The great miracle of China's industrial revolution conforms to the law of "embryo development"

The topic I am talking about today is "The Great Chinese Industrial Revolution." In my speech, I mainly want to give China a new perspective and thinking dimension for China's economic development, as well as the future direction and many problems encountered by other developing countries. Because of the relationship of the work unit, to make a statement, this is my own point of view, does not represent the work unit.

I think that the phenomenon of China's rise cannot be overestimated. I see it as one of the historical events in the history of human economy since the British Industrial Revolution. The reason is simple:

The British industrial revolution has been close to 250 years, but so far only about 10% of the population really lives in a fully industrialized country. If China can complete its industrial revolution, it means that another 20% of the population can enter the modern industrial civilization, and in a shorter time. The British industrial revolution has been used for hundreds of years. We have only used it for more than 30 years, and then we will continue to develop for two or three decades, for a total of five or sixty years.

Moreover, China’s rise is not based on colonialism, imperialism, and war. The driving force it brings to the world’s economy is 100 times that of the rise of the British Empire, which is equivalent to 20 times that of the rise of the United States of America.

Therefore, this power is very powerful and great. It drives Africa, Latin America, Asia, and even developed regions in Europe and America, and brings them growth opportunities. In addition, China may also develop new growth methods and create new industrial civilizations and cultures based on the existing human civilization.

We all know that China was still very poor more than 30 years ago, and per capita income was only one-third of the per capita income of countries in sub-Saharan Africa. But today China has become the world's largest and dynamic manufacturing center, producing half of the world's steel, eight times that of the United States, 60% of the world's cement, and more than 25% of the world's cars. China is currently a large global applicant, and the total number of applications has exceeded the sum of the United States and Japan. China is still a large country in the world producing a large number of industrial products and agricultural products. This is very clear to everyone.

Judging from the gross manufacturing value of the world's top five industrial producers, China was completely at the bottom in the 1970s. However, with China's reform and opening up, the economy has risen step by step, surpassing other established industrial powers. In 2010, it surpassed the United States to become the world, and the growth trend is hard to be reversed. Looking at the total number of applications, China also started from the very bottom of the world rankings. Especially in the late 1990s and early 2000s, the developed countries began to surpass one by one. The total number of applications now far exceeds the sum of the United States and Japan.

But China is a super economic growth achieved under a unique political system. This reality has made the world feel very surprised and puzzled. So many people, including many of us Chinese themselves, such as government officials and entrepreneurs and scholars, still believe that this growth miracle is not sustainable.

1. Several viewpoints explaining Chinese miracles

How to explain this phenomenon? In many theories that explain China's past growth miracles, I have found two more representative views. They are two extremes, and others can be seen as somewhere in between.

The view is that China’s extraordinary growth so far is nothing more than a strong government’s use of various administrative resources and initial market-oriented reform dividends, manufactured by cheap labor, inefficient government and state-owned enterprises, at the expense of the environment. "Rejuvenation illusion." Therefore it is not sustainable at all.

This view holds that China's short-term growth is essentially different from the overall rise of the West since the Renaissance. The reason is simple: China does not have the political system reform that the West has achieved since the industrial revolution. There is no tradition of democracy, the rule of law, human rights, freedom of speech, no modern legal system, no real market economy, no freedom of capital and land. Flowing, there is no Western-style intellectual property, no real technological innovation, only continuous copying or even plagiarism of Western technology.

In a word, China does not have a series of political, cultural, economic, religious, and social conditions that made the West a scientific and technological revolution. Therefore, China is nothing but a lame, sloppy, hypocritical and unrealistic imitator of modern Western civilization. China’s still deeply ingrained feudal consciousness, official position, and crony capitalism are good proof. This view is very representative at home and abroad.

Another point of view is that China's economic growth is nothing but a natural return to history. China used to be the world's largest economy and advanced civilization. At least from 2000 BC to 1800 AD, it led the world civilization for nearly 2,000 years. It was the only civilized system that had not been interrupted. It only started when the British Industrial Revolution. outdated. Therefore, the superiority of Chinese culture determines that it is only a matter of time to rise again.

