wu Tingzhong and others still had to evade tax officials and other government agents. It was against the law to trade in commodities officially monopolized by the state, from grain to meat, cotton to silk, tea to tobacco. But here too, the state's grip weakened significantly. One example comes from Tang Huangdao, a villager who fried peanuts and cakes at night and sold them by the roadside to travelers. Like many others, he hid most of his wares in the fields, carrying only a small quantity of merchandise with him. When he was caught, everything was confiscated, but there was no other punishment.

Outside Tang's village in Henan, a blockade was sometimes imposed to prevent the sale of grain. In the months before and after the wheat harvest in early summer, checkpoints were set up along the main roads to stop people from carrying away bags filled with corn or wheat on their bicycles. But the villagers knew how to avoid the militia, carrying small amounts under cover of darkness or making multiple trips with hidden containers to avoid detection. In any event, a weakened state was no match for determined individuals who had honed their skills over many years of hardship. Villagers who had survived the horrors of Mao's Great Famine were not about to be intimidated by a tax officer hanging about at a roadblock in a conspicuous uniform.

Underground Industry

Returning the land to the cultivators was but one aspect of a silent revolution in the countryside. Some wealthier villages not only planted profitable crops for the market but began establishing local factories.

This was common in many parts of Guangdong. In Chao'an, where entire villages had been reduced to poverty after embroidery was declared "feudal" at the height of the Cultural Revolution, historic links with the overseas community were revived after the Ministry of Light Industry lifted the trading restrictions in 1972. Two years later, up to half the women in some villages once again specialized in drawn work and embroidery. Their output was worth 1.3 million yuan on the foreign market.

Others turned to manufacturing hardware and tools. While some of these village enterprises were collectively owned, many merely used the appearance of a collective to run a business entirely along private lines. A good example was Dongli Village, where all but 40 of the 420 families were members of a nail factory. They worked from home and were paid by the piece. All the profits went straight to the individual workers, who were also responsible for finding the raw material. Some bought it from street peddlers, others obtained recycled iron from the black market, and a few went to Shantou to buy in bulk. A good worker made five to 10 yuan a day, the equivalent of what an ordinary farmer made by working in a commune for an entire month.

The village enterprises contributed to the market in more than one way. They not only sold their wares through intermediaries, but also used their earnings to buy grain and fodder for their pigs, as well as imported goods that the planned economy could not provide, from fish oil to aspirin. They sent purchasing agents to compete with the state sector for scarce resources needed to run their businesses, buying up coal, steel, and iron.

These examples come from Guangdong, but rural enterprises were not limited to the south. In parts of Jiangsu, contracts were concluded between the production team and individual households as early as 1969, in blatant violation of the policies of the time. This process often began in regions where the land was unsuitable for agriculture. Along the coast, for instance, some villagers at first abandoned the sandy soil and switched to raising fish instead. Then they gradually turned their attention to industry. In Chuansha, where the state mandated that villagers grow cotton, the industrial portion of total production increased from 54 percent in 1970 to 74 percent five years later, a rate of growth far superior to the years of "economic reform" after 1978.

In Jiangsu province as a whole, industry represented a mere 13 percent of total output in the countryside in 1970 but a phenomenal 40 percent by 1976. These factories were often collective, if in name only. Tangqiao village, with help from the cadres, established a metalworking factory with 25 employees in 1970. A year later, it set up a power plant as well as a cardboard-box factory, several other metal shops, and an animal-feed processing plant. A brick factory followed in 1972, all of it in blatant disregard of the state's demand that the countryside grow grain. The village leaders now attracted political attention and started opening new enterprises under the umbrella of a "comprehensive factory." The facade of planned unity was abandoned the moment Mao died in 1976.

There were also underground factories that dispensed altogether with the pretense of collective ownership. Some were run by individuals, who merely used the name, and often the accountant, of the collective. In other words, they attached themselves to production teams and relied on state officials for protection.

Officials in the higher echelons of power could do very little to combat these trends. There were periodic campaigns to "cut the tail of capitalism," but they were met with widespread sabotage, as villagers slaughtered their animals and diverted collective resources for their own use.

When the garden economy created by private plots and rented land produced a surplus, villagers sometimes got on their bicycles and went to the city, selling vegetables, fruit, chickens, ducks, and fish. A few took their produce from door to door, and others gathered outside department stores, by railway stations, or near the factory gates, spreading out their wares on the ground or on small card tables. Public security services regularly chased them away, but they kept coming back. Sometimes the local authorities turned a blind eye, as people met at an agreed time to trade goods at makeshift bazaars.

