Chapter 10 Reform has come to a crossroads——Jiang Tiegang interviews Qin Hui

Reporter: At the end of the 20th century, traditional socialist countries embarked on the road of reform one after another. Although the reform models of the countries in the former Soviet Union and the East were very different, they basically all experienced a painful process of political turmoil and economic downturn. China has not yet experienced such a process. This phenomenon, so some people assert that China's reform has succeeded, while the reforms of the former Soviet Union and Eastern countries have failed, or that China's reform model is better than that of the former Soviet and Eastern countries.You have reservations about this argument, and think that the reform process is time-sensitive, and it is far from the time to draw conclusions on the success or failure of the reforms in China and the countries of the former Eastern Soviet Union.

Qin Hui: Regardless of whether they were progressive or radical, the countries of the former Soviet Union and the East have one thing in common: the economic downturn occurred in the early stage of transition, while in the past 20 years of reform in China, the economy has basically continued to grow, and only around 1990 there was an economic downturn for about a year. , which is indeed a well-known fact.But how to explain this phenomenon, there are differences of opinion among different people.Among them, Chinese explanations have undergone many changes, such as surname society, surname capitalism, gradual radicalization, incremental stock, etc. Foreigners also have various explanations, such as a saying that "democracy hinders economic development", which can be summed up in one sentence , is to reduce the transaction cost of system change by reducing democracy or public participation. It is said that the transaction cost of public choice is very high, and the transaction cost of both parties is much smaller.Because the former Soviet Union and Eastern countries had too many public options, the welfare was too high, and the trade unions were too powerful, workers would go on strike and parliaments would debate at every turn, so the price was very high, and it was difficult to implement any reform measures. Asian countries did not allow workers to Freedom to organize trade unions is good.There are also responders to this explanation in China. Some people have compared the reforms of Russia and Vietnam, saying that Vietnam is a shock therapy, where prices are liberalized one step at a time, state-owned enterprises can give to whoever they want, and workers can be kicked out after being laid off. Dare to say "no", so Vietnam's economy is booming.Because of the democracy in Russia, nothing can be done. The shock therapy can't go on after only half a year.In my opinion, regardless of the long-term consequences, this explanation is indeed reasonable if we only look at what has happened.But what I think is more important and often overlooked is another point, that is, the impact of the difference in the economic system before the reform on the "cost" of the reform.

Reporter: That is to say, the reform starting points of China and the former Soviet Union and Eastern countries are different. Qin Hui: Although the pre-reform economic systems of China and the former Soviet Union and Eastern countries are both called planned economies in name, there are actually huge differences between the two.In short, China's rural system before the reform was a community with constraints and no protection, which had the characteristics of socialist primitive accumulation. The fettered agricultural system is even more unfair; before the reform, China's industrial system was a movement economy or a peasant war-style command economy, which was more inefficient than the Soviet-style scientifically planned economy.Therefore, Chinese reforms have specific potential advantages in terms of both equity improvements and efficiency improvements.

