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Ivan Szelenyi argues that no third way alternatives to capitalist market economy
and socialist planned economy are possible, a conclusion he reached
after his own searches for such dating back to the 1980s. My comment
responds to his two main points, about a “real estate bubble,” and hence
the non-sustainability of Chongqing’s third finance, and the historical failures
of third ways in Eastern Europe and Russia, and hence the likelihood of the
same failure in Chongqing and in China.
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2011/11/16
This article compares the Chongqing model of the “third hand” with various
theories of the “third way” in late socialist Eastern Europe. The third hand is
praised as an intriguing attempt to offer an alternative to the invisible hand
of the free market and the redistributive hand of state socialism. Funding of
public goods from capital gains from government-owned land and real estate
is an innovative idea, but it is unclear whether it is a sustainable proposition.
China may be developing a real estate bubble similar to the one that has recently
burst in the United States and continental Europe. The key question is:
can prices of land and real estate grow indefinitely faster than wages?
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2011/11/16
In March 2011 Chongqing Satellite TV was made a public-interest channel
and discontinued advertising, losing 0.3 billion yuan in revenue. The shortfall
is to be partially made up by annual government subsidies of 0.15 billion
yuan. The transformation of Chongqing Satellite TV is very much related
to the widely debated reform of governance in Chongqing (the so-called
Chongqing model), and thus is inevitably controversial. It has attracted
critical commentary from academia, the advertising industry, and netizens,
while the TV station and the Chongqing municipal government have not
mounted an effective defense. Often, the two sides in the debate have been
at cross-purposes and have spoken past each other. This article attempts to
move beyond rigid binary oppositions, such as official/civilian and academic/
political, and to look at the arguments of both sides in the debate with an
eye toward promoting a clearer understanding of public media in China.
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This article interprets the ongoing Chongqing experiment in light of the
theories of Henry George, James Meade, and Antonio Gramsci. It argues
that the Chongqing experiment has shown the possibility of integrating rural
and urban development and of the co-development of public ownership and
private business. Through such practices as sending cadres to work, to live,
and to eat together with the peasants, re-registering rural migrant workers
as urban residents, “singing red songs,” and providing public rental housing
for low- and middle-income people, Chongqing has acted to revitalize the
Chinese Communist Party’s relationship with the people.
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The “every peasant household’s income to grow by 10,000 yuan” project
in Chongqing’s “two wings” region is an important movement implemented
by the Chongqing government to spur development in the rural areas of
Chongqing’s poorest region. The project has two key components at the
policy level. The first is to promote agricultural “industry-ization” 产业化
and to construct corresponding chains of production, processing, and sales
in the two wings, thus forming the basis of growth in peasants’ income. The
second is the emphasis on people’s livelihood, which is based on the ambition
of accomplishing “balanced income growth” or “income growth for every
household.” The project includes both “drawing in business and investment”
招商引资 and “industry planning” 产业规划 as well as “cadres to go into
peasant households and support them directly” 入户帮扶. Some of the practices
of Chongqing cadres in supporting peasants show that the government
can improve the microeconomic environment for peasant households and
enhance the vitality of their small farms. This article first analyzes the policies
and practices of agricultural industry-ization in the income growth project
and the efforts of the Chongqing government to achieve “income growth
for every household.” The theoretical implications of the project, including the role of government in economic development and the vitality of small
farming in China, are then discussed through dialogue with social science
theories.
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Chongqing’s experience suggests that while Janos Kornai is surely correct
about shortage in a planned economy, he is mistaken that market signals
may only be employed under an economic regime of private property.
Chongqing has called instead on government-owned firms, and their market
earnings and appreciation, to fund social equity programs and infrastructural
construction. This “third hand” is different from Adam Smith’s “invisible”
first hand, which, on the basis of rational individuals pursuing their own
interests, supposedly generates a self-regulating and optimizing market
economy; it is also different from the second hand, by which the state
engages in a variety of interventions in order to perfect the functioning of
such a market economy. Its main actors are state-owned and not privately
owned enterprises but, unlike earlier state enterprises, it strives not for
the profit of the enterprise but rather for social equity and public benefit.
It in fact at once challenges and utilizes the other two hands. Though stateowned,
in the context of China’s current political-economic system and
the globalized economy, this third hand does not behave like a monopoly;
rather, it must compete against the other two hands, and not only against
other localities within China but also other nations and economic entities
outside China. Only if it succeeds in driving economic development under
such competition can it become a “model” with wider application in China
as a whole. And only thus can it, in a globalized economy dominated by capitalism, establish equitable development as a realistic alternative. Thanks
to the Chongqing “experiment,” the question is no longer just a theoretical
or ideological one, but one of observable and evolving realities.
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2010/01/24
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2010/01/24
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2010/01/24
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2009/07/29
