下载掌阅APP，畅读海量书库
立即打开
Lin Yifu Justin
(National School of Development, Peking University, Beijing 100871)
Abstract: Economics is an overt discipline in philosophy and social sciences in China. After the reform and opening up, China stepped up its efforts to introduce modern economics from the West. Theories in economics come from summary of past experience or from solutions to problems. As such, theories in economics are inevitably embedded in the social, economic, cultural and political contexts of a country from which these theories are generated, and those contexts are the implicated premise upon which these theories are built. In order to realize the unity of “understanding the world” and “transforming the world”, theories in economics in China must be achieved through independent innovation by summarizing China's social and economic phenomena and solving China's problems. This paper puts forward two paradigms of building a theoretical system for China's economics with Chinese characteristics, Chinese style and Chinese manner under the guidance of Marxism. In view of the problems in the existing discipline of economics, this paper also proposes some suggestions for improvement.
Key words: independent innovation, Marxism, political economics, new structural economics, Western economics
General Secretary Xi Jinping proposed at the Seminar on Philosophy and Social Sciences held on May 17, 2016 that “The distinctive feature and style of a country's philosophy and social sciences is the result of development at a certain stage, and therefore a symbol of its maturity, strength and self-confidence.” He also pointed out that “In the field of philosophy and social sciences in the world of today, China ranks high in the number of researchers and theses, and in government input. However, our standing in the areas of academic ideas, thoughts, viewpoints, and standards, and our voice in international academia, are still incommensurate with our overall national strength and international status.” Xi Jinping noted:“To change this situation we must develop our philosophy and social sciences that are grounded in Chinese conditions, learn from other countries, show humanistic care, research into history, focus on the present, and look into the future. They should display salient Chinese features and style in such areas as guiding principles, range of disciplines, academic system and discourse system.” Economics is an overt discipline in philosophy and social sciences in China. Following the country's reform and opening up, Chinese colleges and universities have made significant efforts to introduce Western modern economics, with substantial government input, a highly qualified faculty, and large student enrollments each year. In contrast, the traditional Marxist political economy has seen diminished significance. This paper delves into the necessity of developing a theoretical framework for Chinese economics, incorporating distinct Chinese features and styles, which will contribute to the nation's rejuvenation. It presents two paradigms for constructing a theoretical system of Chinese economics, guided by Marxist principles, and offers suggestions to enhance the existing disciplinary structure in economics.
Economic theories of any kind originate from economists' observations and summaries of empirical phenomena in their respective countries or are proposed to address significant challenges faced by their nations. In the process of summarizing experiences or proposing theories to address significant problems, economists must “abstract” key variables from the vast array of economic, political, social, and cultural factors present in a country. This involves constructing a causal logic while“neglecting” the remaining variables. It's important to note that the “neglected”variables are not disregarded as nonexistent, but rather not explicitly discussed, thus forming the implicit preconditions of the theory. In cybernetic terminology, these “neglected” variables assume the role of “state variables” within the theory. Put simply, an economic theory reflects the attributes of time and society and is deeply rooted in the country from which it originates. It is shaped by the country's developmental stage, as well as its corresponding industrial, social, institutional, and cultural structures.
Since the publication of Adam Smith's The Wealth of Nations in 1776, modern economics has emerged as a distinct and independent social science, separating itself from the realm of philosophy. The establishment of macroeconomics came with the publication of John Keynes' The General Theory of Employment, Interest and Money in the 1930s. During this period, the United Kingdom served as the world's economic research center. The prominent economists of that time were either British nationals or expatriates working in the UK. Their theories predominantly focused on UK economic phenomena or aimed to address the country's specific challenges. As a result, the theories that predated Keynes were inherently shaped by and embedded in the developmental stage of Britain, along with its corresponding industrial, social, institutional, and cultural structures. As a result, these theories carried distinct British characteristics. Their popularity stemmed from the fact that, after the Industrial Revolution, Britain emerged as the world's largest and most powerful nation. Consequently, economic phenomena and issues in Britain garnered significant global attention and exerted considerable influence. These theories became symbolic of Britain's maturity, strength, and self-confidence at that particular stage of development. However, following the shift of the world economic center to the United States after the Second World War, the focus of global economic research also shifted to the United States. Consequently, the leading economists of the time were predominantly Americans or expatriates working in the United States. Their theories were primarily based on American economic phenomena and aimed to address the nation's specific challenges. Similar to their British counterparts, these theories possessed “embedded”characteristics, reflecting the stage of development, social, economic, and cultural structures of the United States.
