In this regard, Zhang Wuchang posted a message on Sina's blog this morning, saying that he did not remember such a meeting of cadres, nor did he know that there was such a book "Assembling for Public Publication". It is said that none of the documents cited by Professor Zhou are his own works. I hope Professor Zhou won't listen to hearsay.
The full text of the response is as follows:
Three Solutions to Selfishness and Market Reaction
Recently, Zhou Xincheng, a professor and doctoral supervisor at the School of Marxism of China Renmin University, published an article in a mainland journal entitled "People can sum up their theory in one sentence: Eliminating private ownership". When this topic appeared on a website, it was changed to "Professor NPC severely criticized economists such as Zhang Wuchang and Wu Jinglian for advocating private ownership". This article was hotly debated on the Internet, and many friends paid attention to it, and they came to post it to express their condolences, thinking that I had a problem. I have always ignored this criticism, but I have paid too much attention to my friends. 1 month 16, Hong Kong's Ming Pao reported with the title "Party magazine reprinted Zhang Wuchang's article advocating private ownership", so I traced the original text of Professor Zhou Xincheng, and the paragraph that mentioned me was a bit puzzling, so I should respond.
Professor Zhou mentioned that there are many question marks in what I said. The strangest thing is that at a cadre meeting, "the leading cadres present here not only did not refute, but publicly published Zhang Wuchang's speech." I don't remember such a meeting of cadres-I didn't attend all the meetings-and I didn't know there was such a compilation published in public. What's more strange is that my name can't be found in the literature cited by Professor Zhou, and none of them are my works. Did someone do it for nothing? I hope Professor Zhou will read more of my articles and don't listen to hearsay.
I am here to clarify my views on the word "private property" in the simplest terms.
Three solutions to selfishness
There is no other choice to translate the English word private into "private". Unfortunately, China culture has a negative meaning to the word "private", but it is a great cultural tradition. As an empirical science, there are three different views on selfishness in economics.
The first view holds that selfishness is innate. This originated from the book Selfish Genes published by Richard Dawkins 1976. This book is very important, profound and convincing. But in economics, I don't need this selfish explanation.
The second view is that selfishness is the result of natural selection. This originated from The Wealth of Nations published by Adam Smith 1776. It shows that people are not selfish and it is not easy to survive in society. 1950, my teacher, Aqin, published an important article, which expanded Smith's point of view and influenced the debate of a generation of economists on economic scientific methods. A Qin said that the pursuit of maximizing human interests is the result of natural elimination. This view has a great influence on me, but the concept of selfishness I use myself is neither natural elimination nor natural selfishness.
The third selfish view, which I often use, is an arbitrary assumption that selfishness comes from economics. Under this assumption, it doesn't matter whether human beings are born selfish or not. Furthermore, this arbitrary and selfish assumption is the maximization of personal interests under the limitation of economic theory. If you give a child two choices, he can choose one or two of the same sweets. If he chooses two and abandons one, it is selfish.
The summary of selfishness is the law of demand.
The law of demand is the soul of economics. Without this law, there would be no economics that I have been engaged in for decades. This law means that if the price of any item falls, a person's demand for this item will increase. The price mentioned here is limited, and its change leads to the change of demand, which is the result of individuals striving for maximum benefits. So we can say that the law of demand is also the law of selfishness. Economics can not talk about selfishness, but it can not be without the law of demand. The so-called maximization of interests under restrictions can be simplified to the word "selfishness". If you want me to stop being selfish, let me use more words. If I don't say that individuals strive for maximum benefits under restrictions, I will use the word law of demand, which outsiders don't know. The power of the law of demand not only replaces the statement that "selfishness" or "individuals strive for maximum benefits" sounds a bit like values, but more importantly, this law has far-reaching changes and uses. Unfortunately, what should I say to people who have never studied economics? It is not so easy to explain the law of demand.
Back in those days, when I was a graduate student, I studied hard for three years to feel comfortable for the phrase "the price dropped and the demand increased". It takes more than 30 years to master coming and going. Nowadays, western economics professors not only ignore this law, but even stop teaching it. This is the sorrow of economics. I put forward the above three selfish views because I want to clarify that when I say that people are selfish, I only mean that people are obeying the law of demand.
The market is an arrangement to deal with competition.
