lnp3 at SPAMpanix.com
Sun Nov 7 07:16:45 MST 1999
This paper is by a Chinese political economist at MIT, Zhiyuan Cui. It gives
a good summary of the debate in China in recent years.
Cui posts on the Post Keynesian list.
After receiving this note from Henry Liu this morning, I put the paper he
refers to out on http://www.panix.com/~lnp3/china.htm.
It appears in the latest Social Text under the title "Whither China" and
this is the conclusion:
How does the discussion of these three schools of thought on property
rights answer the question "Whither China"? I am not an idealist who gives
priority to ideas in historical explanation. But I submit that ideas play a
particularly important role in times of big social change. It is so because
big social change implies huge uncertainty, and the various actors need
some ideas or theories in order to persuade themselves and others where
their interests may lie. At this kind of historical juncture, ideas could
leave more imprints on historical trajectory than they could possibly be in
relative stable times. China now stands in such an historical juncture.
We have already seen that the sophisticated thesis of "clearness of
property rights" has a big impact on the CCP's decision to establish " the
modern enterprise system" via corporatization. We also have pointed out
that the thesis of clearing property rights can be used for many different
purposes, including argument for "labor's property rights". The news came
out of China immediately after the 15th party congress seems to indicate
that China will experiment with shareholding system on a larger scale . But
the central leaders also cry for caution and prudence in the enlarged
experiment . Therefore, it is not impossible to see the emerging Chinese
shareholding system combining the best elements of each of these three
schools of thought.
However, there is one great danger: corruption in the implementation
process of corportization. It is well known from the Russian privatization
experience that corportization may degenerate into sheer misappropriation
of public assets by corrupted officials and managers. Though the Chinese
leaders insist China's corportization is not voucher privatization of the
Russian kind, it must face some similar problems of procedure in asset
valuation, which are subject to misuse easily. In this light, it is
particularly relevant to connect political democratization with
corportization reform. Wu Jinaglian, whose idea on clearing property rights
we discussed above, has proposed to establish a "public assets committee"
in each level of People's Congress overseeing the implementation of
corportization . If tried, this proposal may prove to be crucial to the
success of Chinese shareholding system.
Finally, can we say today's China is moving toward "capitalism", as the
western left and right are converging their views on this matter? It
depends on what we mean by "capitalism". Deng Xiaoping once said, "we do
not know what is socialism". In fact, we might add to this by saying, "we
also do not know what is capitalism". Fernand Braudel confessed in his
monumental work on the history of modern civilization from the 15th to the
18th century that he might be able to write the whole book without using
the very word "capitalism" . Indeed, the word "capitalism" seems too broad
to be useful for analyzing today's China. Should we say the shareholding
system is inherently "capitalist"? If so, how do we make sense of the
historical fact that J.S. Mill introduced the General Act of Incorporation
with limited liability for shareholders to the British Parliament in 1855
on the basis of its supposed function to promote worker's cooperatives?
After all, Marx converges with the American "legal realism" in insisting
that "ownership" is not a single right, but a "bundle of rights" , which
can be disintegrated and rearranged to regulate changing social relations.
The vocabulary of "bundle of rights" makes it possible to break away from
the Stalinist conception of socialist ownership as having only two possible
types, namely, "state ownership" and "collective ownership". The CCP's 15th
Party Congress did exactly that by allowing cross stockholding between
state shares, legal-person shares and individual shares. It opens up the
possibility of enlarging and democratizing the stakeholders of the bundle
of property rights in corporations. It also leaves the room for corruption
and misappropriation of public assets wide open. It is here that both hope
and danger for China lies.
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