The Cycle of the Commons: China’s 75-Year Struggle with Shared Resources

 

The Cycle of the Commons: China’s 75-Year Struggle with Shared Resources

Since 1949, China has swung between extreme collective ownership and rapid privatization. While these phases look different on the surface, they share a common thread: the "Tragedy of the Commons," where individuals (or officials) exploit a shared resource until it collapses.

1. The Mao Era: The Tragedy of "No Ownership"

Under Mao Zedong, the state abolished private property, turning the entire nation into a "commons."

• The Great Leap Forward (1958-1962): When villagers were forced into People's Communes, the "Common Mess Halls" became a literal tragedy. Because food was free and "shared," people ate everything immediately. With no individual responsibility for the grain supply, the "commons" was depleted, contributing to the Great Famine.

• Backyard Furnaces: To meet steel quotas, people melted down their own tools and communal resources to produce useless pig iron. The shared environment—forests and timber—was stripped bare to fuel these furnaces, a classic destruction of a common resource for short-term political "gain."

2. The Deng & Jiang Era: The "Contract" Tragedy (承包制)

Deng Xiaoping’s Household Responsibility System (家庭聯產承包責任制) is credited with saving the economy, but it created a new version of the tragedy.

• Short-Termism: Farmers were given land on short-term contracts. Because they did not own the land permanently,they had no incentive to maintain soil health. They used massive amounts of chemical fertilizers to maximize yield before the contract ended, leading to widespread soil acidification and groundwater pollution.

• Village Enterprises (TVEs): In the 1990s, local factories popped up everywhere. Since the rivers were "common" property, every factory dumped toxic waste into them to save costs. The result was the "Cancer Village" phenomenon—the economic gain was private, but the environmental cost was shared by the public.

3. The Hu & Xi Era: The Tragedy of High-Tech and Urban Space

Even as China became a global superpower, the tragedy moved into new sectors.

• The Bike-Sharing Collapse (2017): Under Hu and then Xi, companies like Ofo and Mobike flooded city sidewalks with millions of bikes. Because the "sidewalk" was a common public space and the bikes were "shared," users treated them with no care, and companies over-saturated the market. This led to "Bicycle Graveyards" that choked public squares.

• The Real Estate Bubble: Local governments relied on selling land (a finite common resource) to fund their budgets. This led to "Ghost Cities"—over-exploitation of the land for short-term GDP growth, leaving a massive debt burden for the next generation.

When National Ambition Meets System Constraint: TOC Lessons from China’s Great Leap and Industry 2025

When National Ambition Meets System Constraint: TOC Lessons from China’s Great Leap and Industry 2025

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Introduction

The Theory of Constraints (TOC) provides a powerful lens to analyze how systems pursue ambitious goals by focusing on their limiting factor. TOC is most often used in organizations — factories, supply chains, projects — but what happens when this mindset is scaled up to national strategy?

China presents two instructive examples of national-level constraint thinking:

1. The Great Leap Forward (1958–1962), an effort to leapfrog the UK and US through mass industrial mobilization.

2. The Made in China 2025 initiative, a contemporary campaign to elevate China's position in advanced manufacturing and innovation.

Both share a core logic: identify a constraint, marshal national will, and subordinate all other considerations to overcome it. TOC-style thinking is evident — but so are its dangers when applied rigidly or without systemic balance.

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1. Identifying the Constraint

Great Leap Forward (GLF):
China’s leadership saw its backward agricultural economy as the major constraint holding the nation back from becoming a global power. The goal: rapidly transform into an industrial powerhouse to rival the West.

Made in China 2025 (MIC2025):
The modern constraint is technological dependence. Chinese leaders identified reliance on foreign (especially Western) technology as a bottleneck to economic sovereignty and global competitiveness.

In both cases, the constraint is not abstract — it's framed as existential and national, which justifies urgent, large-scale action.

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2. Exploiting the Constraint

GLF:
To “exploit” the constraint of low industrial output, China launched backyard steel furnaces, collectivized agriculture, and diverted rural labor to industrial production — without infrastructure, training, or planning to support it.

MIC2025:
Exploitation is more targeted: R&D subsidies, state-backed financing, acquisition of foreign firms, and domestic capacity-building in robotics, AI, semiconductors, and other key sectors.

