2022/04/29
16:00
CHINA'S HYPERINFLATION
& REVOLUTION
Economic warfare: State market creation and out-
speculating the speculators
Dow
Telu
TO
Eugenio Anguiano
"Why do the Chinese answer to every question that they
have to go back to the liberation period policies?"
(World Bank minutes 1982)
"Rising prices are not good, falling prices, too, are not
good for production. It is better to be groping for stones
to cross the river more steadily."
(Chen Yun, 7 April 1950)
CHINA'S HYPERINFLATION & REVOLUTION 経済戦争：国家による市場創造と投機家のアウトスペック化 ダウ・テル TO Eugenio Anguiano "なぜ中国はあらゆる質問に対して、解放期の政策に戻らなければならないと答えるのだろうか？" (世界銀行議事録1982年）「物価の上昇はよくない、物価の下落も、生産にはよくない。より安定して川を渡るために、石を手探りしているほうがいい。"(陳雲、1919年4月7日) (陳雲、1950年4月7日)
陳 雲（ちん うん、チェン・ユン、1905年6月13日 - 1995年4月10日）は、中華人民共和国の政治家で、中共八大元老の一人。1980年代と1990年代には、陳雲は中共党内で鄧小平に次ぐ第2の実権者であった。
18:30
THE URGE FOR REFORM
"Saying that the market is
limited to capitalism is wrong.
Why can't socialism practice
market economics?"
(Deng Xiaoping 1979)
But how to introduce market
mechanisms into a command
economy?
Deng Xiaoping
T₂
SEN
STU
isabella Weber
Eugenio Anguiand
THE URGE FOR REFORM 「市場が資本主義に限定されているというのは間違いだ。社会主義が市場経済を実践できないのはなぜか。(鄧小平 1979)
しかし、指令経済に市場メカニズムを導入するにはどうしたらいいのだろうか。
鄧小平 T₂ SEN STU isabella Weber Eugenio Anguiand
22:00
okay it's 1003 so we will start and we will begin again good morning good afternoon in some places to everybody thank you very much for your interest i remind you we are at the cycle of conferences of the center for chinese mexican studies of the school of economics of nam this is part of the effort we're doing together yolanda trapaga delfin and myself and i invite you very much to look at the conferences that we usually do every two weeks sometimes every week since 2005. also we have an interesting group of videos powerpoints audios on a wide variety of topics and issues i do also invite you to our next conference that will be in one week no which will be on on trade policies by china uh under the analysis of the world trade organization and we will have willie alfaro who is in charge the director of the division of trade policies of the world trade organization i think this is going to be an interesting a conference for many of us know er today i am very happy uh to to uh to introduce you to dr isabella webber isabel is a political economist working on china trade and development issues and also in here on here the history of economic thought she's an assistant professor of economics at the university of massachusetts in amherst and some of us have read her first book how china escaped shock therapy the market reform debate which won the johann robinson price in 2021 and so we are very happy to uh well here listen uh to some of the opinions analysis on this topic by isabella no you are very welcome isabella and as i mentioned to you we usually have a presentations of around 30 to 45 minutes and a similar time for questions by the chat of sue so again good morning and i'm very happy that we would meet well thank you so much for having me it's a great pleasure to have a chance to share some thoughts on my book with you in these extraordinary times it's actually my first time that i have a chance to present this work in in mexico before presenting in brazil and colombia and so on but it's the first time in mexico so i'm very excited and hope there will be a chance to discuss in in the q a um so let me try to share my screen and i hope it all works can you see my screen now yes perfect yeah okay um as enrique has already said the title of my book is how china escaped shock therapy the market reform debate this book is based on my dissertation and when i started working on this topic already several years ago there was no way for me to know how timely this question would become in the context of the birth events in 2021 and 2022. in particular the context of the regulatory shift in china last year and the context of the dramatic events that are unfolding in front of our eyes so in that sense the book has been in some sense unfortunately been very timely i still hope that it can help us shed some some light in in terms of providing some historical context um to to the kind of juncture that we are at at the moment the book is really a book about the 1980s i'm thinking and conceptualizing the 1980s as a crossroads in the global economy from china's perspective it's the beginning of china's economic conversions with the west that is to say china's weight in the global economy has increased in waste that has brought it closer towards the major western economic powers but this convergence in economic weight has not come along with the wholesale institutional assimilation of the chinese economy and political system with those in europe and the united states even though china has deeply marketized and has been deeply integrated into global capitalism i think to understand this tension between this economic convergence without wholesale institutional assimilation it is worth going back to the first decade of reform in china and understand what kind of path of reform china has embarked on the 1980s also marked a great divergence between what came to be called russia's fall and china's rights which of course cannot be reduced to a simple policy choice in reform policy making but nevertheless it is linked to the difference in market reform approaches in the two countries just to give you a very simple estimate to illustrate what i mean by crossroads of the 1980s if we use medicine gdp data and we go back to the early 19th century then for china this is basically a picture of fall and then re-emergence starting in the 1980s whereas in contrast for the ussr it's a picture of rice and then fall where the turning point is really the 1980s um this experience contrasts sharply but also with the experience of the united states where the same period basically came about came along with a rapid rise and then some sort of a stagnation or slight decline in importance in the world economy if we look at the transition in the two format signs of socialism from the perspective of two basic macroeconomic indicators that is cpi and real gdp we see in the case of russia a picture of hyperinflation and gdp collapse in fact the gdp collapse came along with one of probably the most dramatic periods of de-industrialization in recent history along with a pretty severe crisis in mortality public health education and so on in contrast in china the pace of growth in the cpi has almost consistently outpaced has almost consistently been outpaced by the growth in real gdp with the exception of the um late 1990s so that in contrast to russia we have a a a an image of a relative price stability under conditions of very fast growth of course in china inequality has been rising very fast and problems of environmental degradation and social justice and so on have been on the um on the minds of of scholars of china's development for years um if we compare the evolution of inequality in china and russia we can see that in russia inequality have increased in the context of a overall decline in incomes and then re-emergence and levels of income whereas in china it's basically the rich pulling ahead of the poor the reform approach in russia has been generally labeled as that of shock therapy and of course there's debate of who exactly where the architects of shock therapy and so on and i don't want to go into the details here i just want to characterize this basic approach to thinking about the transition from a plant to a market economy and by i'm summarizing what has been commonly acknowledged as being the four major ingredients of this approach that is the liberalization of oil prices combined with macroeconomic austerity remarkable economic austerity is meant to control the general price level and these two elements taken together is what came to be known the big bang this was then meant to be complemented with trade liberalization in order to integrate the economy into the global market and finally privatization but even the most dedicated shock therapists acknowledge that privatization was a relatively slow complicated process of institutional rebuilding so that the shocking element in shock therapy really was the big bang and the basic logic was that um shocking the system from an old to a new system would require um starting with such a big bang from the perspective of neoclassical economics this is in some sense um emphasizing that one first test to get the prices right otherwise there's no hope of having a market economy there is a rich literature on the path that china has taken there's a rich literature on the economic policies that have been implemented in china but there has been relatively less attention paid to the economics of china's reform approach that is the intellectual underpinnings that inform the ways in which china has been going about its reform approach this reform approach i've been calling in my book and others have been using similar language and gradualist experimentalism that is the idea of feeling the way forward which is not only about pace but also different logic of reform as i will elaborate throughout this talk my book basically has two parts the first part is a kind of exercise in zooming out and asking what different kinds of modes of market creation and price regulation were invoked in the context of china's 1980s market reform debate and were part of the large tapestry of knowledge and institutional legacies that informed market creation in china i start with a chapter on the ancient tradition of statecraft going back to the guanza that is 300 bc where the idea is to illustrate that marketization in china was not simply the same as westernization but that china had its own very long legacy of market creation through the state and market participation in the name of prior stabilization some of the principles that i'm developing there are that economic and social stabilization can be achieved through market participation by the state where the idea is that the state should be focusing on what is heavy to shoot at what is light which is to say should focus on the essential parts of the economic system while governing the non-essential parts by stabilizing the essential parts what is essential in this context changes over time but in the imperial context or even more so in in ancient times this was really about methods salt um grain and some other basic commodities the great the question of grain is probably the most canonical example in this context since the so-called ever normal granularity persists that over centuries was an institution that was run based on the principle of participation by the state in the market where the state would basically run public granaries that would buy grain in fall when the supply was very high and the prices were collapsing and within supply grain um in in spring and summer when supply was short and prices were high thus basically aiming to stabilize prices through market participation of course there were all sorts of crisis and repeated debates and so on and i'm not suggesting that this was all the same over thousands of years but just as a basic logic i think this is an important reference point but the idea of my book is not to say oh we can explain china in the 1980s simply by always having been china by some sort of an essentialist notion of what china has always been um therefore i'm also engaging in detail with the debates over price control during um the second world war in the united states which allegedly is the freest market economy um in the world and in particular also the question of price decontrol after the war since the transition from a planned war economy to a post-war market economy was an important reference point in the debates over market reforms in the socialist world since in many ways this had been the last um incidence of such a transition from a plant to a market economy that people were thinking about these issues in the 80s um could draw on as you can see in this graph um in the second world war um prices were actually surprisingly stable compared to the first world war in the united states um and production was um surprisingly strong again compared to the um first world war and this came along with a very comprehensive and far-ranging um price control regime after the war these price controls were lifted more or less um overnight basically as a result of a political meltdown that resulted in in in a discontinuation of these price controls which then um gave rise to a very sharp increase in inflation and as you can see here this graph starting in 1946 um in the context of decontrol so in that sense this this sharp inflation after the war in some sense was a form of a small bang in the sense of very sudden liberalization but of course china also had its own experiences during wartime and in fact these experiences were incredibly important for the debates in the 1980s if anything i think they would have been the most important reference point for the question of how to recreate a markets in china's command economy as you all know there was a a long-ranging civil war in china and one interpretation is that the communists basically won that war not least because they were very successful at economic warfare that is to say that they re-integrated the commercial links between the countryside and urban centers in their liberated areas and ensured that the currencies that they were issuing had something important to buy stuff like cloth textiles um and then in return in the cities food um grain and so on in fact i made this connection um thanks to a note in um by a word bank official in minutes on meetings with chinese counterparts in 1982 where this world frank officially noted why do the chinese answer to every question that we have to go back to the liberation period policies and these liberation period policies followed a similar kind of logic of state market participation as the one that i have tried to illustrate based on the idea of the ever normal grenary in fact probably the most famous slogan on china's reforms it is better to be groping for stones to cross the river more steadily has been invoked by one of the key architects um of china's early economic reforms chunyun in april 1950 that is um pretty shortly after the revolution when the new communist government was struggling with the question of how to continue their effort at um stabilizing prices moving out of the hyperinflation during the civil war so the complete quote here then is rising prices are not good falling prices too are not good for production and within the consciousness of china's leaders their success and bringing hyperinflation under control which the nationalists had failed to do has been seen as a key element in the initial success of the communists and thus has been considered an important part of the legitimacy of um their government so it's been politically um something that um that that carries a lot of meaning okay moving fast forward to the 1970s and moving into the second part of my book which kind of moves from these like big picture reference points um to the debate in the 1980s um into this very close reading of the market reformed debate in particular they debate over the questions of price liberalization i think it's important to acknowledge that the urge for reform in the late 70s was very great indeed i'm not saying it was universal but in the many interviews that i have conducted which of course is a biased sample so there was some interviewing reformers since i was interested in the debates amongst reformers but across these different kind of economic reformers who violently disagreed on the question of how to reform um there was pretty widespread agreement that in the late 1970s reform was pretty much a choice of no no choice since the cultural revolution had long run out of steam the attempts of huago fung to initiate a um another 10 year plan to push a hat with industrialization had very quickly run into a crisis when the projected oil findings that were meant to finance that big push did not come forward so that in the late 1970s china was really in search for new kind of economic model in this context very early on there was an acknowledgement that this new um economic model would require china to revive markets in a more systematic way in fact already 1979 deng xiaoping told a foreign journalist quote saying that the market is limited to capitalism is wrong why can't socialism practice market economics but the question that was fiercely debated amongst reform economists was how to introduce market mechanisms into a command economy on the surface this might sound like a technical quibble among technocratic economists but as i argue in the book the whole question of market recreation i think turned out to be quite consequential for china's subsequent path very broadly speaking there were two camps of reformers in the book i'm distinguishing more and i'm engaging with a whole range of individuals and quite some detail but for the purposes of this short presentation i'd like to just focus on on two broad groups on the one hand they were they do attract market reformers who broadly speaking were composed of young reformed intellectuals who had returned from the countryside after having spent their youth there during the cultural revolution as so-called sent down youth they were backed by an older generation of leaders such as for exam for example whom you can see here in this picture and they really emerged as an important force in economic reform policy making as a result of their engagement with the agricultural reforms the agricultural reform started more or less as a bottom-up initiative but in order for these bottom-up initiatives to be turned into national policy a lot of systematic research was being conducted on the ground to understand how these experiments were playing out and in this context the so-called nonfatsu the agricultural development group played a critical role and was some sort of a catalyst for these round reform intellectuals they had an educational background being self-trained in marxist classics but also maoism during the cultural revolution when they basically formed um reading groups and we're trying to and think about um the the basic political economy questions in china in the 1970s when they returned to the cities um and when the universities restarted their entrance exams they also very quickly read up on a whole range of vests and social sciences um trying to basically catch up with social science theory and methods as quickly as they could they drew their intellectual inspiration importantly from the political economy of agriculture but also from empirical studies in china in the state and enterprise sector and later on also in other countries so if i'm asking how to create markets in a command economy i think it's worth quickly illustrating um what was at stake with this question or what what the challenges were so if in a very simple heuristic which of course is a simple idealized heuristic um and it's also kind of operating here on the national level where of course there were different layers in terms of provinces and so on but with all these caveats in mind if we um we want to very simply summarize the old model we could say that it was built on the idea of one big national workshop where basically there were some higher level command authorities that would be commanding outputs and assigning inputs to all the production units whereas each production unit would have to deliver its um output to the next production unit and would in return receive um certain inputs that was assigned in order to fulfill the plan on the surface then prices here are simply a shadow operation simply an accounting operation however in reality um they also performed a critical role as a distrib this as a mechanism of distribution since these prices were set in a way that did not necessarily reflect the costs of individual individual production units or even whole sectors but we're rather set in a political sense with an eye to distribution and development efforts so the prices of agricultural votes were set artificially low which resulted in a constant prices are between the um rural sphere and the urban industrious fear but also the prices for heavy industry and you we know that this whole depiction here is only on the urban industrial economy and i'm happy to comment more on the rural economy in the q a so the heavy industry prices in the urban industrial economy were also set relatively low as a way to encourage more downstream industrialization at the same time the prices of downstream non-essential consumer goods were set relatively high in order to extract liquidity from households and thus ensure price stability and and and basically ensure that there is no access demand what happened more or less endogenously as a result of the agricultural reforms was the emergence of a second market track in many ways such market tracks already existed during the mars period but they were basically very limited marginal occurrences that were more or less suppressed throughout the turbulent years of the period in the reform era then they became much stronger and much more prevalent since as agricultural households started to produce not only for the plan but also for the market they were generating cash incomes and they were using these cash incomes to buy stuff like wrist watches bicycles sewing machines radios and so on but soon also the township and village enterprises emerged which meant that in the agricultural sphere there was also a demand for um more upstream kind of industrial goods that would be serving as inputs into the township and village enterprises and furthermore of course if the downstream urban industrial sectors were expanding then they would also have expanding demand for these more upstream industries so that more or less as a result of a demand pool kind of dynamic this production for the market beyond the plan was emerging more or less endogenously so the question then was whether this emergence of markets at the margins under this dual track kind of system was a good thing that should be fostered and systematized and used or whether it was a bad thing that should be suppressed and some other reform approach should be um pursued in this context um one conference in 1984 the so-called morgantown youth conference played an important role where basically um a team of organizers in beijing summoned young scholars from across china based on an essay competition where all of these young scholars were invited to submit essays on questions of reform and then gathered at morganshine mountain for several days discussing questions of economic system reform it very quickly became clear that price reform was the most pressing and most important question on the table so that these various groups of um scholars started to focus on that question now after days of debate they basically settled um on a proposal that suggested that the dual track price system should be turned into a formal reform approach and should be turned into national policy this is in fact also what happened in 1985 um and chaotian who was prime minister in the 1980s and was an absolutely critical player in the creation of these new kind of economic policies that explained to local cadres what this policy would mean this is from the collective works of jazz and i find this a useful way to understand what the um national government was intending with this policy since he was trying to explain it to the people who would have to implement this policy um and he was saying that basically this would mean four things letting go of small commodities the state should focus on controlling important parts of the economy and not over stretch and trying to control all parts of the economy it would also mean reforming and adjusting the prices of of important goods um by improving the price management system and adjusting the prices in small steps so that they would come closer to some notion of cost or value but fourthly it also meant participating some quote after having enlivened prices by letting them go the state had to participate in the market to regulate the prices as in the first years after liberation for sectors where prices were allowed to fluctuate on the market the range of the fluctuations should be limited by market participation that is to say the state should have stocks to be able to add supplies to the market when the price was rising too high and purchased when the price was falling too low in this context and imports could also be used but only as an emergency balancing mechanism and in fact this kind of buffer stock logic of stabilizing the prices of important goods continues to operate until the very day just today one of the headlines that i saw in the economic news on china was that china has released stocks of its egg reserve apparently the chinese state is running an egg reserve since the prices for eggs were increasing too fast in the context of general food price pressures okay let me now move to the competing reform camp which i am broadly speaking calling the packaged price reformers the main members of this group were middle-aged established intellectuals were often um trained in orthodox socialist economics in the 1950s and 60s and then in the 80s were the first to study modern economics in the united states and england they were joined by young academics mostly scientists and engineers who and they shared a vision that mathematical models could model the old system and could model a target system for reform and could help to re to formulate china's path from the old system to the new system they drew their intellectual inspiration from the socialist calculation debate of the interval period um in fact i've also written on this in separate articles and um we're in close exchange with eastern european immigrant economists such as the polish bruce um otta sheikh from the czech republic and kornai who of course was not an immigrant economist but someone who was going back and forth between hungary and harvard they also drew inspiration from monetarists such as friedman and gregory chao and basically the idea of overnight price liberalization as a recipe for for instantaneous miraculous um success was in this context repeatedly um linked or anchored on the idea of an airhead miracle in best german post-war um reform where ludwig earhart allegedly would have instigated the german economic miracle simply by liberalizing all prices overnight um at least this was the story that uh wilton friedman and others were bringing to china and in fact in a forthcoming chapter i'm kind of debunking that story by contrasting it but some of the recent economic history research and german language literature okay um when i'm referring to these exchanges with eastern european immigrant economists i think it's important to highlight the critical role of the world bank the world bank invited many of these economists to china and facilitated exchanges between chinese reformers and these economists who used to be reformers in their own contacts but by the time had basically given up or emigrated to other places this is a picture here of the 1982 world bank conference on questions of price reform from the side of the eastern europeans the only person whom i say got to meet in person was a a man called peter kendall who is the second from the right in the first row who when i met him in paris in a coffee shop in 2017 was wearing the exact same outfit that he's bringing in this picture in 1982 pointing out to me that he had treasured and preserved this outfit since um it was such a bold move to go to china and discuss with chinese officials one of the most critical questions of economic system reform in 1982 at a time when he thought that if he had returned to his native hungary he might well have been arrested at the border i think that this illustrates just how bold not only the eastern europeans were who um engaged in this dialogue but also how bold the chinese were in 1982 that they basically discussed these critical questions with people who were basically considered some some sort of dissidents in in their home countries out of these exchanging this broad tapestry of trying to catch up with modern mainstream economics emerged a critique of the dual track system the argument was that the dual track system would create friction and contradiction and in fact would amount to a more irrational kind of price system than the pre-reform system it might have some role to play as the short-run um transitional mechanism but would have to be overcome as quickly as possible important um the the the dual track price system would reside in inherent rent seeking and corruption since the officials running these production units would now pri face high prices on the market and low prices in the plan which would immediately give incentives for bribery and corruption their recommendation then broadly speaking was to adjust prices based on uh complete models of the economy to basically set up some sort of a equilibrium price vector impose tight fiscal and monetary policy and then let go of prices as quickly as possibly most importantly let go of the core prices the most important most upstream prices stuff like energy steer and so on this was then meant to be combined with wage and tax reform and the market participation by the state should be replaced with indirect macroeconomic policies however a critique of this kind of approach to price reform that more or less resembles analytically the idea of a big bang emerged within china from the side of the dual track reformers they argued that such a big bang that is the liberalization of the most upstream most important prices would reside in cost push inflation without adjusting the relative prices and quantities since the prices in these upstream industries were in the pre-reform era by design too low they would more or less as a necessity be shooting up and since all of these production units they faced a soft budget constraint and were not actually market oriented enterprises they would simply hand down these large price increases to the next production unit which eventually would reside in a wage price spiral which could not be contained by macroeconomic control not only because china didn't have sufficient institutional capacity for macroeconomic control but also because this kind of process was basically a process of endogenous money creation that would be very hard to suppress with macroeconomic austerity the core of the debate then was not whether or not to liberalize downstream prices was not whether or not to let go of so-called small inessential consumer goals especially the highly profitable sectors that were already in surplus but the core of the debate was whether or not the state should keep control of the industrial core of the economy and operate a regime of state market participation in a dual track system in these core parts of the industrial economy in 1986 china came