Villagers migrated in large numbers, despite the restrictions imposed by the household registration system. During the Great Leap Forward, millions had resettled in the cities, working in underground factories or on construction projects. Many were sent home during the famine, but they kept on coming back, carrying out the dirty, dangerous, or demeaning jobs that city dwellers were unwilling to do. By the early 1970s, many villages had a well-established tradition of migration, knowing how to evade agents of the state, where to seek employment in the city, and how to look after family members left behind. Sometimes the cadres themselves encouraged a form of chain migration by agreeing to take care of children and the elderly, as remittances from workers in the city contributed to the survival of the entire village. The migrants continued to submit their quota of grain, either through relatives or by paying a fee directly to the village leader.

Circles of relative wealth appeared around the cities, as peddlers and farmers moved to fringe areas, where they cultivated vegetables or manufactured small goods sold to urban residents. Some set up food stalls or opened small restaurants near the local markets. Many lived in a twilight zone, constantly evading government control and running the risk of being sent back to their home villages, but large numbers managed to acquire the right to stay in the city.

The numbers were staggering, counteracting the efforts the state had made to curb the urban population in 1968–69. In Shaanxi, major cities across the province grew by a quarter of a million people in 1970, and again by a third of a million the following year, reaching a total of 3.6 million. In Hubei, the urban population grew by a mere third of a million between 1965 and 1970, but by half a million in the following two years. Even in Beijing, the authorities found it difficult to control people's movements.

Counter-Revolutionary Culture

The new freedoms being seized extended beyond movement and trade. While the contents of bookshops changed very little, with row after row of works by Mao, Marx, Engels, Lenin, and Stalin, the range of books that circulated under the counter expanded enormously. Even at the height of the Cultural Revolution—as the Red Guards, Mao's militant ideologues, tried to eradicate all signs of a feudal past—some of them quietly pocketed titles that attracted their attention. Quite a few found their way on to a thriving black market. There were even reading groups that exchanged forbidden material and gathered to discuss common interests. One network of readers based in Beijing, with correspondents in other parts of the country, boldly called themselves the Fourth International Counter-Revolutionary Clique. Despite government suppression, these clubs continued to gain members, as a growing number of readers groped toward a critical perspective on the Cultural Revolution.

Not all the literature that circulated was high-minded. On the black market, novels with erotic passages commanded the highest prices, proportionate to the degree of political danger. In this puritanical society, even Stendhal's Le Rouge et le Noir was considered erotic; a copy could command the equivalent of two weeks' wages for an ordinary worker. Such novels were copied by hand, and sometimes crudely mimeographed with simple stencils or hand-cranked devices. At the height of the Cultural Revolution, many units had begun publishing their own bulletins or newspapers. Some of that equipment had escaped from the hands of the Mao Zedong Thought propaganda teams and was now being put to good use, as erotic novels and lewd songs circulated in factories, schools, and even government offices.

Other social activities condemned by the state flourished. There were underground singing clubs, as people gathered under the pretext of singing revolutionary songs, only to enact forbidden plays and sing banned tunes. In the Shanghai Number Two Machine Tool Plant, 100 young workers played forbidden music every Friday in the winter of 1969–70, attracting a lively audience from other factories. The old world made a comeback, as people reconnected with pastimes the Red Guards had decried as feudal or bourgeois. The only widespread children's game by the time of Lin Biao's death was skipping, but soon enough whips and tops, hopscotch, and diabolo could be seen in the streets of Beijing. The sale of traditional, painted silk kites was still restricted to foreigners, but some children knew how to fly ingenious contrivances made of strips of wood and bits of the People's Daily. Poker appeared in the narrow, winding alleys of the capital. Pigeons could be seen racing across the sky with small bamboo pipes attached to their tail feathers, producing an eerie, harmonious whistle. People started keeping birds in cages again, sometimes heading for the parks in the early morning to air their pets.

Underground artists found refuge from politics in art, painting in a manner purposely detached from "socialist realism." Many were deliberately apolitical, trying to carve out a personal space where they could reconnect with their inner selves. Their art was clandestine, but like the underground literary salons and singing clubs, informal groups of amateur artists shared their interests, using abandoned factories, deserted parks, or private flats in buildings with adequate dark hallways and isolated staircases. Some budding Beijing artists from diverse backgrounds came together in a group which received a name only much later: Wuming, or Nameless. "In an era when free association was a crime, the group had to be nameless, shapeless and spontaneous," the historian Wang Aihe writes. "There were no regulations, no membership, no unified artistic principles or style." Many of them came from families defined as "class enemies" and had endured broken homes, ravaged schools, and crumbling communities throughout the Cultural Revolution. They took to the brush, at first honing their skills by following the propaganda campaign and painting portraits of the Chairman. It was a good source of precious oil paint and linen canvas, which they used to begin experimenting in their spare time.