Here, TOC’s principle of focusing resources to maximize constraint output is clearly visible — though the execution and realism vary dramatically.

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3. Subordinating Everything Else

GLF:
The system was subordinated to steel output and industrial metrics. Agricultural production and local decision-making were ignored. Political loyalty replaced feedback. Dissent was suppressed. Subordination became blind and destructive.

MIC2025:
Subordination is more technocratic: capital, talent, and policy attention are channeled toward key sectors. However, critics warn that subsidies and central targets risk crowding out market signals, innovation diversity, and consumer needs.

In both cases, national priorities override bottom-up signals — with different degrees of coercion and consequences.

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4. Elevating the Constraint

GLF:
Elevation was attempted by mobilizing human labor at unprecedented scale — creating an illusion of industrial capacity. But poor quality, inefficiency, and neglect of agriculture led to famine and collapse.

MIC2025:
Elevation involves building domestic champions, scaling research ecosystems, and reducing foreign dependence. Some sectors have made significant progress (e.g., EVs, solar), but others remain constrained by talent gaps and geopolitical limits.

Here we see the contrast between brute-force elevation and strategic capacity-building — a key difference in how TOC's fourth step plays out.

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5. Reassessing the Constraint — or Not

GLF:
The constraint shifted from industrial output to mass starvation — but the system was slow or unwilling to recognize it. Political ideology suppressed correction, leading to disaster.

MIC2025:
The Chinese system today is more flexible and feedback-sensitive, though not without opacity. Still, critics point to potential misalignment — when goals become rigid targets, they risk locking focus on outdated constraints.

TOC reminds us: once the constraint moves, strategy must too. If not, the system begins optimizing for the past.

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Unintended Consequences of Systemic Focus

Scaling TOC logic to a nation comes with risks — especially if subordination is absolute or political:

• GLF: Prioritizing steel over food production caused famine, death, and economic collapse. It was a catastrophic case of misidentified constraint, poor exploitation, and disastrous subordination.

• MIC2025: The risk is different: over-investment, inefficiencies, global pushback, or innovation becoming too state-directed. The system may lose responsiveness and underemphasize soft constraints like creativity, diversity of thought, and bottom-up innovation.

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Is This TOC or Just Command Planning?

Both initiatives use TOC-like elements:

• Define the constraint

• Focus resources

• Align the system

But crucially, TOC — properly practiced — is iterative, feedback-driven, and grounded in logic rather than ideology.

GLF lacked all these qualities.
MIC2025 is more complex: it blends TOC-like clarity with elements of long-term industrial policy. Whether it adapts or ossifies will determine its fate.

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Conclusion

TOC provides a powerful mental model — but national planners must wield it with care. When the system’s constraint is accurately identified and treated as dynamic, TOC can drive transformation. But when constraints are defined politically, subordination becomes suppression, and elevation turns into overreach, the result is instability — or tragedy.

The Great Leap Forward is a cautionary tale of TOC logic applied without systemic thinking. Made in China 2025 is an ongoing test: can a nation maintain focus, adapt its strategy, and balance top-down goals with bottom-up innovation?

TOC teaches us that focus matters — but feedback matters even more.

The Iron Truth: Echoes of Deception from British Railings to China's Smelters – Why Governments Demand Eternal Vigilance

 

The Iron Truth: Echoes of Deception from British Railings to China's Smelters – Why Governments Demand Eternal Vigilance

Across different continents and distinct epochs, the pursuit of national ambition has, at times, led governments down a perilous path of obscured truth and compromised trust. A striking historical parallel emerges when examining Britain's wartime "missing railings" phenomenon alongside China's Great Leap Forward steelmaking campaign. Both represent grand, centrally orchestrated drives for material production, fueled by patriotic zeal or ideological fervor, yet ultimately marred by a systemic disconnect from reality and a profound lack of transparency. From a historian's vantage point, these episodes serve as stark reminders of the inherent dangers when the principle of "for the people" is overshadowed by the chilling conviction that "the end justifies the means," demanding constant vigilance over state power.