very close to implementing a package price reform that was gradually boiled down but nevertheless was focused on liberalizing the most important upstream prices this was ultimately stopped by the intervention of a delegation to hunger in yugoslavia that was sending back telegrams warning that this um this kind of step would reside in the kind of cost push inflation that i have just tried to describe to you in fact this delegation was interestingly sponsored by george soros who's here in in the picture on the bottom meeting with that delegation in 1986. in 1988 don xiaoping himself took initiative towards uh radical price reform and by 1988 the social and political tensions that were unleashed through the reform process were mounting to a point where um where uh then japan seemed to have um found that he needed to somehow push ahead and crash through the barriers that had um build up or as he put it only once prices have been straightened out will we be able to step up reform we cannot not carry out price reform we have to face the risks and difficulties head on we must not be afraid of risks and be even more courageous corruption by then and social inequalities had become a very serious um issue and there was a hope that there's a radical price reform could um elevate these difficulties don't you ping then also adopted more or less the same same kind of rhetoric that we can find in in police for shock therapy more broadly in very different contexts that is the idea that long-term pain is worse than short-term pain so in other words you have to kind of swallow the bitter pill now in order to lay the foundations for future development in fact don't tell pigment as far to say that a lack of price reform impedes china's goal of catching up with western countries by 2050. um on august 18th the state tv then reported that the politburo had passed in principle a plan for price and wage reform and this was happening in a context of already rising price distance um the dual track price system had had progressed um to a point where um several um were more and more also not at all unimportant economists sorry not at all unimportant commodities were being um priced on the market and the reaction to this announcement of um this prize reform plan having passed in principle was in this broad context of enormous tensions enough to basically unleash bank runs and panic buying that were so severe that the chinese leadership reversed this plan and then basically in fall of 1988 more or less put reform more generally on hold inflation continued for a while and this tension between a reversal of reform and rising prices i think is part of the economic context in which then um the the the large scale protests in in 1989 are occurring in 1988 mitt and friedman made another appearance in china in the fall of 1988 where he was once more urging for rapid liberalization but at this point um the window of opportunity um had basically closed and um uh the the the political dynamic was at a point where basically reform was on ice so this didn't have much repercussions in some i think we can contrast two competing logics of reform where the basic logic of shock therapy that i think we can also trace in the chinese context is one to start from comparative statics and to start from a stylized model of the old system and a theoretically derived target model for the future system where reform is then being thought of as a shock that enables the transition from the old to the new system the target system is um a should be a a a system that is composed of complete markets which in this vision can only be achieved by destroying the plan in contrast the logic of the dual track system is i think to start from an analysis of prevailing economic forces and institutions in order to identify ways to create reform dynamics initially at the margins of the system then use these unleashed dynamics to reindustrialize the core hoping that this would work without undermining social stability which is of course always an extremely delicate balance market forces here then are means in a larger transformation process and need to be unleashed steered and guided and stabilized by the state rather than being a goal in themselves in conclusion then i would say that china's policy choice was not the big bank but the dual track system because china's leaders were ultimately not prepared to risk the survival of the communist state and to endanger their vision for long-term development the big banks seem to promise a scientific solution to economic system reform but was ultimately found not to create a viable market economy while being enormously risky since it was built on undermining the functioning of the core of the plan such built on the on undermining the functioning of the backbone of china's industrial economy the dual track system had more or less gradually emerged as policy alternative while these more blueprint type approaches were trying to be worked out this was crea the dual track system was created through an extreme experimental reliance on techniques of market creation by the state always distinguishing between essential and inessential goods and relying on a systematic assessment of the concrete economic conditions and dynamics that prevailed across the different systems in areas of the economy i think that the the the the fact that the dual track system was operate in operation was basically what allowed china's leaders not to go for a big bang because however imperfect the dual track system was and it did create a lot of problems including corruption it nevertheless presented an alternative that was already in operation thank you very much thank you very much isabella very interesting and i think a very provocative in terms of concepts and in terms of reflection while we'll receive some questions and comments and comments and suggestions again through the chat isabella let me pose you two comments in with some questions on the one hand uh the the i don't know if you are aware you very probably are and your opinion would be very welcome the discussion of a transitional institutions by a qian jinki i don't know if you know him he's today in chingua university and he published widely with danny roderick and other institutions uh and this discussion that you post of this dual track system no is highly integrated in this discussion on transitional institutions with the addition that he explicitly discusses the issue of the property in this transition period no which means you can have a transition in terms of uh incentives but surprisingly and in in terms of of results the property is still in the hand of the public sector now from a latin american perspective this is very important because countries such as latin america have gone massively through liberalization processes which are a synonym to privatization this was not the case in china so i i don't know if you're aware of mileage at least discussion uh sorry so discussion of more in the 1980s 1990s what is your opinion on this and then isabella as you might imagine from your perspective what is the relevance of this dual track system in 2022 no is it still alive is it relevant what does it mean in terms of policy options for the current public sector etc again two questions before we receive some questions by the chat no yeah these are great questions thank you very much um on the work of uh tianzini and daniel roderick and transitional institutions i would say that this is basically complementary to my work um i think the difference is that my book is basically on the level of ideas right i've interviewed all these people that were involved in these debates in the 1980s and i'm kind of trying to trace um the the alternative arguments that were at stake in this critical debate whereas their work as far as i understand it it's more of an institutional economics kind of approach trying to um trying to distill some of these institutional dynamics where i'm basically trying to combine institutional economics within intellectual history um on the question of property rights yes this is of course incredibly important and this is basically um uh in some ways an important limitation of my book since in the 1980s it's not like there were no discussions around property rights but they weren't as prevalent yet um so the the the most pressing question in that context was the question of price reform um and in trying to navigate this incredibly messy kind of primary empirical material that i was collecting i used price reform as my anchor point and therefore focused on this primarily however this is not to say that these two approaches don't also tell us something about property reform since um uh if you take the the example of the of the um of the dual track system then this also meant that as these production units started to cater not only to the plan but also the market they were starting to become internally transformed from entities that were basically implementing commands and orders from higher up planning authorities to more and more market-oriented kind of enterprises which then basically completely changed their logic of operation and which was in many ways the starting point of the whole debate around questions of property rights reform and in fact were in the 1980s in in the late 1980s in china first voices emerged that suggested that property rights reform should not simply be a dichotomy between private property and public property but that china should kind of move beyond this and try to come up with its own innovative institutional arrangements that would break through um the dichotomy of private versus public which is i think in many ways linked to this idea of dual track of combinations of market and plan of of the emergence of new kind of economic governance mechanisms on your second question the relevance of the dual track system i think um [Music] there are probably kind of three dimensions in which um i could emphasize the relevance of the dual track system today so first of all i think that for china's re-industrialization process in the 90s and 2000s it was very important that the backbone of the industrial system that was created during the mars period with all the faults of the maoist development model china had made some breakthroughs important breakthroughs in the development of heavy industry and the building up of a basic industrial foundation not giving up on this not um not risking that part i think was an important foundation for the development in the subsequent decades so from that perspective um this to attract system that basically preserve the core and transform the core but without um giving up on it without giving up on the ambition of having these industries within china under the um under the stewardship of the state i think was an important foundation of china's economic rights which in many ways um is um the tension that we are facing now right um in between the u.s um and and china um secondly i think from an institutional perspective of course the dual track system is now no longer like a universal kind of system uh far from it it basically still exists in in some of the most important upstream industries stuff like electricity um but it was the starting point of these decades of institutional reform so if you take the example of the electricity sector in the ways in which the electricity sector was being rebuilt then this was a very um careful cautious kind of process moving from a plant electricity sector under uh under one ministry um into a more corporate kind of structure than several and pretty radical experiments in the early 2000s which were then stopped and then basically this institutional rebuilding process has continued all the way until today in many ways i mean the the whole like cold shortages and electricity shortages in in in fall last year uh in some sense the latest iteration and there's like institutional fine-tuning um of of both the the corporate and property side but also the the price um price design side of the story so in that sense um the the the institutional arrangements and the commanding heights of china's economy are of course no longer what they were in the 1980s but the path very much links um to this um initial um setup to to this dynamic to the logic that is being established in the 80s and then thirdly i mean one of the most pressing um economic policy questions of the day i suppose um at least in the oecd i know in latin america this is probably more of an evergreen but the u.s and europe suddenly wakes up to the problem of inflation after no one has thought about this outside the context of development economics for years and years and years um whereas in the chinese context we see that we basically have an approach to price stabilization that does not exclusively rely on microeconomic stabilization through the central bank or through fiscal policy but that also relies on what i have been calling state market participation for important kinds of consumer and producer goats we could see this in 2021 when the price for um certain methods was shooting up and basically there was a very coordinated effort to increase the supply of these methods by encouraging state-owned enterprises to release some of their inventories and not hoard um these kind of metrics but also by releasing um national reserves and we can see this again as we speak in the context of the inflationary pressures from a cost push perspective that are emerging in the um global economy in in in the context of the war with ukraine and um the the the i mean oh all the terminal of the pandemic that we have all been talking about so that context then i think china really has an institutional setup that allows it to do price stabilization in ways that is quite drastically different and that could prove to be fairly critical in in in the current context very interesting i don't know if you can follow the the the chat usually we have a very active uh fellowship today we are very shy but again there are two questions so far one by jorge vampum i don't know if you can read it regarding this dual track group no what did they read among other things and then the second by professor bruno gandalgrove no yeah um so i think they were really incredibly eclectic in their reading many of them during i mean during the cultural revolution when they were still like part of these kind of informal student type reading groups um were certainly also reading tax that um were related to the new economic policy in russia in in the 1920s and questions of other forms of socialist organizations in that context um in in the in the late 70s it's really i mean there are translation efforts that that are incredibly far-ranging from tigered persons to um cybernetics so you have really like this very very broad engagement with a whole range of of social science theories and methods um where basically we have to remember that during the cultural revolution economics as a discipline had been more or less on hold and um the the the the social science access to western knowledge was also very very limited so this was really like a very major catch-up exercise they were also studying increasingly quote-unquote modern economics and started to adopt the language of of modern economics and replaced the terminology of marxist economics with the terminology of microeconomics and macroeconomics and price elasticities and all of that so that sense they did start to engage with new classical economics in particular however this was always combined with this very inductive approach of going out and doing field research initially in the agricultural experiments and later on also very large scale research survey exercises um in the state on enterprises trying to understand what the state of reform was and what kind of initiatives were emerging spontaneously out of this political opening that uh that that that that happened in in the 1980s so that it was not like there were like five attacks that they read and then they basically threw their ideas based on that and then they implemented them and then that's that's the story but it's rather there's a very eclectic search um across a whole range of different literatures combined and always rooted in these a kind of inductive survey research type of exercises okay thank you and there is another question isabella by professor gandu grover thank you very much and two questions related to the administrative and statistical functioning of the dual track system that you highlight no did the chinese government maintain some kind of national production plan and how did this affect the national accounting system in terms of gdp and growth statistics thank you very much yeah that's a great question um i mean we have to remember that by the beginning of reform china's statistical capacity was actually very very limited again because of the cultural revolution and what that had meant for um for the the statistic i mean the the institutions that were actually i'm collecting statistics and and systematically using them and so on right so in many ways the statistical apparatus was was being really big um through the reform period um there is a shift in in accounting that is occurring um i am not an expert on that and i should not pretend i am um i know that basically i mean there is a lot of price static statistics um available for the 80s um and they were collected with all sorts of different kinds of labels and there were very major price research institutes that also started with these um with these uh uh statistical um uh really like empirical data gathering kind of exercises they were also the first some input output tables constructed and so on um as regards the plan i mean the plan continued in the 80s of course but there was increasingly a shift then in the 1990s from this like straight out direct planning based on some sort of a command economy towards more and more indicative planning um which which came about um as a result of the marketization of the economy in this context then the the macroeconomic governance of course also became increasingly important but it's i think important to see that it not did not completely replace china's economic governance mechanisms but that beyond the surface of um of macroeconomic governance planning mechanisms and state market participation type of mechanisms continued thank you isabella and the last question by ambassador eugene who was ambassador in those times and in from mexico and china and asks a wh what would be the impact of this double track approach in liberating or in the liberalization of crisis in the 1989 political crisis is there some kind of link in your analysis and opinion yeah thank you great question um so basically what happened through the dual track system is that certain things that were that had very high market prices also became incredibly profitable so you could have a situation where people were basically within the first track um let's say high school teachers or university professors who are basically still receiving their salaries based on the plan type of standards suddenly we're making less money than the guy who's selling eggs in the streets or pancakes or whatever it may be so that you get this like very rapid um uh reshuffling of of distribution and these are very erratic kind of ways which i think was an important part of the social tensions that were built up um in in the 80s and then of course um as inflation became a problem those that basically had fixed kind of wage income some uh did not see their incomes just as rapidly as those that had market income so this is an these kind of inequalities the the problem of corruption of course also added to the impression of of of um of an unjust kind of system and a very unjust kind of transition so i think these are some of the points where where these dynamics um uh were connected and and were part of i'm not saying that 89 was simply an economic kind of outcome of inflation but i think that that this kind of economic dynamic fueled the political dynamic that was already in the making thank you isabella look i i think we are pretty much done in terms of questions i i would have one last issue i think one of the great contributions among many others is the issue of your book is the issue of the importance of the world bank in this reform and opening up process and if i understand correctly also the incidents incidents in this dual track system of the world bank no so in in in your opinion more recently it doesn't have to win 2022 but how is the relationship between more recently between the the chinese government and the world bank considering also a difficulties i remind you the harsh discussions and disruptions between the development research center in in 2012 and then this big book no with the world bank that got erased from web pages etc and you can still find it etc in your opinion how is how is the relationship today after this strong impact of the world bank in china in the 1980s and 1990s no yeah um so i'm really not an expert on the world bank's recent engagement in china since i i mean i interviewed all the people who were there in the 80s and so on but this doesn't give me any privileged expertise on on the more more recent developments i just want to like put this caveat i think generally speaking we can say that the relationship between the word bank and china was very different compared to the relationship between the word bank and other developing countries um for broadly speaking i think two reasons one is that china never became in a substantial way dependent on world bank loans right i mean it's not like they didn't take out loans but they never became indebted in a way where any kind of conditionalities and so on would could really have been um employed so in that sense from the chinese perspective the word bank has always been more of a source of economic expertise that the chinese government was trying to draw on and of course also credits that came in useful i'm not saying this didn't didn't matter but it didn't matter i mean it it wasn't existential to the chinese system whether they had these word bank loans or not so in that sense the relationship has i think been been quite different compared to the relationship um in in in in other contexts the related second point that i'd like to make is that of course the economic policy discourse today is by far no no longer as open as it was in the 1980s because in the 80s you have this kind of period where it's really not entirely clear um what the future will look like and china is very seriously engaging with a very wide range of possibilities nevertheless i think this this principle of consulting a very wide range of sources of expertise in important economic policy decisions to some extent continues where you can have a study by mckenzie and a study from the central party school being solicited on the same kind of topic right so in that same context then the word bank is one player amongst many rather than the one and only authoritative source within the chinese system okay thank you very much isabella again i i hope we can continue having this dialogue again as you might imagine this topic of a structural reforms and shock therapies is very important in latin america no since the 1980s latin america has have con and until today we have a long history of shock therapies and the the comparison with china is very relevant no so thank you very much congratulations again on your book and i sincerely hope we can continue in this diet thank you very much for having me i hope there will be a chance to learn more um from the latin american perspective on these questions of shock therapy and how it played out in china would be very interested to learn from everybody's insights and and views on that thank you we hope you can visit us sometime in person uh when the when the health situation allows you to no yeah thank you okay we don't want to take more of your time and thank you very much no have a great time and we will continue writing each other thank you was a very good presentation thank you thank thank you you
わかりました、10:03ですので、始めます、そしてまた始めます おはようございます、所々でこんにちは、皆さん、ご興味を持っていただきありがとうございます、思い出してください、私たちは経済学部の中国メキシコ研究センターの会議のサイクルに参加していますこれは、ヨランダ・トラパガ・デルフィンと私が一緒に行っている取り組みの一部です。2005 年以来、通常は 2 週間ごとに、時には毎週開催しているカンファレンスをぜひご覧ください。また、さまざまなトピックや問題に関するビデオ、パワーポイント、オーディオの興味深いグループもあります。また、1週間後に開催される次の会議にご招待します。世界の分析の下で、中国の通商政策について議論されます。世界貿易機関の通商政策部門の責任者であるウィリー・アルファロ氏が参加します。これは多くの人にとって興味深い会議になると思います。今日はとてもうれしいです。ええと、イザベラ・ウェバー博士を紹介します。イザベルは中国貿易と開発問題に取り組んでいる政治経済学者であり、ここの経済思想の歴史にも取り組んでいます。」彼女はアマーストにあるマサチューセッツ大学の経済学の助教授であり、私たちの中には、2021年にヨハン・ロビンソンの価格を勝ち取った市場改革議論から中国がどうショック療法を逃れたかという彼女の最初の本を読んだ人もいるから、ここで話を聞くことができてとてもうれしく思っているえー、イザベラによるこのトピックに関する意見分析へ いいえ、大歓迎ですイザベラ。先ほども言いましたが、プレゼンテーションは通常約 30 ～ 45 分で、スーのチャットによる質問にも同様の時間があります。またおはようございますそして、良いお会いができてとても嬉しいです、私を迎えに来てくれて本当にありがとう、この特別な時期に私の本についての考えを皆さんと共有する機会を持つことができてとても嬉しいです。」実はブラジルやコロンビアなどで発表する前にメキシコでこの作品を発表する機会があるのは初めてですが、メキシコでは初めてなのでとても興奮していますし、またメキシコで話し合う機会があることを願っています。 qa ええと、画面を共有してみます。すべてうまくいくといいのですが、今私の画面を見ていただけますか。はい、完璧です、はい、わかりました、エンリケがすでに言ったように、私の本のタイトルは、中国がどのようにしてショック療法から逃れたかというものです、市場改革の議論、この本これは私の博士論文に基づいており、すでに数年前にこのテーマに取り組み始めたとき、2021年と2022年の誕生イベントの文脈でこの質問がどれほどタイムリーになるかを知る方法はありませんでした。特に、昨年の中国の規制変更の背景と、私たちの目の前で展開している劇的な出来事の背景を考えているので、その意味で、この本はある意味、残念ながら非常にタイムリーでした。私たちの助けになればと今でも願っています。歴史的背景を提供するという点で、光を当ててください。この本は、私たちが現時点でどのような岐路に立っているのかについて説明します。この本は実際には 1980 年代についての本です。私は 1980 年代を世界経済の岐路として考え、概念化しています。中国の観点からすれば、それは中国の西側諸国との経済転換の始まりである、つまり中国」世界経済における中国の比重は浪費的に増大し、それによって西側の主要経済大国に近づいたが、この経済的比重の集中は、中国の経済と政治システムがヨーロッパや統一諸国と完全に制度的に同化することを伴ったものではない。中国が深く市場化され、グローバル資本主義に深く組み込まれているにもかかわらず、大規模な制度的同化を伴わずにこの経済収束の間のこの緊張関係を理解するには、中国の改革の最初の10年間に遡って、どのような改革の道筋があるのかを理解する価値があると思う。中国が 1980 年代に乗り出したことは、後にロシアの崩壊と呼ばれるようになったものと中国との間の大きな乖離を示すものでもあった」もちろん、国民の権利は、改革政策決定における単純な政策選択に還元することはできませんが、それにもかかわらず、両国の市場改革アプローチの違いに関連しています。私がこの岐路が何を意味するのかを説明するために、非常に簡単に試算してみましょう。 1980 年代、医療の GDP データを使用して 19 世紀初頭に遡ると、中国の場合は基本的に 1980 年代から秋が始まり、その後再興が始まったという構図ですが、ソ連の場合は対照的です。米の絵、その後転落、実際の転換点は 1980 年代です、ええと、この経験ははっきりと対照的ですが、基本的に同じ時期が急速な上昇とその後のある種の停滞または停滞を伴って起こった米国の経験ともはっきりと対照的です。 CPI と実質 GDP という 2 つの基本的なマクロ経済指標の観点から、社会主義の兆候の 2 つの形式の推移を見ると、世界経済における重要性は若干低下する ロシアの場合、ハイパーインフレと GDP 崩壊の構図が見られる事実、GDPの崩壊は、死亡率の公衆衛生教育などにおけるかなり深刻な危機とともに、おそらく近年の歴史の中で最も劇的な産業空洞化の時期の一つを伴って起こったのに対し、中国ではCPIの成長ペースがほぼ一貫して上回っているのとは対照的である。ほぼ持っています1990 年代後半を除いて、一貫して実質 GDP の成長が上回っているため、ロシアとは対照的に、非常に急速な成長の条件下では相対的な物価は安定しているというイメージがありますが、もちろん中国では不平等が非常に急速に拡大しており、環境破壊や社会正義などの問題は、何年もの間、中国の発展を研究する学者たちの頭の中にありました ええと、中国とロシアの不平等の進展を比較すると、ロシアでは状況の中で不平等が増大していることがわかります全体的な収入の減少とその後の回復と収入の水準について説明しているが、中国では基本的に富裕層が貧困層を引き離しているが、ロシアの改革アプローチは一般的にショック療法のアプローチと分類されており、もちろん、そのようなアプローチもある」ショック療法などの設計者が誰であるかについての議論であり、ここでは詳細に立ち入りたくありませんが、プラントから市場経済への移行について考えるためのこの基本的なアプローチを特徴づけたいだけです。このアプローチの 4 つの主要な要素として一般に認識されているものを要約すると、原油価格の自由化とマクロ経済的緊縮策の組み合わせであるが、顕著な緊縮策は一般的な価格水準を制御することを目的としており、これら 2 つの要素を組み合わせることで知られるようになった。このビッグバンは、その後、経済を世界市場に統合するための貿易自由化、そして最終的には民営化によって補完されることを意図していましたが、最も献身的なショック治療家でさえ、民営化は比較的ゆっくりとした複雑な制度再建のプロセスであったことを認めています。ショック療法では実際にはビッグバンであり、基本的なロジックは、システムを古いシステムから新しいシステムにショックを与えるには、新古典派の観点からそのようなビッグバンから始める必要があるというものでした。