As Napoleon said: "China is a sleeping lion. Once it wakes up, it will once again shake the world." So this view is that it is no surprise that China's rise is a natural return to its great history and cultural tradition.

2, the two views cannot withstand scrutiny

In my opinion, neither of these views can stand up to scrutiny. First, a country that lacks a benign incentive mechanism, an effective social management system, and an inclusive open economic structure cannot sustain rapid growth for more than 30 years after reform and opening up. From a poor agricultural society, it quickly transforms into a global Vibrant manufacturing center.

In this regard, Africa, which is rich in resources, has not done it. Latin America, which has more "superior" political and financial systems, has not done so. Eastern Europe and Russia, which have stronger industrial, scientific research and education bases, have not done so after introducing capitalism and market economy. .

Secondly, if splendid ancient civilizations and cultural traditions are the root cause of China's re-emergence, why have we not seen the re-emergence of Egypt, India, Greece and the Ottoman Empire? Therefore, both views are problematic, and we need new ideas and theories.

What is the new theoretical point of view? First of all, we need to unveil the mystery of modern Western civilization. Many textbooks and media have misled us. Western civilization is not what we imagined. I want to cite the historian's investigation of Western civilization to prove it.

"Cotton: A Global History" by Harvard University economic historian Sven Beckett

After studying the British Industrial Revolution, Harvard economic historian Sven Beckett pointed out that "the British Empire of that year, as a country that opened up industrialization, was not a country that was later described as free, enlightened and honest." It is a bureaucratic group and a powerful state with a large military expenditure, always in a state of war, a policy of intervention, high taxes, high debt, extreme trade protectionism. It is not a democratic country."

It seems that everyone must know history and read more history. If you think this Harvard economist is not enough, I quote an economic historian, Joel Mokyr, an economic historian at Northwestern University.

Professor Moel Joel Mokyr, Professor of Economic History, Northwestern University

He believes that on the eve and early days of the industrial revolution, "British society has almost no law and order to protect industrial property and human rights, but is full of looting and theft, as well as local riots caused by economic or political grievances. Britain does not have the professional police force of the police force after 1830 (after the industrial revolution), the court system is also clumsy and expensive, and full of uncertainty and injustice. Because there is no formal legal enforcement mechanism, the whole UK relies on The deterrent effect of the cruel punishment of the people maintains law and order. The punishment is mostly private, and crime prevention is mostly carried out by the people themselves: more than 80% of the crime punishment is carried out privately by the victim."

Therefore, I feel that we must seriously answer the question raised by the new institutional economist Mr. Zhang Wuchang, a challenge to all Chinese economists and Western economists. He says:

"I can write a thick book that criticizes China in a week. However, under so many unfavorable predicaments, China's rapid growth has lasted for so long, and history has never appeared... China must have done The very right thing has produced the economic miracle we have seen. What is it? This is the real problem."

Therefore, simply pointing out China's problems cannot help us understand and explain China's growth miracle. There are many problems in China, and there are many problems in other countries. But why is China growing so fast that no other country can do it? Therefore, it is necessary to find out what China has done right, and it is only a true economist that can not make subversive mistakes in the future reform and opening up.

Many people will say that the Chinese miracle is nothing remarkable. What it does right is nothing more than engaging in a market economy. But when I heard this explanation, the Philippines laughed. It has a longer market economy than your China. Why is it not the same? Ukraine and Russia also laughed. They are engaged in a market economy that is more thorough than yours. Why are they not taking off? The Latin American countries also laughed. When they independently established the country to engage in a market economy, where are you still in China? Therefore, it seems that it is really not easy to find out where China is right.

3. Did a few countries detonate the industrial revolution because of democratic politics?

The idea that Professor Lin Yifu introduced just now is to help find out what China is doing right from a very novel perspective. The following is my point of view. If my point of view is summed up in a simple sentence, it is that China finally succeeded in detonating an industrial revolution after the exploration of the Westernization Movement for more than one hundred years and found the secret of the industrial revolution.

But the problem is coming. What is the secret of the industrial revolution? If this secret exists, everyone can do the same. Then why didn't China know this secret before? Why are there so many backward countries that don’t know this secret? How did Britain find it 250 years ago?