The efficacy of a theory relies on the underlying premises upon which it is built. If the theory fails to account for essential variables, any changes to these variables will render the implied premises obsolete. Consequently, the original theory may no longer serve its purpose of “comprehending and reshaping the world,” necessitating the development of a new theory. To exemplify this phenomenon, consider the following two illustrations.
An example that demonstrates the evolving nature of theories is macroeconomics. In response to the Great Depression of the 1930s, John Keynes introduced Keynesianism, which established macroeconomics as an independent sub-discipline of modern economics. Keynesianism advocated for the use of active fiscal and monetary policies to stimulate demand, create employment, and foster economic growth. However, in the 1970s, the implementation of Keynesian stimulus policies by the US government resulted in a phenomenon known as stagflation, where inflation occurred without a corresponding increase in employment and economic growth. The inability of Keynesianism to explain this phenomenon rendered its policy measures ineffective in “transforming the world”. Consequently, Keynesianism was subsequently replaced by the Rational Expectations Theory proposed by Robert Lucas, a Nobel laureate and professor from the University of Chicago. This theory contradicted the Keynesian argument, maintaining that government intervention or stimulus would have no substantial impact on the economy. The reason behind the replacement of prevailing Keynesianism was that it emerged during the period of the Great Depression when countries faced excessive capacity and insufficient employment. The expansionary fiscal and monetary policies of the government did succeed in stimulating demand, production, employment, and economic growth. However, by the 1960s, the economy had largely restored supply-demand balance, resulting in no surplus capacity or unemployment. Consequently, the implied premise changed, and the government's expansionary stimulus policies only led to inflation, rather than increasing employment or promoting economic growth.
The second example focuses on industrial policy, a topic that has gained significant attention in China in recent times. Alexander Hamilton (1755–1804), one of the founding fathers of the United States, strongly opposed the laissez-faire trade policy advocated by British classical economist Adam Smith during his tenure as Secretary of the Treasury. Hamilton advocated for the use of industrial policy to protect and promote the development of the U.S. manufacturing industry. At the time, the United States was primarily an agricultural nation and, in order to catch up with industrialized Britain, Hamilton implemented tariff protection and tax incentives to support domestic manufacturing. Friedrich List (1789–1846), a founding member of the German historical school, played a significant role in the development of industrial policy theory. During his visit and work in the United States in the 1820s, List witnessed the rapid industrialization of the country under Hamilton's protectionist measures. Upon returning to Germany, List actively promoted the use of protectionism to foster industrial development, seeing it as the key to transforming Germany from an agricultural nation to a manufacturing powerhouse that could rival Britain. However, it is worth exploring why mainstream economics in the United States and other Western European countries have now shifted back to Adam Smith's advocacy of free trade and rejected protectionism. The underlying reason for this shift is the changing conditions. By the 20th century, especially after the Second World War, the United States, much like Britain in the late 18th century, had become the most advanced industrial nation. Germany and other Western European countries also attained significant industrialization, ranking among the world's leading economies. Consequently, their manufacturing industries no longer required protection, and free trade emerged as the dominant ideology, facilitating the entry of their products into global markets. Nevertheless, it should be noted that developed countries in America and Europe still support industrial development. In these countries, new industries rely on breakthroughs in basic scientific research, product development, and new technologies. Enterprises are motivated to invest in developing these new products and technologies due to the potential for acquiring patents. Basic scientific research, however, produces public goods in the form of research papers, which lack the same level of motivation for enterprises to engage in. Yet, the development of new products and technologies requires advances in basic scientific research. As a result, economists in America and Europe have shifted from advocating protectionism during the catch-up stage to promoting free trade policies. The government's policy measures to foster new industries have also shifted from tariff protection and fiscal subsidies towards supporting basic scientific research.
The examples provided above demonstrate that mainstream theories in the West are contextual and subject to change as conditions evolve. They cannot be regarded as timeless wisdom passed down through generations. Developing countries and developed countries differ in terms of their economic foundations, comparative industrial advantages, development bottlenecks, and opportunities, as well as appropriate institutional arrangements and policy measures. For instance, in order to develop their economies, developing countries need to continuously improve labor productivity, foster technological innovation, and upgrade their industries. Developed countries possess advanced industries and technologies, and their own technological innovation and industrial upgrading rely on their own inventions. Through independent research and development (R&D), the prevailing theory in developed countries focuses on promoting the endogenous growth of new technologies (as recognized by the Nobel Prize in Economics awarded to Paul M. Romer in 2018). By contrast, developing countries exhibit lower labor productivity than that in developed countries, and there is a disparity in industry and technology. Thus, technological innovation and industrial upgrading for these countries involve utilizing current technologies with higher value and introducing industries from developed countries. This approach allows developing countries to digest, absorb, and innovate upon the acquired technologies. Taking advantage of this “latecomer's advantage” for innovation is less costly and risky than investing in independent R&D. Under these conditions, the introduction, digestion, and absorption of technologies prove to be more effective for innovation than solely relying on endogenous growth. Therefore, developing countries should not formulate policies for technological innovation and industrial upgrading solely based on the prevalent endogenous growth theory in developed countries. Instead, they should consider their own unique circumstances and leverage effective strategies such as technology transfer and assimilation to promote their economic development.