okay it's 1003 so we will start and we will begin again good morning good afternoon in some places to everybody thank you very much for your interest i remind you we are at the cycle of conferences of the center for chinese mexican studies of the school of economics of nam this is part of the effort we're doing together yolanda trapaga delfin and myself and i invite you very much to look at the conferences that we usually do every two weeks sometimes every week since 2005. also we have an interesting group of videos powerpoints audios on a wide variety of topics and issues i do also invite you to our next conference that will be in one week no which will be on on trade policies by china uh under the analysis of the world trade organization and we will have willie alfaro who is in charge the director of the division of trade policies of the world trade organization i think this is going to be an interesting a conference for many of us know er today i am very happy uh to to uh to introduce you to dr isabella webber isabel is a political economist working on china trade and development issues and also in here on here the history of economic thought she's an assistant professor of economics at the university of massachusetts in amherst and some of us have read her first book how china escaped shock therapy the market reform debate which won the johann robinson price in 2021 and so we are very happy to uh well here listen uh to some of the opinions analysis on this topic by isabella no you are very welcome isabella and as i mentioned to you we usually have a presentations of around 30 to 45 minutes and a similar time for questions by the chat of sue so again good morning and i'm very happy that we would meet well thank you so much for having me it's a great pleasure to have a chance to share some thoughts on my book with you in these extraordinary times it's actually my first time that i have a chance to present this work in in mexico before presenting in brazil and colombia and so on but it's the first time in mexico so i'm very excited and hope there will be a chance to discuss in in the q a um so let me try to share my screen and i hope it all works can you see my screen now yes perfect yeah okay um as enrique has already said the title of my book is how china escaped shock therapy the market reform debate this book is based on my dissertation and when i started working on this topic already several years ago there was no way for me to know how timely this question would become in the context of the birth events in 2021 and 2022. in particular the context of the regulatory shift in china last year and the context of the dramatic events that are unfolding in front of our eyes so in that sense the book has been in some sense unfortunately been very timely i still hope that it can help us shed some some light in in terms of providing some historical context um to to the kind of juncture that we are at at the moment the book is really a book about the 1980s i'm thinking and conceptualizing the 1980s as a crossroads in the global economy from china's perspective it's the beginning of china's economic conversions with the west that is to say china's weight in the global economy has increased in waste that has brought it closer towards the major western economic powers but this convergence in economic weight has not come along with the wholesale institutional assimilation of the chinese economy and political system with those in europe and the united states even though china has deeply marketized and has been deeply integrated into global capitalism i think to understand this tension between this economic convergence without wholesale institutional assimilation it is worth going back to the first decade of reform in china and understand what kind of path of reform china has embarked on the 1980s also marked a great divergence between what came to be called russia's fall and china's rights which of course cannot be reduced to a simple policy choice in reform policy making but nevertheless it is linked to the difference in market reform approaches in the two countries just to give you a very simple estimate to illustrate what i mean by crossroads of the 1980s if we use medicine gdp data and we go back to the early 19th century then for china this is basically a picture of fall and then re-emergence starting in the 1980s whereas in contrast for the ussr it's a picture of rice and then fall where the turning point is really the 1980s um this experience contrasts sharply but also with the experience of the united states where the same period basically came about came along with a rapid rise and then some sort of a stagnation or slight decline in importance in the world economy if we look at the transition in the two format signs of socialism from the perspective of two basic macroeconomic indicators that is cpi and real gdp we see in the case of russia a picture of hyperinflation and gdp collapse in fact the gdp collapse came along with one of probably the most dramatic periods of de-industrialization in recent history along with a pretty severe crisis in mortality public health education and so on in contrast in china the pace of growth in the cpi has almost consistently outpaced has almost consistently been outpaced by the growth in real gdp with the exception of the um late 1990s so that in contrast to russia we have a a a an image of a relative price stability under conditions of very fast growth of course in china inequality has been rising very fast and problems of environmental degradation and social justice and so on have been on the um on the minds of of scholars of china's development for years um if we compare the evolution of inequality in china and russia we can see that in russia inequality have increased in the context of a overall decline in incomes and then re-emergence and levels of income whereas in china it's basically the rich pulling ahead of the poor the reform approach in russia has been generally labeled as that of shock therapy and of course there's debate of who exactly where the architects of shock therapy and so on and i don't want to go into the details here i just want to characterize this basic approach to thinking about the transition from a plant to a market economy and by i'm summarizing what has been commonly acknowledged as being the four major ingredients of this approach that is the liberalization of oil prices combined with macroeconomic austerity remarkable economic austerity is meant to control the general price level and these two elements taken together is what came to be known the big bang this was then meant to be complemented with trade liberalization in order to integrate the economy into the global market and finally privatization but even the most dedicated shock therapists acknowledge that privatization was a relatively slow complicated process of institutional rebuilding so that the shocking element in shock therapy really was the big bang and the basic logic was that um shocking the system from an old to a new system would require um starting with such a big bang from the perspective of neoclassical economics this is in some sense um emphasizing that one first test to get the prices right otherwise there's no hope of having a market economy there is a rich literature on the path that china has taken there's a rich literature on the economic policies that have been implemented in china but there has been relatively less attention paid to the economics of china's reform approach that is the intellectual underpinnings that inform the ways in which china has been going about its reform approach this reform approach i've been calling in my book and others have been using similar language and gradualist experimentalism that is the idea of feeling the way forward which is not only about pace but also different logic of reform as i will elaborate throughout this talk my book basically has two parts the first part is a kind of exercise in zooming out and asking what different kinds of modes of market creation and price regulation were invoked in the context of china's 1980s market reform debate and were part of the large tapestry of knowledge and institutional legacies that informed market creation in china i start with a chapter on the ancient tradition of statecraft going back to the guanza that is 300 bc where the idea is to illustrate that marketization in china was not simply the same as westernization but that china had its own very long legacy of market creation through the state and market participation in the name of prior stabilization some of the principles that i'm developing there are that economic and social stabilization can be achieved through market participation by the state where the idea is that the state should be focusing on what is heavy to shoot at what is light which is to say should focus on the essential parts of the economic system while governing the non-essential parts by stabilizing the essential parts what is essential in this context changes over time but in the imperial context or even more so in in ancient times this was really about methods salt um grain and some other basic commodities the great the question of grain is probably the most canonical example in this context since the so-called ever normal granularity persists that over centuries was an institution that was run based on the principle of participation by the state in the market where the state would basically run public granaries that would buy grain in fall when the supply was very high and the prices were collapsing and within supply grain um in in spring and summer when supply was short and prices were high thus basically aiming to stabilize prices through market participation of course there were all sorts of crisis and repeated debates and so on and i'm not suggesting that this was all the same over thousands of years but just as a basic logic i think this is an important reference point but the idea of my book is not to say oh we can explain china in the 1980s simply by always having been china by some sort of an essentialist notion of what china has always been um therefore i'm also engaging in detail with the debates over price control during um the second world war in the united states which allegedly is the freest market economy um in the world and in particular also the question of price decontrol after the war since the transition from a planned war economy to a post-war market economy was an important reference point in the debates over market reforms in the socialist world since in many ways this had been the last um incidence of such a transition from a plant to a market economy that people were thinking about these issues in the 80s um could draw on as you can see in this graph um in the second world war um prices were actually surprisingly stable compared to the first world war in the united states um and production was um surprisingly strong again compared to the um first world war and this came along with a very comprehensive and far-ranging um price control regime after the war these price controls were lifted more or less um overnight basically as a result of a political meltdown that resulted in in in a discontinuation of these price controls which then um gave rise to a very sharp increase in inflation and as you can see here this graph starting in 1946 um in the context of decontrol so in that sense this this sharp inflation after the war in some sense was a form of a small bang in the sense of very sudden liberalization but of course china also had its own experiences during wartime and in fact these experiences were incredibly important for the debates in the 1980s if anything i think they would have been the most important reference point for the question of how to recreate a markets in china's command economy as you all know there was a a long-ranging civil war in china and one interpretation is that the communists basically won that war not least because they were very successful at economic warfare that is to say that they re-integrated the commercial links between the countryside and urban centers in their liberated areas and ensured that the currencies that they were issuing had something important to buy stuff like cloth textiles um and then in return in the cities food um grain and so on in fact i made this connection um thanks to a note in um by a word bank official in minutes on meetings with chinese counterparts in 1982 where this world frank officially noted why do the chinese answer to every question that we have to go back to the liberation period policies and these liberation period policies followed a similar kind of logic of state market participation as the one that i have tried to illustrate based on the idea of the ever normal grenary in fact probably the most famous slogan on china's reforms it is better to be groping for stones to cross the river more steadily has been invoked by one of the key architects um of china's early economic reforms chunyun in april 1950 that is um pretty shortly after the revolution when the new communist government was struggling with the question of how to continue their effort at um stabilizing prices moving out of the hyperinflation during the civil war so the complete quote here then is rising prices are not good falling prices too are not good for production and within the consciousness of china's leaders their success and bringing hyperinflation under control which the nationalists had failed to do has been seen as a key element in the initial success of the communists and thus has been considered an important part of the legitimacy of um their government so it's been politically um something that um that that carries a lot of meaning okay moving fast forward to the 1970s and moving into the second part of my book which kind of moves from these like big picture reference points um to the debate in the 1980s um into this very close reading of the market reformed debate in particular they debate over the questions of price liberalization i think it's important to acknowledge that the urge for reform in the late 70s was very great indeed i'm not saying it was universal but in the many interviews that i have conducted which of course is a biased sample so there was some interviewing reformers since i was interested in the debates amongst reformers but across these different kind of economic reformers who violently disagreed on the question of how to reform um there was pretty widespread agreement that in the late 1970s reform was pretty much a choice of no no choice since the cultural revolution had long run out of steam the attempts of huago fung to initiate a um another 10 year plan to push a hat with industrialization had very quickly run into a crisis when the projected oil findings that were meant to finance that big push did not come forward so that in the late 1970s china was really in search for new kind of economic model in this context very early on there was an acknowledgement that this new um economic model would require china to revive markets in a more systematic way in fact already 1979 deng xiaoping told a foreign journalist quote saying that the market is limited to capitalism is wrong why can't socialism practice market economics but the question that was fiercely debated amongst reform economists was how to introduce market mechanisms into a command economy on the surface this might sound like a technical quibble among technocratic economists but as i argue in the book the whole question of market recreation i think turned out to be quite consequential for china's subsequent path very broadly speaking there were two camps of reformers in the book i'm distinguishing more and i'm engaging with a whole range of individuals and quite some detail but for the purposes of this short presentation i'd like to just focus on on two broad groups on the one hand they were they do attract market reformers who broadly speaking were composed of young reformed intellectuals who had returned from the countryside after having spent their youth there during the cultural revolution as so-called sent down youth they were backed by an older generation of leaders such as for exam for example whom you can see here in this picture and they really emerged as an important force in economic reform policy making as a result of their engagement with the agricultural reforms the agricultural reform started more or less as a bottom-up initiative but in order for these bottom-up initiatives to be turned into national policy a lot of systematic research was being conducted on the ground to understand how these experiments were playing out and in this context the so-called nonfatsu the agricultural development group played a critical role and was some sort of a catalyst for these round reform intellectuals they had an educational background being self-trained in marxist classics but also maoism during the cultural revolution when they basically formed um reading groups and we're trying to and think about um the the basic political economy questions in china in the 1970s when they returned to the cities um and when the universities restarted their entrance exams they also very quickly read up on a whole range of vests and social sciences um trying to basically catch up with social science theory and methods as quickly as they could they drew their intellectual inspiration importantly from the political economy of agriculture but also from empirical studies in china in the state and enterprise sector and later on also in other countries so if i'm asking how to create markets in a command economy i think it's worth quickly illustrating um what was at stake with this question or what what the challenges were so if in a very simple heuristic which of course is a simple idealized heuristic um and it's also kind of operating here on the national level where of course there were different layers in terms of provinces and so on but with all these caveats in mind if we um we want to very simply summarize the old model we could say that it was built on the idea of one big national workshop where basically there were some higher level command authorities that would be commanding outputs and assigning inputs to all the production units whereas each production unit would have to deliver its um output to the next production unit and would in return receive um certain inputs that was assigned in order to fulfill the plan on the surface then prices here are simply a shadow operation simply an accounting operation however in reality um they also performed a critical role as a distrib this as a mechanism of distribution since these prices were set in a way that did not necessarily reflect the costs of individual individual production units or even whole sectors but we're rather set in a political sense with an eye to distribution and development efforts so the prices of agricultural votes were set artificially low which resulted in a constant prices are between the um rural sphere and the urban industrious fear but also the prices for heavy industry and you we know that this whole depiction here is only on the urban industrial economy and i'm happy to comment more on the rural economy in the q a so the heavy industry prices in the urban industrial economy were also set relatively low as a way to encourage more downstream industrialization at the same time the prices of downstream non-essential consumer goods were set relatively high in order to extract liquidity from households and thus ensure price stability and and and basically ensure that there is no access demand what happened more or less endogenously as a result of the agricultural reforms was the emergence of a second market track in many ways such market tracks already existed during the mars period but they were basically very limited marginal occurrences that were more or less suppressed throughout the turbulent years of the period in the reform era then they became much stronger and much more prevalent since as agricultural households started to produce not only for the plan but also for the market they were generating cash incomes and they were using these cash incomes to buy stuff like wrist watches bicycles sewing machines radios and so on but soon also the township and village enterprises emerged which meant that in the agricultural sphere there was also a demand for um more upstream kind of industrial goods that would be serving as inputs into the township and village enterprises and furthermore of course if the downstream urban industrial sectors were expanding then they would also have expanding demand for these more upstream industries so that more or less as a result of a demand pool kind of dynamic this production for the market beyond the plan was emerging more or less endogenously so the question then was whether this emergence of markets at the margins under this dual track kind of system was a good thing that should be fostered and systematized and used or whether it was a bad thing that should be suppressed and some other reform approach should be um pursued in this context um one conference in 1984 the so-called morgantown youth conference played an important role where basically um a team of organizers in beijing summoned young scholars from across china based on an essay competition where all of these young scholars were invited to submit essays on questions of reform and then gathered at morganshine mountain for several days discussing questions of economic system reform it very quickly became clear that price reform was the most pressing and most important question on the table so that these various groups of um scholars started to focus on that question now after days of debate they basically settled um on a proposal that suggested that the dual track price system should be turned into a formal reform approach and should be turned into national policy this is in fact also what happened in 1985 um and chaotian who was prime minister in the 1980s and was an absolutely critical player in the creation of these new kind of economic policies that explained to local cadres what this policy would mean this is from the collective works of jazz and i find this a useful way to understand what the um national government was intending with this policy since he was trying to explain it to the people who would have to implement this policy um and he was saying that basically this would mean four things letting go of small commodities the state should focus on controlling important parts of the economy and not over stretch and trying to control all parts of the economy it would also mean reforming and adjusting the prices of of important goods um by improving the price management system and adjusting the prices in small steps so that they would come closer to some notion of cost or value but fourthly it also meant participating some quote after having enlivened prices by letting them go the state had to participate in the market to regulate the prices as in the first years after liberation for sectors where prices were allowed to fluctuate on the market the range of the fluctuations should be limited by market participation that is to say the state should have stocks to be able to add supplies to the market when the price was rising too high and purchased when the price was falling too low in this context and imports could also be used but only as an emergency balancing mechanism and in fact this kind of buffer stock logic of stabilizing the prices of important goods continues to operate until the very day just today one of the headlines that i saw in the economic news on china was that china has released stocks of its egg reserve apparently the chinese state is running an egg reserve since the prices for eggs were increasing too fast in the context of general food price pressures okay let me now move to the competing reform camp which i am broadly speaking calling the packaged price reformers the main members of this group were middle-aged established intellectuals were often um trained in orthodox socialist economics in the 1950s and 60s and then in the 80s were the first to study modern economics in the united states and england they were joined by young academics mostly scientists and engineers who and they shared a vision that mathematical models could model the old system and could model a target system for reform and could help to re to formulate china's path from the old system to the new system they drew their intellectual inspiration from the socialist calculation debate of the interval period um in fact i've also written on this in separate articles and um we're in close exchange with eastern european immigrant economists such as the polish bruce um otta sheikh from the czech republic and kornai who of course was not an immigrant economist but someone who was going back and forth between hungary and harvard they also drew inspiration from monetarists such as friedman and gregory chao and basically the idea of overnight price liberalization as a recipe for for instantaneous miraculous um success was in this context repeatedly um linked or anchored on the idea of an airhead miracle in best german post-war um reform where ludwig earhart allegedly would have instigated the german economic miracle simply by liberalizing all prices overnight um at least this was the story that uh wilton friedman and others were bringing to china and in fact in a forthcoming chapter i'm kind of debunking that story by contrasting it but some of the recent economic history research and german language literature okay um when i'm referring to these exchanges with eastern european immigrant economists i think it's important to highlight the critical role of the world bank the world bank invited many of these economists to china and facilitated exchanges between chinese reformers and these economists who used to be reformers in their own contacts but by the time had basically given up or emigrated to other places this is a picture here of the 1982 world bank conference on questions of price reform from the side of the eastern europeans the only person whom i say got to meet in person was a a man called peter kendall who is the second from the right in the first row who when i met him in paris in a coffee shop in 2017 was wearing the exact same outfit that he's bringing in this picture in 1982 pointing out to me that he had treasured and preserved this outfit since um it was such a bold move to go to china and discuss with chinese officials one of the most critical questions of economic system reform in 1982 at a time when he thought that if he had returned to his native hungary he might well have been arrested at the border i think that this illustrates just how bold not only the eastern europeans were who um engaged in this dialogue but also how bold the chinese were in 1982 that they basically discussed these critical questions with people who were basically considered some some sort of dissidents in in their home countries out of these exchanging this broad tapestry of trying to catch up with modern mainstream economics emerged a critique of the dual track system the argument was that the dual track system would create friction and contradiction and in fact would amount to a more irrational kind of price system than the pre-reform system it might have some role to play as the short-run um transitional mechanism but would have to be overcome as quickly as possible important um the the the dual track price system would reside in inherent rent seeking and corruption since the officials running these production units would now pri face high prices on the market and low prices in the plan which would immediately give incentives for bribery and corruption their recommendation then broadly speaking was to adjust prices based on uh complete models of the economy to basically set up some sort of a equilibrium price vector impose tight fiscal and monetary policy and then let go of prices as quickly as possibly most importantly let go of the core prices the most important most upstream prices stuff like energy steer and so on this was then meant to be combined with wage and tax reform and the market participation by the state should be replaced with indirect macroeconomic policies however a critique of this kind of approach to price reform that more or less resembles analytically the idea of a big bang emerged within china from the side of the dual track reformers they argued that such a big bang that is the liberalization of the most upstream most important prices would reside in cost push inflation without adjusting the relative prices and quantities since the prices in these upstream industries were in the pre-reform era by design too low they would more or less as a necessity be shooting up and since all of these production units they faced a soft budget constraint and were not actually market oriented enterprises they would simply hand down these large price increases to the next production unit which eventually would reside in a wage price spiral which could not be contained by macroeconomic control not only because china didn't have sufficient institutional capacity for macroeconomic control but also because this kind of process was basically a process of endogenous money creation that would be very hard to suppress with macroeconomic austerity the core of the debate then was not whether or not to liberalize downstream prices was not whether or not to let go of so-called small inessential consumer goals especially the highly profitable sectors that were already in surplus but the core of the debate was whether or not the state should keep control of the industrial core of the economy and operate a regime of state market participation in a dual track system in these core parts of the industrial economy in 1986 china came very close to implementing a package price reform that was gradually boiled down but nevertheless was focused on liberalizing the most important upstream prices this was ultimately stopped by the intervention of a delegation to hunger in yugoslavia that was sending back telegrams warning that this um this kind of step would reside in the kind of cost push inflation that i have just tried to describe to you in fact this delegation was interestingly sponsored by george soros who's here in in the picture on the bottom meeting with that delegation in 1986. in 1988 don xiaoping himself took initiative towards uh radical price reform and by 1988 the social and political tensions that were unleashed through the reform process were mounting to a point where um where uh then japan seemed to have um found that he needed to somehow push ahead and crash through the barriers that had um build up or as he put it only once prices have been straightened out will we be able to step up reform we cannot not carry out price reform we have to face the risks and difficulties head on we must not be afraid of risks and be even more courageous corruption by then and social inequalities had become a very serious um issue and there was a hope that there's a radical price reform could um elevate these difficulties don't you ping then also adopted more or less the same same kind of rhetoric that we can find in in police for shock therapy more broadly in very different contexts that is the idea that long-term pain is worse than short-term pain so in other words you have to kind of swallow the bitter pill now in order to lay the foundations for future development in fact don't tell pigment as far to say that a lack of price reform impedes china's goal of catching up with western countries by 2050. um on august 18th the state tv then reported that the politburo had passed in principle a plan for price and wage reform and this was happening in a context of already rising price distance um the dual track price system had had progressed um to a point where um several um were more and more also not at all unimportant economists sorry not at all unimportant commodities were being um priced on the market and the reaction to this announcement of um this prize reform plan having passed in principle was in this broad context of enormous tensions enough to basically unleash bank runs and panic buying that were so severe that the chinese leadership reversed this plan and then basically in fall of 1988 more or less put reform more generally on hold inflation continued for a while and this tension between a reversal of reform and rising prices i think is part of the economic context in which then um the the the large scale protests in in 1989 are occurring in 1988 mitt and friedman made another appearance in china in the fall of 1988 where he was once more urging for rapid liberalization but at this point um the window of opportunity um had basically closed and um uh the the the political dynamic was at a point where basically reform was on ice so this didn't have much repercussions in some i think we can contrast two competing logics of reform where the basic logic of shock therapy that i think we can also trace in the chinese context is one to start from comparative statics and to start from a stylized model of the old system and a theoretically derived target model for the future system where reform is then being thought of as a shock that enables the transition from the old to the new system the target system is um a should be a a a system that is composed of complete markets which in this vision can only be achieved by destroying the plan in contrast the logic of the dual track system is i think to start from an analysis of prevailing economic forces and institutions in order to identify ways to create reform dynamics initially at the margins of the system then use these unleashed dynamics to reindustrialize the core hoping that this would work without undermining social stability which is of course always an extremely delicate balance market forces here then are means in a larger transformation process and need to be unleashed steered and guided and stabilized by the state rather than being a goal in themselves in conclusion then i would say that china's policy choice was not the big bank but the dual track system because china's leaders were ultimately not prepared to risk the survival of the communist state and to endanger their vision for long-term development the big banks seem to promise a scientific solution to economic system reform but was ultimately found not to create a viable market economy while being enormously risky since it was built on undermining the functioning of the core of the plan such built on the on undermining the functioning of the backbone of china's industrial economy the dual track system had more or less gradually emerged as policy alternative while these more blueprint type approaches were trying to be worked out this was crea the dual track system was created through an extreme experimental reliance on techniques of market creation by the state always distinguishing between essential and inessential goods and