Reporter: Do you think China's rural reform is just a natural process of breaking away from the "disharmonious community" and giving up "negative Pareto improvement", which is much simpler than the former Soviet and Eastern countries. Qin Hui: Indeed, generally speaking, a system always benefits some people and hurts others, so the reform will be welcomed by the losers and opposed by the beneficiaries. Even if there are more welcomes than opponents, the reform will be very difficult.In terms of economics, the reform of a "non-Pareto system" must also be a non-Pareto process.But if a system hurts everyone, then its reform will benefit everyone, that is, abandoning the "negative Pareto process" will form a Pareto process.Such things are rare in history, but our reforms, at least in the early stages, were like this.China's rural reform began with the disintegration of the people's communes. We used to say that the people's communes were a collective economy. In fact, no matter what level of collectives, whether it was the people's communes, production brigades, or production teams, they did not really become the economic behavior of the people's communes. The government has the final say on production planning and resource allocation, and the entire people's commune is an economy firmly controlled by the state. In terms of the degree of strict control over the people's commune, the people's commune is no less than a state-owned enterprise.The difference between people’s communes and state-owned enterprises is that state-owned enterprises are an economy controlled by the state and the state bears the consequences of the control. Without such benefits, our people's communes are an economy controlled by the state but the peasants bear the consequences of the control. This kind of economy is very bound by the state, but there is basically no protection. It is a very discordant community.Compared with the former Soviet Union and Eastern countries, the difference between this kind of economy is too obvious.We can say that the collective farms in the Soviet Union during Stalin’s era were indeed similar to those in China, but they were in the period of primitive socialist accumulation, and the peasants were pitted in a mess. However, after the completion of the primitive accumulation process, the industry stopped “extracting” the peasants. Since the implementation of the "guaranteed wage system" in Soviet collective farms in 1966, its system has become an economy in which "the state bears the consequences of control" just like urban state-owned enterprises.The agricultural systems of most Eastern European countries were similar to those of the Soviet Union after 1966, and the period of primitive accumulation was shorter. Industrialized countries such as the Czech Republic and East Germany basically did not even have this period.A small number of Eastern European countries did not engage in agricultural collectivization before the upheaval, such as the former Yugoslavia and Poland. Before the upheaval in agriculture, there was individual farm agriculture, but the state still funded the retirement system for farmers in order to increase the "socialist attractiveness" after the 1960s. , free medical care and other social security systems.Therefore, the rural areas of the former Soviet Union and Eastern countries need to pay a price to reform and get rid of the shackles of the community. The peasants there can’t even talk about taking the initiative to reform. The Russian government once rewarded the collective farms willing to reform by exempting huge debts. There are very few.In comparison, China's rural reform is much easier, because the people's communes not only damage the interests of laborers, but also damage the interests of managers, that is, commune cadres and ordinary people are not satisfied. A natural process of abandoning "negative Pareto improvement", which is a rare "progress without price" in the history of Chinese and foreign reforms.To paraphrase Marx, what farmers lose in this process is only chains, but what they gain is the opportunity for survival and development, and the initial distribution of this opportunity (with the land as the carrier) among them is relatively equal. Instead of?

Reporter: Our state-owned enterprise management system is similar to that of the former Soviet Union and Eastern countries. It is both restrained and protected. Now that the reform of state-owned enterprises has been carried out for so many years, there is no economic downturn like that of the former Soviet and Eastern countries. Does it mean that the reform model we choose is superior to theirs? Qin Hui: At present, there are piles of existing economic problems represented by state-owned enterprises in my country, but judging from some indicators, there has not yet been a big landslide like the early reform period of the former Soviet Union and Eastern countries. This has caused some people to completely deny "radical reform" and deny justice. The main reason for the reform.In fact, apart from the fact that some deep-rooted problems are still being covered up or even accumulated, the more important factor is the difference between China and the former Soviet Union and Eastern countries before the reform.Take the Soviet Union as an example. Although the old system of China and the Soviet Union was the result of revolutions in backward peasant countries, with the characteristics of the traditional "command economy" that Hicks called the pre-market era, Russia was influenced by industrial civilization and civil society. After all, the influence is deeper, and its system has more elements of "scientific rational planning" of industrial civilization.From Lenin's appreciation of the Ford system and Taylor system, the "Masteel Constitution" in Stalin's period emphasized expert management, economic accounting, bureaucratic management and one-management system, until the Brezhnev era's great revival of mathematical economics, emphasizing the ultimate allocation of elements Optimize the model and gradually develop a set of "scientific plan" system.The rationality of this interlocking system is very high. For example, the Soviet railway system lags behind Europe and the United States by more than 20 years in technology, but the traffic density of the Soviet railway system is four to five times higher than that of Europe and the United States. This can be said to be a product of the highly planned Soviet economy.But this economic system naturally requires it to operate in a static equilibrium manner. Although its design is optimal, it is a static optimum. In this interlocking economic system, as long as there is trouble in one link, the balance will be broken will be disrupted, so any improvement and innovation will not be stimulated and motivated, but will be suppressed.Before the upheaval in the Soviet Union and the East, many countries had tried market-oriented reform experiments, put profits in command, and increased corporate autonomy. However, as soon as the economy was launched, a series of chaos immediately occurred, and the economy immediately fell. There was no way but to turn around. To emphasize another type of reform, the so-called strengthening of the scientific nature of planning, to improve the degree of economic optimization design.In the end, the scientific and planned economies of the former Soviet Union and Eastern countries reached an unimaginable peak, and the potential of scientific planning was basically exhausted, so that there was no room for development in this direction.Under such circumstances, the countries of the former Soviet Union and the East are facing a very severe situation: either maintain the status quo, stand still, and stagnate, or find another way out and make up their minds to carry out thorough market-oriented reforms.As a result, they chose the latter, and the problems that occurred during the market-oriented reforms reappeared. The interlocking production links were immediately interrupted, raw materials could not come in, products could not be sold, and the benefits of marketization had not yet been seen. When we arrive, the decline in production efficiency and the economic downturn will be seen first.This is a common phenomenon in the former Soviet Union and Eastern countries.

