In 1987 the county trade office paid the nomads 3 yuan (US$1 = 3.71 yuan) or 6 jin of grain per jin of wool and sold it to the prefecture for 3.9 yuan, making a 30% profit. It paid the nomads 13 yuan (or 26 jin of grain) for cashmere, receiving 20 yuan from the prefecture for a 54% profit.  The county's gross profit on the wool and the cashmere totaled 199,232 yuan. The gross is actually somewhat larger than this because most nomads take grain rather than money and the county obtains the grain for less than the 0.5 yuan it charges the nomads. From these gross profits the county pays the trade office workers' salaries, a 10% tax to the TAR government, and freight charges, but the profit clearly is still enormous given that the annual salary of a top official in the county is only 2,500-3,000 yuan.12

The high profitability of these livestock products continues as one moves up the market ladder. Since trade figures are treated as a secret in China, we were unable to obtain official figures on wool and cashmere prices from trade offices above the county level, but information from various sources indicated sales prices. One jin of nondehaired goat cashmere sold in 1987 for about $12.50 (46.5 yuan) per jin in Guangzhou. This was 2.3 times more per jin than was paid to the county and 3.6 times more than the nomads of Phala received. The only value added to this item as it went up the ladder was sorting it into grades based primarily on color. If the cashmere was dehaired before sale, it brought twice the price—approximately $25 (93 yuan) per jin. Wool is said to have been sold in 1987 to Shanghai and Guangzhou for 4.6 yuan per jin, 18% higher than the price the county received and 53% higher than the nomads received. The wool price for export sales to Nepal in 1987 was said to be 6.5 yuan per jin delivered to the Nepalese border. Comparing the value of the 145,895 jin sold by the nomads in 1987 at different levels reveals the extent of the profit—whereas the nomads received 437,685 yuan, the county got 568,991 yuan and the prefecture (at the Nepal price) 948,318 yuan. The county therefore made a profit of about 131,305 yuan on the wool trade and the prefecture 379,327 yuan, their joint profit being about 510,632 yuan. Wool and cashmere also bring high prices on the Tibetan open market. In Lhasa in 1987, for example, one jin of wool fetched about 5 yuan (versus the 3 yuan paid the nomads), and the three Phala nomad households who went south to trade with farmers during the winter of 1987 bartered their excess wool (that left after fulfilling their contract quota) for 9.8 jin of barley per jin of wool (equal to 4.9 yuan), 63% more than the district price. Similarly, private traders coming to Phala in 1987 were offering 25-35 yuan per jin of cashmere, over twice as much as that offered by the district.

The trade exploitation of the nomads is also occurring at the district level. Nomads are presently compelled to sell butter and sheep to district officials for those officials' own consumption needs.  Here too, the system works not by an open market economy but by establishing a contract (quota) at prices below the market. The district officials decide how much butter and meat they need and then establish a per animal quota to yield that amount, which is then passed on to the nomads based on the number of head of livestock they hold. On the other hand, because these officials want the "contracts" to appear voluntarily entered into, they cannot pay the nomads too little and thus provoke them to protest to Lhasa. Thus, the price of cashmere increased from 8 yuan per jin in 1985 to 11 yuan in 1986, to 13 yuan in 1987, and to between 18-24 yuan in 1988. The price of wool has also increased from 2 yuan per jin in 1985 to 2.4 yuan in 1986 to3 yuan in 1987 and 1988. These increases have more than offset the increases in the price of grain and other imported staples such as tea.13 Officials also work energetically to keep the district store well stocked, frequently trucking in grain and other products. Because they offer the nomads a reasonable, albeit slightly lower price than that available on the open market, because they offer either cash or goods, and because they offer the convenience of having to travel only three days to the district headquarters instead of a month to trade with more distant farmers, most nomads would probably trade with the government's trade office even if they had free choice. However, they do not have that option. This appears to be a case where thoughtful and sympathetic national-level policies on Tibet are being contravened at lower levels. Our discussion with nomads in adjacent counties indicates that this is not an isolated problem and that the same practices are being employed in other nomad regions.

