Liu Guoguang: Why can't plans and markets be superstitious?

In order to ensure that the socialist market economy always remains on the right track, it is necessary to bring into play the advantages and advantages of both planning and the market. The advantage of the plan is that it can concentrate the necessary financial, material and human resources on a social scale, do a few major things, and can regulate income distribution and maintain social justice. The advantage of the market is that it can promote the progress of technology and management through competition and the mechanism of survival of the fittest, and realize the convergence of production and demand. Bringing out the best of both is theoretically the benefit of combining planning and marketing. But in practice, the two are often not well combined, not combining the advantages and strengths of the two, but combining the defects and disadvantages of the two; Or subjectively, we want to integrate the plan with the market well, but in actual economic life, there is neither a plan, or a plan but cannot be implemented; There is no market, and the competition mechanism of survival of the fittest cannot work at all. Therefore, when discussing the issue of establishing an economic operation mechanism that combines the planned economy with market regulation, I put forward two suggestions: First, we should adhere to the planned economy, but not be superstitious about the plan; The other is that we should promote market-oriented reforms, but we must not be superstitious about the market. In short, we need to dispel two kinds of superstitions. First of all, let's not be superstitious about the market.

The so-called market regulation is what Adam Smith called the "invisible hand" that regulates and the law of value regulates spontaneously. We should attach importance to the law of value, but we should not think that the law of value can do everything well, so we will let the law of value regulate everything by itself. I think there are a few things that cannot be completely left to the law of value. First, the balance of economic aggregates. If this matter is completely left to the market and the law of value to take care of itself, the result can only be a back-and-forth cycle of vibrations and frequent economic crises. Second, the overall economic restructuring should be readjusted. We hope to modernize and upgrade the mainland's industrial structure in a relatively short historical period, for example, within 10, 20, or 30 years. It is not impossible to do this through the spontaneous way of allocating resources through the market mechanism, but it will be a very slow process, which will have to go through many major iterations and crises, and may have to pay a great price. We can't afford to wait so long and we can't afford to pay such a heavy price. Third, the issue of fair competition. The idea that the market can guarantee perfect competition is nothing more than a myth, not even in the era of liberal capitalism. The law of the market is that big fish eat small fish, which will inevitably lead to monopoly and unfair competition. In response to this situation, even the governments of Western capitalist countries have enacted anti-monopoly laws, laws to protect fair competition, and so on. Fourth, there are issues related to ecological balance, environmental protection, and what is called "external uneconomic" in economics. In dealing with this kind of problem, the market mechanism is incompetent and even harmful, and if it is completely left to the initiative of the market, it will bring about consequences that are harmful to the interests of society and even the interests of future generations. Fifth, the relationship between fairness and efficiency. It is impossible for the market to achieve real social justice, and the market can only practice equivalent exchange and a certain degree of equal competition, which is conducive to promoting efficiency. However, the spontaneous role of the market will inevitably bring about social polarization and disparity between the rich and the poor. At present, in the process of market-oriented reform, some signs have emerged in this regard, causing social unrest and affecting people's enthusiasm. The government cannot but pay attention to this and take effective measures to prevent the vicious development of this phenomenon.

It can be seen from this that at least a few of the areas listed above cannot be completely left to the "invisible hand" of the market to manipulate, and must be intervened by the visible hand, that is, state planning and government management. The so-called complete and pure market economy is not at all the direction of our market-oriented reform. This market economy is also changing in the capitalist countries of the West, through government policy or planning intervention, to make it a less complete and less typical market economy. Putting forward a completely market-oriented reform proposal, leaving aside the ideological aspect, is at least a naïve idea. We practice a socialist planned commodity economy, and in the market-oriented reform, we must not be superstitious about the market, and we must attach importance to the guiding role of state planning and macroeconomic regulation and control, that is, we must see the important role of the "cage" mentioned by Comrade Chen Yun.