relying on a systematic assessment of the concrete economic conditions and dynamics that prevailed across the different systems in areas of the economy i think that the the the the fact that the dual track system was operate in operation was basically what allowed china's leaders not to go for a big bang because however imperfect the dual track system was and it did create a lot of problems including corruption it nevertheless presented an alternative that was already in operation thank you very much thank you very much isabella very interesting and i think a very provocative in terms of concepts and in terms of reflection while we'll receive some questions and comments and comments and suggestions again through the chat isabella let me pose you two comments in with some questions on the one hand uh the the i don't know if you are aware you very probably are and your opinion would be very welcome the discussion of a transitional institutions by a qian jinki i don't know if you know him he's today in chingua university and he published widely with danny roderick and other institutions uh and this discussion that you post of this dual track system no is highly integrated in this discussion on transitional institutions with the addition that he explicitly discusses the issue of the property in this transition period no which means you can have a transition in terms of uh incentives but surprisingly and in in terms of of results the property is still in the hand of the public sector now from a latin american perspective this is very important because countries such as latin america have gone massively through liberalization processes which are a synonym to privatization this was not the case in china so i i don't know if you're aware of mileage at least discussion uh sorry so discussion of more in the 1980s 1990s what is your opinion on this and then isabella as you might imagine from your perspective what is the relevance of this dual track system in 2022 no is it still alive is it relevant what does it mean in terms of policy options for the current public sector etc again two questions before we receive some questions by the chat no yeah these are great questions thank you very much um on the work of uh tianzini and daniel roderick and transitional institutions i would say that this is basically complementary to my work um i think the difference is that my book is basically on the level of ideas right i've interviewed all these people that were involved in these debates in the 1980s and i'm kind of trying to trace um the the alternative arguments that were at stake in this critical debate whereas their work as far as i understand it it's more of an institutional economics kind of approach trying to um trying to distill some of these institutional dynamics where i'm basically trying to combine institutional economics within intellectual history um on the question of property rights yes this is of course incredibly important and this is basically um uh in some ways an important limitation of my book since in the 1980s it's not like there were no discussions around property rights but they weren't as prevalent yet um so the the the most pressing question in that context was the question of price reform um and in trying to navigate this incredibly messy kind of primary empirical material that i was collecting i used price reform as my anchor point and therefore focused on this primarily however this is not to say that these two approaches don't also tell us something about property reform since um uh if you take the the example of the of the um of the dual track system then this also meant that as these production units started to cater not only to the plan but also the market they were starting to become internally transformed from entities that were basically implementing commands and orders from higher up planning authorities to more and more market-oriented kind of enterprises which then basically completely changed their logic of operation and which was in many ways the starting point of the whole debate around questions of property rights reform and in fact were in the 1980s in in the late 1980s in china first voices emerged that suggested that property rights reform should not simply be a dichotomy between private property and public property but that china should kind of move beyond this and try to come up with its own innovative institutional arrangements that would break through um the dichotomy of private versus public which is i think in many ways linked to this idea of dual track of combinations of market and plan of of the emergence of new kind of economic governance mechanisms on your second question the relevance of the dual track system i think um [Music] there are probably kind of three dimensions in which um i could emphasize the relevance of the dual track system today so first of all i think that for china's re-industrialization process in the 90s and 2000s it was very important that the backbone of the industrial system that was created during the mars period with all the faults of the maoist development model china had made some breakthroughs important breakthroughs in the development of heavy industry and the building up of a basic industrial foundation not giving up on this not um not risking that part i think was an important foundation for the development in the subsequent decades so from that perspective um this to attract system that basically preserve the core and transform the core but without um giving up on it without giving up on the ambition of having these industries within china under the um under the stewardship of the state i think was an important foundation of china's economic rights which in many ways um is um the tension that we are facing now right um in between the u.s um and and china um secondly i think from an institutional perspective of course the dual track system is now no longer like a universal kind of system uh far from it it basically still exists in in some of the most important upstream industries stuff like electricity um but it was the starting point of these decades of institutional reform so if you take the example of the electricity sector in the ways in which the electricity sector was being rebuilt then this was a very um careful cautious kind of process moving from a plant electricity sector under uh under one ministry um into a more corporate kind of structure than several and pretty radical experiments in the early 2000s which were then stopped and then basically this institutional rebuilding process has continued all the way until today in many ways i mean the the whole like cold shortages and electricity shortages in in in fall last year uh in some sense the latest iteration and there's like institutional fine-tuning um of of both the the corporate and property side but also the the price um price design side of the story so in that sense um the the the institutional arrangements and the commanding heights of china's economy are of course no longer what they were in the 1980s but the path very much links um to this um initial um setup to to this dynamic to the logic that is being established in the 80s and then thirdly i mean one of the most pressing um economic policy questions of the day i suppose um at least in the oecd i know in latin america this is probably more of an evergreen but the u.s and europe suddenly wakes up to the problem of inflation after no one has thought about this outside the context of development economics for years and years and years um whereas in the chinese context we see that we basically have an approach to price stabilization that does not exclusively rely on microeconomic stabilization through the central bank or through fiscal policy but that also relies on what i have been calling state market participation for important kinds of consumer and producer goats we could see this in 2021 when the price for um certain methods was shooting up and basically there was a very coordinated effort to increase the supply of these methods by encouraging state-owned enterprises to release some of their inventories and not hoard um these kind of metrics but also by releasing um national reserves and we can see this again as we speak in the context of the inflationary pressures from a cost push perspective that are emerging in the um global economy in in in the context of the war with ukraine and um the the the i mean oh all the terminal of the pandemic that we have all been talking about so that context then i think china really has an institutional setup that allows it to do price stabilization in ways that is quite drastically different and that could prove to be fairly critical in in in the current context very interesting i don't know if you can follow the the the chat usually we have a very active uh fellowship today we are very shy but again there are two questions so far one by jorge vampum i don't know if you can read it regarding this dual track group no what did they read among other things and then the second by professor bruno gandalgrove no yeah um so i think they were really incredibly eclectic in their reading many of them during i mean during the cultural revolution when they were still like part of these kind of informal student type reading groups um were certainly also reading tax that um were related to the new economic policy in russia in in the 1920s and questions of other forms of socialist organizations in that context um in in the in the late 70s it's really i mean there are translation efforts that that are incredibly far-ranging from tigered persons to um cybernetics so you have really like this very very broad engagement with a whole range of of social science theories and methods um where basically we have to remember that during the cultural revolution economics as a discipline had been more or less on hold and um the the the the social science access to western knowledge was also very very limited so this was really like a very major catch-up exercise they were also studying increasingly quote-unquote modern economics and started to adopt the language of of modern economics and replaced the terminology of marxist economics with the terminology of microeconomics and macroeconomics and price elasticities and all of that so that sense they did start to engage with new classical economics in particular however this was always combined with this very inductive approach of going out and doing field research initially in the agricultural experiments and later on also very large scale research survey exercises um in the state on enterprises trying to understand what the state of reform was and what kind of initiatives were emerging spontaneously out of this political opening that uh that that that that happened in in the 1980s so that it was not like there were like five attacks that they read and then they basically threw their ideas based on that and then they implemented them and then that's that's the story but it's rather there's a very eclectic search um across a whole range of different literatures combined and always rooted in these a kind of inductive survey research type of exercises okay thank you and there is another question isabella by professor gandu grover thank you very much and two questions related to the administrative and statistical functioning of the dual track system that you highlight no did the chinese government maintain some kind of national production plan and how did this affect the national accounting system in terms of gdp and growth statistics thank you very much yeah that's a great question um i mean we have to remember that by the beginning of reform china's statistical capacity was actually very very limited again because of the cultural revolution and what that had meant for um for the the statistic i mean the the institutions that were actually i'm collecting statistics and and systematically using them and so on right so in many ways the statistical apparatus was was being really big um through the reform period um there is a shift in in accounting that is occurring um i am not an expert on that and i should not pretend i am um i know that basically i mean there is a lot of price static statistics um available for the 80s um and they were collected with all sorts of different kinds of labels and there were very major price research institutes that also started with these um with these uh uh statistical um uh really like empirical data gathering kind of exercises they were also the first some input output tables constructed and so on um as regards the plan i mean the plan continued in the 80s of course but there was increasingly a shift then in the 1990s from this like straight out direct planning based on some sort of a command economy towards more and more indicative planning um which which came about um as a result of the marketization of the economy in this context then the the macroeconomic governance of course also became increasingly important but it's i think important to see that it not did not completely replace china's economic governance mechanisms but that beyond the surface of um of macroeconomic governance planning mechanisms and state market participation type of mechanisms continued thank you isabella and the last question by ambassador eugene who was ambassador in those times and in from mexico and china and asks a wh what would be the impact of this double track approach in liberating or in the liberalization of crisis in the 1989 political crisis is there some kind of link in your analysis and opinion yeah thank you great question um so basically what happened through the dual track system is that certain things that were that had very high market prices also became incredibly profitable so you could have a situation where people were basically within the first track um let's say high school teachers or university professors who are basically still receiving their salaries based on the plan type of standards suddenly we're making less money than the guy who's selling eggs in the streets or pancakes or whatever it may be so that you get this like very rapid um uh reshuffling of of distribution and these are very erratic kind of ways which i think was an important part of the social tensions that were built up um in in the 80s and then of course um as inflation became a problem those that basically had fixed kind of wage income some uh did not see their incomes just as rapidly as those that had market income so this is an these kind of inequalities the the problem of corruption of course also added to the impression of of of um of an unjust kind of system and a very unjust kind of transition so i think these are some of the points where where these dynamics um uh were connected and and were part of i'm not saying that 89 was simply an economic kind of outcome of inflation but i think that that this kind of economic dynamic fueled the political dynamic that was already in the making thank you isabella look i i think we are pretty much done in terms of questions i i would have one last issue i think one of the great contributions among many others is the issue of your book is the issue of the importance of the world bank in this reform and opening up process and if i understand correctly also the incidents incidents in this dual track system of the world bank no so in in in your opinion more recently it doesn't have to win 2022 but how is the relationship between more recently between the the chinese government and the world bank considering also a difficulties i remind you the harsh discussions and disruptions between the development research center in in 2012 and then this big book no with the world bank that got erased from web pages etc and you can still find it etc in your opinion how is how is the relationship today after this strong impact of the world bank in china in the 1980s and 1990s no yeah um so i'm really not an expert on the world bank's recent engagement in china since i i mean i interviewed all the people who were there in the 80s and so on but this doesn't give me any privileged expertise on on the more more recent developments i just want to like put this caveat i think generally speaking we can say that the relationship between the word bank and china was very different compared to the relationship between the word bank and other developing countries um for broadly speaking i think two reasons one is that china never became in a substantial way dependent on world bank loans right i mean it's not like they didn't take out loans but they never became indebted in a way where any kind of conditionalities and so on would could really have been um employed so in that sense from the chinese perspective the word bank has always been more of a source of economic expertise that the chinese government was trying to draw on and of course also credits that came in useful i'm not saying this didn't didn't matter but it didn't matter i mean it it wasn't existential to the chinese system whether they had these word bank loans or not so in that sense the relationship has i think been been quite different compared to the relationship um in in in in other contexts the related second point that i'd like to make is that of course the economic policy discourse today is by far no no longer as open as it was in the 1980s because in the 80s you have this kind of period where it's really not entirely clear um what the future will look like and china is very seriously engaging with a very wide range of possibilities nevertheless i think this this principle of consulting a very wide range of sources of expertise in important economic policy decisions to some extent continues where you can have a study by mckenzie and a study from the central party school being solicited on the same kind of topic right so in that same context then the word bank is one player amongst many rather than the one and only authoritative source within the chinese system okay thank you very much isabella again i i hope we can continue having this dialogue again as you might imagine this topic of a structural reforms and shock therapies is very important in latin america no since the 1980s latin america has have con and until today we have a long history of shock therapies and the the comparison with china is very relevant no so thank you very much congratulations again on your book and i sincerely hope we can continue in this diet thank you very much for having me i hope there will be a chance to learn more um from the latin american perspective on these questions of shock therapy and how it played out in china would be very interested to learn from everybody's insights and and views on that thank you we hope you can visit us sometime in person uh when the when the health situation allows you to no yeah thank you okay we don't want to take more of your time and thank you very much no have a great time and we will continue writing each other thank you was a very good presentation thank you thank thank you you
わかりました、10:03ですので、始めます、そしてまた始めます おはようございます、所々でこんにちは、皆さん、ご興味を持っていただきありがとうございます、思い出してください、私たちは経済学部の中国メキシコ研究センターの会議のサイクルに参加していますこれは、ヨランダ・トラパガ・デルフィンと私が一緒に行っている取り組みの一部です。2005 年以来、通常は 2 週間ごとに、時には毎週開催しているカンファレンスをぜひご覧ください。また、さまざまなトピックや問題に関するビデオ、パワーポイント、オーディオの興味深いグループもあります。また、1週間後に開催される次の会議にご招待します。世界の分析の下で、中国の通商政策について議論されます。世界貿易機関の通商政策部門の責任者であるウィリー・アルファロ氏が参加します。これは多くの人にとって興味深い会議になると思います。今日はとてもうれしいです。ええと、イザベラ・ウェバー博士を紹介します。イザベルは中国貿易と開発問題に取り組んでいる政治経済学者であり、ここの経済思想の歴史にも取り組んでいます。」彼女はアマーストにあるマサチューセッツ大学の経済学の助教授であり、私たちの中には、2021年にヨハン・ロビンソンの価格を勝ち取った市場改革議論から中国がどうショック療法を逃れたかという彼女の最初の本を読んだ人もいるから、ここで話を聞くことができてとてもうれしく思っているえー、イザベラによるこのトピックに関する意見分析へ いいえ、大歓迎ですイザベラ。先ほども言いましたが、プレゼンテーションは通常約 30 ～ 45 分で、スーのチャットによる質問にも同様の時間があります。またおはようございますそして、良いお会いができてとても嬉しいです、私を迎えに来てくれて本当にありがとう、この特別な時期に私の本についての考えを皆さんと共有する機会を持つことができてとても嬉しいです。」実はブラジルやコロンビアなどで発表する前にメキシコでこの作品を発表する機会があるのは初めてですが、メキシコでは初めてなのでとても興奮していますし、またメキシコで話し合う機会があることを願っています。 qa ええと、画面を共有してみます。すべてうまくいくといいのですが、今私の画面を見ていただけますか。はい、完璧です、はい、わかりました、エンリケがすでに言ったように、私の本のタイトルは、中国がどのようにしてショック療法から逃れたかというものです、市場改革の議論、この本これは私の博士論文に基づいており、すでに数年前にこのテーマに取り組み始めたとき、2021年と2022年の誕生イベントの文脈でこの質問がどれほどタイムリーになるかを知る方法はありませんでした。特に、昨年の中国の規制変更の背景と、私たちの目の前で展開している劇的な出来事の背景を考えているので、その意味で、この本はある意味、残念ながら非常にタイムリーでした。私たちの助けになればと今でも願っています。歴史的背景を提供するという点で、光を当ててください。この本は、私たちが現時点でどのような岐路に立っているのかについて説明します。この本は実際には 1980 年代についての本です。私は 1980 年代を世界経済の岐路として考え、概念化しています。中国の観点からすれば、それは中国の西側諸国との経済転換の始まりである、つまり中国」世界経済における中国の比重は浪費的に増大し、それによって西側の主要経済大国に近づいたが、この経済的比重の集中は、中国の経済と政治システムがヨーロッパや統一諸国と完全に制度的に同化することを伴ったものではない。中国が深く市場化され、グローバル資本主義に深く組み込まれているにもかかわらず、大規模な制度的同化を伴わずにこの経済収束の間のこの緊張関係を理解するには、中国の改革の最初の10年間に遡って、どのような改革の道筋があるのかを理解する価値があると思う。中国が 1980 年代に乗り出したことは、後にロシアの崩壊と呼ばれるようになったものと中国との間の大きな乖離を示すものでもあった」もちろん、国民の権利は、改革政策決定における単純な政策選択に還元することはできませんが、それにもかかわらず、両国の市場改革アプローチの違いに関連しています。私がこの岐路が何を意味するのかを説明するために、非常に簡単に試算してみましょう。 1980 年代、医療の GDP データを使用して 19 世紀初頭に遡ると、中国の場合は基本的に 1980 年代から秋が始まり、その後再興が始まったという構図ですが、ソ連の場合は対照的です。米の絵、その後転落、実際の転換点は 1980 年代です、ええと、この経験ははっきりと対照的ですが、基本的に同じ時期が急速な上昇とその後のある種の停滞または停滞を伴って起こった米国の経験ともはっきりと対照的です。 CPI と実質 GDP という 2 つの基本的なマクロ経済指標の観点から、社会主義の兆候の 2 つの形式の推移を見ると、世界経済における重要性は若干低下する ロシアの場合、ハイパーインフレと GDP 崩壊の構図が見られる事実、GDPの崩壊は、死亡率の公衆衛生教育などにおけるかなり深刻な危機とともに、おそらく近年の歴史の中で最も劇的な産業空洞化の時期の一つを伴って起こったのに対し、中国ではCPIの成長ペースがほぼ一貫して上回っているのとは対照的である。ほぼ持っています1990 年代後半を除いて、一貫して実質 GDP の成長が上回っているため、ロシアとは対照的に、非常に急速な成長の条件下では相対的な物価は安定しているというイメージがありますが、もちろん中国では不平等が非常に急速に拡大しており、環境破壊や社会正義などの問題は、何年もの間、中国の発展を研究する学者たちの頭の中にありました ええと、中国とロシアの不平等の進展を比較すると、ロシアでは状況の中で不平等が増大していることがわかります全体的な収入の減少とその後の回復と収入の水準について説明しているが、中国では基本的に富裕層が貧困層を引き離しているが、ロシアの改革アプローチは一般的にショック療法のアプローチと分類されており、もちろん、そのようなアプローチもある」ショック療法などの設計者が誰であるかについての議論であり、ここでは詳細に立ち入りたくありませんが、プラントから市場経済への移行について考えるためのこの基本的なアプローチを特徴づけたいだけです。このアプローチの 4 つの主要な要素として一般に認識されているものを要約すると、原油価格の自由化とマクロ経済的緊縮策の組み合わせであるが、顕著な緊縮策は一般的な価格水準を制御することを目的としており、これら 2 つの要素を組み合わせることで知られるようになった。このビッグバンは、その後、経済を世界市場に統合するための貿易自由化、そして最終的には民営化によって補完されることを意図していましたが、最も献身的なショック治療家でさえ、民営化は比較的ゆっくりとした複雑な制度再建のプロセスであったことを認めています。ショック療法では実際にはビッグバンであり、基本的なロジックは、システムを古いシステムから新しいシステムにショックを与えるには、新古典派の観点からそのようなビッグバンから始める必要があるというものでした。
経済学 これはある意味、価格を正しく設定するための最初のテストであることを強調しています、そうでなければ市場経済を実現する希望はありません 中国がたどった道については豊富な文献があります 実施された経済政策については豊富な文献がありますしかし、中国では、中国の改革アプローチの経済学、つまり中国が改革アプローチにどのように取り組んでいるかを知らせる知的基盤である改革アプローチには比較的あまり注目されていない。私の本で呼びかけている人たちもいますし、他の人たちも同じような言葉遣いや漸進主義的な実験主義を使っています。これは前進する道を感じるという考え方であり、これは単にペースに関するだけではなく、この講演を通して詳しく説明するように、改革の異なるロジックでもあります。私の本は基本的に 2 つの部分から構成されています最初の部分は、ズームアウトして、中国の文脈でどのようなさまざまな種類の市場創造と価格規制が発動されたのかを問う一種の演習である。」1980 年代の市場改革議論は、中国の市場創造に影響を与えた知識と制度的遺産の大きなタペストリーの一部でした。私は、紀元前 300 年のグアンザにまで遡る古代の国家権力の伝統に関する章から始めます。ここでのアイデアは、次のことを説明することです。中国の市場化は単に西洋化と同じではなく、中国には国家による市場創造と、事前の安定化の名の下での市場参加という独自の非常に長い伝統があり、その原則のいくつかは、そこで発展しているのは、国家による市場参加を通じて経済的および社会的安定が達成できるということであり、国家は軽いものを撃つために重いものに焦点を当てるべきである、つまり社会の本質的な部分に焦点を当てるべきであるというものである。経済システムは、本質的な部分を安定させることによって非必須の部分を管理しながら、この文脈で何が不可欠であるかは時間の経過とともに変化しますが、帝国の文脈では、または古代ではさらにそうですが、これは実際には方法、塩、穀物、その他の基本的な商品に関するものでした。素晴らしい、穀物の問題は、おそらくこの文脈で最も標準的な例である。なぜなら、何世紀にもわたって、国家が基本的に運営する市場への国家参加の原則に基づいて運営されていた機関であるという、いわゆる常に正常な粒度が存続しているからである。公共穀物倉庫は、供給が非常に多く価格が暴落していた秋に穀物を購入し、穀物は供給範囲内で、供給が不足して価格が高かった春と夏に購入するため、基本的には市場参加を通じて価格の安定を目指していました。ある種の危機や繰り返される議論など、これが何千年も同じだったと言っているわけではありませんが、基本的な論理として、これは重要な参照点だと思いますが、私の本のアイデアは、「ああ」と言うことではありません
1980年代の中国は、中国が常に何であったのかというある種の本質主義的な概念によって、常に中国であったというだけで説明できる。また、世界で最も自由な市場経済と言われている米国における第二次世界大戦中の価格統制をめぐる議論、特に計画経済から移行してからの戦後の価格統制解除の問題にも詳しく取り組んでいます。戦争経済から戦後の市場経済への移行は、社会主義世界における市場改革をめぐる議論の重要な基準点であった。なぜなら、多くの意味で、人々が考えていたような工場から市場経済へのそのような移行はこれが最後だったからである。 80年代のこれらの問題については、このグラフでわかるように、えー、第二次世界大戦では、えー、米国では第一次世界大戦に比べて、実際、価格は驚くほど安定していました、そして、生産は、えー、1980年代に比べて、また驚くほど好調でした。第一次世界大戦、そしてこれは戦後の非常に包括的で広範囲にわたる価格統制制度 これらの価格統制は多かれ少なかれ一夜にして解除されましたが、これは基本的に政治的メルトダウンの結果としてこれらの価格統制が中止され、その後非常に大きな混乱を引き起こしました。インフレの急激な増加、ここに見られるように、このグラフは 1946 年から始まっていますが、統制解除の文脈でのことであり、その意味では、戦後のこの急激なインフレは、ある意味、非常に突然の自由化という意味では小さな衝撃の一形態でした。もちろん、中国にも戦時中の独自の経験があり、実際、これらの経験は 1980 年代の議論にとって非常に重要であり、どちらかと言えば、中国市場をどのように再構築するかという問題の最も重要な参照点だったと思います」皆さんご存知のとおり、中国では長期にわたる内戦があり、ある解釈では、共産主義者が基本的にその戦争に勝利したのは、とりわけ彼らが経済戦争で大成功を収めた、つまり通商関係を再統合したためであるというものです。解放地域の田舎と都市中心部の間で、彼らが発行する通貨には、布地や織物などの物を買うための重要なものが含まれていることを確認し、その代わりに都市で食料や穀物などを買うことができました。実際、私はこのつながりを作りました、ありがとう。 1982年の中国側との会議の議事録にあるワードバンク関係者のメモへ、世界の率直な意見では、なぜ中国人はすべての質問に対して解放期の政策に戻らなければならないと答え、解放期の政策はその後も続いているのかを公式に指摘した。似たような種類の国家市場参加の論理は、私が常に正常な穀物庫の考えに基づいて説明しようとしたものであり、実際、おそらく中国改革に関する最も有名なスローガンである、より着実に川を渡るために石を手探りしているほうが良いという言葉が引用されている。 1950年4月、中国の初期経済改革の主要な立役者の一人、春運氏によるものです。それは革命直後、新共産主義政府がハイパーインフレから脱却するために価格を安定させる努力をどのように継続するかという問題に悩んでいた頃のことです。内戦なので、ここでの完全な引用は、価格の上昇は良くない、価格の下落も生産にとって良くない、そして中国の意識の範囲内である」国家主義者たちが果たせなかった成功とハイパーインフレの抑制は、共産主義者の初期の成功の重要な要素とみなされており、したがって彼らの政府の正当性の重要な部分と考えられているため、政治的にはそうである。ああ、それは多くの意味を持っています。それでは 1970 年代に早送りして、私の本の第 2 部に移ります。全体像のようなものから 1980 年代の議論へ、そして非常に綿密な読み物へと移ります。市場改革の議論、特に価格自由化の問題について議論しているが、70年代後半の改革への衝動は確かに非常に大きかったということを認識することが重要だと思う」それが普遍的だと言っているわけではありませんが、私が行った多くのインタビューでは、もちろん偏ったサンプルなので、改革者間の議論に興味があったので、改革者にインタビューする人もいましたが、これらの異なる種類の経済改革者全体で激しく意見が一致していませんでした。どうやって改革するかという問題は、1970年代後半には、文化大革命が長い間失速していたので、改革はほぼ仕方のない選択だったということで、かなり広く合意があったが、花籠芬の試みは、ええと、さらに10か年計画を開始しようとしていた。工業化の推進に資金を提供する予定だった石油に関する調査結果が示されなかったとき、工業化は急速に危機に陥っていたため、1970 年代後半、中国はこの文脈で新しい種類の経済モデルを本当に模索していました。早い段階でこの新しい経済モデルは、中国がより体系的な方法で市場を復活させる必要があることを認識しており、
実際にはすでに1979年に鄧小平が外国人ジャーナリストに語った言葉で、市場は資本主義に限定されているというのは間違っている、なぜ社会主義は市場経済を実践できないのかという疑問がある改革経済学者の間で激しく議論されたのは、コマンド経済に市場メカニズムをどのように導入するかということであった。表面的には、テクノクラート経済学者の間では技術的な屁理屈のように聞こえるかもしれないが、本の中で私が論じているように、市場再創造の問題全体は非常に重要であることが判明したと思う非常に大まかに言えば、この本の中に改革派の二つの陣営があったが、これは中国のその後の進路に重大な影響を与えるものであり、私はそれをさらに区別している。
私はあらゆる範囲の人々とかなり詳細に関わっていますが、この短いプレゼンテーションの目的のために、私はここでは、市場改革者たちを惹きつけているという 2 つの大きなグループに焦点を当てたいと思います。一方で、市場改革者たちは、いわゆる文化大革命中に田舎で青春時代を過ごした後、田舎から戻ってきた若い改革派知識人で構成されていました。彼らは若者たちを送り出し、例えばこの写真に見られるような、試験のためのような古い世代の指導者によって支援されており、彼らは農業改革への関与の結果として、経済改革政策決定における重要な力として実際に台頭しました。農業改革は多かれ少なかれボトムアップの取り組みとして始まりましたが、これらのボトムアップの取り組みを国家政策に変えるために、これらの実験がどのように展開され、この文脈でどのように展開されるかを理解するために多くの体系的な研究が現地で行われました。のいわゆるノンファツと呼ばれる農業開発グループは重要な役割を果たし、これらのラウンド改革の触媒のようなものでした。知識人はマルクス主義の古典を独学で学んできた学歴を持っていましたが、基本的に読書グループを形成していた文化革命中に毛沢東主義も学びました。そして、私たちは'1970年代の中国では基本的な政治経済の質問について考えようとしていたのですが、彼らは都市に戻ってきて、大学が入学試験を再開したときも、あらゆる種類のベストや社会科学についてもすぐに調べました。基本的に社会科学の理論と方法にできるだけ早く追いつくために、彼らは知的インスピレーションを主に農業の政治経済から得たが、中国の国営企業部門やその後は他の国々の実証研究からも得た。 「コマンドエコノミーで市場をどうやって作るかということを聞いているんですが、この質問で何が問題になっているのか、あるいは何が課題なのかを、非常に単純なヒューリスティックで簡単に説明する価値があると思います。もちろん、それは単純な理想化されたヒューリスティックです。」ここでは国家レベルでも活動しており、もちろん州などの観点からはさまざまな層がありましたが、これらすべての注意点を念頭に置いて、古いモデルを非常に簡単に要約したい場合は、それが構築されたと言えるでしょう一つの大規模な国家ワークショップのアイデアに基づくもので、基本的には、出力を指揮し、すべての生産ユニットに入力を割り当てる、いくつかのより高いレベルの指揮権限があり、一方、各生産ユニットは、そのUM出力を次の生産ユニットに提供し、その見返りとして、表面上の計画を達成するために割り当てられた特定の入力を受け取ると、ここでの価格は単なる影の操作に過ぎず、単なる会計操作ですが、実際には、これらの価格は流通メカニズムとして重要な役割も果たしました。に設定されていましたこの方法は、必ずしも個々の生産単位や部門全体のコストを反映しているわけではありませんが、むしろ流通と開発の取り組みに目を向けて政治的な意味で設定されているため、農業票の価格は人為的に低く設定され、その結果一定の利益が得られます。
価格は田舎の地域と都市の勤勉な恐怖の間にありますが、重工業の価格でもあります。ここでの描写全体が都市の産業経済についてのみであることはわかっています。QAで農村経済についてさらにコメントしたいと思います。そのため、下流の非必須消費財の価格が設定されると同時に、下流の工業化を促進する方法として、都市工業経済における重工業価格も比較的低く設定されました。家計から流動性を引き出して価格の安定を確保し、そして基本的にアクセス需要がないことを保証するために、農業改革の結果として多かれ少なかれ内生的に起こったことは、次のような多くの点で第二の市場トラックの出現であった。市場の足跡は火星の時代にすでに存在していましたが、基本的には非常に限られた周辺的な出来事であり、改革時代の激動の時代を通じて多かれ少なかれ抑制されていましたが、その後、はるかに強力になり、より普及しました。
農家は計画のためだけでなく、市場のためにも生産を始め、現金収入を生み出し、その現金収入を使って腕時計、自転車、ミシン、ラジオなどの物品を購入していましたが、すぐに町や村の企業も出現しました。つまり、農業分野では、町や村の企業への投入物となる、より上流の種類の工業製品に対する需要もあり、さらに、下流の都市産業部門が拡大していれば、当然、需要も拡大するでしょう。これらのより上流の産業では、多かれ少なかれ、ある種の需要プールのダイナミックさの結果として、計画を超えた市場向けの生産が多かれ少なかれ内生的に生じていたため、問題は、この市場の出現が、このような二重軌道システムの下での余白は、促進され、体系化され、活用されるべき良いものであったのか、それとも、それは抑制されるべきであり、他の改革アプローチが追求されるべきであったのかどうか、この文脈で、えー、1984 年のある会議で、いわゆるモーガンタウン青年会議は重要な役割を果たしました。基本的に北京の主催者チームがエッセイコンテストに基づいて中国全土から若い学者を招集し、若い学者全員が改革の問題についてエッセイを提出するよう招待され、その後モーガンシャインに集まりました。山は経済システム改革の問題を数日間議論したが、すぐに価格改革が議題の中で最も差し迫った最も重要な問題であることが明らかになったので、これらのさまざまな学者グループは数日間の議論を経て今その問題に焦点を当て始めた。
議論の結果、彼らは基本的に、複線価格制度を正式な改革アプローチに転換し、国家政策に転換すべきであるという提案に落ち着いたそして、これらの新しい種類の経済政策の作成において絶対的に重要な役割を果たし、地元の幹部にこの政策が何を意味するのかを説明しました。これはジャズの集合作品からのもので、これは中央政府が何を意図しているのかを理解するのに役立つ方法だと思いますこの政策について、彼はこの政策を実施しなければならない人々に説明しようとしていたので、ええと、彼は基本的に、これは小規模商品を手放すという4つのことを意味し、国家は経済の重要な部分を管理することに集中すべきであり、そうではないと言っていたのです。過度のストレッチと経済のあらゆる部分をコントロールしようとすることは、重要な商品の価格を改革し、調整することも意味します。つまり、価格管理システムを改善し、コストや価値の概念に近づけるために価格を少しずつ調整することですが、
第四に、それはまた、価格を解放することで価格を活性化させた後に、価格に参加することを意味した。解放後の最初の数年間のように、市場で価格の変動が許可されていた部門では、変動の範囲を制限する必要があるため、国家は価格を規制するために市場に参加しなければならなかった。市場参加によって制限されるべきである。つまり、国家は、価格が上昇しすぎたときに市場に供給を追加し、価格が下落しすぎたときに購入できる在庫を保有すべきであり、輸入品も使用できるが、緊急時のバランス調整としてこのメカニズムと実際、重要な商品の価格を安定させるこの種の緩衝在庫ロジックは、まさに今日まで機能し続けている。中国に関する経済ニュースで見た見出しの一つは、中国が卵の備蓄在庫を放出したようだというものだった。一般的な食料価格圧力の状況で卵の価格があまりにも急速に上昇したため、中国国家は卵の備蓄を行っています。それでは、競合する改革陣営に移りましょう。
私は大まかに言えばパッケージ価格改革派を主要メンバーと呼んでいます。このグループは中年の確立された知識人で、多くの場合、1950 年代と 60 年代に正統的な社会主義経済学の訓練を受け、その後 80 年代にアメリカとイギリスで初めて現代経済学を研究しましたが、彼らに若い学者、主に科学者や技術者が加わりました。彼ら彼らは、数学モデルが古い制度をモデル化し、改革の目標となる制度をモデル化し、中国が古い制度から新しい制度への道を再構築するのに役立つ可能性があるというビジョンを共有した。彼らは、インターバル期の社会主義計算論争から知的インスピレーションを得た。ええと、実はこれについては別の記事でも書きましたが、ええと、チェコ共和国出身のポーランド人のブルース・ウム・オッタ・シェイクや、もちろん移民経済学者ではなくハンガリーとハーバード大学を行ったり来たりしていたコルナイなどの東欧移民経済学者と密接な交流があり、彼らはまた、次のようなマネタリストからもインスピレーションを得た。
フリードマンやグレゴリー・チャオのように、基本的に、瞬時に奇跡的な成功をもたらすためのレシピとしての一晩の価格自由化というアイデアは、ルートヴィヒ・イアハートが主張した戦後最高のドイツ改革における気の抜けた奇跡のアイデアに繰り返し結びついたり、定着したりしたのです。すべての価格を一夜にして自由化するだけでドイツ経済の奇跡を引き起こしただろう、少なくともこれはウィルトン・フリードマンらが中国に持ち込んでいた話であり、実際に次の章で私は述べた私はそれを対比させることでその話の間違いを暴きたいのですが、最近の経済史研究とドイツ語文献の一部はわかります、東ヨーロッパの移民経済学者とのこれらのやりとりについて言及しているとき、私はそう思います世界銀行の重要な役割を強調することが重要であり、世界銀行はこれらの経済学者の多くを中国に招待し、中国の改革者と、かつては自らの接触で改革者だったが、その時までに基本的に諦めたか移住していた経済学者との間の交流を促進した。他の場所では、これは東ヨーロッパ側からの価格改革の問題に関する1982年の世界銀行会議の写真です。
私が直接会うことができた唯一の人は、右から2番目のピーター・ケンドールという男性でした。 2017年にパリのコーヒーショップで彼に会ったとき、最初の列の人は彼とまったく同じ服を着ていました。1982年にこの写真を持ち込んできた彼は、1982年の講演会で中国に行って中国当局者らと経済システム改革の最も重要な問題の一つを議論するのはとても大胆な行動だったので、この衣装を大切にして保存していたと私に指摘してくれました。もし故郷のハンガリーに戻っていたら国境で逮捕されていたかもしれないと彼が考えたとき、このことはこの対話に参加した東ヨーロッパ人だけでなく、中国人がいかに大胆だったかを示していると思います。 1982年、現代の主流経済学に追いつこうとするこの広範なタペストリーを交換する中で、母国では基本的にある種の反体制派と考えられていた人々とこれらの重要な問題について基本的に議論したことで、二重トラックシステムへの批判が浮上した。それはデュアルだったのかトラック制度は摩擦と矛盾を生み、実際、改革前の制度よりも不合理な種類の価格制度になるだろうし、短期的な移行メカニズムとして何らかの役割を果たすかもしれないが、一刻も早く克服しなければならないだろう。
おそらく重要なことですが、デュアルトラック価格システムには、固有のレントシーキングと汚職が存在するでしょう。なぜなら、これらの生産ユニットを運営する役人は、市場では高価格を設定し、計画では低価格を優先するため、すぐに贈収賄と汚職のインセンティブを与えることになるからです。そのときの推奨は、大まかに言えば、経済の完全なモデルに基づいて価格を調整し、基本的にある種の均衡価格ベクトルを設定し、緊縮財政政策と金融政策を課し、その後できるだけ早く価格を手放す、最も重要なのは中核を手放すというものだった。価格 最も重要な上流の価格 エネルギー政策などのこと これはその後、賃金と税制の改革と組み合わせることが意図されており、国家による市場参加は間接的なマクロ経済政策に置き換えられるべきであるが、この種の価格アプローチに対する批判は分析的にはビッグバンの考え方に多かれ少なかれ似ている改革が、複線改革派の側から中国国内で浮上し、最上流の最も重要な価格の自由化であるそのようなビッグバンは、調整なしのコストプッシュインフレに存在すると主張した。これらの上流産業の価格は改革前の設計により低すぎたため、多かれ少なかれ必然的に高騰するだろうし、これらすべての生産ユニットは柔らかい予算制約に直面しており、相対的な価格と数量はそうではなかった。実際には市場指向の企業は、これらの大幅な価格上昇を次の生産部門に単純に転嫁するだけであり、最終的には、中国が抑制しなかったためだけでなく、マクロ経済管理によっても抑制できない賃金価格スパイラルに陥ってしまうだろう。マクロ経済管理のための十分な制度的能力がないだけでなく、この種のプロセスは基本的にマクロ経済緊縮政策で抑制するのが非常に難しい内生的貨幣創造のプロセスであるため、当時の議論の中心は下流価格を自由化するかどうかではなかったいわゆる小さな非本質的な消費者目標、特にすでに黒字になっている高収益部門を手放すべきかどうかだが、議論の核心は、国家が経済の中核である産業の管理を維持し、体制を運営すべきかどうかだった。 1986 年には、これらの産業経済の中核部分における複線システムへの国家市場参加の割合が増加し、中国はパッケージ価格改革の実施に非常に近づいた。この改革は徐々に煮詰められながらも、最も重要な分野の自由化に焦点を当てていた。上流の価格について、これは最終的にユーゴスラビアの飢餓対策代表団の介入によって止められました。代表団は、えー、この種の措置は、私が先ほど説明しようとしたコストプッシュインフレの一種に含まれると警告する電報を送り返していました。