China is not the case. What it has established is more of an "unplanned command economy" with the color of traditional peasant wars, which embodies not so much the scientism and economic rationality of industrial civilization, but rather the will and will of officials in the agricultural era. romantic passion.China's "Anshan Iron and Steel Constitution" and the Soviet Union's "Magang Constitution", China's party committee system and the Soviet Union's one-management system, China's political factories and Soviet experts' factories, Chinese mass movements and Soviet bureaucratic management, China Before the reform, China still only knew "political economics" and did not know mathematical economics. Before the reform of the Soviet Union, few people in the field of economics had eaten the previous bowl of rice. China's "small but comprehensive", The "San Cave" and the Soviet Union's emphasis on optimizing the division of labor, scale effect, and scientific layout...all reflect that the "command economy" of the agricultural era is different from the "planned economy" of the industrial era.Therefore, China faced a very favorable situation at the beginning of its reform, and no matter which direction it went in, it was a positive path.On the one hand, it can go in the direction of strengthening the scientific nature of planning, because China still has a lot of room for improvement in the "planned economy", unlike the Soviet Union, which has come to an end and has to completely change its "course".In a certain sense, China's reform did not start with marketization at the beginning, but with the restoration of some things in the Soviet Union.This can be seen clearly from Deng Xiaoping's statement that "the reform actually started in 1975, but it was called 'rectification' at that time".On the other hand, it can also go in the direction of marketization, because China's reform has not enjoyed the benefits of the "scientific plan", and of course it does not have to bear the price of giving up the "scientific plan". There are also endless opportunities for expanding market share. benefit.

Reporter: That is to say, the achievements of China's reforms are partly due to our low starting point and certain "advantages of backwardness". Qin Hui: I pointed out two years ago that our current achievements and the plight of the former Soviet and Eastern countries are not so much a sign that we are doing better than them now, but rather a sign that we were doing worse than them in the past —Our communes are not as fair as their farms, and our command economy is not as efficient as their planned economy.But it is impossible for us to live on the "backward advantage" forever.It should be noted that both the fairness improvement contrasted by the extreme unfairness of the commune system and the efficiency improvement contrasted by the extreme inefficiency of the "sport economy" have time limits.Needless to say, the management level of state-owned enterprises today is much higher than during the Cultural Revolution, but the plight of state-owned enterprises is far worse than then. At the same time, the primitive accumulation of power and money has also formed serious social injustice.All this indicates that the reform process has entered another critical point, whether it is to move towards a market economy with fair competition, from the fairness of acquisition to the fairness of transactions, or from the power-house-win-win to the winner-take-all, falling into "unfair pseudo-competition" The vicious cycle of "anti-competitive pseudo-fairness" depends on our choice at this time.