Translated by Liu Peng
Observer page 36 issue 402
Original article: [Chinese]

The EO continues its special focus series on Mao Yushi, prominent reformist, economist, and social critic. For more on Mao's background, see our earlier report.

Guo Yukuan: Like many intellectuals of the time, you started as a railway engineer. How did you turn to study economics later on?

Mao Yushi: It was very late when I began to come into contact with economic theory. That said, since the early 1950s, I had already taken a deep interest in operations analysis. At that time, I had found an English book relating how the British used operations analysis to detect German submarines. From that book, I learned how to reduce coal-consumption and improve efficiency in the railway system. That was probably the first time I dealt with the economics.

Guo Yukuan: Operations analysis seems to be most suitable for planned economy theory. Haven't you been advocating market economics?

Mao Yushi: It did have some characteristics of a planned economy, if applied to macro-economics.  Both market and planned economies sought increased efficiency. However, it was wrong to achieve this through centralized control under a planned economy. People are frailt and selfish, and it's hard for a planned economy to conquer these human weaknesses. I have said that a dictatorship by God is the best system to govern a country, as God is a sympathetic, selfless, omnipotent and omniscient being. But where can one find such an almighty God? By comparison, market mechanisms are more reliable and feasible.

Guo Yukuan: When did you recognize market economics? Did it happen before China introduced the reform and opening up policy?

Mao Yushi: I had yet to come in contact with economic theory before then. But looking back, I did have some keen instincts, some basic ideas of what a market economy was. For example, I often saw that many people couldn't buy pork after queuing for a long time because of its scarcity. Why couldn't farmers profit from pig-farming? Why was it that those who wanted to eat pork couldn't buy it? I expressed my opinion that pork prices be raised to promote farmers' enthusiasms for pig farming. Later on, however, my opinions became my crime, as they were interpreted as "right-wing remarks".

Guo Yukuan: Did you begin to doubt our fundamental system after that point? That takes great courage. Many people didn't dare think about at that point.

Mao Yushi: It was a natural process. In the beginning, I felt everything was nice in the new China. Especially when hearing Chair Mao declare that the Chinese people had stood up, I felt exhilarated. There was morality, and we all were dedicated to building Chinese socialism. However, later on, I felt something had gone wrong. I certainly had plenty to tell but dare not to. During that period, people didn't trust each other. As one joke goes, during an anti-rightist struggle, everyone was trying hard to look for a rightist target but all remained silent out of respect. Suddenly, one person had to excuse himself to go to the bathroom. Unfortunately, when he came back, he was labeled a rightist.

Guo Yukuan: Did you ever feel desperate during that period?

Mao Yushi: Most of time I was quite optimistic. Even at my toughest moments, I always believed that such absurd days would be gone eventually. This was especially true late in the Cultural Revolution; I thought such days couldn't last much longer. I remembered that when Mao Zedong passed away, I was transcribing materials in the research office of the Railway Department. I became aware of this news by hearing someone crying outside. I stopped to go home immediately. That was the most momentus day of my whole life. I knew China would be transformed.

There was one point, however, when I was really in danger. Around 1958 I received a notice saying that I must go to a quarry for reform through manual labor. I was devastated. I knew that if I went, I would die in that pit. I  couldn't tell my wife. Strangely enough, after a period of time, my name was crossed out of the list. I still have no idea what kind person did that for me. I'm really thankful for whoever it was that sympathized with me. I didn't dare ask who it was. Even today I still want to find this person to thank them, but I can't find them. Perhaps they've already passed away.

It wasn't until the 1980's that I read "the Road to Serfdom" by Friedrich A. Hayek. The book reflected exactly my sentiments during the Cultural Revolution.

Guo Yukuan: Three decades have passed since China launched reform and opening up. Many think the policy has saved China, but others say it has opened a Pandora's Box and let out capitalistic evils.

Mao Yushi: Despite its problems, China has seen tremendous progress. Some youth today who have never experienced anything like the Cultural Revolution have been quick to mistake propaganda for history, and have thus jumped to a one-sided conclusions. But I also know some senior citizens who think that things today are worse than during the Cultural Revolution. There are all kinds of people out there, some of whom are impossible to sway from their beliefs.

Guo Yukuan: How do you look at the gap between the rich and poor? Your opinions here have been at times controversial.

Mao Yushi: This topic is a social issue that should be researched in-depth. It's necessary to enhance the rights, benefits, and opportunities for the disadvantaged. That's why I set up a micro-loan company and founded the Fuping School with other economists.

I thought equality should be at least classified into two aspects--social status and wealth, because one who hold the pursestrings aren't necessarily those in power, and vice versa.

I found Chinese to be more sensitive to inequality in wealth rather than social status. China's wealth gap would only become larger and larger with social development.
After paying too many taxes, Bill Gates still accumulated billions of dollars in wealth, 100 million times more than an modest farmer's income. Nevertheless, the gap in the US social status, especially in personal dignity, has been narrowing.

During the Cultural Revolution, our wage income seemed to be much fairer but our social status was not. After liberation, we eliminated the rich, the landlord and capitalists and thus greatly narrowed the wealth gap. However, we drew an artificial distinction in our social status. Farmers were classified into second class citizens, and the city residents were also pinned with different social tags. We went in the opposite direction that the rest of the world was going in. I believe that in the next 30 to 50 years, China can significantly narrow down its gap in social status, though the wealth gap may still exist. However, many citizens still regard the Cultural Revolution as the fairest of times.

Guo Yukuan: How do you look at corruption, which citizens bitterly detest? There is a standpoint that the corruption is derived from reform and that present social wealth was born of exploitation.

Mao Yushi: I, too, hate the corruption, but I oppose using it to negate the achievements of reform and opening-up. The policy's major achievement was to grant partial freedom to the people and thus creates tremendous social wealth. This was the main reason for our three decades' development. Corruption can't create any social wealth. Also, all the developing countries have corruption to some degree, and China isn't the worst of them. However, some people have only paid attention to corruption. This is unreasonable and based on fallacy. Certainly, we should be resolute to combat corruption and strengthen our political system's reform. But I am opposed to negating China's reform simply because of corruption.

Guo Yukuan: You often speak on behalf of entrepreneurs, praising them for their contributions to society. Some have criticized you for this and accused you of neglecting the workers and farmers' contributions.