興味深いことに、この代表団はジョージ・ソロスによって後援されており、1986年にその代表団と会合した下の写真に写っています。1988 年にドン小平自身が急進的な価格改革に向けて主導権を握り、1988 年までに改革プロセスを通じて解き放たれた社会的、政治的緊張が高まり、あの頃日本がそう見えていたところを、何とか推進する必要があることがわかった。積み重なった障壁を打ち破る、あるいは彼の言葉を借りれば、価格が是正されて初めて改革を強化できるだろう 価格改革を実行しないわけにはいかない、リスクと困難に正面から向き合わなければならない、やってはいけないリスクを恐れて、もっと勇気を出してください。その頃までに汚職があり、社会的不平等が非常に深刻な問題になっていて、抜本的な価格改革があれば、これらの困難をさらに高めることができるという期待がありました。その後、あなたは、警察のショック療法で見られるのとほぼ同じ種類のレトリックを、非常に異なる文脈でより広範に採用しました。つまり、長期の痛みは短期の痛みよりも悪いという考えであり、他の分野でも同様です。将来の発展の基礎を築くために、今は苦い薬を飲み込まなければならないような言葉だが、実際のところ、価格改革の欠如が2050年までに西側諸国に追いつくという中国の目標を妨げるということまでは顔料に伝えていない。8月18日、国営テレビは、政治局が価格と賃金の改革計画を大筋で可決したと報じましたが、これはすでに物価上昇の状況の中で起こっており、二重トラック価格制度は、まあ、ある点まで進歩していました。何人かは、まったく重要ではない経済学者も増えてきました、申し訳ありませんが、まったく重要ではない商品が市場で価格設定されており、この賞品改革計画が原則として可決されたというこの発表に対する反応は、巨大な緊張のこの広範な状況の中で十分でした基本的に取り付け取り付けとパニック買いを引き起こし、それがあまりに深刻だったため、中国指導部はこの計画を撤回し、基本的には1988年の秋に多かれ少なかれ改革をより一般的に保留にした。インフレはしばらく続き、改革の反転と上昇の間の緊張が続いた。私が思う価格これは経済的背景の一部であり、1989年に大規模な抗議活動が1988年に起こっている。ミットとフリードマンは1988年の秋に再び中国に姿を現し、そこで再び急速な自由化を訴えたが、この時点ではうーん、機会の窓は基本的に閉まっており、政治力学は基本的に改革が氷河期にある時点にあったので、これは起こりませんでした一部の人々にはあまり影響を与えていない 2 つの競合する改革の論理を対比できると思う。中国の文脈でもたどることができると思うショック療法の基本的な論理は、比較静学から始めるものと様式化された社会モデルから始めるものである。古いシステムと、理論的に導き出された将来のシステムのターゲット モデル。改革は、古いシステムから新しいシステムへの移行を可能にするショックとして考えられています。ターゲット システムは、完全な市場で構成される aaa システムである必要があります。このビジョンでは、複線システムの論理とは対照的に、計画を破壊することによってのみ達成できます。私は、最初にシステムの周縁部で改革の力学を生み出す方法を特定するために、普及している経済力と制度の分析から始めると考えています。次に、これらの解き放たれたダイナミクスを使用して、社会の安定を損なうことなくこれが機能することを期待して中核を再産業化するが、これはもちろん常に非常に微妙なバランスであり、市場の力はより大きな変革プロセスにおける手段であり、目的ではなく国家によって誘導され、指導され、安定化される必要がある。それ自体、結論として、中国の政策選択は大手銀行ではなく、複線システムだったと言えます。中国の指導者らは最終的に、共産主義国家の存続を危険にさらし、長期的発展のビジョンを危険にさらす覚悟ができていなかった。大手銀行は経済システム改革に対する科学的解決策を約束しているように見えたが、最終的には、持続可能な市場経済を構築することはできないことが判明した。それは計画の中核の機能を損なうことに基づいて構築されたものであり、中国の基幹の機能を損なうことに基づいて構築されたものであるため、非常に危険である」産業経済において、複線システムは多かれ少なかれ政策代替案として徐々に浮上してきたが、これらのより青写真型のアプローチが解決されようとしている間に、これは複線システムが国家による市場創造技術への極端な実験的依存によって作られたものであった。常に必需品と非必需品を区別し、具体的な経済状況と経済分野のさまざまなシステム全体に広がっている力学の体系的な評価に依存しているという事実は、基本的に二重軌道システムが運用されていたという事実であると思います。中国は何を許したのか」米国の指導者らは、ビッグバンには行かないでください。なぜなら、複線システムはいかに不完全であり、汚職を含む多くの問題を引き起こしたからです。にもかかわらず、既に運用されている代替案を提示したのです。ありがとうございます。ありがとうございます。イザベラは非常に興味深いです。概念と考察の点で非常に挑発的だと思いますが、イザベラ チャットを通じていくつかの質問、コメント、コメント、提案を再度受け取ります。一方、いくつかの質問とともに 2 つのコメントを提示させてください。 「あなたが知っているかどうかはわかりませんが、あなたはおそらくそうしているでしょうし、あなたの意見は大歓迎です。銭仁基による移行制度についての議論は大歓迎です。
あなたが彼を知っているかどうかはわかりませんが、彼」今日はチンガ大学で彼はダニー・ロデリックや他の機関と広く出版しており、この二重軌道システムについてあなたが投稿したこの議論は移行制度に関するこの議論に高度に統合されており、さらに彼は財産の問題について明確に議論しています。この移行期間はありません。つまり、インセンティブの観点からは移行できるということですが、驚くべきことに、結果の観点から言えば、ラテンアメリカの観点から見ると、資産は現在も公共部門の手にあり、これは非常に重要です。ラテンアメリカは民営化と同義である自由化プロセスを大規模に通過してきたが、これは中国には当てはまらなかったので、あなたがそう思うかどうかは分からない」少なくとも走行距離については知っています、議論してください、申し訳ありませんが、1980年代、1990年代についてはさらに議論します、これについてあなたの意見は何ですか、それからイザベラ、あなたの観点から想像できると思いますが、この複線システムは2022年にどのような関連性があるのですか、いいえ、それはまだ生きていますそれは、現在の公共部門の政策オプションなどの観点から、それが何を意味するのかに関連しています。チャットでいくつかの質問を受け取る前に、もう一度 2 つの質問をします。
いいえ、素晴らしい質問です。ありがとうございます。
えー、tianzini 氏と daniel roberick 氏、そして移行期の仕事についてこれは基本的に私の仕事を補完するものだと思いますが、違いは私の本が基本的にアイデアのレベルにあることだと思います。
私は 1980 年代にこれらの議論に関与したすべての人々にインタビューしました。私は、この批判的な議論で問題になっている代替的な議論を追跡しようとしているようなものですが、私が理解している限り、彼らの研究は、制度経済学の一種のアプローチであり、制度のダイナミクスの一部を抽出しようとしています。私は基本的に知的歴史の中に制度経済学を組み合わせようとしています ええと、財産権の問題についてです はい、これはもちろん非常に重要であり、これは基本的に、ええと、ある意味で私の本の重要な制限です 1980年代には、権利がまったくなかったわけではないので、財産権に関する議論があったが、それは成立しなかった」まだそれほど普及していないので、その文脈で最も差し迫った問題は価格改革の問題でした。私が収集していたこの信じられないほど厄介な種類の主要な経験的資料をナビゲートしようとして、私は価格改革をアンカーポイントとして使用し、したがって焦点を当てましたただし、これは、これら 2 つのアプローチがそうではないと言っているわけではありません。不動産改革についても教えてください。複線システムの例を挙げると、これは、これらの生産ユニットが計画だけでなく市場にも対応し始めたことを意味します。基本的に上位の計画当局からの命令や命令を実行する企業から、より市場志向の企業へと内部的に変革が始まり、それが基本的に業務のロジックを完全に変え、多くの点で全体の出発点となった。
財産権改革の問題をめぐる議論は実際に 1980 年代に中国で行われ、財産権改革は単に私有財産と公有財産の間の二分法であるべきではなく、中国はある種の動きをすべきであると示唆する最初の声が現れた。これを超えて、私的対公的という二分法を打破する独自の革新的な制度的取り決めを考え出すことを試みています。これは多くの点で、市場と新しいものの出現の計画の組み合わせの二重軌道という考えに関連していると思います。 2番目の質問についての経済統治メカニズムのようなもの 複線システムの関連性 ええと、[音楽]おそらく3つの側面があると思いますが、今日は複線システムの関連性を強調できると思いますので、まず第一に、中国のために」90 年代と 2000 年代の再工業化のプロセスでは、毛沢東主義の発展モデル中国のすべての欠点を伴った火星の時代に作られた産業システムのバックボーンが、重工業の発展における重要なブレークスルーをもたらしたことが非常に重要でした。そして、これを諦めずに、その部分を危険にさらさないで基礎的な産業基盤を構築することは、その後の数十年間の発展にとって重要な基盤だったと思いますので、その観点から、これは基本的に中核を維持し、社会を変革するシステムを誘致するためのものです。核心はあるけど、それを諦めずに、これらの産業を中国国内で国家の管理下に置くという野望を諦めずに、それが中国の重要な基盤だったと思う」経済的権利は、さまざまな意味で、私たちが今直面している緊張です。えーっと、そして中国 えー、第二に、もちろん制度的な観点から考えると、複線システムは今や普遍的なシステムのようなものではありません、えー、それからは程遠い、電力などの最も重要な上流産業の一部には基本的に依然として存在していますしかし、それはここ数十年にわたる制度改革の出発点だったので、電力部門の再建方法で電力部門を例に挙げると、これは非常に慎重で慎重な種類のプラント電力部門からの移行プロセスでした。えー、一つの省庁の下で、えー、2000年代初頭のいくつかの非常に過激な実験がその後中止され、その後基本的にこの制度的再構築のプロセスが、多くの意味で今日までずっと続いているというよりは、より企業的な構造に、つまり全体のようなものです。寒い昨年の秋に不足と電力不足が発生しました えー、ある意味では最新の反復であり、企業側と不動産側の両方の制度的な微調整のようなものがありますが、話の価格、つまり価格設計の側面もありますので、その意味ではもちろん、制度上の取り決めや中国経済の圧倒的な高さは、もう 1980 年代のようなものではありませんが、その道筋は、この初期設定と、この原動力と、現在確立されつつある論理とを大きく結びつけています。 80年代、そして3番目に、今日の最も差し迫った経済政策の問題の1つを意味します。少なくともOECDでは私は知っていますが、ラテンアメリカでは、これはおそらく常緑樹のようなものですが、U.アメリカとヨーロッパは、何年も何年も開発経済学の文脈の外で誰もこの問題について考えなかった後、突然インフレの問題に目覚めました。一方、中国の文脈では、私たちは基本的に物価安定化へのアプローチを持っていることがわかります。もっぱら中央銀行や財政政策によるミクロ経済の安定に依存しているが、それは私が重要な種類の消費者および生産者ヤギの国家市場参加と呼んでいるものにも依存している、特定の手法の価格が高騰していた2021年にはこれが見られるだろうそして基本的には、国有企業に在庫の一部を解放し、この種の指標をため込まないよう奨励するだけでなく、国家備蓄を解放することによって、これらの方法の供給を増やすための非常に調整された取り組みがあったことがわかります。
もう一度、ウクライナとの戦争の文脈で世界経済に現れているコストプッシュの観点からのインフレ圧力の文脈で話します。そして、つまり、つまり、私たちがパンデミックの終焉を迎えているということです。みんなが話し合っているので、その文脈では、中国は実際には、これまでとは全く異なる方法で価格安定化を可能にする制度的枠組みを持っていると思いますが、それは現在の文脈ではかなり重要であることが判明する可能性があり、非常に興味深いですチャットをフォローできるかどうかわかりません。今日はとても活発な交流があります。私たちはとても内気ですが、ここでも質問が 2 つあります。1 つはホルヘ ヴァンプムによるものです。このデュアルトラックグループに関する本を読めるかどうかはわかりません、いや、彼らはとりわけ何を読んだのでしょう、そしてブルーノ・ガンダルグローブ教授による二番目の本は、いや、ええと、だから彼らは本当に信じられないほど折衷的な読書をしていたと思います。彼らがまだこの種の非公式の学生タイプの読書グループの一員のようだった頃、文化革命についての本も確かに読んでいました。そうですね、1920 年代のロシアの新しい経済政策に関連したものや、その文脈における他の形態の社会主義組織の問題についての本も読んでいました。 70年代後半にそれはつまり、虎に巻かれた人々からサイバネティクスに至るまで、信じられないほど広範囲にわたる翻訳作業が行われているということです。つまり、社会科学の理論と手法の全範囲とのこの非常に広範な関与が本当に気に入っているのです。基本的に、私たちが覚えておく必要があるのは、文化革命の間、学問としての経済学は多かれ少なかれ保留されており、社会科学も西洋の知識へのアクセスは非常に限られていたため、これは実際には非常に重要なキャッチアップのようなもので、彼らも研究を進めていました。 -現代経済学の引用を外し、現代経済学の用語を採用し始め、マルクス主義経済学の用語をミクロ経済学、マクロ経済学、価格弾力性などの用語に置き換え、その意味で彼らは新しい古典経済学と関わり始めました。特に、これは、最初は農業実験として外に出て現地調査を行うという非常に帰納的なアプローチと常に組み合わされ、その後は改革の状況を理解しようとする企業に対する非常に大規模な調査研究演習も行われました。この政治的開口部からどのようなイニシアチブが自然発生的に現れたのか、それは 1980 年代に起こった、つまり 5 回ほどの攻撃があったということではなく、基本的にそれに基づいてアイデアを提案し、その後彼らがそれらを実装したらそれで終わりですが、むしろそこにあります。」非常に折衷的な検索で、さまざまな文献を組み合わせて、常にこれらに根ざした一種の帰納的調査研究タイプの演習です。
はい、ありがとうございます。ガンドゥ グローバー教授によるイザベラに関する別の質問があります。ありがとうございました。それと、この問題に関連する 2 つの質問です。あなたが強調した複線システムの管理と統計機能、いいえ、中国政府は何らかの国家生産計画を維持していましたか、そしてこれはGDPと成長統計の観点から国家会計制度にどのような影響を与えましたか、ありがとうございました、それは素晴らしい質問ですねつまり、中国の改革が始まるまでにそれを覚えておく必要がある」文化革命とそれが統計にとって意味するもの、つまり実際に存在していた機関にとって、統計能力は実際には非常に非常に限られていました。統計を収集し、それを体系的に使用するなど、そうですね。つまり、さまざまな意味で、統計装置は非常に大きなものでした。改革期間を通じて、会計に変化が生じています。ええ、私はそのことについては専門家ではありません。私がそうだというふりをしないでください、基本的に、80年代には利用可能な価格の静的統計がたくさんあり、それらはあらゆる種類の異なる種類のラベルで収集され、非常に主要な価格調査機関もありました。これらは、ええと、統計的な、ええと、実証的なデータ収集のような演習が本当に好きで、それらはまた、最初に構築された入出力テーブルなどでもありました。計画に関しては、もちろん計画は 80 年代も継続していましたが、ますます1990年代にはこれから直接的に移行しましたある種の指令経済に基づいて、ますます指示的な計画に向けて計画を立てます えー、これはこの文脈での経済の市場化の結果として生まれました えー、もちろんマクロ経済ガバナンスもますます重要になってきましたが、私は重要だと思います中国を完全に置き換えたわけではないことを確認してください」経済ガバナンスのメカニズムはもちろんですが、マクロ経済ガバナンス計画のメカニズムや国家市場参加型のメカニズムの表面を超えたものは続いています、イザベラに感謝します。そして、当時メキシコと中国から大使を務めていたユージーン大使による最後の質問です。 1989 年の政治危機における危機の解放または自由化において、この複線アプローチはどのような影響を与えるでしょうか。あなたの分析と意見には何らかの関連性がありますか。はい、ありがとうございます。素晴らしい質問です。それでは、基本的に複線システムを通じて何が起こったのかは次のとおりです。市場価格が非常に高かった特定の商品も信じられないほど収益性が高くなったので、基本的に人々が最初のトラックに留まる状況が発生する可能性があります基本的に計画型の基準に基づいて給与を受け取っている高校教師や大学教授が、突然私たちの収入がその人よりも減ったと言っています。路上で卵を売ったり、パンケーキを売ったり、あるいはそれが何であれ、流通の非常に急速な変更のようなものであり、これらは非常に不安定な種類の方法であり、これが構築された社会的緊張の重要な部分だったと私は思います80年代に、そしてもちろんインフレが問題になったとき、基本的に固定的な賃金収入を持っていた人々は、市場収入を持っている人々ほど早く収入が増えなかったので、これはこの種の不平等です。もちろん、汚職の問題もまた、不当な種類の制度と非常に不当な種類の移行という印象をさらに強めました。したがって、これらは、これらの力学が結びつき、そして私たちの一部となったポイントのいくつかであると思います。 '89 年が単にインフレによる経済的な結果だったと言っているわけではありませんが、この種の経済力学がすでに進行していた政治力学を刺激したと思います、イザベラさん、ありがとうございます ii 質問に関してはほぼ終わったと思います ii最後にもう 1 つ問題を持ちたいと思いますが、他の多くの貢献の中でも特に大きな貢献の 1 つは、あなたの本の問題は、この改革開放プロセスにおける世界銀行の重要性の問題です。そして、私が正しく理解しているのであれば、この二重の事件の出来事も世界銀行の追跡システムはそうではありません、あなたの意見では、最近ではそうではありません2022年に勝つ必要はないが、最近の中国政府と世界銀行の関係はどうなっているのか、これも困難を考慮しているが、2012年の開発研究センターとその後のこの大著「ノー」との間の厳しい議論と混乱を思い出してほしい。世界銀行、ウェブページなどから消去されていますが、まだ見つけることができます、あなたの意見ではどうですか、1980年代と1990年代の中国における世界銀行の強い影響の後、今日の関係はどうですか、いいえ、ええと、私は本当にそうではありません世界銀行の最近の中国関与に関する専門家です。つまり、私は80年代などにそこにいたすべての人々にインタビューしましたが、これはそうではありません最近の動向については特別な専門知識は与えられませんが、これはお断りしておきたいのですが、一般的に言えば、ワードバンクと中国の関係は、ワードバンクとその他の国の関係に比べて非常に異なっていたと言えると思います。発展途上国 大まかに言えば、理由は2つあると思います 1つは、中国が世界銀行の融資に大幅に依存するようになったことがないということです つまり、融資をしなかったわけではありませんが、何らかの形で借金を負うことがなかったということです条件などは本当に採用されていたかもしれないので、その意味で中国の観点からすると、銀行という言葉は常に中国政府が活用しようとしていた経済的専門知識の源であり、もちろん役立つクレジットでもありました私'これが問題ではなかったと言っているわけではありませんが、問題ではありませんでした、つまり、銀行ローンという言葉があるかどうかは中国のシステムにとって存在意義ではなかったので、その意味では関係はかなり良好だったと思います他の文脈における um in in in の関係と比べて違う これに関連して私が申し上げたい 2 番目の点は、もちろん、今日の経済政策に関する議論は、1980 年代ほどオープンではなくなっているということです。君にはこういう時期があるんだよ』将来がどうなるかはまったく明確ではありませんが、中国は非常に幅広い可能性に真剣に取り組んでいますが、重要な経済政策の決定において非常に幅広い専門知識源を参考にするというこの原則はある程度継続すると思います。マッケンジーの研究と、同じ種類のテーマについて募集されている中央党学校の研究があるので、同じ文脈で言えば、ワードバンクは中国語における唯一の権威ある情報源というよりも、多数の中の1役であることになる。システムはわかりました、ありがとうございます、またイザベラ、またこの対話を続けられることを願っています、ご想像のとおり、構造改革とショック療法というこのテーマはラテンアメリカでは非常に重要です、いいえ、1980年代以来、ラテンアメリカには詐欺があり、今日に至るまで、平行ショック療法の歴史と中国との比較は非常に重要です いいえ、ありがとうございました 著書の出版おめでとうございます。このダイエットを続けられることを心から願っています 私を受け入れてくれてありがとうございます 学ぶ機会があることを願っていますショック療法のこれらの問題と、それが中国でどのように展開されたかについて、ラテンアメリカの観点からもっと知りたいです。それについての皆さんの見識や見解から学ぶことに非常に興味があります。ありがとうございます。いつか直接私たちを訪問できることを願っています。えっと、いつですか？健康状態により、いいえ、はい、ありがとう、わかりました、これ以上時間をかけたくありません、ありがとうございます、いいえ、楽しい時間を過ごしました、そしてこれからもお互いに手紙を書き続けます、ありがとう、とても良いプレゼンテーションでした、ありがとう、ありがとう、ありがとうあなたもっとお時間をいただきたいのですが、ありがとうございました いいえ、とても楽しい時間を過ごさせていただきました。これからもお互いに手紙を書き続けます、ありがとう、とても良いプレゼンテーションでした、ありがとう、ありがとう、ありがとう
0:06okay it's 1003 so we will start and we will
0:12begin again good morning good afternoon in some places to everybody thank you very much for
0:19your interest i remind you we are at the cycle of conferences of
0:25the center for chinese mexican studies of the school of economics of nam
0:32this is part of the effort we're doing together yolanda trapaga delfin and myself
0:39and i invite you very much to look at the conferences that we usually do every
0:45two weeks sometimes every week since 2005. also we have an interesting
0:54group of videos powerpoints audios on a wide variety of topics and issues
1:01i do also invite you to our next conference that will be in
1:07one week no which will be on on trade policies by
1:12china uh under the analysis of the world trade organization and we will have willie
1:19alfaro who is in charge the director of the division of trade policies of the
1:26world trade organization i think this is going to be an interesting a conference
1:33for many of us know er today i am very happy uh to
1:39to uh to introduce you to dr isabella webber
1:46isabel is a political economist working on china trade and development issues and
1:54also in here on here the history of economic thought she's an assistant professor of economics
2:01at the university of massachusetts in amherst and
2:06some of us have read her first book how china escaped shock
2:12therapy the market reform debate which won the johann robinson price in
2:182021 and so we are very happy to uh well here listen uh to some of the
2:26opinions analysis on this topic by isabella no you are very welcome isabella and as i
2:33mentioned to you we usually have a presentations of around 30 to 45 minutes
2:40and a similar time for questions by the chat of sue
2:47so again good morning and i'm very happy that we would meet well
2:55thank you so much for having me it's a great pleasure to have a chance to share some thoughts on my book with you in
3:01these extraordinary times it's actually my first time that i have a chance to present this work in in mexico
3:08before presenting in brazil and colombia and so on but it's the first time in mexico so i'm very excited and hope
3:13there will be a chance to discuss in in the q a um so let me try to share my screen and i
3:20hope it all works can you see my screen now yes perfect yeah okay um
3:27as enrique has already said the title of my book is how china escaped shock therapy the market reform debate this
3:34book is based on my dissertation and when i started working on this topic
3:40already several years ago there was no way for me to know how
3:45timely this question would become in the context of the birth events in 2021 and
3:512022. in particular the context of the regulatory shift in china last year and
3:58the context of the dramatic events that are unfolding in front of our eyes so in that sense the book has been in some
4:04sense unfortunately been very timely i still hope that it can help us
4:10shed some some light in in terms of providing some historical context um to to the kind of juncture that we are at
4:16at the moment the book is really a book about the 1980s i'm thinking and conceptualizing
4:23the 1980s as a crossroads in the global economy from china's perspective it's the
4:29beginning of china's economic conversions with the west that is to say china's weight in the global economy has
4:36increased in waste that has brought it closer towards the major western
4:41economic powers but this convergence in economic weight
4:47has not come along with the wholesale institutional assimilation of the
4:53chinese economy and political system with those in europe and the united states
4:59even though china has deeply marketized and has been deeply integrated into
5:06global capitalism i think to understand this tension between this economic
5:12convergence without wholesale institutional assimilation it is worth going back to the first decade of reform
5:20in china and understand what kind of path of reform china has embarked on
5:26the 1980s also marked a great divergence between what came to be called russia's
5:32fall and china's rights which of course cannot be reduced to a simple policy
5:37choice in reform policy making but nevertheless it is linked to the difference in market
5:44reform approaches in the two countries
5:49just to give you a very simple estimate to illustrate what i mean by crossroads
5:56of the 1980s if we use medicine gdp data and we go back to the early 19th century then for
6:04china this is basically a picture of fall and then re-emergence starting in
6:09the 1980s whereas in contrast for the ussr it's a picture of rice and then
6:15fall where the turning point is really the 1980s
6:20um this experience contrasts sharply but also with the experience of the united states where the same period basically
6:27came about came along with a rapid rise and then some sort of a stagnation
6:33or slight decline in importance in the world economy
6:39if we look at the transition in the two format signs of socialism from the perspective of two basic macroeconomic
6:45indicators that is cpi and real gdp we see in the case of russia a picture
6:51of hyperinflation and gdp collapse in fact the gdp collapse came along with
6:57one of probably the most dramatic periods of de-industrialization in
7:03recent history along with a pretty severe crisis in
7:08mortality public health education and so on
7:14in contrast in china the pace of growth in the cpi has almost
7:20consistently outpaced has almost consistently been outpaced by the growth in real gdp with the
7:27exception of the um late 1990s so that in contrast to russia
7:32we have a a a an image of a relative price stability under conditions of very
7:39fast growth of course in china inequality has been
7:45rising very fast and problems of environmental degradation and social
7:50justice and so on have been on the um on the minds of of scholars of china's
7:55development for years um if we compare the evolution of
8:00inequality in china and russia we can see that in russia inequality
8:06have increased in the context of a overall decline in incomes and then
8:12re-emergence and levels of income whereas in china it's basically the rich pulling ahead of the poor
8:22the reform approach in russia has been generally labeled as that of shock therapy and of course there's debate of
8:29who exactly where the architects of shock therapy and so on and i don't want to go into the details here i just want
8:34to characterize this basic approach to thinking about the transition from a plant to a market economy and by i'm
8:42summarizing what has been commonly acknowledged as being the four major ingredients of this approach
8:49that is the liberalization of oil prices combined with macroeconomic austerity remarkable economic austerity is meant
8:56to control the general price level and these two elements taken together is
9:01what came to be known the big bang this was then meant to be complemented with trade liberalization in order to
9:08integrate the economy into the global market and finally privatization but
9:14even the most dedicated shock therapists acknowledge that privatization was a relatively slow
9:21complicated process of institutional rebuilding so that the shocking element in shock therapy really was the big bang
9:28and the basic logic was that um shocking the system from an old to a new system would require um starting with such a
9:36big bang from the perspective of neoclassical economics this is in some sense um
9:42emphasizing that one first test to get the prices right otherwise there's no hope of having a market economy
9:50there is a rich literature on the path that china has taken there's a rich
9:56literature on the economic policies that have been implemented in china
10:01but there has been relatively less attention paid to the economics of china's reform approach that is the
10:08intellectual underpinnings that inform the ways in which china has been going about its reform approach this reform
10:16approach i've been calling in my book and others have been using similar language and gradualist experimentalism
10:24that is the idea of feeling the way forward which is not only about pace but also different logic
10:30of reform as i will elaborate throughout this talk
10:36my book basically has two parts the first part is a kind of exercise in zooming out and
10:43asking what different kinds of modes of market creation and price regulation were
10:50invoked in the context of china's 1980s market reform debate and were part of
10:55the large tapestry of knowledge and institutional legacies that informed
11:01market creation in china i start with a chapter on the ancient
11:08tradition of statecraft going back to the guanza that is 300 bc where the idea is to illustrate that marketization in
11:16china was not simply the same as westernization but that china had its own very long legacy of
11:23market creation through the state and market participation in the name of prior stabilization
11:30some of the principles that i'm developing there are that economic and social stabilization can be achieved
11:37through market participation by the state where the idea is that the state
11:42should be focusing on what is heavy to shoot at what is light which is to say
11:48should focus on the essential parts of the economic system while governing the non-essential parts by
11:56stabilizing the essential parts what is essential in this context changes over
12:01time but in the imperial context or even more so in in ancient times this was
12:07really about methods salt um grain and some other basic commodities
12:13the great the question of grain is probably the most canonical example in this context since the so-called ever
12:19normal granularity persists that over centuries was an institution that was
12:25run based on the principle of participation by the state in the market where the state would basically run
12:32public granaries that would buy grain in fall when the supply was very high and
12:37the prices were collapsing and within supply grain um in in spring and summer
12:42when supply was short and prices were high thus basically aiming to stabilize
12:48prices through market participation of course there were all sorts of crisis and repeated debates and so on and i'm
12:54not suggesting that this was all the same over thousands of years but just as a basic logic i think this
12:59is an important reference point
13:05but the idea of my book is not to say oh we can explain china in the 1980s simply
13:11by always having been china by some sort of an essentialist notion of what china
13:17has always been um therefore i'm also engaging in detail with the debates over
13:24price control during um the second world war in the united states which allegedly
13:30is the freest market economy um in the world and in particular also the question of
13:36price decontrol after the war since the transition from a planned war economy to
13:42a post-war market economy was an important reference point in the debates
13:47over market reforms in the socialist world since in many ways this had been the last um
13:54incidence of such a transition from a plant to a market economy that people
14:00were thinking about these issues in the 80s um could draw on as you can see in this graph um in the
14:08second world war um prices were actually surprisingly stable compared to
14:13the first world war in the united states um and production was um surprisingly
14:18strong again compared to the um first world war and this came along with a very comprehensive and far-ranging um
14:25price control regime after the war these price controls were
14:31lifted more or less um overnight basically as a result of a political
14:37meltdown that resulted in in in a discontinuation of these price controls
14:43which then um gave rise to a very sharp increase in
14:48inflation and as you can see here this graph starting in 1946 um in the context
14:53of decontrol so in that sense this this sharp inflation after the war in some sense
15:01was a form of a small bang in the sense of very sudden liberalization
15:10but of course china also had its own experiences during wartime and in fact these experiences were incredibly
15:16important for the debates in the 1980s if anything i think they would have been the most important reference point for
15:24the question of how to recreate a markets in china's command economy
15:30as you all know there was a a long-ranging civil war in china
15:35and one interpretation is that the communists basically won that war not least because they were very successful
15:43at economic warfare that is to say that they re-integrated the
15:50commercial links between the countryside and urban centers in their liberated
15:55areas and ensured that the currencies that they were issuing had something
16:00important to buy stuff like cloth textiles um and then in return in
16:07the cities food um grain and so on in fact i made this connection um thanks
16:13to a note in um by a word bank official in minutes on meetings with chinese
16:18counterparts in 1982 where this world frank officially noted why do the chinese answer to every question that we
16:26have to go back to the liberation period policies and these liberation period
16:31policies followed a similar kind of logic of state market participation as the one that i have
16:37tried to illustrate based on the idea of the ever normal grenary in fact probably
16:43the most famous slogan on china's reforms it is better to be groping for stones to cross the river more steadily
16:51has been invoked by one of the key architects um of china's early economic reforms
16:57chunyun in april 1950 that is um pretty shortly after
17:03the revolution when the new communist government was struggling
17:08with the question of how to continue their effort at um stabilizing prices moving out of the
17:14hyperinflation during the civil war so the complete quote here then is rising prices are not good falling
17:22prices too are not good for production and within the consciousness of china's
17:28leaders their success and bringing hyperinflation under control which the
17:33nationalists had failed to do has been seen as a key element in
17:39the initial success of the communists and thus has been considered an important part of the legitimacy of um
17:47their government so it's been politically um something that um that
17:52that carries a lot of meaning okay moving fast forward to the 1970s
17:59and moving into the second part of my book which kind of moves from these like big picture reference points um to the
18:07debate in the 1980s um into this very close reading of the market reformed
18:13debate in particular they debate over the questions of price liberalization i think it's important to acknowledge
18:19that the urge for reform in the late 70s was very great indeed i'm not saying it was universal
18:26but in the many interviews that i have conducted which of course is a biased sample so
18:31there was some interviewing reformers since i was interested in the debates amongst
18:37reformers but across these different kind of economic reformers who violently
18:42disagreed on the question of how to reform um there was pretty widespread agreement that in the late
18:501970s reform was pretty much a choice of no no choice since the cultural revolution had long run out of steam the
18:58attempts of huago fung to initiate a um another 10 year plan to push a hat with
19:03industrialization had very quickly run into a crisis when the projected oil
19:09findings that were meant to finance that big push did not come forward so that in the late 1970s
19:15china was really in search for new kind of economic model in this context
19:21very early on there was an acknowledgement that this new um economic model would require china to
19:28revive markets in a more systematic way in fact already 1979 deng xiaoping told
19:34a foreign journalist quote saying that the market is limited to capitalism is wrong why can't socialism practice
19:40market economics but the question that was fiercely debated amongst reform economists was
19:48how to introduce market mechanisms into a command economy on the surface this
19:54might sound like a technical quibble among technocratic economists but as i argue in the book
20:02the whole question of market recreation i think turned out to be quite
20:08consequential for china's subsequent path
20:13very broadly speaking there were two camps of reformers in the book i'm distinguishing more and i'm
20:21engaging with a whole range of individuals and quite some detail but for the purposes of this short
20:26presentation i'd like to just focus on on two broad groups on the one hand they were they do attract market reformers
20:33who broadly speaking were composed of young reformed intellectuals who had returned from the countryside after
20:40having spent their youth there during the cultural revolution as so-called sent down youth
20:46they were backed by an older generation of leaders such as for exam for example
20:52whom you can see here in this picture and they really emerged as an important
20:57force in economic reform policy making as a result of their engagement with the
21:04agricultural reforms the agricultural reform started more or less as a bottom-up initiative but in order for
21:11these bottom-up initiatives to be turned into national policy
21:16a lot of systematic research was being conducted on the ground to understand
21:21how these experiments were playing out and in this context the so-called nonfatsu the agricultural development
21:27group played a critical role and was some sort of a catalyst for these round reform
21:33intellectuals they had an educational background being self-trained in marxist classics
21:40but also maoism during the cultural revolution when they basically formed um reading groups and we're trying to and
21:46think about um the the basic political economy questions in china in the 1970s
21:53when they returned to the cities um and when the universities restarted their entrance exams they also very quickly
22:00read up on a whole range of vests and social sciences um trying to basically catch up with social science theory and
22:08methods as quickly as they could they drew their intellectual inspiration importantly
22:15from the political economy of agriculture but also from empirical studies in china in the state and
22:20enterprise sector and later on also in other countries
22:26so if i'm asking how to create markets in a command economy
22:33i think it's worth quickly illustrating um what was at stake with this question or
22:39what what the challenges were so if in a very simple heuristic which
22:45of course is a simple idealized heuristic um and it's also kind of operating here on
22:52the national level where of course there were different layers in terms of provinces and so on but with all these caveats in
22:58mind if we um we want to very simply summarize the old model we could say that it was
23:06built on the idea of one big national workshop where basically there were some higher level command authorities
23:13that would be commanding outputs and assigning inputs to all the production units whereas each production unit would
23:20have to deliver its um output to the next production unit and would in return
23:26receive um certain inputs that was assigned in order to fulfill the plan
23:31on the surface then prices here are simply a shadow operation simply an accounting operation however in reality
23:37um they also performed a critical role as a distrib this as a mechanism of
23:43distribution since these prices were set in a way that did not necessarily
23:48reflect the costs of individual individual production units or even whole sectors but we're rather set in a
23:54political sense with an eye to distribution and
24:00development efforts so the prices of agricultural votes were set
24:06artificially low which resulted in a constant prices are between the um rural
24:11sphere and the urban industrious fear but also the prices for heavy industry
24:16and you we know that this whole depiction here is only on the urban industrial economy and i'm happy to
24:22comment more on the rural economy in the q a so the heavy industry prices in the
24:28urban industrial economy were also set relatively low as a way to encourage
24:33more downstream industrialization at the same time the prices of downstream non-essential consumer goods
24:41were set relatively high in order to extract liquidity from
24:46households and thus ensure price stability and and and basically
24:52ensure that there is no access demand what happened more or less endogenously
25:00as a result of the agricultural reforms was the emergence of a second market
25:05track in many ways such market tracks already existed during the mars period but they were basically
25:11very limited marginal occurrences that were more or less suppressed
25:19throughout the turbulent years of the period in the reform era then they became much
25:26stronger and much more prevalent since as agricultural households started to produce not only for the plan but also
