Carry out the revolution and increase production!

Abstract

This article is a first non-marxist attempt to explain the evolution of the Chinese economic order theoretically, using Bergsonian welfare economics and the Tinbergen theory of the optimum regime. After a discussion of the Maoist attempt to create a new type of human being, the aims of Chinese economic policy are identified as the drive to achieve a rapid rate of growth, a paternalistic preference for social goods, and a more or less egalitarian system of income distribution in which the relationship between individual income and individual achievement is broken. The actual pattern of Chinese economic (de)centralisation and (de)concentration can be explained by the Chinese decision makers' gradual acceptance of an optimum economic order, which does not depend solely on objective factors but also on the subjective choices made when deciding on the aims. The Chinese optimal order is chargcterised, on the one hand, by a pattern of centralisation which is similar to the Western type of centralisation, and, on the other hand, by a degree of concentration which is lower than in any other economy of comparable size and living standards.