China's other cultural revolution: black markets, books, music, and sex in Mao's Middle Kingdom.

• Author: Dikotter, Frank
• Position: Culture and Reviews

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 the 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...