Vision and Calculation by Sheng Hong

Author:Sheng Hong
Language: eng
Format: epub
ISBN: 9789811528989
Publisher: Springer Singapore

7.3 Comparing and Rethinking

Looking back, we are astonished that this costly evolution of land institutions in modern China is just a repeat of what our ancestors did thousands of years ago. It brought nothing but harm to the country. Should we not learn a lesson from that bitterness? Most effective, lasting, and stable institutions in human history are time-proven and costly. If we turn a blind eye to that, we’ll pay the price repeatedly.

First of all, we should reflect on the inferiority of Chinese intellectuals toward China’s institutions since modern times. Military failure caused them to think less of China in all perspectives. Without a thorough analysis, they denied entire economic institutions. As discussed above, in terms of markets, China had established since the Qin and Han Dynasties a set of institutions under which property rights were clearly defined, and land was open for transactions without feudal restrictions. When it came to the Ming and Qing Dynasties and Republic era, these institutions had developed into a purely free contracting pattern. Permanent tenure was the effective result of such institutions. In contrast, British land institutions remained nominally feudal. Ironically, the United Kingdom realized its modernization without eradicating this seemingly backward institutional arrangement, while China abolished institutions conducive to modernization, which in turn retarded the country’s development.

The second lesson is about the fundamentalist understanding and implementation of a certain theory. Marxist class struggle and views of human development were oversimplified explanations of human history. Despite their academic value, these theories, once adopted as a political belief and rigidly applied in practice, produced procrustean conformity. The theory of class struggle divides people into good and bad, identified with the advanced and the backward respectively. To deliver institutional reform, good ones are encouraged to resort to violence to wipe out or even torture the bad. This theory and its attendant practices totally ignored the diversity of human beings, who not only play certain roles in production, but also belong to different communities based on different criteria. For example, in the United Kingdom, landlords could be scientists or industrialists—they are not limited to one fixed position. That’s exactly why the evolution of society is so complicated and unpredictable.

The third lesson is about rigid perceptions and simplified thinking about institutional development. People divide institutions only into good ones and bad ones. In this view, anything is worth sacrificing to set up good institutions. But this view fails to recognize that an institution is an organism which is generated internally from a society, as is its evolution. A new institution derives from an old one. Successful and low-costing institutional development is achieved by the interaction of emerged and past institutions. New institutions emerge naturally as solutions to problems that couldn’t be solved by the old ones, which in turn complement the new ones, which are often too radical and lack tradition. Such interactions prevent traumatic discontinuities. That was exactly what happened in the United Kingdom: its institutional evolution was not that radical. Alongside inevitable industrialization there was traditional culture of gentry to be against it (Wiener 2013).

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