In calculating the national economic growth, the common practice in the United States and Europe is to take into account the capital and labor used in production activities, excluding the capital and labor invested in R&D for acquiring new technologies, as the contribution of the latter to output is represented as residual in growth accounting that cannot be attributed to the input of capital and labor in production activities. The residual is referred to as Total Factor Productivity (TFP) by Robert Solow, the Nobel laureate in Economics in 1987, and is used to represent technological progress. When developing countries introduce new technology or industries, they usually achieve this through purchasing equipment containing new technologies. This kind of technological progress and industrial upgrading is reflected in the increase of capital, so it does not appear as TFP in growth accounting. A comparison of economic growth and its sources in developed and developing countries reveals an interesting phenomenon. In developed countries like the United States, two-thirds of the growth comes from TFP, but the economic growth rate is relatively low, around 3% per year. By contrast, developing countries like China can achieve economic growth rates three times or even higher than those of developed countries but with low TFP. So, the question arises: is it better to achieve technological progress and have low TFP but high growth rates through introducing technological equipment, or to have high TFP and low growth rates through independent R&D? Development is undoubtedly the key. Developed countries cannot achieve technological progress without TFP. To promote economic growth, they must engage in high-risk, high-investment, low-return TFP R&D. Developing countries, on the other hand, have the opportunity to achieve technological innovation and industrial upgrading by introducing low-risk, low-investment, high-return technological equipment. Therefore, they should not be fixated on TFP. When their industrial technology is close to or at the world's cutting edge, relying on independent R&D to achieve technological innovation and industrial upgrading becomes a necessary choice. At that time, TFP will naturally become the main source of economic growth.
So is it feasible for developing countries to simply follow the path of countries like the United States and Germany, adopting theories and policies proposed by economists like Hamilton and List? However, it may not be feasible. The reason lies in the fact that in the late 18th and early 19th centuries, the gap between the United States, Germany, and Britain, the world's most advanced countries at the time, was not wide. According to statistics by Madison, in 1820, the per capita Gross Domestic Product (GDP) of the UK, the US, and Germany were 1706, 1257, and 1077 international dollars, respectively. The GDPs of the US and Germany accounted for approximately 74% and 63% of the UK's, indicating that their capitals were not scarce in comparison to the UK. During the UK's industrial revolution, advanced manufacturing industries, such as textiles and related equipment, were considered “light industries.” The US and Germany already possessed the capital endowments necessary for developing such industries and had potential comparative advantages. However, what they lacked were the provision of external compensations for pioneering entrepreneurs and abilities to overcome the infrastructure bottlenecks required for manufacturing industry development. Therefore, the governments of the United States and Germany provided entrepreneurs with the aforementioned assistance in order to enable the industries that needed to be prioritized for development to quickly transform from potential comparative advantages to competitive advantages. After World War II, in order to help developing countries that had just freed themselves from colonial and semi-colonial status to achieve industrialization and modernization, development economics emerged as a new sub-discipline separate from mainstream economics. The first generation of development economists, known as structuralists, advocated import substitution policies to support the advanced manufacturing industry and catch up with developed countries. These policies bore similarities to the theories proposed by Hamilton and List. However, developing countries that formulated policies based on structuralism generally had the problems of low efficiency, economic stagnation, and continuous crises, despite being able to establish some advanced manufacturing industries with governmental protective subsidies. As a result, their economic development became unsustainable, and the gap with developed countries continued to widen, without rapidly becoming advanced industrialized nations like the United States and Germany. The divergence in outcomes resulted from the fact that, after World War II, developing countries implementing structuralist trade protection policies had a per capita GDP of less than 10% of that of the United States. Their conditions were not conducive to capital-intensive heavy industries, which were the comparative advantages of the US at that time. Pursuing such industries went against the principle of comparative advantages, and artificially nurturing them led to a lack of competitiveness in open markets. Despite strong governmental resource mobilization and protective subsidies, these industries ultimately failed due to their inefficiency.
