Abstract: Peasant poverty during the collectivization period manifested itself in widespread phenomenon of overspending households.Allowing overspending can be seen as a moral subsidy from the government to the farmers and a historical starting point for China's anti-poverty cause.The design and practice of the collectivized system of centralized labor and uniform distribution is the institutional root of the overspending phenomenon.Overspending occurs when the distributed income is greater than the labor input, reflecting the averaging in the collectivization system:The collective quantifies labor inputs while taking into account the needs of farmers' "survival ethics".Such system is designed to become a livelihood guarantee for farmers in need, but it also leads to problems of equity and efficiency, resulting in a vicious circle of overspending and thus affecting the stability of the collective economy.Although the state and farmers have made many attempts to solve the overspending problem, it was not until the widespread household contract responsibility system in rural areas released the reform dividend, motivated farmers to develop production, and improved the efficiency of resource allocation and resource utilization that the overspending problem was completely solved.This provides important historical insights for the current implementation of the rural revitalization strategy, consolidation of poverty eradication and promotion of rural development.

Key words: collectivization, household overspending, rural reform, rural revitalization