MIT and Harvard University are located side by side in Cambridge, Massachusetts, and have always maintained a very close inter-school relationship. Students from one university can take classes in another university and get corresponding credits. Of course, there are also many students who only take advantage of this good inter-school relationship to attend courses and lectures that interest them, instead of getting formal credits. It is the tradition and practice of this dual college that has created my lifelong friendship with Pushan (called Pushou Mountain in America).
There were many after-school discussion groups. I joined a group under the Massachusetts Institute of Technology, and a friend of mine suggested that we include general kindness in regular informal discussions. I often go to lectures by famous Harvard professors, and Pushan is also interested in many of them. Similarly, Paul Samuelson, a rising American economist, attracted Pu Shan to attend lectures at MIT.
There were many interesting discussions in our after-school group, which laid the foundation for us to keep in touch intermittently after everyone left Cambridge. After leaving school, I joined the Cowles Economic Research Committee of the University of Chicago, while Pu Shoushan finished his studies at Harvard and went to teach in carleton college, Minnesota. In the Economics Department of carleton college, there is our friend Kenneth May. Later, at the beginning of China's economic reform, Pushan returned to carleton college for a short visit and delivered a speech on China's economic reform at Wharton Econometrics College.
When I was at school, I always thought Pu Shoushan was the best doctoral student in economics at Harvard University. Interestingly, when I got the teaching position of 1949 University of Michigan, I found that many people thought of the "China undergraduate" who went to Harvard to study for a doctorate. People often ask me if I have seen him in Cambridge. Every time I answer "yes" happily, and I admire the University of Michigan for doing such a good job in the selection and training of undergraduate students in economics. Obviously, at the University of Michigan, Pu Shoushan left a deep impression on people-noble character, rigorous scholarship, and promising in the field of American higher academic research.
1949, Pu Shoushan told me that he was going back to China, so our friendship line was temporarily interrupted. Since then, I can only get sporadic information about his activities, especially his diplomatic activities to solve the Korean War as a member of the China delegation. Especially at that time, The New York Times described the characteristics of a young member of the China delegation as follows: proficient in English, well-educated in English literature, and knowledgeable in economics. I'm sure this is my best friend during my stay at MIT-Harvard University in Cambridge, Massachusetts.
Our contact has been broken for decades. However, in the early days of China's reform, when I visited China with an economics delegation composed of academic institutions such as the National Academy of Sciences, I immediately found out about Dr. Pushoushan, who was renamed Pushan at that time. 1979, we failed to meet. 1980, we finally met at an econometric seminar in Beijing.
Since then, we have been in regular contact, whether in the United States, Japan or China. I cherish our discussions in1980s,1990s and the beginning of the new century. At that time, our wife and other family members also joined our conversation, which was very pleasant and cordial and has become a beautiful memory in my life.
During the period of 1979, our academic group visited many universities and academic institutions, and I was surprised to find that the economic knowledge gap in China was so large. Sometimes, people will tell us about American professors who taught them in the 1920s, but only Pu Shan and a few colleagues know about contemporary advanced economics. Thanks to his study in ann arbor and Cambridge, as well as his working experience in other research centers in the United States, Europe and Asia, Pushan's contribution to China's economics during the reform period can be said to be very far-reaching. He played an important role in the negotiation of China's entry into the World Bank.
Some academic works of Pushan
Since China's reform, our topics have mainly focused on macroeconomics, world political affairs and socialist economic theory. As president of the Graduate School of Chinese Academy of Social Sciences and director of the Institute of World Economics and Politics, Pushan's contribution to China's higher education is reflected in his overall management ability and extensive understanding of international affairs. Having these is very valuable, but it is not enough to fully reflect his outstanding economic analysis ability and far-reaching academic achievements.