I started thinking about the need to establish China's own economic theory in 1988 when the country experienced an unusually high inflation rate of 18.5%, the first time since the founding of the PRC. Having just returned from the United States with a doctoral degree in 1987, I learned that the rational expectations theory suggested using higher interest rates to control investment and consumer demand to manage inflation. According to this theory, reducing the gross demand would naturally lower the inflation rate, and only good investment projects that could afford higher interest rates would be retained, while weak projects would be eliminated, leading to more efficient resource allocation. However, China back then implemented a policy of “rectification” without adjusting interest rates. Instead, administrative measures were employed to cut investments and projects in order to suppress gross demand and inflation rates. From the perspective of mainstream Western theories, such administrative measures could lead to misallocation of resources due to information deficiencies. Good projects might be cut while poor ones would be retained, making it an incorrect policy measure. Yet, how could the Chinese government, if truly irrational, maintain an average annual growth rate of 9% over nine years from 1978 to 1987? Achieving 9% growth in a developing country is not easy, let alone sustaining it for nine years, particularly in a country in transition. Upon deeper reflection, I discovered that this was because the underlying conditions of China's economy were different from those of developed countries like the United States. China, as a transitioning nation, had numerous capital-intensive state-owned enterprises that went against comparative advantages, were of significant scale, and related to national defense, security, and public welfare. These enterprises lacked the ability to survive in open competitive markets and required low-interest subsidies to sustain themselves. If the government were to raise interest rates to control inflation, these enterprises would suffer losses, and to ensure their survival, financial subsidies had to be granted. Such subsidies would lead to fiscal deficits, and the government would resort to issuing more currency to compensate for the deficit, ultimately causing a new round of inflation. Developed countries can use higher interest rates to control inflation because they do not have a large number of enterprises that require low-interest subsidies and they allow companies to go bankrupt. So, as the conditions are different, the corresponding measures to control inflation are also different.
In the ever-changing landscape of developed countries, the theories that guide them naturally evolve to match new realities. Therefore, it becomes unrealistic to expect that theories from developed nations, shaped by their unique circumstances, will seamlessly apply to developing countries as well. Each country has its distinctive conditions, and a one-size-fits-all approach doesn't consider these intricacies. Therefore, in the context of developing countries, the role of economic theories goes beyond a mere quest for knowledge from the West; instead, it must serve the greater purpose of “understanding the world and effecting transformative change.”
Nonetheless, the theories prevailing in developed nations can serve as powerful tools for critical analysis in developing countries. Often coming from the vantage point of progress, intellectuals and elites in developing nations may view the systems and experiences of developed countries as superior. Thus, any deviation from those models might be considered a mistake. It is crucial to recognize that the realities of transitional countries are far from ideal. Distortions exist, and these can carry significant costs. Developing nations are bound to encounter challenges, and it is understandable that intellectuals and elites might perceive the root cause of these issues as a failure to adopt the advanced systems and theories of developed countries in their policymaking. In a society where the desire to emulate the West prevails, using theories from developed nations to criticize the shortcomings of developing countries can be seen as a morally superior stance, attracting praise and possibly influencing those who face their share of hardships. This can inadvertently pave the way for societal shifts and, in certain circumstances, may even fuel color revolutions akin to those witnessed in the Soviet Union and Eastern European countries.
However, up until now, there hasn't been any instance where developing countries achieved genuine success by strictly adhering to the mainstream theories of developed nations. In fact, attempts of color revolution have often led to exacerbating existing socio-economic challenges. Even the handful of developing countries and regions that managed to catch up with developed nations adopted the policies that diverged from the prevailing mainstream theories of their time. For example, during the 19th century, the United States, inspired by the ideas of Alexander Hamilton, and Germany, which followed the approach of Friedrich List, implemented protectionist trade policies. These policies were considered erroneous from the perspective of the prevalent classical free trade theories of Britain. Similarly, in the post-World War II era, the Asian Tigers pursued export-oriented strategies focused on traditional small-scale labor-intensive industries. These policies were deemed inappropriate according to the prevailing structuralist theories, which advocated large-scale import substitution to catch up with developed countries. Likewise, in China, after the implementation of reform and opening up, the country adopted a gradual dual-track transition policy, which contradicted the then-popular shock therapy theory of the “Washington Consensus” promoted by neoliberalism.
Chinese intellectuals should maintain a clear understanding that every theory is intricately linked to the economic foundation and corresponding socio-political structure of the country where it originates and evolves. Despite seemingly similar issues in countries at different stages of development, uncritically applying prevailing theories from advanced nations to address these challenges may lead to impractical or ineffective solutions, as it fails to consider the unique conditions and differences in each country's development context.
