With the Chinese economy slowing and the stock market bubble bursting, a Financial Times article is highlighting research by a group of prominent economists that says a return to Maoist policies could yield 4-5% annual GDP growth.
According to yesterday’s feature by Jamil Anderlini in Beijing, Chinese policymakers should not be too quick to rule out return to the collectivist totalitarianism of Maoist economics.
In a paper, four economists, based at the Federal Reserve Bank of Dallas, Princeton, Yale and Sciences Po in Paris, have examined productivity and growth rates in China at the height of the Maoist period and extrapolated those to predict how China would grow between now and 2050 had the country returned to those policies.
They concluded that the abolition of the private sector in China and the return to a command economy would yield an annual average GDP growth rate of 4 to 5 per cent between now and 2050, the FT piece stated.
That was only about a percentage point less than the average growth rate they predict China will achieve if it continues with market-based reforms that began in the late 1970s and are credited with lifting hundreds of millions out of poverty in only a few decades.
“Our model is essentially an accounting exercise that allows us to uncover the key factors of growth in China during and after the Mao era,” the exposé quoted Aleh Tsyvinski, a professor of economics at Yale and co-author of the report, as saying. “The main point of our findings is that, contrary to common misconceptions, productivity growth under Mao, particularly in the non-agricultural sector, was actually pretty good.”
Assuming a continuation of current policies, the paper predicts the Chinese economy will expand by 7-8 per cent for the next 10 years or so, with growth slowing to 5.2 per cent on average between 2024 and 2036 and then a rate of just 3.6 per cent between 2036 and 2050.
That is actually slower than the growth rate of 3.9 per cent it predicts between 2036 and 2050 if China were to return to Maoist policies introduced in the aftermath of the disastrous Great Leap Forward, in which between 30m and 40m died in a famine that was largely the result of economic mismanagement.
According to the newspaper, the authors of the paper were focused only on economic factors and did not consider the impact of individual policies or the enormous social costs of Mao’s “brutal” political movements and purges, which left many millions dead, ostracized or imprisoned in gulags.
In contrast to their findings on the Maoist economy, an earlier paper by the four co-authors, who are all ethnically Russian, entitled “Was Stalin necessary for Russia’s economic development?” concluded Stalin’s industrialization and collectivization policies were disastrous even in purely economic terms.
Chinese President Xi Jinping’s hardening of authoritarian rule and penchant for Mao quotations has led some reform-minded officials to accuse him of seeking a return to the dark days of Maoist totalitarianism. But almost no one seriously expects him or his administration to abolish or significantly roll back market reforms that have helped make China a rising superpower and the world’s largest economy in purchasing power terms.
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