

In China, social divisions are written in a little red booklet - tokenadult
http://www.latimes.com/business/la-fi-china-hukou-20121212,0,1248525.story

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kevin_rubyhouse
Could somebody with a background in economics explain to me why hukou was
introduced in the first place?

Why couldn't they let natural market forces determine where people stay. And
why would it cost 240 billion to change this? Is that how much covering
everybody's medical, insurance, and all that stuff cost?

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frozenport
It was the same way in the USSR. Moscow and St. Petersbrug were significantly
more habitable. If you were going to find goods in the USSR it was going to be
in Moscow. In parallel many Russian cities of 100,000 were inhospitable,
isolated, and dull places. Nevertheless Russia is a large country and if free
travel was allowed key industries such as mining or wheat production would
disappear. In modern Russia large areas that were cultivated in Soviet times
(due to this system) remain underutilized. Lastly finding work was never a
problem in the USSR and hence anybody transferring would be likely to find
work as long as they were a legal resident (not working was criminal). To
counter any potential demographic shift the Soviet authorities made it
difficult to move from rural area to the city. A similar system existed in
China.