Notwithstanding the controversial use of contract-quota purchases, it is clear that the nomads' main livestock products are increasing in value under the new market-oriented economy. This, coupled with the tax concession, has produced an improvement in the standard of living in Phala despite an overall 8% decrease in herd size since decollectivization in 1981.14 Nomads, for example, are buying traditional items such as pots, pans, clothes, jewelry, and metal trunks, as well as new "luxury" items such as radios, tape cassettes, sewing machines, gasoline lamps, and iron stoves and, as indicated above, hiring villagers to do a variety of manual labor tasks. Many have built new storehouses, and a few even new residences, costly investments since wood for the beams and pillars has to be brought from hundreds of miles away.

Since wool traditionally has been Tibet's main export item, the nomads have always been part of a larger market system. However, their dependence on distant Chinese and world markets has increased since decollectivization. The construction of "truckable" roads from the county to the district in the mid-1970s has played an important role in fostering this increasing entanglement. It signaled the beginning of a new era when the government (and eventually private traders) could easily bring grain and other commodities to the district headquarters, and thus to within three to four days' walk of virtually all Phala nomads. The subsequent completion (around 1980) of a feeder road from the district to segments of most xiang (including Phala) made truck transport even more convenient. Although these roads were originally constructed to facilitate government communication between counties and their remote districts, their impact has beef more widespread. They not only have allowed the government to keep the local nomad districts well stocked with grains and other essential trade goods, but have facilitated visits by Lhasa-based traders seeking cashmere, skins, and (illegal) furs, as well as offering nomads the possibility of trading directly with new markets such as the city of Shigatse, which is just two to three days distant by truck but close to two month's trek by caravan.

The truck trade option, which is just emerging, usually involves nomads renting space on one of the district's trucks to take livestock products (even live sheep) to be sold in Shigatse, then using the profits to purchase manufactured goods to resell to other nomads on the Changtang. A government loan policy has facilitated utilization and expansion of this option. Since 1986 loans have been made available to nomads desiring to do business as part-time traders, either in Shigatse or with other nomads farther west where there is a thriving yak trade, and 17 households in Phala have received them, one valued at 10,000 yuan. The Shigatse trade has not yet proved to be highly profitable for most participants because of the high cost of operating the trucks and the nomads' lack of business skills, but it is likely to increase in importance in the future as the nomads gain familiarity with these new markets.

All of this is gradually changing the pattern of Phala trade. Last year, for example, only three Phala households took the traditional one- to two-month winter trading trip with their pack animals to adjacent farm areas. The rest conducted all or most of their business with the district trade office and store, and the remainder either with traders who came to the Changtang or, in a few cases, by taking some goods by truck to Shigatse. And although those who took the traditional winter trip bartered their excess products for prices higher than the trade office paid, this incremental profit is unlikely to compensate for the overall arduousness of this trip and the harm it does to livestock. Thus, it appears certain that the nomads will at least continue, and probably increase, their entanglement in distant market systems. Although this will likely produce future changes in the nomads' way of life, there is no reason at present to assume that this will be anything but profitable to the overall nomad economy, and the nomads are not being coerced to participate in this development.



TABLE 2        Household Livestock Holdings Per Capita in 1981 and 1988


                                Number of Animals Per Capita







No. (%) of households 1981

0 (0%)

35 (88%)

3 (7%)

2 (5%)

0 (0%)

No. (%) of households 1988

20 (38%)

19 (37%)

7 (13%)

1 (2%)

5 (10%)



Perhaps the most striking consequence of China's post-1981 reform policy is the rapidity and extent to which economic and social differentiation has reemerged in Phala. While all nomads started more or less equally in Phala in 1981, each having at least 39 head of livestock per person, some have seen their herd increase while others have experienced a dramatic decline. There are now again both poor and very wealthy nomads. Livestock holdings range from 0 to 154 animals per capita per household. Table 2 reveals the substantial shift that has occurred. In 1981, 88% of the households averaged 30-49 head of livestock per person, while only 37% had that many in 1988. Moreover, while no households had less than 30 animals per capita in 1981, 38% had less in 1988. At the high end of the continuum, only 12% had more than 50 head of livestock in 1981 while 25% had more in 1988, and 10% of the households had more than 90 head of livestock per capita in 1988. As a result of this process of economic differentiation, the richer 16% of the population in 1988 owned 33% of the animals while the poorer 33% of the population owned only 17% of the Phala animals. The leveling imposed by the commune and the equal division of its livestock in 1981 reduced the tremendous economic inequality that so typified the old society, but the past seven years of market-oriented economics has resulted in an increasing concentration of animals in the hands of a small number of newly wealthy households and the emergence once again of a stratum of households with no or few animals.

