Economic history of China 1

ECON0605/ECON2273ECONOMICHISTORYOFCHINASecondSemester2015-2016Dr.PatrickLeungFIRSTWEEKSUMMARYIntroductionandOverviewWhydowestudyeconomichistory?“Whocontrolsthepast,controlsthefuture;whocontrolsthepresent,controlsthepast.”--GeorgeOrwell,1984ECONOMICGROWTHOCCURSTHROUGH?INVESTMENT–SolovianGrowth(RobertSolow)Increasecapital(land&resources)/laborratio–increaseoutputpercapitaRefrainfromconsumptioninthepresentinordertoenjoyhigherconsumptioninthefutureCOMMERCIALEXPANSION–SmithianGrowth(AdamSmith)Increaseinexchangesofgoods,services,laborandcapital–specializationTradewillincreaseifthereis:–declineintransactioncosts;–declineintransportationcosts;–improvementintheenforcementofpropertyrights.TECHNOLOGICALANDORGANIZATIONALPROGRESS–SchumpeterianGrowth(JosephSchumpeter)Increaseinthestockofhumanknowledgewhichincludes-technologicalprogress,and-changesininstitutionsandorganizationalstructureswhichresultingreaterefficiencyTheapplicationofthenewknowledgetoproductionprocesseswhichresultsin–productionofgivenoutputwithfewerresources–productionofbetterproductsornewproductsCONQUESTANDPLUNDER–ColumbusianGrowth(ChristopherColumbus)Seizingtheresourcesofweakerforeigncountriesforone’sexploitationSCALEEFFECTSPopulationgrowthmakesspecializationpossibleFixedcostexpenditure(roads,canals,irrigationworksetc.)areworthwhileonlyifpopulationreachesacertainsizeHowever,continuousgrowthinpopulationwillputpressureonlimitedresourcesandleadtoDiminishingReturnsand–increaseintotalGDP,but–decreaseinpercapitaGDPINTENSIVEGROWTH–increaseinpercapitaGDPEXTENSIVEGROWTH–increaseintotalGDPSolovianGrowthSmithianGrowthSCALEEFFECTSchumpeterianGrowthColumbusianGrowthINVENTIONS•thosethatwerepurelyempirical(allinventionsbeforethemid-nineteenthcentury)•thosethatdependonscientificknowledgeMICROINVENTIONS•smallincrementalstepsthatreducecosts,improvefunctionsandreduceenergyandrawmaterialsneedsetc.;•farmorefrequent,respondtopricesandincentives;•accountsformostgainsinproductivity.MACROINVENTIONS•radicalnewideaswithoutprecedent;•resultfromstrokeofgeniusorluckINVENTIONSANDINNOVATIONSINVENTIONS-dependslargelyonindividualeffortsINNOVATIONS(real-worldapplicationsofinventions)•dependsoninstitutionsandmarkets,socialandeconomicinnature•reductionofgapbetweenbestpracticeandaveragetechnology(spreadofbestpracticetechnology)•morerelevanttoeconomichistoryTHREEFACTORSBEHINDSUCCESSOFINNOVATIONS•supplyofingeniousandresourcefulinnovators•rightincentivestructure•diversityandtoleranceFRENCHANNALESSCHOOL(法國年鑒學派)Breaksdownthestudyofhistoryintothreelevels.EnvironmentalandecologicalHistory(自然地理環境史)-focusesontherelationshipbetweenhumansandtheenvironment;-changeswereslowandalmostimperceptible;-dealswithdeepstructuresandthelongterm;-timewasgeographicaltime.Economic,socialandculturalhistory(社會經濟和文化史)-focusesoneconomicandsocialstructures,andculturesandcivilizations;-changeswereslightlyfasterwithperceptibleeconomicanddemographiccyclesovergenerationsandcenturies;-dealswiththemediumterm;timewassocialtime.Historyofevents(事件史)-conventionalpolitical,diplomaticandmilitaryhistory;-changeswerefastestandperceptibletohumans;-dealswiththeshortterm;timewasindividualtime.Thehistoryofevents,themainsubjectofinterestintraditionalhistory,wasmerelythesurfacemanifestationsofthemorebasicbutlessvisiblemovementsofstructuresandconjunctures.“Resoundingeventsareoftenonlymomentaryoutbursts,surfacemanifestationsof……largermovementsandexplicableonlyintermsofthem.”Individuals,includingapparentlypowerfulkings,emperorsanddictators,wereseverelylimitedandconstrainedinwhattheycouldachievebybroaderanddeeperstructuresbeyondtheircontrol.Inhistory,humanswereprisonersoftheirphysicalenvironmentandtheirmentalframework.EnvironmentalandEcologicalConstraintsEconomic,CulturalandSocialConstraintsHumanAgencyUNIVERSEOFALLPOSSIBLEDEVELOPMENTPATHSDynamicratherthanStaticProbabilisticratherthanDeterministicGeographicDeterminismEconomicDeterminismCulturalDeterminismChallengesResponses(ArnoldToynbee)ChallengesResponsesPathofLeastResistanceNewInstitutionsNewEquilibriumInstitutionsarehistoryspecificandpathdependent天時地利人和HistoricalConjuncturesEnvironmentalandEcologicalFactorsHumanAgency(Institutions)BRIEFOVERVIEWOFCHINAANDEUROPEOVERDIFFERENTPERIODSOFHISTORYCHINESEDYNASTIESANDTHEIRCORRESPONDINGPERIODSINEUROPEChineseDynastiesCorrespondingPeriodsinEurope221BCE–220CEQin,WesternHan,EasternHanRomanRepublic,RomanEmpire（秦，西漢，東漢）220CE–589CEThreeKingdoms,Eastern&WesternRomanEmpires,WestandEastJin,beginningofByzantiumEmpireNorthernandSouthernDynasties（三國，西晉，東晉，南北朝）589CE–907CESuiandTangDynastiesDarkAges（隋，唐）907CE–960CEFiveDynasties,TenKingdomsMiddleAges（五代十國）960CE–1276CENorthernandSouthernSongMiddleAges（北宋，南宋）1276CE–1368CEYuanMiddleAges（元）1368CE–1644CEMingRenaissancePeriod（明）(文藝復興時代）1644CE–1911CEQingEnlightenmentPeriod（啟蒙時代）（清）IndustrialRevolution（工業革命）HAN/ROMEHan–excelledinmetallurgyandagricultureRome–excelledinconstructionandtransportationTANG/EUROPEDARKAGESTang–tworiverempireEurope–wealthiestpartwasMoslemSpainSONG/EUROPEMIDDLEAGESSong-Intensiveeconomicgrowth:•newvarietie