To solve the current and future problems of China as a developing country in transition, and to achieve the great rejuvenation of the Chinese nation, Chinese economists must, like Alexander Hamilton in late 18th-century America and Friedrich List in early 19th-century Germany, not simply copy the prevailing theories of developed countries. Instead, they must seek truth from facts, understand the nature of the problems that China needs to address, and grasp the characteristics of China's economy, society, politics, and culture. They should propose their own innovative theories, so that the function of theory to “understand the world and transform the world” can be unified in China. The theories generated from such efforts will inevitably have Chinese characteristics, Chinese style and Chinese manner.
China's position as the world's largest trading nation and the second-largest economy is undeniable. Looking ahead to 2025, it is poised to US$12,700 per capita GDP, officially entering the ranks of high-income countries. This transformation is set to elevate the share of its population living in prosperous nations from 15% to an impressive 34%. As China embarks on this remarkable journey, it is imperative for its economics community to possess unwavering confidence in synthesizing its unique developmental experiences and formulating comprehensive new theories tailored to address emerging challenges. Nonetheless, it is crucial to maintain a realistic perspective. In comparison to advanced industrialized countries in Europe and America, China's current level of development is still only a fraction, at approximately one-fourth of its stature. As China continues its pursuit of progress, it must remain steadfast in adopting open-minded and pragmatic approaches to devise theories that resonate with its distinctive economic, political, social, and cultural landscape. By nurturing a culture of intellectual innovation and receptivity to fresh ideas, China can effectively realize its ambitious vision of becoming a modernized, strong socialist nation by 2050. The great rejuvenation of the Chinese nation is a shared aspiration, and by nurturing homegrown solutions, China will pave the way towards a brighter and more prosperous future on both national and global fronts.
By considering purchasing power parity (PPP), China has already cemented its position as the world's largest economy. By 2035, when the vision of constructing a modern socialist nation materializes, China is destined to become the top global economic powerhouse, even by market exchange rates. Similar to the shift of the economic center from Britain to the United States in the early 20th century, the 21st century offers the promise of gradually shifting the world's economic center towards China. Since the 18th century, the world's economic center has been a focal point for research and a breeding ground for economic luminaries. With our unwavering strength and confidence, we are ready to embrace the forthcoming transition. Presenting an economic theory system with distinctive Chinese characteristics and style represents a remarkable opportunity and a momentous responsibility for Chinese community of economics.
China, as a socialist country, is guided by Marxism in its philosophy and social sciences, as emphasized by General Secretary Xi Jinping in his speech at the seminar. He highlighted that adhering to Marxism sets contemporary Chinese philosophy and social sciences apart from others, and it is crucial to maintain a clear-cut stance on this. When it comes to building a theoretical system for China's economics with Chinese characteristics, Chinese style and Chinese manner under the guidance of Marxism, there are two possible paradigms. The first approach, embraced by political economists in Chinese universities and research institutions, integrates the achievements of modern economics into the study of China's economic phenomena and issues, guided by Marxism, so as to yield a new theoretical system that differs from the Western mainstream. The second approach involves studying China's economic phenomena and issues using the principles of Marxism, including dialectical materialism and historical materialism, and the analytical methods of modern economics. This approach, similar to the new structural economics advocated in recent years, aims to propose a new theoretical system.
Both of these paradigms share two similarities: their primary focus is on Chinese economic phenomena and issues, and they are guided by the principles of Marxism.
First and foremost, new theories are derived from analyzing new phenomena and proposing solutions to new prominent problems. Theories in economics with Chinese characteristics, Chinese style, and Chinese manner must be based on a thorough study of China's economic phenomena and China's problems. Only by doing so can theoretical innovation be integrated into the economic, social, and cultural framework of China, and can the unity of “understanding the world” and“transforming the world” be realized in China's economic and social development.
Secondly, the fundamental concepts of Marxist ideology are dialectical materialism and historical materialism. Dialectical materialism asserts that existence determines consciousness, and consciousness in turn affects existence. Historical materialism, on the other hand, applies the principles of dialectical materialism to the study of human society, examining the relationship between the economic base and the superstructure. It recognizes that different countries, at different stages of development, possess varying levels of productive forces, relations of production, and infrastructure. Consequently, even when faced with similar challenges like technological innovation and industrial upgrades, the necessary policies and institutional frameworks will differ accordingly. Only by thoroughly embracing the fundamental perspective of Marxism can the people prevent the misinterpretation of theories regarding the development stage and structural characteristics of developed countries as universal truths. When formulating theories based on the phenomena and problems of the country, the people can consciously investigate and understand the development stage, social, economic, and cultural characteristics, and the significance of these characteristics for economic operation. Only then can the theories proposed not only possess Chinese characteristics, Chinese style, and Chinese manner but also achieve the unity of “understanding the world” and “transforming the world” in solving China's issues.