These "new poor" subsist by working for rich nomads, several of whom now regularly employ borders, milkers, and servants for long stretches of time, as in the old society. These workers are not being exploited, however, since they receive a decent wage for their labor—usually one sheep per month (equal to roughly 25 yuan) plus good food and even clothes if the contract is for an entire year. There is also piece work available to the poor in the form of tailoring, spinning, weaving, wool shearing, cashmere combing, livestock slaughtering, grass cutting, and ear-mark cutting. Ironically, the new economic policy in Phala has particularly benefited the former wealthy class, i.e., those who were expropriated and severely discriminated against during the Cultural Revolution. Of the six households that now have 70 or more head of livestock per capita, four (66%) are households from that class, and all of the former wealthy class households are among those with the largest herds and most secure income. On the other hand, all of today's poor are from households that were very poor in the old society, although some from this stratum have also done well. The former commune cadre fall between these poles. Since virtually all nomads previously were categorized as either middle or poor class, a number of the former commune and party cadre actually did not come from the poorest segment of the traditional society. Nevertheless, they have not done as well as the formerly wealthy households. A few cadre have become well-to-do, but a number are now poor or lower middle class.

This economic resurgence of the former wealthy class is extending into the spheres of authority, influence, and prestige. For example, one of the two local-level elected xiang leaders in Phala is an ex-monk of wealthy class background who was persecuted during the Cultural Revolution, and others of the class are now influential in the community. Most nomads, rightly or wrongly, explain this phenomenon by a "culture of poverty" ideology wherein those who were formerly poor do worse because they have internalized values and attitudes that eschew hard work and planning while the formerly wealthy stratum is succeeding precisely because its value system advocates the opposite. This development is resented by a tiny minority of nomads who, though powerful officials during the commune period, are today unpopular and powerless. Bitter at the loss of their authority and prestige, one of them once came to the authors' tent and whispered, "You have to tell Lhasa about what is going on here." When we asked him what he meant, he repeated this, adding "you know, you know." After much insistence he finally said, "You know, the 'class enemies,' they are rising up again."  The persistence of views like this, no matter how few their adherents, creates an undercurrent of anxiety among most nomads who fear that the leftist pendulum will suddenly reappear and sweep away all the new gains.

Two brief examples of how poor and rich households managed their household economies in 1987-88 will illustrate their very different strategies for survival.

Household One is wealthy and does not have to do any trading other than its forced quota sales to the district trade office. It was wealthy in the old society and was expropriated when the commune was created. It contains seven members: three adult males, two adult females, an elderly female, and a youth. In the summer of 1988 it owned 646 animals (278 sheep, 322 goats, 41 yak, and 5 horses) or 92 animals per person. The market value of these animals was about 31,000 yuan (US$8,329). This household slaughtered 70 goats and sheep for meat for its members and its hired hands. For its quota sales to the district, the household sold:


170 jin of wool @ 6 jin of barley per jin = 1,020 jin barley

27 jin of cashmere @ 28 jin of barley per jin wool = 756 jin barley

9 jin of yak kulu (cashmere) @ 1.5 yuan per jin =  13.5 yuan

4.2 jin of butter @ 2.5 yuan per jin = 10.5 yuan

12 sheep @ 16 to 25 yuan = 270 yuan


This yielded a total of 1,776 jin of barley (254/in per person), roughly 500 jin more than it needed for its basic subsistence. It also earned 294 yuan in cash, which it used for other expenses. Household One paid nine sheep/goats as wages to Tibetan villagers who tanned 90 sheep and goat skins for it, and another 32 sheep as wages to nomad herders and milkers it had hired. It owns two storehouses at its home base encampment, and is gradually acquiring traditional and-new luxury goods such as a cassette tape/radio player and several metal trunks. It is one of the wealthiest households in Phala. By contrast, the head of Household Two was from a beggar household in the old society and he is again one of the poorest nomads in Phala. His household contains four persons (two adults and two young children) and requires about 500 jin of grain for a year. In the summer of 1988 it owned only 64 livestock (7 yak, 29 sheep, and 28 goats) and had slaughtered just eight goats for meat in the fall of 1987. For its quota sales to the district, the household sold:


13 jin of wool @ 6 jin of barley per jin = 78 jin of barley

2 jin of goat cashmere @ 13 yuan per jin = 26 yuan

2.6 jin of batter @ 2,5 yuan per jin = 6.5 yuan

2 sheep @ 20 and 21 yuan = 41 yuan


This yielded a total of 78 jin of barley plus 73.5 yuan in cash. The household also bartered a sheep with a farmer-trader for about 75 jin of tsamba (parched barley flour), but even when we convert the money earned into barley, the total is still roughly 200 jin short of its subsistence grain needs. The male head of the household, therefore, was forced to engage in a variety of tasks for wages that took him away from home for over four months of the year:


1.   He worked two months as a herder for Household One. He ate his own food for one month in order to earn three sheep as salary instead of the normal two,

2.   He spun 27 jin of yak hair for two households and received two goats as wages.

3.   He worked two months as herder for a household in another encampment and received two sheep as salary.

4.   He snared one antelope, ate the meat, and sold the skin for 50 yuan to a visiting trader from eastern Tibet.

5.   He butchered over 100 sheep/goats and seven yak for other nomad households, receiving payment of about 80 jin of grain plus miscellaneous entrails.


The grain, money, and free meals deriving from his labor provided enough supplementary income to meet his household's grain needs. But the household also required other products such as tea, cooking oil, clothes, skins, matches, cigarettes, tobacco, etc. Normally it would have sold the sheep and goats the household head earned as wages to acquire these items, but in 1987 it received 250 jin of barley as welfare and therefore was able to add these to its herd, increasing its potential for future income.

These two examples reveal the tremendous differences that have developed in the seven years since dissolution of the commune. The poor household now must work for wages, accept welfare from the government, and subsist with the poorest quality diet. The rich household, on the other hand, as it did in the old society, hires poor nomads to do many of the difficult tasks and consumes a high quality, more varied diet. It is not possible here to account in detail for these differences, but in general they derive from a concatenation of factors such as luck, skill, consumption philosophy, and diligence. The nomads see this dramatic change as a part of the natural way of things, and they accept these outcomes since all households had (and have) equal opportunity to succeed or fail as their luck and skill allows. And although they all agree that economic polarization is not as advanced as it was in the old society, it seems likely that the newly poor households such as the one just described will form a permanent laborer/servant stratum.

Despite the forced quota sales and the economic differentiation, all nomads reported that economic life is much better these days than during the commune period when people often went hungry. The main reason for this, as indicated earlier, is the absence of taxes and the increase in the value of nomad products, which itself is an artifact of the larger economic reforms in the TAR and in China as a whole. Also important, is the great demand for laborers in Phala and the relatively high wages being paid. The nomads with large herds require substantial labor both for milking and processing the milk. products and for herding. This, coupled with an absence of strong value on material acquisitiveness and high value on leisure time, has produced a situation where individuals generally work for other households only if they are doing a favor for a friend or kinsman or, like Household Two, are not generating enough income to survive. And since the current level of economic differentiation has not pushed many households below the individual subsistence level, labor is scarce and work can be readily obtained.

It should also be noted that welfare is playing an important role in preventing complete destitution for a number of families. In 1987, for example, ten households (18%) received welfare from the county amounting to 1,804 jin of barley. One additional individual (household) is completely disabled and receives the "5-guarantee" welfare from the TAR. The local government has also organized a system for that individual wherein other households work in rotation to provide free labor for such tasks as making fires and emptying bedpans. It is interesting to note that all ten households who received welfare in 1987 were poor in the old society also.

While there clearly has been a substantial improvement in the overall standard of living in Phala since 1981, it should be noted that by objective measures most of these nomads are still very poor. Their tents rarely have rugs and they often wear tattered clothes. Many can afford to eat meat for just four or five months a year and a number do not even have a yakhair tent, living instead in small cloth tents that are frequently torn and battered by the fierce winds. Economically, they still have a long way to go to approach the standard of living of most Han villagers in eastern China.