In the summer of 1990, at a forum, I talked about my experience of Comrade Chen Yun's economic thought, and mentioned that Comrade Chen Yun had likened the relationship between planning and the market to the relationship between a cage and a bird. Later, the "People's Daily" published this speech, which attracted a lot of criticism from overseas newspapers and periodicals, calling it "birdcage economic theory". Some foreign people have asked me for further views on this issue. I said, what's all the fuss about, every country must have a cage for managing the economy, and the state budget for revenue and expenditure is a very hard cage. In 1990, after several months of failure by the United States Congress and the President to agree on a budget, for several days in early October it was not clear whether the United States Government could afford to pay its staff, the National Parks and Pensions Administration was in danger of shutting down, and the "Lady Liberty" in New York Harbor had to be closed to all visitors for two days. At that time, I was visiting San Francisco with a delegation from the Chinese Academy of Social Sciences, and we were almost in danger of the airport being closed and not being able to fly on schedule. I told foreigners who visited me that the monetary and fiscal policies of Western countries smell of cages. As soon as the Federal Reserve Bank's interest rate increases, the cage for economic activity shrinks because the cost of investment increases; As soon as the interest rate decreases and the monetary policy relaxes, the cage of economic activity is enlarged. The planned cage can be large or small, depending on the specific situation of the department, product, etc. Furthermore, the cage can be made of different materials. It can be made of steel and be rigid; It can also be made of plastic, eraser, and is elastic. The directive plan is rigid, and the guiding plan and policy plan are flexible. In the United States, I see that the cage of government management of the economy is even stronger than that of countries with planned economies. For example, the "growth management" of the city draws a circle for the expansion of the city, and only the development within the circle is allowed, and the development outside the circle is subject to prohibitive high taxes. That's what Oregon did. That circle is really a cage. Turning the topic back, we must not be superstitious about the market when carrying out market-oriented reforms, and we must not ignore the role of necessary planning guidance and government management, that is, we cannot ignore the role of the necessary cage. To this end, the market-oriented reform we have implemented should have included the reform of the planning system and should have paid attention to strengthening effective planning management.

On the other hand, we must adhere to the planned economy, but we must also be careful not to be superstitious about the plan. Superstitious schemes are equally fallible. The planned economy only provides the possibility of consciously proportional development on the basis of public ownership, but it does not guarantee the inevitability of regular proportional development. If the planning work does not take into account the market law of supply and demand and value, it will also get out of control and make mistakes, and we have learned many lessons in this regard. In our traditional planned economy in the past, there were major disproportions and great ups and downs on more than one occasion. In the process of reform, there has also been a macroeconomic runaway. In recent years, the mainland's right to examine and approve fixed asset investment projects at and above the county level has been in the hands of governments at all levels, and it has been examined and approved by planning agencies at all levels. At present, we have more than 160 production lines for color televisions, more than 90 production lines for refrigerators, and many production lines for latex gloves and beer. It is necessary to realize that planning work is also work done by people, and it is inevitable that mortals will have limitations, and planning work will inevitably have limitations, and there will be many contradictions that are not easy to overcome. For example, the contradiction between subjectivity and objectivity is a major contradiction in planning work. First, because there are limitations in our subjective understanding, our understanding of the objective situation and the objective law will have limitations, and in this regard we have made mistakes such as detaching ourselves from the national conditions, surpassing our national strength, and rushing for success. The second is due to the limitations of objective information. Planning work depends on information, and the collection and transmission of information cannot be perfected at any time, and even if the electronic computers are upgraded several times in the future and their performance is higher and more popular, it is impossible to collect, process, and process all economic information in a timely manner. Third, there are also limitations in the relationship of interests and in the stance and angle of observing problems. Because planning agencies and macro-management organs either belong to this region or that region, either to this department or to that department, and either stand from this angle or from that angle, they each represent a certain relationship of interest and are constrained by a certain relationship of interest, and government leaders and planning personnel cannot be omnipotent. All of the above-mentioned limitations make their behavior unable to fully conform to the objective situation and may deviate greatly from the objective situation and laws, resulting in mistakes in planning and macro-management work. Therefore, to uphold the planned economy, we must constantly raise our own level of understanding and consciousness, constantly improve and improve our planning work, and make the planning work conform to the requirements of the objective law and the objective situation, and in particular, we must take into account the requirements of the market supply and demand situation and the law of value.

In short, we must adhere to the state's macroeconomic regulation and control and national plans, but we must not be superstitious about plans; We must carry out market-oriented reforms, but we must not be superstitious about the market. Through the combination of planning and the market, we must not only play to the strengths and weaknesses of both, but also overcome the shortcomings and weaknesses of both. Of course, this is a very complex task that requires a lot of exploratory research. It is necessary for the joint efforts of our planning departments, financial departments, banking departments, as well as market departments, commercial departments, and material departments to gradually solve this problem.