Modern economics was born in England in 1776, with the publication of the Wealth of Nations. A central and lasting message of Adam Smith concerns the role of the state vis-à-vis the market in the working of a free economy. Over the past two hundred and forty years, economics has gone through many revolutions (Ricardian, Marxian, marginal, Marshallian, Keynesian, Austrian, Samuelsonian, Robbins-Beckerian, and neo-institutional). Since the 1940s, the epicenter of economic research has shifted across the Atlantic. Since the end of the Cold War, modern economics ,with a common set of basic concepts, principles and analytical tools, has been taught all over the globe. Despite such revolutions in economic knowledge and changes in the production and consumption of economic knowledge, the economic role of the state remains a central point of debate and inquiry.
Nowhere is this debate more central and this inquiry more demanding than in China. After nearly four decades of “reforms and opening up”, the Chinese government is strong in taxation and investing but weak in regulation and governance. Despite decades of liberalization, the market has not yet assumed the “decisive” role in the economy. What is the proper role of government vis-à-vis the market in the economy as China furthers its economic and political reforms? The current debate on the economic role of the state in China echoes and is inevitably influenced by the ancient contention between Confucianism, which calls for benevolent meritocracy, and Taoism, which cherishes “governance through inaction” (无为而治).At the center of this ongoing debate stands New Structural Economics (NSE), which advocates a “facilitating state”(因势利导型政府)in the process of structural transformation distinguished from the “developmental state” of Structuralism and a "limited state" of the Neoliberalism.From the perspective of NSE, a facilitating state is to help enterprises to overcome externality and coordinating issues in the process of structural transformation. Critics of NSE, however, question on both theoretical and practical grounds the viability of the state in facilitating economic development without undermining entrepreneurship or crowding out market forces.
In order to sharpen the focus of this debate and clarify the market-state relation in economic development, with particular reference to China, we’d like to call your attention to a forthcoming academic workshop in Jun. 2017, organized by the Center for New Structural Economics at Peking University, in collaboration with Man and the Economy: the Journal of the Coase Society. Founded by Ronald Coase, Man and the Economy aims to work with students of economies across disciplines and all over the world, and bring diversity and competition into the marketplace for economics ideas.
At the workshop, selected authors have the opportunity to share their preliminary draft and present key arguments of their paper. We hope the workshop will help them sharpen their viewpoints and revise the paper. The best papers will be included in a special issue of Man and the Economy, to be published by December 2017.