As the economic reforms have unfolded, China's economy has become a patchwork of very different patterns. In industry, for example, some state-owned enterprises have fired large numbers of employees as a coiporate strategy, either because the firm is going broke or because it wants to replace them with cheaper short-contract workers.1 Some other state enterprises, such as in the textile and footwear industries,2 have driven their long-term workforce to labor under worse conditions for depressed wages. Yet there are also profit-making state enterprises that have acted in a paternalistic fashion, that have been solicitous of the concerns of employees, and that have sought to improve their livelihoods. The managements of such firms, as will be seen, have been responding to workcommunity norms and expectations that effectively pressure them to act in such a fashion.
We are currently engaged in conducting research for a book-length social history of a state enterprise of this latter type.3 It is a large liquor distillery located in one of China's largest inland cities. It is not a local "model" factory, and there was no effort by Chinese authorities to steer us to it.4 During 2002-2004 we undertook full-time research there for a number of months and were able to conduct unsupervised in-depth interviews with dozens of its employees and retirees.
It is not known exactly what percentage of state-sector firms are similar to this distillery in their relations with employees, as there are no known relevant surveys and very few studies of individual state-owned factories.5 But our interviewees insist that many of the state-owned enterprises in their city's food-processing sector have workplace environments similar to the distillery's. It is quite possible that such enterprises represent a significant part of Chinese industrial society-a type of firm that has not previously been examined by foreign observers.
In this paper we will focus on a scenario that got played out at the distillery when it was announced in the mid-1990s that a substantial number of new apartments were to be built for subsidized sale to selected employees. It will be seen how the pressures emanating from the workforce obliged management to put into play a form of grass-roots democracy to resolve this issue of paramount importance to the work community, and how, in this setting, "moral economy" arguments earned the day. We will also examine two further episodes at the distillery involving housing-in 1999 and in 2003-04-and we will witness how the rapidly changing political and economic landscape in China has influenced employee and management behavior.
The Moral Economy
The term "moral economy", as employed in the writings of E. P. Thompson, James C. Scott and others, encapsulates several important features of the work-community ethos that prevails in such a Chinese enterprise. Thompson used the term in a famous paper analyzing food riots in 18th century urban England, in which he noted that the riots cannot be explained simply as an effort by hungry people to grab food; rather, their actions were in protest against the violation of a 'moral economy' in which they held a right to subsistence:
... the men and women in the crowd were informed by the belief that they were defending traditional rights or customs; and in general, that they were supported by the consensus of the community ... as to what were legitimate and what were illegitimate practices. ... An outrage to these moral assumptions, quite as much as actual deprivation, was the usual occasion for direct action. ... [These 'moral-economy' notions] found some support in the paternalist tradition of the authorities; notions which the people re-echoed so loudly in their turn that the authorities were, in some measure, the prisoners of the people.6
Although Thompson was focusing on riots as a means to make these people's voices heard about violations to a moral economy, he also noted that such rioting is not "the only or the most obvious form of collective action-there may be alternatives such as mass petitioning of the authorities". …