Religion also went underground, allowing people to remain secretly connected to their faiths. When lamas, imams, and priests were sent to re-education camps, ordinary Christians, Buddhists, Taoists, and Muslims stepped in to hold their communities together. Local gods were also stubborn, subverting the state's attempts to replace them with the cult of Mao. In some villages, local festivals and public rituals were discontinued and temples closed down, yet many villagers continued to worship at small shrines or altars inside their homes. They burned incense, offered vows, invoked the spirits, or otherwise communicated with a variety of gods away from the public eye, from ancestral spirits and patron deities to rain gods and fertility goddesses. The ultimate act of subversion was probably to turn the Chairman himself into a local deity.

Larger statues also survived, even as temples were demolished or turned into granaries. In some cases they were moved from one place to another, until by 1972 local communities felt it safe enough to give them a more permanent home. Sometimes a temple was built with collective funds under the pretense of establishing a school.

The family endured sustained attack during the Cultural Revolution, with senseless and unpredictable purges designed to cow the population, rip apart communities, and produce docile, atomized individuals loyal to no one but the Chairman. Family members were expected to denounce each other at public struggle meetings; love was considered a decadent, bourgeois emotion, and sex was taboo. In the words of Rae Yang, one of the Red Guards dispatched to rural China: "We did not have sex or even think about it. Sex was bourgeois. No doubt about it! In my mind, it was something very dirty and ugly. It was also extremely dangerous. In the books I read and the movies I saw, only the bad guys were interested in sex. Revolutionaries had nothing to do with it. When revolutionaries fell in love, they loved with their hearts. They didn't even touch hands."

But like so many other students sent to the countryside, Rae learned quickly by watching the farm animals. She was put in charge of breeding boars, having to guide their quivering genitals into a sow's vagina. "It was like watching pornographic movies day in and day out." Once Lin Biao had vanished, young people began to meet socially and quietly pair up, seeking privacy away from collective dormitories and crowded dining halls. In Manchuria, with temperatures plunging to 30 degrees below zero, young couples on state farms had little choice but to take to the great outdoors. Despite the cold they persisted, rushing back to the dormitories to embrace the heaters after less than 20 minutes.

For students who did not work on agricultural collectives controlled by the army, living among the villagers instead, the opportunities for sexual encounters were much greater. In some cases young people even lived together, a practice unimaginable in the cities. A few had children out of wedlock, refusing to marry for fear of being stuck in the countryside forever.

Except for those students from the cities, the vast majority of people in the countryside were far less coy about sex. When they first arrived among their peasant hosts, quite a few young students were taken aback by their open displays of affection. One day Wang Yuanyuan, a 16-year-old girl sent to Inner Mongolia, saw a couple making love by the side of a ditch and reported the affair to the brigade leader. "The old peasants, though, didn't treat it as anything and just laughed." As in so many other aspects of folk culture, the Cultural Revolution ran no more than skin deep.

Revolution from Below

After Deng Xiaopeng took the reins of state, he initially attempted to restore the planned economy to its pre-Cultural Revolution days. But he had neither the will nor the ability to fight the trend. Everywhere, in one way or another, people had been emboldened by the failure of the Cultural Revolution to take matters into their own hands. It was an uneven, patchy, and largely silent revolution, but eventually it would engulf the entire country. In the winter of 1982–83, the people's communes were finally officially dissolved. It was the end of an era.

The covert practices that had spread across the countryside in the last years of the Cultural Revolution now flourished, as villagers returned to family farming, cultivated crops that could be sold for a profit, established privately owned shops, or went to the cities to work in factories. Rural decollectivization, in turn, liberated even more labor in the countryside, fueling a boom in village enterprises. Rural industry provided much of the country's double-digit growth, offsetting the inefficient performance of state-owned enterprises.

And this change was driven from below. As Kate Zhou has written, "When the government lifted restrictions, it did so only in recognition of the fact that the sea of unorganized farmers had already made them irrelevant." The private entrepreneurs who transformed the economy were millions upon millions of ordinary villagers, who effectively outmaneuvered the state. If there was a great architect of economic reform, it was the people.