On the contrary, the study of China's economic phenomena cannot accurately uncover its true essence and explain its underlying “principles, theories, and philosophies” without the guidance of Marxism. For example, in the past 40 years of China's reform and opening up, remarkable achievements have been made in economic development. Numerous studies published in prominent international journals have employed intricate mathematical models and analyzed China's empirical data. Nevertheless, a majority of these findings attribute the success of China's economic development during the reform period to privatization, drawing on the prevailing Western theory of property rights. At first glance, this perspective seems logical. In 1978, when the reform and opening up began, approximately 80% of China's GDP came from state-owned enterprises. However, the situation has changed, as now only about 25% of China's GDP is generated by state-owned enterprises, with the remaining 75% being contributed by private enterprises. The prevailing theory of property rights abroad suggests that private enterprises are more efficient than state-owned enterprises. According to this viewpoint, the success of China's transition can be attributed to a robust mathematical model that reallocates a significant amount of resources previously controlled by inefficient state-owned enterprises to efficient private enterprises, leading to positive outcomes. This theory also argues that the presence of problems in China, such as corruption and income inequality can be attributed to the incomplete privatization and the reliance on government protection and subsidies for inefficient state-owned enterprises. According to this perspective, such intervention and distortion have hindered progress. These articles appear to be quite convincing and have the potential to be published in internationally renowned journals. However, if these articles were to truly reveal the underlying principles and theories behind China's economic stability and rapid development through reform and opening up, then the Soviet Union and Eastern Europe, where all enterprises were state-owned before their transition, should have experienced better development than China after their privatization. Nevertheless, these countries faced economic collapse, stagnation, and ongoing crises, while China managed to maintain stability and achieve rapid growth. Additionally, they also encountered issues of corruption and income distribution that are prevalent in China, and these problems were generally more severe in their case. Furthermore, if the aforementioned theories indeed uncover the principles and theories behind China's successful transformation, the share of state-owned enterprises in the overall economy should not only diminish, but the actual output should also decline. But, in reality, even though the proportion of state-owned enterprises has considerably decreased since the initiation of reform and opening up, their absolute value has multiplied by ten. Obviously, the cause of China's successful transformation does not stem from reallocating resources from“inefficient” state-owned enterprises to “efficient” private enterprises.
In order to understand the underlying principles, theories, and philosophies behind China's economic phenomena as a developing and transitioning country, and to address its economic challenges, it is essential to adopt a Marxist perspective. By doing so, one can acknowledge the inherent factors that shape the structure of countries at different stages of development, as well as the inherent distortions in transitioning economies. Moreover, one can also appreciate the impact of these inherent factors on development, transition, and economic performance. By utilizing this Marxist epistemology, one can gain a genuine understanding of the essence of the phenomena. Taking the above-mentioned success of China's transformation as an example, due to the pragmatic and gradual dual-track approach adopted by China, many large state-owned enterprises that are related to national defense and people's livelihood were given necessary protection subsidies during the transition period. Simultaneously, labor-intensive industries that align with China's comparative advantages were opened up and guided for development. As a result, China's economy not only remained stable but also experienced rapid growth. The private sector, which aligns with comparative advantages, witnessed even more rapid development. Additionally, as the economy progressed, there was an increasing demand for infrastructure such as roads, transportation, communication, and electricity. This led to the strengthening of China's national strength, enabling it to invest in industries related to national defense and people's livelihood. It is evident that China's state-owned enterprises are also developing, although at a slower pace than that of private enterprises.
The distinction between these two paradigms lies in their use of methods from Marxist political economy or neoclassical methods for analysis and discussion. Traditionally, the former emphasizes the analysis of relations of production, which helps in examining the advantages of the socialist system, but gives less attention to the economic performance. On the other hand, the latter focuses on analyzing from the viewpoint of rational people, which aids in studying the laws of economic performance but overlooks the influence of inherent structural disparities in countries at different stages of development and their impact on the economic operation. The first one can incorporate the advancements made in modern economics and enhance the study of economic development, transformation, and operational principles. The second one can examine the inherent variations in industrial structure and technological structure that determine the level of national productivity during different stages of development. This perspective is grounded in dialectical materialism and historical materialism, beginning with the material existence of factor endowments and their structures at each point in time. It then analyzes the distribution of labor, relations of production, various suitable institutions as superstructures, and the laws governing economic operations in countries with varying levels of development due to these inherent differences. Mainstream neoclassical economics fails to incorporate a historical materialist viewpoint, as it regards the structure present in developed countries, such as industry, institutions, culture, and ideology as the only structure. When examining developing countries, it attempts to understand their issues by comparing them to the established structures of developed nations. Any deviations from the norms of developed countries are considered distorted. Essentially, mainstream neoclassical economics is limited in its perspective, operating within a two-dimensional framework. New structural economics, however, follows the principles and methods of dialectical materialism and historical materialism. This three-dimensional economic approach recognizes that countries at various stages of development have different structural characteristics in terms of factor endowments, industries, institutions, and more. The process of development involves upgrading from a low-productivity structure to a high-productivity structure, while transition entails transforming from a distorted structure to an undistorted one. The transformation objective of new structural economics differs from that of traditional neoclassical economics. The former aims to adapt institutional arrangements based on the development levels of respective countries, while the latter aims to adopt institutional arrangements similar to those of developed countries. Moreover, different levels of economic operation have unique characteristics. For instance, the approach towards technological innovation and industrial upgrading, whether it should be through independent research and development or through the introduction, digestion, absorption, and re-innovation, varies for countries at different stages of development.