The new Chinese economic and cultural policies implemented in Tibet following Hu Yaobang's investigation tour in May of 1980 have produced a major transformation in Phala. Following decollectivization, the nomads' economy immediately reverted to the traditional household system of production and management, which, enhanced by the concession on taxes, has led to an overall improvement in the standard of living even though local-level officials have not completely implemented an open (or negotiated) market system. The new policies have also led to increasing involvement in the market economy and dramatic social and economic differentiation. Equally important, the post-1980 policies have fostered a cultural and social revitalization that has allowed the nomads to resurrect basic components of their traditional culture. With no Han Chinese officials to deal with and using written and spoken Tibetan as their medium of interaction with the government, these nomadic pastoralists are in the process of reconstructing what Wallace called "a satisfying cultural system." Despite their lack of confidence in Beijing's long-term commitment to the new policies and their perception of vulnerability vis-à-vis the arbitrary and sometimes exploitive practices of the government's representatives, life in Phala today is closer to that of the traditional era than at any time since China assumed direct administrative control over Tibet in 1959. The post-1980 reforms created conditions whereby the nomadic pastoralists of Phala were able to regain control of their lives and recreate a matrix of values, norms, and beliefs that is psychologically and culturally meaningful. The new polices have, in essence, vindicated the nomads' belief in the worth of their nomadic way of life and their Tibetan ethnicity.









1. The TAR is virtually identical with the polity ruled by the Dalai Lama in the 1930s and 1940s.  

2. See Melvyn C. Goldstein, A History of Modern Tibet, 1913-51: The Demise of the Lamaist State (Berkeley: University of California Press, 1989) for a detailed account of this agreement and the historical events leading up to it.

3. The background to this investigation is not public knowledge, but informed sources suggested the above mentioned sequence. Independent of this, a recent article by Jigme Ngapo conveys much the same story ("Behind Tibetan Riots," Tibet Forum, 1988, in Chinese).

4. See BBC, Summary of World Broadcasts, Far East, 4 June 1980, BII/4.

5. There are, however, varying government-set limits on the number of monks who can be recruited into monasteries. This policy is disliked by Tibetans who see it as a continuing curtailment of their ability to practice their religion as they wish.

6. A. F. C Wallace, Religion: An Anthropological View (New York:  Random House, 1966), p. 30.

7. A. F. C. Wallace, "Revitalization Movements," American Anthropologist 58 (1956). p. 265.

8. Reproductive freedom, an important issue in Han China, was never an issue in Phala because China’s population control policy has not been pursued in rural Tibet. These nomads, not surprisingly, have relatively large families: women (married and unmarried) aged 30-39 averaged 3.1 births, and those aged 40-49 averaged 5.4 births.

9. Farmers, however, are not constrained with regard to selling their produce on the open market.

10. Translated by the authors.

11. Ton Chub, “Tibet’s Foreign Trade,” in Tibetans on Tibet (Beijing: Foreign Language Press, 1988), p. 114 (emphasis added).

12. Data derived from interviews with officials at district and county levels and with local nomads.

13. Grain increased from .15 per gyama in 1984 to .5 in 1985, remaining the same after that. Tea increased from 1.51 to 1.88 yuan per brick in 1985.

14. In M. C. Goldstein and C. M. Beall, "Studying Nomads on the Tibetan Plateau," China Exchange News 14:4 (December 1986), pp. 2-7, we erroneously reported an increase in the number of livestock in Phala after decollectivization. We did not realize then that the local records of the division of commune animals did not include the "private" animals (gersha) held by households at that time. For more detail on the pastoral production system and this decrease see M. C. Goldstein and C. M. Beall, "Nomadic Pastoralism on the Western Tibetan Plateau," Nomadic Peoples (in press).





Melvyn C. Goldstein is Professor and Chairman, Department of Anthropology, and Director of the Center for Research on Tibet at Case Western Reserve University, Cleveland, Ohio. Cynthia M. Beall is Professor of Anthropology at Case Western Reserve University. The research on which this article is based was carried out over a 16- month period (198&-88) in the TAR, was conducted in conjunction with the Lhasa-based Tibet Academy of Social Sciences (TASS), and was supported by grants from the National Academy of Sciences' Committee on Scholarly Communication with the People's Republic of China, the Committee on Research and Exploration of the National Geographic Society, and the National Science Foundation. The authors are grateful to TASS, their research assistants, and the district and county officials for their gracious cooperation. They are particularly grateful to the nomads of Phala for their friendship, patience, and assistance.


© 1989 by The Regents of the University of California