A far more complicated problem is that in a society with scarce resources and a large population, competition is bound to appear. Like any competition, there is a standard to measure who wins and who loses. The market we see every day, the highest price wins, and the standard that determines the outcome is the market price. I have repeatedly stated that there are many standards that can determine the result of competition, but the only one that will not lead to the dissipation of rental value is the market price. This is because when you want to buy what I have, you must produce something yourself and make a contribution to the society before you can pay the price I ask. Instead of using market price as the criterion to determine the result, adopting any other criterion will definitely lead to the dissipation of rent value to some extent. I clearly explained this view to my friends in Beijing in an article in 1979. They attach importance to this article.
The core issue here is the so-called Coase's law put forward by my good friend Coase in 1960. Coase said that without a clear definition of rights, the market would not appear. If there is no market, the market price cannot be used as the standard to determine the result of competition. The use of any other competition criteria, such as personnel relations, seniority or the use of force, will inevitably lead to a certain degree of rent dissipation. Unfortunately, there is a clear definition of rights, that is, the private property right that Professor Zhou Xincheng opposes, commonly known as private property in English and fee in law. Simple? Absolutely.
On the other hand, the cost of defining rights is quite high, and the cost of market formation is also very high. These are expenses other than production costs, collectively referred to as transaction costs. In a developed country, transaction costs usually account for more than 70% of national income. Today, we have banks, commercial organizations, lawyers, police, courts and so on. , and the cost is huge, in order to strive for the market price as the criterion of competition, in order to reduce the huge rent dissipation that will inevitably occur when there is no market but competition. The huge rent dissipation is the experience of China before the reform and opening up. We can't talk about private property, or even use the word "private", but do we want a market? The main contribution of the market to society is that under competition, the use of resources and the distribution of income must be decided, and the adoption of market price is the only standard that will not lead to the dissipation of land rent value. However, the adoption of market price standards requires a clear definition of rights! This is another way of looking at Coase's law.
The core of China system is the definition of rights.
In a little book published in 2008 called "China's Economic System", I clearly stated: "For more than 40 years, I firmly believed in the value of private property and market to society. But I have never opposed the existence of China. From the first day, I opposed the reform through democratic voting. "
I went on to say, "What China has achieved makes me angry! Political parties have always had difficulties, many of them. Party member has 80 million. How should we arrange the party's responsibilities and implement party rules? Incredible. "
I went on to say, "The Party has led and guided the reform. However, the main reasons for success are China people: diligence, intelligence and endurance. As long as they can see that there is hope for tomorrow, they can endure great suffering today. "
The book China's Economic System is actually a long article. I have studied the economic development of China for 30 years, and it took me three years to find an explanation. The focus of this paper is to clearly define the rights between governments and citizens at all levels in the region through the contract system at different levels in the region. Because the land use right fell into the hands of counties, there was fierce inter-county competition. We can not talk about private property, but a clear definition of rights is indispensable. In fact, the two are the same thing.
Recovering royalties can be a joke.
I am not a reformer. I just think that I fled and starved so many children in Guangxi during World War II, and I can't hide my concern for the country. 1979, I went to Guangzhou after a long absence. When I saw the devastation there, I couldn't help taking my two nieces to study in America. Following China's economic research, I wrote "Will China Go Capitalist?" in 198 1. That little book is actually asking whether China will move towards a market economy, and accurately infers the road that China will take. At Coase's urging, I gave up my position in the United States in 1982 and returned to Hong Kong to teach. After I returned to Hong Kong, friends from Xinhua News Agency encouraged me to write articles, and both Beijing and Shenzhen provided assistants to help me find information and analyze China's problems. I wrote three books in one breath: The Words of Orange Gate (1984), The Future of China (1985) and On China Again (1987). The last two books are printed in Beijing, each with 2000 copies, which means internal reading. I am very happy. If Professor Zhou Xincheng thinks that these two books mislead friends in Beijing, then I should consider taking back royalties (smile).
198 1 year, when I thought about returning to Hong Kong to teach, Coase, barzel and other colleagues thought that my understanding of the operation of the economic system was unprecedented. I'm eighty-two today. I'm really tired after running in the mainland for so many years. At dusk, what I can do for my country is almost enough. Professor Zhou Xincheng wants to eliminate private ownership, but I don't know what private ownership is, so I can neither agree nor oppose it. Today, the land in Hongkong and China is not privately owned, but the right to use and the right to income are clearly defined. China's cultural traditions are not easy to accept. I hope Professor Zhou will not object to the clear definition of rights, nor to the market price as the standard to determine the outcome of the competition. As long as we can keep these two points, it doesn't matter what else we say.