In her recent article in Business Insider<\/em>,\u00a0Linette Lopez<\/a>, a graduate of the School of Journalism at Columbia University, argues that China\u2019s latest efforts to spur the economy are too little, too late. She holds that Xi Jinping is opposed to massive stimulus programs that would directly stimulate consumption by sending checks to households because \u201cthe Chinese president is a follower of the Austrian economist Friedrich Hayek, who believed that direct stimulus distorts markets and leads to uncontrollable inflation.\u201d<\/p>\n

Xi\u2019s Views Are Diametrically Opposed to Hayek\u2019s<\/strong><\/p>\n

Xi Jinping has never been a follower of Hayek, a free market, classical liberal economist. Unlike Hayek, Xi and his comrades see order flowing from power, not from the voluntary actions of free individuals in pursuit of a better life bounded by limited government under a just rule of law. The Hayekian idea of spontaneous order, based on private property rights and a free market for ideas, is\u00a0anathema to Xi and the CCP.<\/p>\n

Since Xi took power as general secretary of the Chinese Communist Party (CCP) in November 2012 and as president in March 2013,\u00a0China has moved away from market liberalization<\/a> and returned to state-led development and industrial policy. The private sector has lost out to the growing state sector, and individual freedom has suffered under Xi\u2019s crackdown on human rights. Reformers and all those who favor greater freedom of thought and expression have been silenced. Moreover, Xi\u2019s\u00a0 suppression of Hong Kong\u2019s free market in ideas<\/a>\u2014in the name of \u201cnational security\u201d\u2014has transformed what was once the star of market liberalism into a puppet of China.<\/p>\n

The Case of Unirule<\/strong><\/p>\n

One notable example is the\u00a0closure of the Unirule Institute<\/a> in August 2019. Established in 1993 by Mao Yushi and others, it was a beacon for liberty and a proponent of Hayek\u2019s ideas. As early as 1998,\u00a0 Mao commissioned<\/a> a Chinese translation of The Constitution of Liberty<\/em>, one of Hayek\u2019s most important works. In 2012, just before Xi came to power, the Cato Institute awarded Mao with its highest honor, the\u00a0Milton Friedman Prize for Advancing Liberty.<\/a><\/p>\n

\n<\/div>\n
The fragile future of freedom under Xi was already evident by October 2013, when\u00a0 Gao Quanxi<\/a>, a noted Hayekian and law professor at Beihang University spoke at the Unirule Institute. With members of the Hayek Association present, he warned, \u201cToday we\u2019re in a new planned economy\u201d with less freedom than a decade ago. The free market for ideas is moribund. \u201cCommunism has failed. Socialism has failed. What we have here is statism. And Hayek really opposed that.\u201d Upon the closing of Unirule, its executive director,\u00a0 Sheng Hong<\/a>, sadly stated, \u201cWe no longer have any space for survival.\u201d<\/p>\n
The CCP\u2019s Opposition to Welfarism<\/strong><\/p>\n
The real reason Xi opposes the welfare state is not because he is a follower of Hayek, but because the CCP has always been ideologically against social welfare spending. The CCP\u2019s long-held doctrine is that welfare spending would only prolong poverty by diminishing the incentive to work and to save. As\u00a0Lingling Wei and Stella Yifan Xie<\/a> note, \u201cThe lack of spending on social welfare runs counter to some stated goals of China\u2019s Communist Party, which has staked its legitimacy on delivering continued prosperity.\u201d<\/p>\n
The key role of the CCP is to nurture \u201csocialism with Chinese characteristics,\u201d not to imitate Western welfare states. China\u2019s paramount leader Deng Xiaoping realized that prosperity was better served with economic liberalization than continued central planning and state-led development.\u00a0Xi has turned away from that vision.<\/p>\n
China Needs Hayek<\/strong><\/p>\n
China\u2019s biggest challenge will be to rethink the role of the state and market, and consider the fundamental role of a free market for ideas\u2014and a genuine rule of law\u2014in the quest for prosperity and human well-being.<\/p>\n
In doing so, reflection on Hayek\u2019s work can provide some guiding principles, the most important of which is the role of freedom in creating a spontaneous social and economic order, which cannot be attained by the power of central planning and control. As Hayek concluded in\u00a0The Road to Serfdom<\/em><\/a>, now celebrating its 80th anniversary, the \u201conly truly progressive policy\u201d is \u201ca policy of freedom for the individual.\u201d\u00a0<\/p>","protected":false},"excerpt":{"rendered":"
James A. Dorn In her recent article in Business Insider,\u00a0Linette Lopez, a graduate of the School of Journalism at Columbia University, argues that China\u2019s latest efforts to spur the economy are too little, too late. She holds that Xi Jinping is opposed to massive stimulus programs that would directly stimulate consumption by sending checks to <\/p>\n","protected":false},"author":0,"featured_media":35026,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-35025","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"_links":{"self":[{"href":"https:\/\/keepcalmnprofit.com\/wp-json\/wp\/v2\/posts\/35025","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/keepcalmnprofit.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/keepcalmnprofit.com\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/keepcalmnprofit.com\/wp-json\/wp\/v2\/comments?post=35025"}],"version-history":[{"count":0,"href":"https:\/\/keepcalmnprofit.com\/wp-json\/wp\/v2\/posts\/35025\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/keepcalmnprofit.com\/wp-json\/wp\/v2\/media\/35026"}],"wp:attachment":[{"href":"https:\/\/keepcalmnprofit.com\/wp-json\/wp\/v2\/media?parent=35025"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/keepcalmnprofit.com\/wp-json\/wp\/v2\/categories?post=35025"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/keepcalmnprofit.com\/wp-json\/wp\/v2\/tags?post=35025"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}