The theoretical system of economics constructed by these two paradigms bears a resemblance to the traditional philosophical systems of Neo-Confucianism in the Song and Ming Dynasties and Zen Buddhism in China. During the reign of Emperor Wu of Han, Confucianism became the dominant philosophy after the Hundred Schools of Thought were abolished. However, during the Northern and Southern Dynasties, social unrest occurred, and Confucianism failed to address people's sense of emptiness and quest for the ultimate meaning of life. During the Tang Dynasty, intellectuals, according to Han Yu, one of the esteemed figures of that time, embraced either Buddhism or Taoism as their personal beliefs. Although they were required to study Confucianism for the imperial examination, their inner convictions were either rooted in the metaphysics of Taoism or the philosophy of Buddhism. It was only when Neo-Confucianism in the Song and Ming Dynasties incorporated Buddhism's view on the mind, the exploration of human life, and the ultimate truth of the universe that Confucianism experienced a revival. This revival can be compared to the way Marxist political economy absorbed the core principles of mainstream Western economic theory and expanded its focus from the study of relations of production to the study of economic laws. Similarly, new structural economics can be likened to Zen Buddhism, which initially clashed with traditional Chinese culture as it originated from a foreign religion. During the Tang Dynasty, Monk Huineng, the sixth patriarch, developed Zen Buddhism, incorporating the core spirit of benevolence in Confucianism. He advocated that everyone possessed an innate Buddha-nature, and could attain enlightenment through self-realization. He transformed Buddhism from being solely focused on personal liberation to a broader commitment to the well-being of the world. By incorporating the cultural significance of China, Buddhism became deeply integrated into Chinese culture while still maintaining its original teachings. New structural economics, influenced by Marxism and grounded in the principles of dialectical materialism and historical materialism, utilizes modern economic methods to analyze China's economic phenomena and address the pressing issues of our time. In this way, it shares similarities with the practice of Zen Buddhism.
The development of these two paradigms in the theoretical system of Chinese economics can be seen as interconnected. Despite having different expressions, they share the same objects of study and guiding principles. Political economy, based on the principles of Marxism, aligns with China's socialist ideology and aims to unify the thoughts, understanding, and actions of the people with the policy put forth by the Party and the country. The discourse of new structural economics is similar to the discourse of neoclassical economics commonly used in foreign countries. This encourages theoretical competition among domestic intellectuals, public opinion, and mainstream Western economics. It allows learners to compare and understand which approach can better serve the purpose of “understanding the world and transforming the world” in China's economic practice. Furthermore, it helps to promote Chinese wisdom, the Chinese path, and the Chinese solution globally, thereby raising China's voice and influence in the international community.
The establishment and advancement of disciplines are closely interconnected. At present, there are three challenges in the building of the discipline of economics in China, which significantly deviate from the requirements of developing an economic theory system with Chinese characteristics, Chinese style, and Chinese manner guided by Marxism in the current era.
Firstly, the Ministry of Education has published a list of 14 categories in the discipline catalog, with economics being one of them. Economics is further divided into two branches: theoretical economics and applied economics. This division suggests that theoretical economics focuses on understanding the world without considering how to apply that knowledge to make changes, while applied economics concentrates on transforming the world without much emphasis on understanding it. This division contradicts the viewpoint supported by Marxist dialectical materialism, which argues that understanding and transforming the world are interconnected processes. According to this perspective, understanding the world is essential for transforming it, and transforming the world is only possible by comprehending the laws governing the development of the objective world. Furthermore, improving our understanding of these laws is achieved through the practice of transforming the world. In fact, out of the 14 categories listed by the Ministry of Education, economics is the only one that separates theory and application as two first-level disciplines.