But unfortunately, economists and economic historians have long debated the mystery of the industrial revolution. Now it is still unclear why the industrial revolution happened. Why did it happen in Britain, not France and Germany? Why didn’t it happen? Simultaneous China and India? As the American economic historian Clark pointed out in 2012, “Explaining the industrial revolution is still a grand prize in economic history. It has inspired generations of scholars to live their lives forever, but it has never ended.”

I believe that China's experience can illuminate this historical mystery and help uncover the secrets of the industrial revolution, because China is undergoing an industrial revolution.

In the historical industrial revolution, we know that it has brought a sudden breakthrough leap in human productivity. Before the industrial revolution, humans for thousands of years, no matter which country, no matter what dynasty, per capita income is very low, lying on the edge of the Malthusian trap.

But after 1800, there was a "big diversion" that Pomeran said. Because a few countries detonated the industrial revolution, their incomes continued to grow and their living standards continued to increase. The rest of the country remained in the Malthus trap, including during the Westernization Movement and China during the Republic of China.

Why have only a few countries successfully replicated the British industrial revolution? Western-style democracy is by no means a necessary and sufficient condition.

Regrettably, so far, only a few countries and regions have successfully replicated the British industrial revolution, although it is impossible to say what it is. For example, in Western Europe, industrialization was completed from about 1820 to around 1960, and the United States opened and completed the industrial revolution in about the same period of time.

Japan started late, probably 50 years later, and then completed industrialization in the 1960s in a shorter period of time and entered the welfare society. The four Asian dragons rose after the war and spent less time to achieve economic take-off, but not everyone has completely completed industrialization. For example, Taiwan’s per capita income is currently only about 60% of the United States.

We add these countries and regions together, which is only 10% to 15% of the world's population. None of the rest is open or industrialized.

Why are only a few countries successful so far? The current theory of economic development is called the new institutional economics. This set of theories is very simple. It is believed that human society probably has two political systems, one is an inclusive system, such as constitutional monarchy and democracy.

This system means that it can limit the power of the elite and limit his right to extract and deprive others of the results, thus implying good private property rights protection, and people thus have the enthusiasm of accumulating wealth and inventing innovation, leading to economic growth.

The other is the extractive system, such as authoritarianism and dictatorship. Under this system, there is no good protection of private property rights. The people thus have no enthusiasm for labor and accumulation of wealth. Because they have been robbed by the king and the authoritarian government after they have accumulated, they will not innovate and invent, which means poverty.

Therefore, in this theory, the solution to poverty is simple: to achieve democratic elections with one person, one vote. This theory is well illustrated in the book "Why the country fails" by Asimo and Rubinson.

In my opinion, this theory cannot be justified. It does not match historical facts. For example, the United Kingdom did not rise under the democratic system. Although there was a constitutional monarchy brought by the glorious revolution, its private property rights protection did not change because of the constitutional monarchy, and its legal system did not become more perfect. The historian's statement. For example, the rise of Germany and Russia after the mid-19th century is not based on a democratic system, but rises under an authoritarian system.

Second, this theory is not in line with contemporary practice. Contemporary practice shows that when we impose democratic institutions on developing countries through revolutions, these countries are not rich and strong because they adopt democratic systems, but they are constantly civil strife, such as Iraq, Libya, Afghanistan, Egypt, and Ukraine.

Third, this theory cannot explain many other phenomena. For example, Russia adopted the democratic system after the economic reform, but it has not become a super economic power, which is in stark contrast with the Chinese miracle.

For example, Japan’s rise in the Meiji Restoration at the end of the 19th century was not carried out under the democratic system. South Korea’s rapid industrialization in the 1960s and 1970s was achieved under the dictatorship. Singapore’s post-independence economic take-off was not under democracy. Realized.

Fourth, we also see that even under the same political and legal system, such as different cities in the United States and different neighborhoods in the same city, even with the same system, the same private property rights protection, the same law, we can see On one side is a large area of ​​slums, on the other side is rich and oily; on the one hand, illegal robbery and lawlessness, on the other hand, social order and law-abiding.

For example, Italy's political system and property rights protection are the same throughout the country, and the legal system is the same, but southern Italy is much poorer than the north. why?