25:33for the market they were generating cash incomes and they were using these cash incomes to buy stuff like wrist watches
25:39bicycles sewing machines radios and so on but soon also the township and village
25:46enterprises emerged which meant that in the agricultural sphere there was also a demand for um more upstream kind of
25:53industrial goods that would be serving as inputs into the township and village enterprises and furthermore of
25:59course if the downstream urban industrial sectors were expanding then they would also have expanding
26:06demand for these more upstream industries so that more or less as a result of a demand pool kind of dynamic
26:14this production for the market beyond the plan was emerging
26:20more or less endogenously so the question then was whether this
26:25emergence of markets at the margins under this dual track kind of system
26:32was a good thing that should be fostered and systematized and used or whether it was a bad thing that should be
26:38suppressed and some other reform approach should be um
26:43pursued in this context um one conference in 1984 the so-called morgantown youth
26:50conference played an important role where basically um a team of organizers
26:55in beijing summoned young scholars from across china based on an essay competition where all of these
27:02young scholars were invited to submit essays on questions of reform and then gathered at morganshine mountain for
27:09several days discussing questions of economic system reform it very quickly became clear that price reform was the
27:15most pressing and most important question on the table so that these various groups of um scholars started to
27:21focus on that question now after days of debate they basically settled um on a
27:27proposal that suggested that the dual track price system should be turned into
27:33a formal reform approach and should be turned into national policy
27:40this is in fact also what happened in 1985 um and chaotian who was prime
27:45minister in the 1980s and was an absolutely critical player in the creation of these new kind
27:52of economic policies that explained to local cadres what this policy would mean
27:57this is from the collective works of jazz and i find this a useful way to understand what the um national
28:04government was intending with this policy since he was trying to explain it to the people who would have to
28:10implement this policy um and he was saying that basically this would mean four things letting go of
28:17small commodities the state should focus on controlling important parts of the economy and not
28:24over stretch and trying to control all parts of the economy it would also mean reforming and adjusting the prices
28:31of of important goods um by improving the price management system and
28:37adjusting the prices in small steps so that they would come closer to some
28:42notion of cost or value but fourthly it also meant participating
28:48some quote after having enlivened prices by letting them go the state had to
28:54participate in the market to regulate the prices as in the first years after
29:00liberation for sectors where prices were allowed to fluctuate on the market the range of the
29:05fluctuations should be limited by market participation that is to say the state
29:10should have stocks to be able to add supplies to the market when the price was rising too high and purchased when
29:17the price was falling too low in this context and imports could also be used
29:22but only as an emergency balancing mechanism and in fact this kind of buffer stock
29:28logic of stabilizing the prices of important goods continues to operate until the
29:35very day just today one of the headlines that i saw in the economic news on china was that china
29:41has released stocks of its egg reserve apparently the chinese state is running
29:46an egg reserve since the prices for eggs were increasing too fast in the context of
29:53general food price pressures okay let me now move to the competing reform
30:01camp which i am broadly speaking calling the packaged price reformers
30:06the main members of this group were middle-aged established intellectuals
30:11were often um trained in orthodox socialist economics in the 1950s and 60s
30:17and then in the 80s were the first to study modern economics in the united states and england they were joined by
30:24young academics mostly scientists and engineers who and they shared a vision that
30:31mathematical models could model the old system and could model a target system for reform and could help to re to
30:39formulate china's path from the old system to the new system
30:44they drew their intellectual inspiration from the socialist calculation debate of the interval period um in fact i've also
30:51written on this in separate articles and um we're in close exchange with eastern european immigrant economists
30:57such as the polish bruce um otta sheikh from the czech republic and kornai who
31:02of course was not an immigrant economist but someone who was going back and forth between hungary and harvard
31:09they also drew inspiration from monetarists such as friedman and gregory
31:15chao and basically the idea of overnight price liberalization as a recipe for for
31:21instantaneous miraculous um success was in this context repeatedly um linked or
31:28anchored on the idea of an airhead miracle in best german post-war um
31:35reform where ludwig earhart allegedly would have instigated the german economic miracle
31:42simply by liberalizing all prices overnight um at least this was the story
31:48that uh wilton friedman and others were bringing to china and in fact in a forthcoming chapter i'm kind of
31:54debunking that story by contrasting it but some of the recent economic history research and german language literature
32:02okay um when i'm referring to these exchanges with eastern european immigrant
32:07economists i think it's important to highlight the critical role of the world bank
32:13the world bank invited many of these economists to china and facilitated
32:18exchanges between chinese reformers and these economists who used to be reformers in
32:24their own contacts but by the time had basically given up or emigrated to other places this is a
32:31picture here of the 1982 world bank conference on questions of price reform
32:38from the side of the eastern europeans the only person whom i say got to meet in person
32:43was a a man called peter kendall who is the second from the right in the first
32:49row who when i met him in paris in a coffee shop in 2017 was wearing the exact same
32:56outfit that he's bringing in this picture in 1982 pointing out to me that he had treasured and preserved this
33:02outfit since um it was such a bold move to go to china and discuss with chinese
33:07officials one of the most critical questions of economic system reform in 1982 at a time
33:14when he thought that if he had returned to his native hungary he might well have been arrested at the border i think that
33:22this illustrates just how bold not only the eastern europeans were who um
33:27engaged in this dialogue but also how bold the chinese were in 1982 that they
33:32basically discussed these critical questions with people who were basically considered some some sort of dissidents
33:39in in their home countries out of these exchanging this broad
33:45tapestry of trying to catch up with modern mainstream economics emerged a critique of the dual track system the
33:53argument was that the dual track system would create friction and contradiction and in fact would amount to a more
33:59irrational kind of price system than the pre-reform system it might have some
34:05role to play as the short-run um transitional mechanism but would have to be overcome as quickly as possible
34:13important um the the the dual track price system would reside in inherent
34:18rent seeking and corruption since the officials running these production units would now pri face high prices on the
34:25market and low prices in the plan which would immediately give incentives for bribery and corruption
34:33their recommendation then broadly speaking was to adjust prices based on uh complete
34:40models of the economy to basically set up some sort of a equilibrium price vector impose tight fiscal and monetary
34:48policy and then let go of prices as quickly as possibly most importantly let go of the
34:55core prices the most important most upstream prices stuff like energy steer
35:00and so on this was then meant to be combined with wage and tax reform and
35:06the market participation by the state should be replaced with indirect macroeconomic policies
35:15however a critique of this kind of
35:20approach to price reform that more or less resembles analytically the idea of a big bang emerged within china from the
35:27side of the dual track reformers they argued that such a big bang that is the
35:33liberalization of the most upstream most important prices would reside in cost push inflation
35:39without adjusting the relative prices and quantities since the prices in these
35:44upstream industries were in the pre-reform era by design too low they
35:50would more or less as a necessity be shooting up and since all of these production units
35:55they faced a soft budget constraint and were not actually market oriented enterprises they would simply hand down
36:02these large price increases to the next production unit which eventually would reside in a wage price spiral which
36:09could not be contained by macroeconomic control not only because china didn't have sufficient institutional capacity
36:16for macroeconomic control but also because this kind of process was basically a process of endogenous money
36:23creation that would be very hard to suppress with macroeconomic austerity
36:30the core of the debate then was not whether or not to liberalize downstream prices was not whether or not to let go
36:37of so-called small inessential consumer goals especially the highly profitable sectors that were
36:44already in surplus but the core of the debate was whether or not the state should keep control of
36:50the industrial core of the economy and operate a regime of state market
36:56participation in a dual track system in these core parts of the industrial
37:02economy in 1986 china came very close to
37:08implementing a package price reform that was gradually boiled down but nevertheless was focused on liberalizing
37:15the most important upstream prices this was ultimately stopped by the
37:20intervention of a delegation to hunger in yugoslavia that was sending back telegrams warning that this um this kind
37:27of step would reside in the kind of cost push inflation that i have just tried to describe to you in fact this delegation
37:34was interestingly sponsored by george soros who's here in in the picture on the bottom meeting with that delegation
37:40in 1986. in 1988 don xiaoping himself took
37:45initiative towards uh radical price reform and by 1988 the social and
37:51political tensions that were unleashed through the reform process were mounting to a point where um where uh then japan
37:58seemed to have um found that he needed to somehow push ahead and crash through
38:04the barriers that had um build up or as he put it only once prices have been straightened
38:10out will we be able to step up reform we cannot not carry out price reform we
38:16have to face the risks and difficulties head on we must not be afraid of risks and be
38:21even more courageous corruption by then and social inequalities had become a very serious
38:27um issue and there was a hope that there's a radical price reform could um elevate
38:33these difficulties don't you ping then also adopted more or less the same same kind of rhetoric that
38:40we can find in in police for shock therapy more broadly in very different
38:45contexts that is the idea that long-term pain is worse than short-term pain so in
38:50other words you have to kind of swallow the bitter pill now in order to lay the foundations for future development in
38:57fact don't tell pigment as far to say that a lack of price reform impedes china's goal of catching up with western
39:04countries by 2050. um on august 18th the state tv then
39:12reported that the politburo had passed in principle a plan for price and wage
39:17reform and this was happening in a context of already rising price distance um the dual track price system had had
39:25progressed um to a point where um several um were more and more also not at all unimportant economists
39:32sorry not at all unimportant commodities were being um priced on the market and
39:37the reaction to this announcement of um this prize
39:42reform plan having passed in principle was in this broad context of enormous
39:48tensions enough to basically unleash bank runs and panic buying that were so severe
39:54that the chinese leadership reversed this plan and then basically in fall of 1988 more or less put reform more
40:00generally on hold inflation continued for a while and this tension between a reversal of reform and rising prices i
40:08think is part of the economic context in which then um the the the large scale
40:13protests in in 1989 are occurring
40:18in 1988 mitt and friedman made another appearance in china in the fall of 1988
40:23where he was once more urging for rapid liberalization but at this point um the window of opportunity um had basically
40:31closed and um uh the the the political dynamic was at a point where basically reform was on ice
40:38so this didn't have much repercussions in some i think we can contrast two
40:45competing logics of reform where the basic logic of shock therapy that i
40:50think we can also trace in the chinese context is one to start from comparative statics and to
40:57start from a stylized model of the old system and a theoretically derived target model
41:04for the future system where reform is then being thought of as a shock that
41:09enables the transition from the old to the new system the target system is um a
41:16should be a a a system that is composed of complete markets
41:22which in this vision can only be achieved by destroying the plan in contrast the logic of the dual track
41:29system is i think to start from an analysis of prevailing economic forces
41:34and institutions in order to identify ways to create reform dynamics initially
41:40at the margins of the system then use these unleashed dynamics to reindustrialize the core
41:47hoping that this would work without undermining social stability which is of course always an extremely delicate
41:54balance market forces here then are means in a larger transformation process and need
41:59to be unleashed steered and guided and stabilized by the state rather than
42:05being a goal in themselves
42:11in conclusion then i would say that china's policy choice was not the big bank but the dual track
42:18system because china's leaders were ultimately not prepared to risk the survival of the communist state and to
42:24endanger their vision for long-term development the big banks seem to promise a scientific solution to
42:31economic system reform but was ultimately found not to create a viable market economy while being enormously
42:39risky since it was built on undermining the functioning of the core of the plan
42:45such built on the on undermining the functioning of the backbone of china's
42:50industrial economy the dual track system had more or less gradually emerged as policy alternative
42:57while these more blueprint type approaches were trying to be worked out
43:03this was crea the dual track system was created through an extreme experimental reliance
43:09on techniques of market creation by the state always distinguishing between essential and inessential goods and
43:16relying on a systematic assessment of the concrete economic conditions and dynamics that prevailed across the
43:23different systems in areas of the economy i think that the the the
43:29the fact that the dual track system was operate in operation was basically what
43:35allowed china's leaders not to go for a big bang because however imperfect the
43:41dual track system was and it did create a lot of problems including corruption it
43:47nevertheless presented an alternative that was already in operation thank you
43:52very much thank you very much isabella very
43:58interesting and i think a very provocative
44:03in terms of concepts and in terms of reflection while we'll receive some questions and
44:11comments and comments and suggestions again through the chat
44:16isabella let me pose you two comments in
44:21with some questions on the one hand uh the the i don't know
44:26if you are aware you very probably are and your opinion would be very welcome
44:32the discussion of a transitional institutions by a qian jinki i don't
44:40know if you know him he's today in chingua university and he published
44:47widely with danny roderick and other institutions uh and this discussion that
44:55you post of this dual track system no is highly integrated in this discussion
45:02on transitional institutions with the addition that he explicitly discusses the issue
45:10of the property in this transition period no which means you can have a transition
45:18in terms of uh incentives but surprisingly and in in terms
45:26of of results the property is still in the
45:32hand of the public sector now from a latin american perspective this is very
45:37important because countries such as latin america have gone massively
45:42through liberalization processes which are a synonym to privatization this was not
45:50the case in china so i i don't know if you're aware of mileage at least
45:56discussion uh
46:05sorry so discussion of
46:10more in the 1980s 1990s what is your opinion on this and then
46:16isabella as you might imagine from your perspective what is the
46:22relevance of this dual track system in 2022 no is it still alive is it relevant
46:31what does it mean in terms of policy options for the current public sector etc again
46:39two questions before we receive some questions by the chat no
46:46yeah these are great questions thank you very much um on the work of uh tianzini and daniel
46:53roderick and transitional institutions i would say that this is basically complementary to my work um i think the
46:59difference is that my book is basically on the level of ideas right i've
47:04interviewed all these people that were involved in these debates in the 1980s and i'm kind of trying to trace um the
47:10the alternative arguments that were at stake in this critical debate whereas
47:15their work as far as i understand it it's more of an institutional economics kind of approach trying to um trying to
47:23distill some of these institutional dynamics where i'm basically trying to combine institutional economics within
47:29intellectual history um on the question of property rights yes this is of course
47:35incredibly important and this is basically um uh in some ways an important limitation of
47:41my book since in the 1980s it's not like there were no discussions around property rights but they weren't as prevalent yet um so the the the most
47:49pressing question in that context was the question of price reform um and in trying to navigate this incredibly
47:56messy kind of primary empirical material that i was collecting i used price reform as my
48:02anchor point and therefore focused on this primarily however this is not to say that these
48:08two approaches don't also tell us something about property reform since um
48:13uh if you take the the example of the of the um of the dual track system then this also
48:21meant that as these production units started to cater not only to the plan but also the market they were starting
48:28to become internally transformed from entities that were basically implementing commands and orders from
48:35higher up planning authorities to more and more market-oriented kind of
48:40enterprises which then basically completely changed their logic of operation and which was in many ways the
48:46starting point of the whole debate around questions of property rights reform and
48:51in fact were in the 1980s in in the late 1980s in china first voices emerged that
48:57suggested that property rights reform should not simply be a dichotomy between
49:02private property and public property but that china should kind of move beyond this and try to come up with its own
49:08innovative institutional arrangements that would break through um the dichotomy of private versus public which
49:15is i think in many ways linked to this idea of dual track of combinations of market and plan of of the emergence of
49:23new kind of economic governance mechanisms on your second question the relevance of
49:29the dual track system i think um [Music] there are probably kind of
49:35three dimensions in which um i could emphasize the relevance of the dual
49:41track system today so first of all i think that
49:48for china's re-industrialization process in the 90s and 2000s it was very
49:54important that the backbone of the industrial system that was created during the mars period with all the
50:00faults of the maoist development model china had made some breakthroughs important
50:05breakthroughs in the development of heavy industry and the building up of a basic industrial foundation
50:12not giving up on this not um not risking that part i think was an important
50:18foundation for the development in the subsequent decades so from that perspective um this to attract system
50:25that basically preserve the core and transform the core but without um giving
50:31up on it without giving up on the ambition of having these industries within china under the um under the
50:37stewardship of the state i think was an important foundation of china's economic rights
50:43which in many ways um is um the tension that we are facing now right um in
50:49between the u.s um and and china um secondly i think from an institutional
50:56perspective of course the dual track system is now no longer like a universal kind of
51:02system uh far from it it basically still exists in in some of the most important
51:08upstream industries stuff like electricity um but it was the starting point of these
51:14decades of institutional reform so if you take the example of the electricity sector in the ways in which the
51:20electricity sector was being rebuilt then this was a very um careful
51:26cautious kind of process moving from a plant electricity sector under uh under
51:33one ministry um into a more corporate kind of structure than several and
51:38pretty radical experiments in the early 2000s which were then stopped and then basically this institutional rebuilding
51:45process has continued all the way until today in many ways i mean the the whole like cold shortages and electricity
51:50shortages in in in fall last year uh in some sense the latest iteration and
51:56there's like institutional fine-tuning um of of both the the corporate and property side but also the the price um
52:04price design side of the story so in that sense um
52:09the the the institutional arrangements and the commanding heights of china's economy are of course no longer what
52:14they were in the 1980s but the path very much links um to this um initial um
52:21setup to to this dynamic to the logic that is being established in the 80s and
52:26then thirdly i mean one of the most pressing um economic policy questions of the day i suppose um at
52:33least in the oecd i know in latin america this is probably more of an evergreen but the u.s and europe suddenly wakes up to
52:40the problem of inflation after no one has thought about this outside the context of development
52:45economics for years and years and years um whereas in the chinese context we see
52:51that we basically have an approach to price stabilization that does not exclusively rely on microeconomic
52:57stabilization through the central bank or through fiscal
53:02policy but that also relies on what i have been calling state market participation
53:09for important kinds of consumer and producer goats we
53:14could see this in 2021 when the price for um certain methods was shooting up and
53:20basically there was a very coordinated effort to increase the supply of these methods by
53:26encouraging state-owned enterprises to release some of their inventories and not hoard um these kind of metrics but
53:32also by releasing um national reserves and we can see this again as we speak in the context of the
53:40inflationary pressures from a cost push perspective that are emerging in the um global economy in in in the context of
53:47the war with ukraine and um the the the i mean oh all the terminal of the pandemic that we
53:52have all been talking about so that context then i think china really has an institutional setup that allows it to do
53:59price stabilization in ways that is quite drastically different and that could prove to be fairly critical in in
54:06in the current context very interesting i don't know if you can
54:12follow the the the chat usually we have a very active
54:18uh fellowship today we are very shy
54:24but again there are two questions so far one by jorge vampum i don't know if you can
54:30read it regarding this dual track group no what did they read
54:37among other things and then the second by professor bruno
54:42gandalgrove no yeah um so i think they were really incredibly
54:48eclectic in their reading many of them during i mean during the cultural revolution when they were still like
54:54part of these kind of informal student type reading groups um were
55:00certainly also reading tax that um were related to the new economic policy in
55:05russia in in the 1920s and questions of other forms of socialist organizations
55:11in that context um in in the in the late 70s it's really
55:18i mean there are translation efforts that that are incredibly far-ranging from
55:24tigered persons to um cybernetics so you have really like this very very
55:30broad engagement with a whole range of of social science theories and methods
55:35um where basically we have to remember that during the cultural revolution economics as a discipline had been more
55:40or less on hold and um the the the the social science access to
55:46western knowledge was also very very limited so this was really like a very major catch-up exercise
55:53they were also studying increasingly quote-unquote modern economics and started to adopt the language of of
56:00modern economics and replaced the terminology of marxist economics with the terminology of microeconomics and
56:07macroeconomics and price elasticities and all of that so that sense they did start to engage with new classical
56:13economics in particular however this was always combined with this very
56:20inductive approach of going out and doing field research
56:25initially in the agricultural experiments and later on also very large scale research
56:31survey exercises um in the state on enterprises trying to understand what the state of reform was and what kind of
56:38initiatives were emerging spontaneously out of this political opening that uh that that
56:45that that happened in in the 1980s so that it was not like there were like five attacks that they read and then
56:52they basically threw their ideas based on that and then they implemented them and then that's that's the story but
56:57it's rather there's a very eclectic search um across a whole range of different literatures combined and
57:03always rooted in these a kind of inductive survey research type of exercises
57:11okay thank you and there is another question isabella by professor
57:17gandu grover thank you very much and two questions related to the administrative
57:23and statistical functioning of the dual track system that you highlight no did
57:29the chinese government maintain some kind of national production plan
57:34and how did this affect the national accounting system in terms of gdp and
57:40growth statistics thank you very much
57:47yeah that's a great question um i mean we have to remember that by the beginning of reform china's statistical
57:53capacity was actually very very limited again because of the cultural revolution
57:58and what that had meant for um for the the statistic i mean the the institutions that were actually i'm
58:05collecting statistics and and systematically using them and so on right so in many ways the statistical
58:11apparatus was was being really big um through the reform period um
58:17there is a shift in in accounting that is occurring um i am not an expert on
58:23that and i should not pretend i am um i know that basically i mean there is a lot of price static
58:29statistics um available for the 80s um and they were collected with all sorts
58:35of different kinds of labels and there were very major price research institutes that also started with these
58:41um with these uh uh statistical um uh really like empirical data gathering
58:48kind of exercises they were also the first some input output tables constructed and so on um
58:55as regards the plan i mean the plan continued in the 80s of course but there
59:00was increasingly a shift then in the 1990s from this like straight out direct
59:06planning based on some sort of a command economy towards more and more indicative
59:11planning um which which came about um as a result of the marketization of the
59:16economy in this context then the the macroeconomic
59:22governance of course also became increasingly important but it's i think important to see that it not did not
59:27completely replace china's economic governance mechanisms but that beyond the surface
59:34of um of macroeconomic governance planning mechanisms and state market
59:40participation type of mechanisms continued
59:46thank you isabella and the last question by ambassador eugene who was ambassador in those times and in
59:54from mexico and china and asks a wh what would be the impact of this
1:00:00double track approach in liberating or in the liberalization of crisis in the
1:00:061989 political crisis is there some kind of link
1:00:11in your analysis and opinion
1:00:17yeah thank you great question um so basically what happened through the dual track
1:00:24system is that certain things that were that had very high market prices also became
1:00:31incredibly profitable so you could have a situation where people were basically within the first track um let's say
1:00:39high school teachers or university professors who are basically still receiving their salaries based on the plan type of
1:00:46standards suddenly we're making less money than the guy who's selling eggs in the streets or pancakes or whatever it
1:00:52may be so that you get this like very rapid um uh
1:00:58reshuffling of of distribution and these are very erratic kind of ways which i
1:01:03think was an important part of the social tensions that were built up um in
1:01:08in the 80s and then of course um as inflation became a problem those that
1:01:13basically had fixed kind of wage income some uh did not see their incomes just
1:01:19as rapidly as those that had market income so this is an these kind of inequalities the the
