Chapter 3 Two Research Tools and Two Conclusions

Maintaining long-term unity in a region with a vast territory, a large population, and diverse folk customs is a very arduous task. Those who rule the country must have excellent wisdom in the distribution of interests among various social classes and the construction of basic systems. From this, I conclude Two tools for observation and analysis are provided. The first is the game method of the four major interest groups.I believe that all the problems in China that have occurred in history and in the present are the result of the struggle, game and compromise between the four major interest groups, the central government, the local government, the propertied class and the proletariat.

. Followed by the four basic system analysis method.Compared with other countries, the most unique thing about China is that we are the only country that has maintained a centralized system for two thousand years, and it is also the only country that has maintained this system among the top 30 economies in the world today.This centralized and unified national model was not built in a day, it has gone through a long, bloody and exploratory process.For autocrats, if they want to maintain centralized rule, they must complete system construction in four aspects: the power distribution model between the central and local governments, the control model of the people's ideology, the control model of the social elite, and the corresponding macroeconomic system model. .Many institutional innovations in Chinese history, in essence, revolve around the four basic institutions.In the pre-industrial civilization, they were presented as--

County system: In order to ensure the stability of the empire, it is necessary to ensure the central government's personnel appointment power politically and avoid the breeding of local separatist forces; The system of respecting Confucianism: strangling the academic tradition of "a hundred schools of thought contending" in order to achieve the ideological unity of the whole people; Imperial examination system: Through a fair examination system, social elites are absorbed into the system for my own use; State-owned monopoly system: Economically, the state-owned monopoly of important resources is implemented to control the national economy and people's livelihood.

These four basic systems, such as the four "pillars" jointly support the "edifice" of the centralized regime, and their commonality is to pursue the consistency of behavior and thought of various interest groups and maintain "top-down control."After thousands of years of polishing and exploration, these systems have gradually become more refined and perfected, reaching their peak in the Ming and Qing Dynasties.As Liang Qichao said: "China is a country with an autocratic regime, and the world knows it. Although its autocratic regime also follows the axiom of evolution, it has gradually developed, and it has only been consummated since the present." In this sense, China is really a big country. The "hometown" of the unified system.As far as modern times are concerned, driven by the wave of globalization, China has embarked on a difficult modernization transformation. Many of the above-mentioned four systems have undergone major changes. However, the basic concepts of maintaining great unity and implementing authoritarian governance have not changed substantially Therefore, the goals and means of institutional innovation are still on the same track, showing a distinctive continuation feature.This is one of the most serious propositions for China's future-oriented reform.

This book follows the thread of history, takes economic system reform as the core theme, and makes a straightforward narrative across time and space. In the first and second lectures, I will describe two important reforms in China before the completion of the Great Unification - the "Guan Zhong Reform" in the 7th century BC and the "Shang Yang Reform" in the 4th century BC. The idea of ​​"separation of industries among the people", the monopoly policy of salt and iron, and Shang Yang's bold experiments in land privatization, county system, household registration system, and military nobility system are all pioneering. They respectively provide two rather extreme governance models. , like the left and right poles, standing at the two ends of the previous changes in later generations.

The third lecture "Emperor Wu of the Han Dynasty's reform" is a key point. During this great change that lasted half a century, China completed the construction of the imperial model. Focusing on core economic propositions such as industry, circulation, currency, and finance and taxation, he implemented the first overall supporting system reform in history, and many economic policies he promulgated were used for reference by later generations.The fourth lecture, "Wang Mang Reform", is a Confucian emperor's extreme imitation of Emperor Wu of the Han Dynasty. This is the first time in history, and it is also a very short-lived experiment in classical socialism.

The fifth and sixth lectures respectively describe the political and economic changes of the two most prosperous dynasties in the history of Chinese civilization - the Tang Dynasty and the Song Dynasty.Emperor Taizong of Tang created the strongest empire with the smallest government in history, and created the "Zhenguan Reign" which flourished for a while. However, 130 years later, the flaws in the system made it difficult for the Tang Dynasty to escape the catastrophe of "Anshi Rebellion".Song Taizu decisively deprived the power of local vassals and towns, and resolved the local government's challenge to the central government's authority. The innovation of the economic system in the Song Dynasty was the most in history, and the "Wang Anshi Reform" in the late Northern Song Dynasty was a turning point. The last overall supporting system reform during the imperial period, the Eastern and Western civilizations also parted ways at this time.

The seventh lecture "Stagnation in Ming and Qing Dynasties" tries to answer these questions: Why did China fall into the trap of "high-level stagnation" for 500 years after experiencing thousands of years of development; Passive behavior, or self-confident active decision-making; How did the Chinese people’s ability to degenerate in economic innovation and technological innovation occur; How did the social and economic form of “men farming and women weaving” come into being. Starting from the eighth lecture "Westernization Movement", China was dragged into the torrent of globalization as the "sick man of East Asia" and re-started on the track of positive change. This is the first imported reform in Chinese history, and the process is painful and passive. , Exhausting the efforts of a generation of elites.The Westernization Movement in the late Qing Dynasty started almost at the same time as the Meiji Restoration in Japan, but they resulted in completely different national fortunes. The two incidents of "National Advancement and Private Retreat" that occurred during this period are worthy of vigilance for future generations.

The ninth lecture "Two Republics of China" provides two samples of reforms that are completely different from each other in terms of ideas and models. One is an extremely free and indulgent market economy movement, and the other is a centralized reform in the name of "controlled economy". Yes, they all failed.During this period, China's modernization movement has actually fallen into a closed-loop contradiction that is difficult to advance and retreat. The tenth, eleventh and twelfth lectures are about the brief history of the economic transformation of the People's Republic of China. For more than 20 years after 1949, a plan with a strong ideological atmosphere and the goal of eliminating private capital was carried out. The great economic experiment, which once achieved brilliant economic achievements, finally dragged China into a quagmire of stagnation and chaos. The reform and opening up after 1978 was further divided into two stages: “Decentralization of power and transfer of profits” and “Return of centralization”. China rose to become the world’s second largest economy, and various institutional constraints made the long-term future of reform seem confusing.

The above twelve lectures began in the distant 7th century BC and ended in 2013. The long narrative is like a tiring journey, which is an intellectual and physical test for both the writer and the reader.During the days and nights when I was creating behind closed doors, I often had the feeling of replaying chess games with the ancients. Sometimes we were happy together, sometimes we were happy together, and sometimes we were depressed together. Warm tribute” mood. Douglas North, the winner of the Nobel Prize in Economics in 1993, once said: "With regard to political economy, economic development, and economic times, we must understand the ideological model and ideology behind the decision-makers. explanations, how to adjust the order of the environment, and a set of common thinking patterns behind the countermeasures proposed.” In this book, I gave up the attitude of critics, and hoped to explore and study with a constructive and rational attitude. The historical trajectory and possible future of the country.Therefore, after the twelfth lecture, I added a section "Back to the Fundamentals of History" to reflect on the relationship between "unified culture", political system reform, and economic development. Economic change provides some basic judgments.

In this book, I will make two, perhaps controversial, conclusions: First, the great economic rise in the past thirty years is not so much an "unintended consequence of human behavior", but a rational evolution in the history of economic reforms in the past two thousand years, and we are still in danger of falling into the closed-loop logic of history; Second, the "structural flaw" in China's economic system is a "constructive result" that has an inseparable relationship with the centralized system that has maintained unity for thousands of years.