Classical economics comes to China

I am in China where I have just given my paper on classical economic theory and supply-side economics, which was as well received as any paper I have ever given. Coincidentally, this was the Liberty Quote as I came to write this post.

Economic freedom is an essential requisite for political freedom. By enabling people to cooperate with one another without coercion or central direction, it reduces the area over which political power is exercised.

FWIW so far as classical economics is concerned, I was speaking to a group who get it. They understand Mill even if they don’t read him, and get the point about what is needed to run an economy. The paper I am now looking most forward to at the History of Economic Conference which starts on the weekend is titled, “The Diffusion of F.A. Hayek’s Thought in Mainland China and Taiwan”. If ever there is a place where Y=C+I+G seems more certain for the dustbin of history, this is it. Try this out from the paper:

His thoughts [that is, Hayek’s thoughts] about market economy and the Rule of Law have now begun to influence the process of China reforms in practice.”

Let me just add this from the paper about the attitude to Keynes.

When socialist central planned economy had become popular globally and Keynes’s theory had occupied the commanding heights of economic thought, Mises and Hayek could still keep their ‘cool heads’ and criticize the impossibility of a centrally planned economy. They even concluded that these practices that were opposed to the liberal market theories would completely fail finally. The predictions of these liberals, we can argue, have all turned out to be true.

The future is certainly a foreign country, and who knows what it may bring.

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