1:01:26problem of corruption of course also added to the impression of of of um of
1:01:32an unjust kind of system and a very unjust kind of transition so i think these are some of the points where where
1:01:39these dynamics um uh were connected and and were part of i'm not saying that 89
1:01:44was simply an economic kind of outcome of inflation but i think that that this kind of economic dynamic
1:01:51fueled the political dynamic that was already in the making
1:01:57thank you isabella look i i think we are pretty much
1:02:04done in terms of questions i i would have one last issue
1:02:09i think one of the great contributions among many others is the issue of your book is the issue
1:02:16of the importance of the world bank in this reform and
1:02:22opening up process and if i understand correctly also the incidents incidents in this dual
1:02:29track system of the world bank no so in in in your opinion
1:02:37more recently it doesn't have to win 2022 but how is the relationship between more
1:02:44recently between the the chinese government and the world bank
1:02:50considering also a difficulties i remind you
1:02:57the harsh discussions and disruptions between the development research center
1:03:03in in 2012 and then this big book no
1:03:09with the world bank that got erased from web pages etc and you
1:03:16can still find it etc in your opinion how is
1:03:21how is the relationship today after this strong impact of the world bank in china
1:03:27in the 1980s and 1990s no yeah um so i'm really not an expert on
1:03:34the world bank's recent engagement in china since i i mean i interviewed all the people who were there in the 80s and
1:03:40so on but this doesn't give me any privileged expertise on on the more more recent
1:03:46developments i just want to like put this caveat i think generally speaking we can say that the relationship between
1:03:52the word bank and china was very different compared to the relationship between the word bank and other developing countries um
1:03:59for broadly speaking i think two reasons one is that china never became in a
1:04:04substantial way dependent on world bank loans right i mean it's not like they didn't take out loans but they never
1:04:10became indebted in a way where any kind of conditionalities and so on would could really have been um
1:04:17employed so in that sense from the chinese perspective the word bank has always been more of a source of economic
1:04:24expertise that the chinese government was trying to draw on and of course also credits that came in useful i'm not
1:04:30saying this didn't didn't matter but it didn't matter i mean it it wasn't existential to the chinese system
1:04:36whether they had these word bank loans or not so in that sense the relationship has i think been been quite different
1:04:44compared to the relationship um in in in in other contexts the
1:04:50related second point that i'd like to make is that of course the economic policy discourse
1:04:57today is by far no no longer as open as it was in the 1980s because in the 80s you have this
1:05:04kind of period where it's really not entirely clear um what the future will look like and china is very seriously engaging
1:05:11with a very wide range of possibilities nevertheless i think this this
1:05:17principle of consulting a very wide range of sources of expertise in
1:05:23important economic policy decisions to some extent continues where you can have
1:05:29a study by mckenzie and a study from the central party school being solicited on
1:05:34the same kind of topic right so in that same context then the word bank is one
1:05:40player amongst many rather than the one and only authoritative source within the
1:05:46chinese system okay thank you very much isabella again
1:05:53i i hope we can continue having this dialogue again as you might imagine this
1:06:00topic of a structural reforms and shock therapies is very important in
1:06:07latin america no since the 1980s latin america has have con
1:06:14and until today we have a long history of shock therapies and
1:06:19the the comparison with china is very relevant no so thank you very much congratulations
1:06:26again on your book and i sincerely hope we can continue in this diet
1:06:33thank you very much for having me i hope there will be a chance to learn more um from the latin american perspective on
1:06:38these questions of shock therapy and how it played out in china would be very interested to learn from everybody's
1:06:45insights and and views on that thank you we hope you can visit us sometime in person
1:06:52uh when the when the health situation allows you to no
1:06:58yeah thank you okay we don't want to take more of your time and thank you very much no have a
1:07:05great time and we will continue writing each other thank you was a very
1:07:10good presentation thank you thank thank you
1:07:33you
0:06okay it's 1003 so we will start and we will
0:12begin again good morning good afternoon in some places to everybody thank you very much for
0:19your interest i remind you we are at the cycle of conferences of
0:25the center for chinese mexican studies of the school of economics of nam
0:32this is part of the effort we're doing together yolanda trapaga delfin and myself
0:39and i invite you very much to look at the conferences that we usually do every
0:45two weeks sometimes every week since 2005. also we have an interesting
0:54group of videos powerpoints audios on a wide variety of topics and issues
1:01i do also invite you to our next conference that will be in
1:07one week no which will be on on trade policies by
1:12china uh under the analysis of the world trade organization and we will have willie
1:19alfaro who is in charge the director of the division of trade policies of the
1:26world trade organization i think this is going to be an interesting a conference
1:33for many of us know er today i am very happy uh to
1:39to uh to introduce you to dr isabella webber
1:46isabel is a political economist working on china trade and development issues and
1:54also in here on here the history of economic thought she's an assistant professor of economics
2:01at the university of massachusetts in amherst and
2:06some of us have read her first book how china escaped shock
2:12therapy the market reform debate which won the johann robinson price in
2:182021 and so we are very happy to uh well here listen uh to some of the
2:26opinions analysis on this topic by isabella no you are very welcome isabella and as i
2:33mentioned to you we usually have a presentations of around 30 to 45 minutes
2:40and a similar time for questions by the chat of sue
2:47so again good morning and i'm very happy that we would meet well
2:55thank you so much for having me it's a great pleasure to have a chance to share some thoughts on my book with you in
3:01these extraordinary times it's actually my first time that i have a chance to present this work in in mexico
3:08before presenting in brazil and colombia and so on but it's the first time in mexico so i'm very excited and hope
3:13there will be a chance to discuss in in the q a um so let me try to share my screen and i
3:20hope it all works can you see my screen now yes perfect yeah okay um
3:27as enrique has already said the title of my book is how china escaped shock therapy the market reform debate this
3:34book is based on my dissertation and when i started working on this topic
3:40already several years ago there was no way for me to know how
3:45timely this question would become in the context of the birth events in 2021 and
3:512022. in particular the context of the regulatory shift in china last year and
3:58the context of the dramatic events that are unfolding in front of our eyes so in that sense the book has been in some
4:04sense unfortunately been very timely i still hope that it can help us
4:10shed some some light in in terms of providing some historical context um to to the kind of juncture that we are at
4:16at the moment the book is really a book about the 1980s i'm thinking and conceptualizing
4:23the 1980s as a crossroads in the global economy from china's perspective it's the
4:29beginning of china's economic conversions with the west that is to say china's weight in the global economy has
4:36increased in waste that has brought it closer towards the major western
4:41economic powers but this convergence in economic weight
4:47has not come along with the wholesale institutional assimilation of the
4:53chinese economy and political system with those in europe and the united states
4:59even though china has deeply marketized and has been deeply integrated into
5:06global capitalism i think to understand this tension between this economic
5:12convergence without wholesale institutional assimilation it is worth going back to the first decade of reform
5:20in china and understand what kind of path of reform china has embarked on
5:26the 1980s also marked a great divergence between what came to be called russia's
5:32fall and china's rights which of course cannot be reduced to a simple policy
5:37choice in reform policy making but nevertheless it is linked to the difference in market
5:44reform approaches in the two countries
5:49just to give you a very simple estimate to illustrate what i mean by crossroads
5:56of the 1980s if we use medicine gdp data and we go back to the early 19th century then for
6:04china this is basically a picture of fall and then re-emergence starting in
6:09the 1980s whereas in contrast for the ussr it's a picture of rice and then
6:15fall where the turning point is really the 1980s
6:20um this experience contrasts sharply but also with the experience of the united states where the same period basically
6:27came about came along with a rapid rise and then some sort of a stagnation
6:33or slight decline in importance in the world economy
6:39if we look at the transition in the two format signs of socialism from the perspective of two basic macroeconomic
6:45indicators that is cpi and real gdp we see in the case of russia a picture
6:51of hyperinflation and gdp collapse in fact the gdp collapse came along with
6:57one of probably the most dramatic periods of de-industrialization in
7:03recent history along with a pretty severe crisis in
7:08mortality public health education and so on
7:14in contrast in china the pace of growth in the cpi has almost
7:20consistently outpaced has almost consistently been outpaced by the growth in real gdp with the
7:27exception of the um late 1990s so that in contrast to russia
7:32we have a a a an image of a relative price stability under conditions of very
7:39fast growth of course in china inequality has been
7:45rising very fast and problems of environmental degradation and social
7:50justice and so on have been on the um on the minds of of scholars of china's
7:55development for years um if we compare the evolution of
8:00inequality in china and russia we can see that in russia inequality
8:06have increased in the context of a overall decline in incomes and then
8:12re-emergence and levels of income whereas in china it's basically the rich pulling ahead of the poor
8:22the reform approach in russia has been generally labeled as that of shock therapy and of course there's debate of
8:29who exactly where the architects of shock therapy and so on and i don't want to go into the details here i just want
8:34to characterize this basic approach to thinking about the transition from a plant to a market economy and by i'm
8:42summarizing what has been commonly acknowledged as being the four major ingredients of this approach
8:49that is the liberalization of oil prices combined with macroeconomic austerity remarkable economic austerity is meant
8:56to control the general price level and these two elements taken together is
9:01what came to be known the big bang this was then meant to be complemented with trade liberalization in order to
9:08integrate the economy into the global market and finally privatization but
9:14even the most dedicated shock therapists acknowledge that privatization was a relatively slow
9:21complicated process of institutional rebuilding so that the shocking element in shock therapy really was the big bang
9:28and the basic logic was that um shocking the system from an old to a new system would require um starting with such a
9:36big bang from the perspective of neoclassical economics this is in some sense um
9:42emphasizing that one first test to get the prices right otherwise there's no hope of having a market economy
9:50there is a rich literature on the path that china has taken there's a rich
9:56literature on the economic policies that have been implemented in china
10:01but there has been relatively less attention paid to the economics of china's reform approach that is the
10:08intellectual underpinnings that inform the ways in which china has been going about its reform approach this reform
10:16approach i've been calling in my book and others have been using similar language and gradualist experimentalism
10:24that is the idea of feeling the way forward which is not only about pace but also different logic
10:30of reform as i will elaborate throughout this talk
10:36my book basically has two parts the first part is a kind of exercise in zooming out and
10:43asking what different kinds of modes of market creation and price regulation were
10:50invoked in the context of china's 1980s market reform debate and were part of
10:55the large tapestry of knowledge and institutional legacies that informed
11:01market creation in china i start with a chapter on the ancient
11:08tradition of statecraft going back to the guanza that is 300 bc where the idea is to illustrate that marketization in
11:16china was not simply the same as westernization but that china had its own very long legacy of
11:23market creation through the state and market participation in the name of prior stabilization
11:30some of the principles that i'm developing there are that economic and social stabilization can be achieved
11:37through market participation by the state where the idea is that the state
11:42should be focusing on what is heavy to shoot at what is light which is to say
11:48should focus on the essential parts of the economic system while governing the non-essential parts by
11:56stabilizing the essential parts what is essential in this context changes over
12:01time but in the imperial context or even more so in in ancient times this was
12:07really about methods salt um grain and some other basic commodities
12:13the great the question of grain is probably the most canonical example in this context since the so-called ever
12:19normal granularity persists that over centuries was an institution that was
12:25run based on the principle of participation by the state in the market where the state would basically run
12:32public granaries that would buy grain in fall when the supply was very high and
12:37the prices were collapsing and within supply grain um in in spring and summer
12:42when supply was short and prices were high thus basically aiming to stabilize
12:48prices through market participation of course there were all sorts of crisis and repeated debates and so on and i'm
12:54not suggesting that this was all the same over thousands of years but just as a basic logic i think this
12:59is an important reference point
13:05but the idea of my book is not to say oh we can explain china in the 1980s simply
13:11by always having been china by some sort of an essentialist notion of what china
13:17has always been um therefore i'm also engaging in detail with the debates over
13:24price control during um the second world war in the united states which allegedly
13:30is the freest market economy um in the world and in particular also the question of
13:36price decontrol after the war since the transition from a planned war economy to
13:42a post-war market economy was an important reference point in the debates
13:47over market reforms in the socialist world since in many ways this had been the last um
13:54incidence of such a transition from a plant to a market economy that people
14:00were thinking about these issues in the 80s um could draw on as you can see in this graph um in the
14:08second world war um prices were actually surprisingly stable compared to
14:13the first world war in the united states um and production was um surprisingly
14:18strong again compared to the um first world war and this came along with a very comprehensive and far-ranging um
14:25price control regime after the war these price controls were
14:31lifted more or less um overnight basically as a result of a political
14:37meltdown that resulted in in in a discontinuation of these price controls
14:43which then um gave rise to a very sharp increase in
14:48inflation and as you can see here this graph starting in 1946 um in the context
14:53of decontrol so in that sense this this sharp inflation after the war in some sense
15:01was a form of a small bang in the sense of very sudden liberalization
15:10but of course china also had its own experiences during wartime and in fact these experiences were incredibly
15:16important for the debates in the 1980s if anything i think they would have been the most important reference point for
15:24the question of how to recreate a markets in china's command economy
15:30as you all know there was a a long-ranging civil war in china
15:35and one interpretation is that the communists basically won that war not least because they were very successful
15:43at economic warfare that is to say that they re-integrated the
15:50commercial links between the countryside and urban centers in their liberated
15:55areas and ensured that the currencies that they were issuing had something
16:00important to buy stuff like cloth textiles um and then in return in
16:07the cities food um grain and so on in fact i made this connection um thanks
16:13to a note in um by a word bank official in minutes on meetings with chinese
16:18counterparts in 1982 where this world frank officially noted why do the chinese answer to every question that we
16:26have to go back to the liberation period policies and these liberation period
16:31policies followed a similar kind of logic of state market participation as the one that i have
16:37tried to illustrate based on the idea of the ever normal grenary in fact probably
16:43the most famous slogan on china's reforms it is better to be groping for stones to cross the river more steadily
16:51has been invoked by one of the key architects um of china's early economic reforms
16:57chunyun in april 1950 that is um pretty shortly after
17:03the revolution when the new communist government was struggling
17:08with the question of how to continue their effort at um stabilizing prices moving out of the
17:14hyperinflation during the civil war so the complete quote here then is rising prices are not good falling
17:22prices too are not good for production and within the consciousness of china's
17:28leaders their success and bringing hyperinflation under control which the
17:33nationalists had failed to do has been seen as a key element in
17:39the initial success of the communists and thus has been considered an important part of the legitimacy of um
17:47their government so it's been politically um something that um that
17:52that carries a lot of meaning okay moving fast forward to the 1970s
17:59and moving into the second part of my book which kind of moves from these like big picture reference points um to the
18:07debate in the 1980s um into this very close reading of the market reformed
18:13debate in particular they debate over the questions of price liberalization i think it's important to acknowledge
18:19that the urge for reform in the late 70s was very great indeed i'm not saying it was universal
18:26but in the many interviews that i have conducted which of course is a biased sample so
18:31there was some interviewing reformers since i was interested in the debates amongst
18:37reformers but across these different kind of economic reformers who violently
18:42disagreed on the question of how to reform um there was pretty widespread agreement that in the late
18:501970s reform was pretty much a choice of no no choice since the cultural revolution had long run out of steam the
18:58attempts of huago fung to initiate a um another 10 year plan to push a hat with
19:03industrialization had very quickly run into a crisis when the projected oil
19:09findings that were meant to finance that big push did not come forward so that in the late 1970s
19:15china was really in search for new kind of economic model in this context
19:21very early on there was an acknowledgement that this new um economic model would require china to
19:28revive markets in a more systematic way in fact already 1979 deng xiaoping told
19:34a foreign journalist quote saying that the market is limited to capitalism is wrong why can't socialism practice
19:40market economics but the question that was fiercely debated amongst reform economists was
19:48how to introduce market mechanisms into a command economy on the surface this
19:54might sound like a technical quibble among technocratic economists but as i argue in the book
20:02the whole question of market recreation i think turned out to be quite
20:08consequential for china's subsequent path
20:13very broadly speaking there were two camps of reformers in the book i'm distinguishing more and i'm
20:21engaging with a whole range of individuals and quite some detail but for the purposes of this short
20:26presentation i'd like to just focus on on two broad groups on the one hand they were they do attract market reformers
20:33who broadly speaking were composed of young reformed intellectuals who had returned from the countryside after
20:40having spent their youth there during the cultural revolution as so-called sent down youth
20:46they were backed by an older generation of leaders such as for exam for example
20:52whom you can see here in this picture and they really emerged as an important
20:57force in economic reform policy making as a result of their engagement with the
21:04agricultural reforms the agricultural reform started more or less as a bottom-up initiative but in order for
21:11these bottom-up initiatives to be turned into national policy
21:16a lot of systematic research was being conducted on the ground to understand
21:21how these experiments were playing out and in this context the so-called nonfatsu the agricultural development
21:27group played a critical role and was some sort of a catalyst for these round reform
21:33intellectuals they had an educational background being self-trained in marxist classics
21:40but also maoism during the cultural revolution when they basically formed um reading groups and we're trying to and
21:46think about um the the basic political economy questions in china in the 1970s
21:53when they returned to the cities um and when the universities restarted their entrance exams they also very quickly
22:00read up on a whole range of vests and social sciences um trying to basically catch up with social science theory and
22:08methods as quickly as they could they drew their intellectual inspiration importantly
22:15from the political economy of agriculture but also from empirical studies in china in the state and
22:20enterprise sector and later on also in other countries
22:26so if i'm asking how to create markets in a command economy
22:33i think it's worth quickly illustrating um what was at stake with this question or
22:39what what the challenges were so if in a very simple heuristic which
22:45of course is a simple idealized heuristic um and it's also kind of operating here on
22:52the national level where of course there were different layers in terms of provinces and so on but with all these caveats in
22:58mind if we um we want to very simply summarize the old model we could say that it was
23:06built on the idea of one big national workshop where basically there were some higher level command authorities
23:13that would be commanding outputs and assigning inputs to all the production units whereas each production unit would
23:20have to deliver its um output to the next production unit and would in return
23:26receive um certain inputs that was assigned in order to fulfill the plan
23:31on the surface then prices here are simply a shadow operation simply an accounting operation however in reality
23:37um they also performed a critical role as a distrib this as a mechanism of
23:43distribution since these prices were set in a way that did not necessarily
23:48reflect the costs of individual individual production units or even whole sectors but we're rather set in a
23:54political sense with an eye to distribution and
24:00development efforts so the prices of agricultural votes were set
24:06artificially low which resulted in a constant prices are between the um rural
24:11sphere and the urban industrious fear but also the prices for heavy industry
24:16and you we know that this whole depiction here is only on the urban industrial economy and i'm happy to
24:22comment more on the rural economy in the q a so the heavy industry prices in the
24:28urban industrial economy were also set relatively low as a way to encourage
24:33more downstream industrialization at the same time the prices of downstream non-essential consumer goods
24:41were set relatively high in order to extract liquidity from
24:46households and thus ensure price stability and and and basically
24:52ensure that there is no access demand what happened more or less endogenously
25:00as a result of the agricultural reforms was the emergence of a second market
25:05track in many ways such market tracks already existed during the mars period but they were basically
25:11very limited marginal occurrences that were more or less suppressed
25:19throughout the turbulent years of the period in the reform era then they became much
25:26stronger and much more prevalent since as agricultural households started to produce not only for the plan but also
25:33for the market they were generating cash incomes and they were using these cash incomes to buy stuff like wrist watches
25:39bicycles sewing machines radios and so on but soon also the township and village
25:46enterprises emerged which meant that in the agricultural sphere there was also a demand for um more upstream kind of
25:53industrial goods that would be serving as inputs into the township and village enterprises and furthermore of
25:59course if the downstream urban industrial sectors were expanding then they would also have expanding
26:06demand for these more upstream industries so that more or less as a result of a demand pool kind of dynamic
26:14this production for the market beyond the plan was emerging
26:20more or less endogenously so the question then was whether this
26:25emergence of markets at the margins under this dual track kind of system
26:32was a good thing that should be fostered and systematized and used or whether it was a bad thing that should be
26:38suppressed and some other reform approach should be um
26:43pursued in this context um one conference in 1984 the so-called morgantown youth
26:50conference played an important role where basically um a team of organizers
26:55in beijing summoned young scholars from across china based on an essay competition where all of these
27:02young scholars were invited to submit essays on questions of reform and then gathered at morganshine mountain for
27:09several days discussing questions of economic system reform it very quickly became clear that price reform was the
27:15most pressing and most important question on the table so that these various groups of um scholars started to
27:21focus on that question now after days of debate they basically settled um on a
27:27proposal that suggested that the dual track price system should be turned into
27:33a formal reform approach and should be turned into national policy
27:40this is in fact also what happened in 1985 um and chaotian who was prime
27:45minister in the 1980s and was an absolutely critical player in the creation of these new kind
27:52of economic policies that explained to local cadres what this policy would mean
27:57this is from the collective works of jazz and i find this a useful way to understand what the um national
28:04government was intending with this policy since he was trying to explain it to the people who would have to
28:10implement this policy um and he was saying that basically this would mean four things letting go of
28:17small commodities the state should focus on controlling important parts of the economy and not
28:24over stretch and trying to control all parts of the economy it would also mean reforming and adjusting the prices
28:31of of important goods um by improving the price management system and
28:37adjusting the prices in small steps so that they would come closer to some
28:42notion of cost or value but fourthly it also meant participating
28:48some quote after having enlivened prices by letting them go the state had to
28:54participate in the market to regulate the prices as in the first years after
29:00liberation for sectors where prices were allowed to fluctuate on the market the range of the
29:05fluctuations should be limited by market participation that is to say the state
29:10should have stocks to be able to add supplies to the market when the price was rising too high and purchased when
29:17the price was falling too low in this context and imports could also be used
29:22but only as an emergency balancing mechanism and in fact this kind of buffer stock
29:28logic of stabilizing the prices of important goods continues to operate until the
29:35very day just today one of the headlines that i saw in the economic news on china was that china
29:41has released stocks of its egg reserve apparently the chinese state is running
29:46an egg reserve since the prices for eggs were increasing too fast in the context of
29:53general food price pressures okay let me now move to the competing reform
30:01camp which i am broadly speaking calling the packaged price reformers
30:06the main members of this group were middle-aged established intellectuals
30:11were often um trained in orthodox socialist economics in the 1950s and 60s
30:17and then in the 80s were the first to study modern economics in the united states and england they were joined by
30:24young academics mostly scientists and engineers who and they shared a vision that
30:31mathematical models could model the old system and could model a target system for reform and could help to re to
30:39formulate china's path from the old system to the new system
30:44they drew their intellectual inspiration from the socialist calculation debate of the interval period um in fact i've also
30:51written on this in separate articles and um we're in close exchange with eastern european immigrant economists
30:57such as the polish bruce um otta sheikh from the czech republic and kornai who