Secondly, there are a total of 16 second-level disciplines in the field of economics, among which political economics serves as a second-level discipline of theoretical economics while national economics serves as a second-level discipline of applied economics. These two are the only ones that still embody the fundamental principles and characteristics of Marxism, accounting for only 1/8 of the entire set of second-level disciplines. This arrangement undermines the prominent role of Marxism in the allocation of resources and personnel training in the field of economics in universities. Moreover, it is worth noting that among 14 other second-level disciplines, as long as there is no similar discipline setting in foreign countries, China does not have such second-level discipline settings either. As a result, certain areas that are vital for China's economic and social advancement are not encompassed within these second-level disciplines. A clear example of this is the absence of development economics as a designated second-level discipline, despite its undeniable importance for China as a developing nation. Neither economic theory nor applied economics has recognized development economics as a distinct field. In fact, development economics gained popularity internationally after World War II as a separate field aimed at guiding developing countries escaped from their colonial or semi-colonial status in achieving industrialization and modernization. Many universities established specialized programs in development economics to support these efforts. However, in the 1970s, countries that followed the theories of the mainstream development economics for their development policies faced economic stagnation and crises, widening the gap with developed nations. Additionally, the rise of neoliberalism suggested that developing countries should simply adopt the economic systems and theories of developed countries. Consequently, the field of development economics declined. In the United States, apart from Williams College and Vanderbilt University, there are no other universities that specifically offer degree programs in development economics. As a result, China does not have a second-level discipline in development economics. In China's field of economics, there is a pressing need to restore the leading role of Marxism and reconsider the establishment of first-level and second-level disciplines in economics according to the needs of China's socio-economic development.
The third question pertains to textbooks. Currently, the textbooks used in the field of economics at universities in China are either translations of the original English versions or written based on the original English versions. These textbooks discuss social and economic phenomena in developed countries like the United Kingdom and the United States, and propose solutions to their prominent issues. They are deeply rooted in mainstream theories of their respective economies, societies, cultures, and ideologies. However, these theories overlook the differences and endogeneity of countries at different stages of development, as well as the various distortions that exist. Consequently, while these textbooks can be effective as a tool for criticism in developing countries, they often lack the power to truly transform the world. During the Seminar on Philosophy and Social sciences, General Secretary Xi Jinping highlighted the interdependence of the discipline system and the textbook system. He emphasized that the disciplinary system is inseparable from the textbook system, and in terms of level of development they are interdependent. However, the current textbook system of economics in China does not facilitate the building of a theoretical system for China's economics with Chinese characteristics, Chinese style, and Chinese manner.
The establishment of academic disciplines is the fundamental principle that determines the allocation of faculties, students, and resources in universities. Currently, Marxism serves as a guiding principle for both political economics and national economics. However, it is important to note that these two disciplines are just a fraction of the larger academic landscape, which consists of 16 second-level disciplines. This poses challenges in attracting qualified teachers and providing comprehensive training for students. Therefore, it is crucial to modify the current disciplinary structure in economics to establish a theoretical system for China's economics that is guided by Marxism. For this reason, it is advised to establish three first-level disciplines: political economics, new structural economics, and Western economics. These disciplines should be further expanded to include second-level disciplines that meet the specific needs of China's socio-economic growth. The first two disciplines aim to incorporate China's experiences and conduct theoretical innovation based on Marxism. They also serve as a foundation for textbook development and student education. Meanwhile, the third discipline continues to follow the mainstream economic theories prevalent in the Western world. The implementation of three first-level disciplines is beneficial for China to gain insights from foreign countries while taking domestic conditions into account, and to compete for influence and a greater say by utilizing the theoretical system that can effectively “understand and transform the world”. Additionally, it contributes to the establishment and development of the theoretical system for China's economics that fully embodies Chinese characteristics, Chinese style and Chinese manner in guiding ideology, discipline system, academic framework and discourse system.
[1] Xi Jinping. “Develop Philosophy and Social Sciences with Chinese Features (May 17, 2016)”．习进平谈治国理政(The Governance of China) (英文版) 第二卷[M]．北京：外文出版社，2017.
[2] 亚当·斯密．国富论[M]．谢宗林译．北京：中央编译出版社，2010．
[3] 约翰·梅纳德·凯恩斯．就业、利息和货币通论[M]．郭武军译．上海：上海文化出版社，2021.
[4] 弗里德里希·李斯特．政治经济学的国民体系[M]．陈万煦译，蔡受百校．北京：商务印书馆，1961.
[5] 林毅夫．新结构经济学——反思经济发展与政策的理论框架[M]．苏剑译，北京：北京大学出版社，2012.
[6] 艾思奇．大众哲学[M]．上海：上海三联书店，2019.
[7] Paul Romer. Increasing returns and long-run growth[J]. Journal of Political Economy. 1986, 95(5): 1002-1037.