During the darkest days of World War II, following the dire straits of Dunkirk, Britain embarked on a nationwide crusade. Under Lord Beaverbrook's fervent encouragement, ornamental iron gates and railings, symbols of private property and public grandeur, were enthusiastically surrendered by citizens. The public wholeheartedly embraced the narrative: this iron would be melted down to forge the very weapons needed to secure victory. It was a potent act of "wartime sacrifice," a visible contribution to national defense that rallied a populace under siege. Yet, as historical inquiries now reveal, the grand gesture of collection far outstripped the practical capacity for processing. Millions of tons of metal were gathered, but a mere fraction, perhaps only 26%, ever became munitions. The vast remainder, a rusting testament to overzealous collection, was quietly stockpiled, buried, or even dumped at sea, its fate shrouded in secrecy, with pertinent records conspicuously absent. The "stumps of trust" left in walls across the UK were not just physical voids, but enduring symbols of a public largely kept in the dark about the true utility of their sacrifice.

Decades later, half a world away, China embarked on an even more ambitious, and ultimately catastrophic, industrialization drive: the Great Leap Forward (1958-1962). Under Mao Zedong's ideological conviction, the nation was mobilized to "surpass Britain in steel production" within fifteen years. Millions of peasants, diverted from agriculture, were pressed into building "backyard furnaces" in a frantic effort to produce steel. The propaganda machine tirelessly extolled the virtues of this "people's steel," depicting a unified nation striving for communist prosperity. However, like the British railings, the reality was a tragic farce. Much of the steel produced in these rudimentary furnaces was of abysmal quality – brittle, full of impurities, and utterly unusable for industrial purposes. Furthermore, the diversion of labor from farming, coupled with falsified production reports to meet unrealistic quotas, led directly to one of history's worst famines, claiming tens of millions of lives. The truth of the famine and the industrial failure was suppressed, dissent crushed, and the narrative of success maintained at an unimaginable human cost.

The parallels between these two seemingly disparate events are chilling. Both involved:

• Mass Mobilization & Propaganda: Governments in crisis (war for Britain, ideological transformation for China) successfully rallied their populations to contribute en masse, leveraging powerful, albeit incomplete, narratives.
• Disregard for Practicality: In Britain, the logistics of collecting and processing vast quantities of iron outstripped industrial capacity. In China, the steel produced was largely worthless, and the agricultural sector, the very foundation of life, was fatally neglected.
• Systemic Secrecy & Deception: Both governments chose to withhold the full truth from their citizens. In Britain, it was a quiet omission to preserve morale and avoid embarrassment. In China, it was a brutal suppression of facts to maintain ideological control and prevent internal dissent.
• The "End Justifies the Means": For Britain, winning the war was the paramount end, justifying a degree of paternalistic deception. For China, achieving rapid industrialization and communist ideals justified extreme measures, even at the cost of widespread suffering and death.
• Profound Long-Term Costs: While the British experience primarily resulted in a subtle erosion of public trust and aesthetic scars, the Great Leap Forward led to an economic collapse and an unparalleled demographic catastrophe.

From a historian's viewpoint, these episodes underscore a timeless imperative: governments must be checked. Power, by its very nature, tends to concentrate information and decision-making, creating an environment where ambition or expediency can eclipse prudence and transparency. As the esteemed Lord Acton famously warned, "Power tends to corrupt, and absolute power corrupts absolutely." When the state, even with purportedly noble intentions, believes it knows best and that the "end justifies the means," it risks leading its citizens down paths paved with illusion and unintended suffering.

The integrity of a nation's relationship with its people rests on a foundation of truth and accountability. Thomas Jefferson's dictum, "Eternal vigilance is the price of liberty," applies not just to safeguarding individual freedoms, but to holding state power accountable for its actions and pronouncements. George Washington, understanding the dual nature of governance, noted: "Government is not reason; it is not eloquence; it is force. Like fire, it is a dangerous servant and a fearful master."¹⁰

The visible stumps of missing railings in British cities and the invisible graves of millions who perished during China's steel famine stand as solemn monuments to this truth. They are historical lessons that transcend specific political systems or historical contexts, serving as a perpetual reminder that even in times of grave national challenge, transparency, accountability, and the unyielding scrutiny of government are not mere luxuries, but the very bedrock of a functional and ethical society.