As I said before, Pushan was an excellent student in his class when he was studying at Harvard, and he should be the same at the University of Michigan, even though I didn't know him at that time. His doctoral thesis at Harvard is entitled "Technological Progress and Employment". When the paper 1949 was passed, this topic was a very important economic issue. This paper is obviously influenced by many scholars, such as joseph schumpete, Wassily Leontief and paul samuelson, who are either his mentor or the object of his careful study. Other influential scholars he mentioned include nicholas kaldor, Carleschi, simon Kuznets, john maynard keynes, Evci Thomas, Roy roy harrod, Oscar Langer and friedrich hayek.
Just as all scholars' achievements are based on previous academic research, he obviously learned a lot and created a lot. He did this when he was in the United States and Europe after World War II, and has been learning and creating ever since. We can easily see this until now.
During the period of 1946- 1949, people paid attention to the reconstruction of post-war manufacturing and general industrial system, and there were many new developments in technology, but the public was generally worried that the shortage of employment opportunities before the war would reappear. With the birth of jet plane, radar, atomic energy and computer, the influence of technological progress is gradually reflected. Now, what we are facing is the all-round development of computers, transistors, lasers and nanotechnology, and the new concern about the labor market, because the progress of information technology has brought about the effect of "layoffs".
The situation of 1949 is very different from that in 2000, so many arguments in Dr. Pu Shan's thesis need to be revised accordingly. However, many insights of Pu Shan's analysis of current problems were well known at that time. They are:
(1) In the case that all prices and wages are not completely flexible, it is important to clarify the market. Generally speaking, the purpose of capitalist business cycle is to clear the market, and it is not feasible to solve it purely statically under the condition of complete elasticity.
(2) Logarithmic linear functions with constant scale returns (such as simple Cobb-Douglas function) can not well reflect the technical production process.
(3) Technological progress in highly correlated industrial economy can be better analyzed as endogenous changes rather than exogenous changes.
(4) Under the open capitalist system, the industrial combination tends to become a monopoly or oligopoly model. This is self-evident in M&A activities, especially when the scale returns increase.
(5) A far-sighted method to simulate technological changes is to modify the pure Cobb-Douglas function by introducing the capital-labor ratio, which is being adopted in information technology research 50 years later. Pushan regards this method as the core of his production mode.
(6) Monetary policy must deal with the rapidly changing coefficient of currency circulation, which disturbs the simple quantitative theory method of classical stability. Information technology has fundamentally changed modern finance, which makes quantitative theorists very angry.
The theoretical basis of Pushan's thesis is macroeconomic analysis. To this end, he studied the relationship between micro and macro economy. In this respect, he didn't adopt the suggestion of Wesley Leontief and me, that is, to find the mathematical relationship between the sub-variables of independent variables, while ignoring their economy and probability distribution. He adopted a much more direct method, that is, he distinguished two kinds of relationships: one is the relationship between capital and output, and the other is the relationship between labor and capital.
Pushan's doctoral thesis is a theoretical analysis of macroeconomics, with strict logical reasoning and enlightening significance for understanding what may happen in the post-war economy. It uses the new statistical reasoning method of econometrics and provides a solid platform for empirical analysis. Among them, the quotations and reference materials include the works of Timberland, Frish and Javier Mo (all of whom later won the Nobel Prize in Economics). However, the road to learning has never been opened for Pu Shan-he returned to China at the beginning of the founding of the People's Republic of China.
Views on socialist economics
Pu Shan's colleagues followed China in his political economy research, but they lagged far behind him. In addition, Pushan also turned his attention to the theoretical analysis of socialist economy. His article published in Cato Magazine (1989 Winter Edition) is a comment on an article by milton friedman entitled "Using the Market to Promote Social Development". These two articles were published in the same issue of Cato Magazine, entitled "Economic Reform in China".