31:02of course was not an immigrant economist but someone who was going back and forth between hungary and harvard
31:09they also drew inspiration from monetarists such as friedman and gregory
31:15chao and basically the idea of overnight price liberalization as a recipe for for
31:21instantaneous miraculous um success was in this context repeatedly um linked or
31:28anchored on the idea of an airhead miracle in best german post-war um
31:35reform where ludwig earhart allegedly would have instigated the german economic miracle
31:42simply by liberalizing all prices overnight um at least this was the story
31:48that uh wilton friedman and others were bringing to china and in fact in a forthcoming chapter i'm kind of
31:54debunking that story by contrasting it but some of the recent economic history research and german language literature
32:02okay um when i'm referring to these exchanges with eastern european immigrant
32:07economists i think it's important to highlight the critical role of the world bank
32:13the world bank invited many of these economists to china and facilitated
32:18exchanges between chinese reformers and these economists who used to be reformers in
32:24their own contacts but by the time had basically given up or emigrated to other places this is a
32:31picture here of the 1982 world bank conference on questions of price reform
32:38from the side of the eastern europeans the only person whom i say got to meet in person
32:43was a a man called peter kendall who is the second from the right in the first
32:49row who when i met him in paris in a coffee shop in 2017 was wearing the exact same
32:56outfit that he's bringing in this picture in 1982 pointing out to me that he had treasured and preserved this
33:02outfit since um it was such a bold move to go to china and discuss with chinese
33:07officials one of the most critical questions of economic system reform in 1982 at a time
33:14when he thought that if he had returned to his native hungary he might well have been arrested at the border i think that
33:22this illustrates just how bold not only the eastern europeans were who um
33:27engaged in this dialogue but also how bold the chinese were in 1982 that they
33:32basically discussed these critical questions with people who were basically considered some some sort of dissidents
33:39in in their home countries out of these exchanging this broad
33:45tapestry of trying to catch up with modern mainstream economics emerged a critique of the dual track system the
33:53argument was that the dual track system would create friction and contradiction and in fact would amount to a more
33:59irrational kind of price system than the pre-reform system it might have some
34:05role to play as the short-run um transitional mechanism but would have to be overcome as quickly as possible
34:13important um the the the dual track price system would reside in inherent
34:18rent seeking and corruption since the officials running these production units would now pri face high prices on the
34:25market and low prices in the plan which would immediately give incentives for bribery and corruption
34:33their recommendation then broadly speaking was to adjust prices based on uh complete
34:40models of the economy to basically set up some sort of a equilibrium price vector impose tight fiscal and monetary
34:48policy and then let go of prices as quickly as possibly most importantly let go of the
34:55core prices the most important most upstream prices stuff like energy steer
35:00and so on this was then meant to be combined with wage and tax reform and
35:06the market participation by the state should be replaced with indirect macroeconomic policies
35:15however a critique of this kind of
35:20approach to price reform that more or less resembles analytically the idea of a big bang emerged within china from the
35:27side of the dual track reformers they argued that such a big bang that is the
35:33liberalization of the most upstream most important prices would reside in cost push inflation
35:39without adjusting the relative prices and quantities since the prices in these
35:44upstream industries were in the pre-reform era by design too low they
35:50would more or less as a necessity be shooting up and since all of these production units
35:55they faced a soft budget constraint and were not actually market oriented enterprises they would simply hand down
36:02these large price increases to the next production unit which eventually would reside in a wage price spiral which
36:09could not be contained by macroeconomic control not only because china didn't have sufficient institutional capacity
36:16for macroeconomic control but also because this kind of process was basically a process of endogenous money
36:23creation that would be very hard to suppress with macroeconomic austerity
36:30the core of the debate then was not whether or not to liberalize downstream prices was not whether or not to let go
36:37of so-called small inessential consumer goals especially the highly profitable sectors that were
36:44already in surplus but the core of the debate was whether or not the state should keep control of
36:50the industrial core of the economy and operate a regime of state market
36:56participation in a dual track system in these core parts of the industrial
37:02economy in 1986 china came very close to
37:08implementing a package price reform that was gradually boiled down but nevertheless was focused on liberalizing
37:15the most important upstream prices this was ultimately stopped by the
37:20intervention of a delegation to hunger in yugoslavia that was sending back telegrams warning that this um this kind
37:27of step would reside in the kind of cost push inflation that i have just tried to describe to you in fact this delegation
37:34was interestingly sponsored by george soros who's here in in the picture on the bottom meeting with that delegation
37:40in 1986. in 1988 don xiaoping himself took
37:45initiative towards uh radical price reform and by 1988 the social and
37:51political tensions that were unleashed through the reform process were mounting to a point where um where uh then japan
37:58seemed to have um found that he needed to somehow push ahead and crash through
38:04the barriers that had um build up or as he put it only once prices have been straightened
38:10out will we be able to step up reform we cannot not carry out price reform we
38:16have to face the risks and difficulties head on we must not be afraid of risks and be
38:21even more courageous corruption by then and social inequalities had become a very serious
38:27um issue and there was a hope that there's a radical price reform could um elevate
38:33these difficulties don't you ping then also adopted more or less the same same kind of rhetoric that
38:40we can find in in police for shock therapy more broadly in very different
38:45contexts that is the idea that long-term pain is worse than short-term pain so in
38:50other words you have to kind of swallow the bitter pill now in order to lay the foundations for future development in
38:57fact don't tell pigment as far to say that a lack of price reform impedes china's goal of catching up with western
39:04countries by 2050. um on august 18th the state tv then
39:12reported that the politburo had passed in principle a plan for price and wage
39:17reform and this was happening in a context of already rising price distance um the dual track price system had had
39:25progressed um to a point where um several um were more and more also not at all unimportant economists
39:32sorry not at all unimportant commodities were being um priced on the market and
39:37the reaction to this announcement of um this prize
39:42reform plan having passed in principle was in this broad context of enormous
39:48tensions enough to basically unleash bank runs and panic buying that were so severe
39:54that the chinese leadership reversed this plan and then basically in fall of 1988 more or less put reform more
40:00generally on hold inflation continued for a while and this tension between a reversal of reform and rising prices i
40:08think is part of the economic context in which then um the the the large scale
40:13protests in in 1989 are occurring
40:18in 1988 mitt and friedman made another appearance in china in the fall of 1988
40:23where he was once more urging for rapid liberalization but at this point um the window of opportunity um had basically
40:31closed and um uh the the the political dynamic was at a point where basically reform was on ice
40:38so this didn't have much repercussions in some i think we can contrast two
40:45competing logics of reform where the basic logic of shock therapy that i
40:50think we can also trace in the chinese context is one to start from comparative statics and to
40:57start from a stylized model of the old system and a theoretically derived target model
41:04for the future system where reform is then being thought of as a shock that
41:09enables the transition from the old to the new system the target system is um a
41:16should be a a a system that is composed of complete markets
41:22which in this vision can only be achieved by destroying the plan in contrast the logic of the dual track
41:29system is i think to start from an analysis of prevailing economic forces
41:34and institutions in order to identify ways to create reform dynamics initially
41:40at the margins of the system then use these unleashed dynamics to reindustrialize the core
41:47hoping that this would work without undermining social stability which is of course always an extremely delicate
41:54balance market forces here then are means in a larger transformation process and need
41:59to be unleashed steered and guided and stabilized by the state rather than
42:05being a goal in themselves
42:11in conclusion then i would say that china's policy choice was not the big bank but the dual track
42:18system because china's leaders were ultimately not prepared to risk the survival of the communist state and to
42:24endanger their vision for long-term development the big banks seem to promise a scientific solution to
42:31economic system reform but was ultimately found not to create a viable market economy while being enormously
42:39risky since it was built on undermining the functioning of the core of the plan
42:45such built on the on undermining the functioning of the backbone of china's
42:50industrial economy the dual track system had more or less gradually emerged as policy alternative
42:57while these more blueprint type approaches were trying to be worked out
43:03this was crea the dual track system was created through an extreme experimental reliance
43:09on techniques of market creation by the state always distinguishing between essential and inessential goods and
43:16relying on a systematic assessment of the concrete economic conditions and dynamics that prevailed across the
43:23different systems in areas of the economy i think that the the the
43:29the fact that the dual track system was operate in operation was basically what
43:35allowed china's leaders not to go for a big bang because however imperfect the
43:41dual track system was and it did create a lot of problems including corruption it
43:47nevertheless presented an alternative that was already in operation thank you
43:52very much thank you very much isabella very
43:58interesting and i think a very provocative
44:03in terms of concepts and in terms of reflection while we'll receive some questions and
44:11comments and comments and suggestions again through the chat
44:16isabella let me pose you two comments in
44:21with some questions on the one hand uh the the i don't know
44:26if you are aware you very probably are and your opinion would be very welcome
44:32the discussion of a transitional institutions by a qian jinki i don't
44:40know if you know him he's today in chingua university and he published
44:47widely with danny roderick and other institutions uh and this discussion that
44:55you post of this dual track system no is highly integrated in this discussion
45:02on transitional institutions with the addition that he explicitly discusses the issue
45:10of the property in this transition period no which means you can have a transition
45:18in terms of uh incentives but surprisingly and in in terms
45:26of of results the property is still in the
45:32hand of the public sector now from a latin american perspective this is very
45:37important because countries such as latin america have gone massively
45:42through liberalization processes which are a synonym to privatization this was not
45:50the case in china so i i don't know if you're aware of mileage at least
45:56discussion uh
46:05sorry so discussion of
46:10more in the 1980s 1990s what is your opinion on this and then
46:16isabella as you might imagine from your perspective what is the
46:22relevance of this dual track system in 2022 no is it still alive is it relevant
46:31what does it mean in terms of policy options for the current public sector etc again
46:39two questions before we receive some questions by the chat no
46:46yeah these are great questions thank you very much um on the work of uh tianzini and daniel
46:53roderick and transitional institutions i would say that this is basically complementary to my work um i think the
46:59difference is that my book is basically on the level of ideas right i've
47:04interviewed all these people that were involved in these debates in the 1980s and i'm kind of trying to trace um the
47:10the alternative arguments that were at stake in this critical debate whereas
47:15their work as far as i understand it it's more of an institutional economics kind of approach trying to um trying to
47:23distill some of these institutional dynamics where i'm basically trying to combine institutional economics within
47:29intellectual history um on the question of property rights yes this is of course
47:35incredibly important and this is basically um uh in some ways an important limitation of
47:41my book since in the 1980s it's not like there were no discussions around property rights but they weren't as prevalent yet um so the the the most
47:49pressing question in that context was the question of price reform um and in trying to navigate this incredibly
47:56messy kind of primary empirical material that i was collecting i used price reform as my
48:02anchor point and therefore focused on this primarily however this is not to say that these
48:08two approaches don't also tell us something about property reform since um
48:13uh if you take the the example of the of the um of the dual track system then this also
48:21meant that as these production units started to cater not only to the plan but also the market they were starting
48:28to become internally transformed from entities that were basically implementing commands and orders from
48:35higher up planning authorities to more and more market-oriented kind of
48:40enterprises which then basically completely changed their logic of operation and which was in many ways the
48:46starting point of the whole debate around questions of property rights reform and
48:51in fact were in the 1980s in in the late 1980s in china first voices emerged that
48:57suggested that property rights reform should not simply be a dichotomy between
49:02private property and public property but that china should kind of move beyond this and try to come up with its own
49:08innovative institutional arrangements that would break through um the dichotomy of private versus public which
49:15is i think in many ways linked to this idea of dual track of combinations of market and plan of of the emergence of
49:23new kind of economic governance mechanisms on your second question the relevance of
49:29the dual track system i think um [Music] there are probably kind of
49:35three dimensions in which um i could emphasize the relevance of the dual
49:41track system today so first of all i think that
49:48for china's re-industrialization process in the 90s and 2000s it was very
49:54important that the backbone of the industrial system that was created during the mars period with all the
50:00faults of the maoist development model china had made some breakthroughs important
50:05breakthroughs in the development of heavy industry and the building up of a basic industrial foundation
50:12not giving up on this not um not risking that part i think was an important
50:18foundation for the development in the subsequent decades so from that perspective um this to attract system
50:25that basically preserve the core and transform the core but without um giving
50:31up on it without giving up on the ambition of having these industries within china under the um under the
50:37stewardship of the state i think was an important foundation of china's economic rights
50:43which in many ways um is um the tension that we are facing now right um in
50:49between the u.s um and and china um secondly i think from an institutional
50:56perspective of course the dual track system is now no longer like a universal kind of
51:02system uh far from it it basically still exists in in some of the most important
51:08upstream industries stuff like electricity um but it was the starting point of these
51:14decades of institutional reform so if you take the example of the electricity sector in the ways in which the
51:20electricity sector was being rebuilt then this was a very um careful
51:26cautious kind of process moving from a plant electricity sector under uh under
51:33one ministry um into a more corporate kind of structure than several and
51:38pretty radical experiments in the early 2000s which were then stopped and then basically this institutional rebuilding
51:45process has continued all the way until today in many ways i mean the the whole like cold shortages and electricity
51:50shortages in in in fall last year uh in some sense the latest iteration and
51:56there's like institutional fine-tuning um of of both the the corporate and property side but also the the price um
52:04price design side of the story so in that sense um
52:09the the the institutional arrangements and the commanding heights of china's economy are of course no longer what
52:14they were in the 1980s but the path very much links um to this um initial um
52:21setup to to this dynamic to the logic that is being established in the 80s and
52:26then thirdly i mean one of the most pressing um economic policy questions of the day i suppose um at
52:33least in the oecd i know in latin america this is probably more of an evergreen but the u.s and europe suddenly wakes up to
52:40the problem of inflation after no one has thought about this outside the context of development
52:45economics for years and years and years um whereas in the chinese context we see
52:51that we basically have an approach to price stabilization that does not exclusively rely on microeconomic
52:57stabilization through the central bank or through fiscal
53:02policy but that also relies on what i have been calling state market participation
53:09for important kinds of consumer and producer goats we
53:14could see this in 2021 when the price for um certain methods was shooting up and
53:20basically there was a very coordinated effort to increase the supply of these methods by
53:26encouraging state-owned enterprises to release some of their inventories and not hoard um these kind of metrics but
53:32also by releasing um national reserves and we can see this again as we speak in the context of the
53:40inflationary pressures from a cost push perspective that are emerging in the um global economy in in in the context of
53:47the war with ukraine and um the the the i mean oh all the terminal of the pandemic that we
53:52have all been talking about so that context then i think china really has an institutional setup that allows it to do
53:59price stabilization in ways that is quite drastically different and that could prove to be fairly critical in in
54:06in the current context very interesting i don't know if you can
54:12follow the the the chat usually we have a very active
54:18uh fellowship today we are very shy
54:24but again there are two questions so far one by jorge vampum i don't know if you can
54:30read it regarding this dual track group no what did they read
54:37among other things and then the second by professor bruno
54:42gandalgrove no yeah um so i think they were really incredibly
54:48eclectic in their reading many of them during i mean during the cultural revolution when they were still like
54:54part of these kind of informal student type reading groups um were
55:00certainly also reading tax that um were related to the new economic policy in
55:05russia in in the 1920s and questions of other forms of socialist organizations
55:11in that context um in in the in the late 70s it's really
55:18i mean there are translation efforts that that are incredibly far-ranging from
55:24tigered persons to um cybernetics so you have really like this very very
55:30broad engagement with a whole range of of social science theories and methods
55:35um where basically we have to remember that during the cultural revolution economics as a discipline had been more
55:40or less on hold and um the the the the social science access to
55:46western knowledge was also very very limited so this was really like a very major catch-up exercise
55:53they were also studying increasingly quote-unquote modern economics and started to adopt the language of of
56:00modern economics and replaced the terminology of marxist economics with the terminology of microeconomics and
56:07macroeconomics and price elasticities and all of that so that sense they did start to engage with new classical
56:13economics in particular however this was always combined with this very
56:20inductive approach of going out and doing field research
56:25initially in the agricultural experiments and later on also very large scale research
56:31survey exercises um in the state on enterprises trying to understand what the state of reform was and what kind of
56:38initiatives were emerging spontaneously out of this political opening that uh that that
56:45that that happened in in the 1980s so that it was not like there were like five attacks that they read and then
56:52they basically threw their ideas based on that and then they implemented them and then that's that's the story but
56:57it's rather there's a very eclectic search um across a whole range of different literatures combined and
57:03always rooted in these a kind of inductive survey research type of exercises
57:11okay thank you and there is another question isabella by professor
57:17gandu grover thank you very much and two questions related to the administrative
57:23and statistical functioning of the dual track system that you highlight no did
57:29the chinese government maintain some kind of national production plan
57:34and how did this affect the national accounting system in terms of gdp and
57:40growth statistics thank you very much
57:47yeah that's a great question um i mean we have to remember that by the beginning of reform china's statistical
57:53capacity was actually very very limited again because of the cultural revolution
57:58and what that had meant for um for the the statistic i mean the the institutions that were actually i'm
58:05collecting statistics and and systematically using them and so on right so in many ways the statistical
58:11apparatus was was being really big um through the reform period um
58:17there is a shift in in accounting that is occurring um i am not an expert on
58:23that and i should not pretend i am um i know that basically i mean there is a lot of price static
58:29statistics um available for the 80s um and they were collected with all sorts
58:35of different kinds of labels and there were very major price research institutes that also started with these
58:41um with these uh uh statistical um uh really like empirical data gathering
58:48kind of exercises they were also the first some input output tables constructed and so on um
58:55as regards the plan i mean the plan continued in the 80s of course but there
59:00was increasingly a shift then in the 1990s from this like straight out direct
59:06planning based on some sort of a command economy towards more and more indicative
59:11planning um which which came about um as a result of the marketization of the
59:16economy in this context then the the macroeconomic
59:22governance of course also became increasingly important but it's i think important to see that it not did not
59:27completely replace china's economic governance mechanisms but that beyond the surface
59:34of um of macroeconomic governance planning mechanisms and state market
59:40participation type of mechanisms continued
59:46thank you isabella and the last question by ambassador eugene who was ambassador in those times and in
59:54from mexico and china and asks a wh what would be the impact of this
1:00:00double track approach in liberating or in the liberalization of crisis in the
1:00:061989 political crisis is there some kind of link
1:00:11in your analysis and opinion
1:00:17yeah thank you great question um so basically what happened through the dual track
1:00:24system is that certain things that were that had very high market prices also became
1:00:31incredibly profitable so you could have a situation where people were basically within the first track um let's say
1:00:39high school teachers or university professors who are basically still receiving their salaries based on the plan type of
1:00:46standards suddenly we're making less money than the guy who's selling eggs in the streets or pancakes or whatever it
1:00:52may be so that you get this like very rapid um uh
1:00:58reshuffling of of distribution and these are very erratic kind of ways which i
1:01:03think was an important part of the social tensions that were built up um in
1:01:08in the 80s and then of course um as inflation became a problem those that
1:01:13basically had fixed kind of wage income some uh did not see their incomes just
1:01:19as rapidly as those that had market income so this is an these kind of inequalities the the
1:01:26problem of corruption of course also added to the impression of of of um of
1:01:32an unjust kind of system and a very unjust kind of transition so i think these are some of the points where where
1:01:39these dynamics um uh were connected and and were part of i'm not saying that 89
1:01:44was simply an economic kind of outcome of inflation but i think that that this kind of economic dynamic
1:01:51fueled the political dynamic that was already in the making
1:01:57thank you isabella look i i think we are pretty much
1:02:04done in terms of questions i i would have one last issue
1:02:09i think one of the great contributions among many others is the issue of your book is the issue
1:02:16of the importance of the world bank in this reform and
1:02:22opening up process and if i understand correctly also the incidents incidents in this dual
1:02:29track system of the world bank no so in in in your opinion
1:02:37more recently it doesn't have to win 2022 but how is the relationship between more
1:02:44recently between the the chinese government and the world bank
1:02:50considering also a difficulties i remind you
1:02:57the harsh discussions and disruptions between the development research center
1:03:03in in 2012 and then this big book no
1:03:09with the world bank that got erased from web pages etc and you
1:03:16can still find it etc in your opinion how is
1:03:21how is the relationship today after this strong impact of the world bank in china
1:03:27in the 1980s and 1990s no yeah um so i'm really not an expert on
1:03:34the world bank's recent engagement in china since i i mean i interviewed all the people who were there in the 80s and
1:03:40so on but this doesn't give me any privileged expertise on on the more more recent
1:03:46developments i just want to like put this caveat i think generally speaking we can say that the relationship between
1:03:52the word bank and china was very different compared to the relationship between the word bank and other developing countries um
1:03:59for broadly speaking i think two reasons one is that china never became in a
1:04:04substantial way dependent on world bank loans right i mean it's not like they didn't take out loans but they never
1:04:10became indebted in a way where any kind of conditionalities and so on would could really have been um
1:04:17employed so in that sense from the chinese perspective the word bank has always been more of a source of economic
1:04:24expertise that the chinese government was trying to draw on and of course also credits that came in useful i'm not
1:04:30saying this didn't didn't matter but it didn't matter i mean it it wasn't existential to the chinese system
1:04:36whether they had these word bank loans or not so in that sense the relationship has i think been been quite different
1:04:44compared to the relationship um in in in in other contexts the
1:04:50related second point that i'd like to make is that of course the economic policy discourse
1:04:57today is by far no no longer as open as it was in the 1980s because in the 80s you have this
1:05:04kind of period where it's really not entirely clear um what the future will look like and china is very seriously engaging
1:05:11with a very wide range of possibilities nevertheless i think this this
1:05:17principle of consulting a very wide range of sources of expertise in
1:05:23important economic policy decisions to some extent continues where you can have
1:05:29a study by mckenzie and a study from the central party school being solicited on
1:05:34the same kind of topic right so in that same context then the word bank is one
1:05:40player amongst many rather than the one and only authoritative source within the
1:05:46chinese system okay thank you very much isabella again
1:05:53i i hope we can continue having this dialogue again as you might imagine this
1:06:00topic of a structural reforms and shock therapies is very important in
1:06:07latin america no since the 1980s latin america has have con
1:06:14and until today we have a long history of shock therapies and
1:06:19the the comparison with china is very relevant no so thank you very much congratulations
1:06:26again on your book and i sincerely hope we can continue in this diet
1:06:33thank you very much for having me i hope there will be a chance to learn more um from the latin american perspective on
1:06:38these questions of shock therapy and how it played out in china would be very interested to learn from everybody's
1:06:45insights and and views on that thank you we hope you can visit us sometime in person
1:06:52uh when the when the health situation allows you to no
1:06:58yeah thank you okay we don't want to take more of your time and thank you very much no have a
1:07:05great time and we will continue writing each other thank you was a very
1:07:10good presentation thank you thank thank you
1:07:33you
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