Yao Yang's approach to establishing a Chinese school of economics
Set one's own agendas, address real-life issues, integrate Chinese economics and politics but avoid excessive criticism of political intervention to create a constructive framework.
Hi, this is Jia Yuxuan from Beijing. The East is Read has recently published Part III and Part IV, following Part I and Part II on Pekingnology, of the translation of Chapter 8, titled "中国经济学的过去、现在和未来 The Past, Present, and Future of Chinese Economics", of Yao Yang's 2023 Chinese-language book 经济学的意义 The Meaning of Economics.
The Chapter is made of five parts and this newsletter marks the final part of the series:
I. The Development of Chinese Economics
II. Contributions of Chinese Economists to the Development of Economics
III. Chinese Economics Today
IV. Which of China’s Problems are Worth Studying by Economists Today?
V. Can a Chinese School of Economics be Formed?
Remember, in the previous posts, I wrote that Pekingnology was planning to take over and release Part V? Well, forget it. My colleague, Zichen, who is the editor of Pekingnology, is just overwhelmed with tasks and cannot manage this responsibility. Therefore, the final part will be published here on The East is Read instead.
Yao Yang is Liberal Arts Chair Professor; Dean, National School of Development; Executive Director, Institute of South-South Cooperation and Development; Director, China Center for Economic Research at Peking University.
The chapter was first translated and published by David Cowhig, a retired U.S. diplomat who generously authorized me to share his translation, to which we have made a few minor changes.
Cowihg worked 25 years as a U.S. State Department Foreign Service Officer including 10 years at the U.S., Embassy in Beijing and U.S. Consulate General in Chengdu and four years as a China Analyst in the Bureau of Intelligence and Research of the State Department. Before State, he translated Japanese and Chinese scientific and technical books and articles into English for freelance for six years. Before that, he taught English at Tunghai University in Taiwan for three years.
I have also separately consulted with Yao, who agrees to this publication as well.
Can a Chinese School of Economics be Formed?
Establishing a Chinese school of economics is a very ambitious goal, but no matter how grand the goal, it ultimately comes down to how to implement it. Currently, there are far more discussions about goals than about implementation in China, which is not a positive phenomenon.
How to implement it? I believe the most crucial aspect is to develop the ability to set one's own research agenda. Once a research agenda is established, continuous efforts, ongoing exchanges, and the formation of an academic community will gradually make others hear your voice. Only then can a distinct Chinese economic school, or a Chinese school of economics, truly take shape.
I think everyone is now aware of the importance of setting research agendas, but when it comes to how to proceed, there is a sense of confusion. Especially among young scholars, I've found in my interactions with them that while they recognize the issue, they don't know how to advance it.
The crux of the matter is that our young scholars do not pay enough attention to and are not involved enough in real-world issues. On the one hand, they worry about not being able to conduct research on real-world problems, and on the other hand, they are reluctant to actively participate in discussions on real-world issues, considering these discussions to be of low quality. They also do not want to write articles for the public, thinking it's a waste of time. They fail to realize that economists can absorb a lot from policy discussions and interaction with the public, fostering their own progress. I believe our young scholars need to change their mindset.
Furthermore, in the broader Chinese context, as mentioned earlier, almost all economic issues involve political factors. Therefore, I believe that if economists want to establish a genuine Chinese school of economics, it must be at the intersection of politics and economics. If our young scholars want to make a mark in the international economics community, they must have this concept in mind.
Moreover, economists must conduct more positive research. What is positive research? It is research that explains why China has succeeded. Only by studying how China has been successful can we establish our own school of thought. Constantly studying the negative impact of political intervention on the economy is not sufficient. It's not that the orientation of this issue is wrong, but many scholars have already studied it extensively, making it unlikely to yield new results. The world operates in this way; political intervention in the economy also occurs in the United States.
Chinese entities the US government has placed on the Entity List face restrictions, and US companies cannot engage with them. This undoubtedly affects the efficiency of US companies. For example, 60% of the semiconductor market is in China, and without access to the Chinese market, US semiconductor companies cannot keep pace with the industry's development. Therefore, writing more articles discussing the negative impact of politics on economic efficiency does not bring much new value. Research that makes a real contribution should inform us of which political factors, against the backdrop of China, not only failed to hinder economic growth but actually facilitated it. This is not to defend government intervention in the market but to recognize that the market itself has flaws, necessitating government involvement to provide necessary supplementary support.
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Conducting positive research does not mean refraining from criticizing the government; rather, if we want to establish our own economics, we must develop theories that guide society and the economy toward success.
Friedrich Hayek is one of the few well-known economists famous for criticism. His critique of socialism earned him international recognition. However, without writing monumental works like The Constitution of Liberty, a comprehensive, positive defense of classical liberalism, it's challenging to say whether he would have eventually won the Nobel Prize in Economics.
Milton Friedman had a similar trajectory. He was a staunch critic of big government, but his academic foundation was his monetarist theory. In the 1980s and 1990s, during the early stages of reform and opening up in China, 钱颖一 Qian Yingyi and 许成钢 Xu Chenggang could have chosen to do research that criticized government policy, but they instead chose to research how fiscal decentralization contributed to China's success. The principle here is the same: scholars always need to "establish" something in the end, explaining how it is useful, to potentially gain a foothold in the academic community.
Therefore, to establish a Chinese school of economics, the entire academic community, especially young scholars, need to focus more on the realities of China and pay less attention to the specific publication of articles. Once we thoroughly research the most significant issues in China, the publication of quality articles will naturally follow.
Of course, this is challenging. Many of China's universities still emphasize the quantity of published articles in their assessment criteria. Faced with the threat of "publish or perish 要么发表，要么走人", young scholars seem compelled to prioritize the quantity of published articles. Therefore, changing the academic evaluation mechanism within universities is an urgent task.
Below are the first two parts published by Pekingnology:
And Part III and Part IV on The East is Read:
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