During his early study and teaching in the United States, Pu Shan had a big discussion on whether rational economic behavior under socialist conditions was possible. In particular, there is a very heated debate among ultra-conservatives. In particular, ludwig von mises believes that according to classicism, under the direct plan characterized by public ownership of the means of production, the economy cannot operate effectively. Under such conditions, how does the price system work? Friedrich hayek (later winner of the Nobel Prize in Economics) admitted that, theoretically speaking, under socialist conditions, rational pricing guidance for economic behavior can be achieved, but there is no incentive mechanism to create technological progress. In addition, he also believes that the actual process of determining the appropriate price is too complicated to work in practice. Of course, these viewpoints were put forward before the rapid development of computer and information science/engineering in the second half of the 20th century.
Milton friedman often expressed similar views with Hayek and others. Pushan responded to Friedman's article in Cato Magazine. Allow me to insert a short story about milton friedman and his wife Ross Friedman here. 196 1 In the summer of, the Klein family and Professor Friedman were invited to attend a dinner party near Dartmouth College. Before dinner, everyone was talking about space flight and the operation of the Soviet economy. Friedman's point of view is that yuri gagarin's space flight is totally unbelievable, because the only original information about this event comes from the Soviet Union's broadcast. The point is, according to the Friedmans, it is impossible for a country lacking a reasonable price system to make such a breakthrough in the fields of science and engineering.
This is very important, because those fanatical fans who believe that the price system of market clearing has the supreme ability believe that they can rely entirely on this extraordinary tool, even though a large number of financial crises caused by market failures occurred in the 1930s and still occurred in the 1980s and 1990s.
Commenting on China's successful transition to market socialism, Pushan pointed out that China adopted a gradual reform method and made great achievements, which were beyond the reach of extremely conservative thinkers such as Hayek and Friedman. The step-by-step approach is very consistent with China culture. He realized that possible problems in the reform, such as inflation and different degrees of economic relations, bound various decision makers in production, consumption and market liquidation. Pushan pointed out the partial and gradual steps to guide China to realize the efficient operation of the socialist system. He described the unique role played by township enterprises, which linked rural activities with industrial management in different seasons of the year. He also vividly demonstrated how China can avoid sudden inflation and business cycle fluctuations, which are the characteristics of a market economy. In his view, China's reform in 1980s was partial and gradual, but the old method was well combined with the new one, and political reform should be carried out simultaneously with economic reform. When talking about the long-term economic operation of China, Pushan tried his best to defend China's economic progress. 10 After making the above evaluation, Pushan saw the economic situation of China in the 1990s, and all market economy countries in the world were surprised by the progress made by China. They all tried to explain China's achievements for their own benefit. My advice to them is to carefully read Pushan's economic analysis and closely combine it with the evolving China system. The direction of this institutional change is very close to that pointed out by Pu Shan many years ago.
In Japan, Professor Shinichi Ichimura, who is also a Ph.D. in Economics at MIT and also influenced by paul samuelson, gave a detailed and in-depth introduction to the operation of the socialist economy. The topic of his speech is "On the Prospect of Socialist Market Economy in China". 1996 In May, Pushan gave a speech on the same topic at the University of Michigan.
This speech is very important, because it shows that Pushan has formed his own views on China's economic problems, and it is not limited to milton friedman's comments on the operation of socialist economy. In his empirical exposition, Pu Shan bluntly pointed out that he believed that China was in a transitional stage-from a centrally planned economy to a socialist market economy. This process is going on, and the effect is good, but it is not finished yet. He pointed out that the proper description should be "... Socialism with Chinese characteristics ... not the transition from socialism to capitalism." Unfortunately, ordinary journalists and other non-professional economists failed to grasp this point. Generally speaking, many outsiders fail to distinguish between the role of market mechanism and the role of ownership of means of production.
Pushan emphasized that political stability is an important feature of China today. Perhaps those casual observers can't understand this, but for those who have experienced the Cultural Revolution, this is very important.
Finally, in the conclusion of this political economy speech, Pu Shan pointed out the emerging inequality and the moral and ethical side effects caused by it, but he hoped to reverse this deepening inequality through the financial system. He predicted that China's economic transformation will be completed before 20 10, and China will reach the middle level of economic development in 2 1 century.