Difficult to state ownership is compatible with the constitutional rule of law

 Life University School of Management Professor of Financial Economics
Reviewed by: Professor Li Shuguang, China University of Political Science, Graduate Dean
Moderator: Cai Jian, Professor of China University of Political Science, Institute of constitutional
time: May 22 (Friday night 7:00)
Location: Changping District
Cai Jian (China University of Political Science Professor, Institute of constitutional):
students, teachers, good evening! Today is ; constitutional trends in China purposes. This year's theme is the economic crisis and constitutional change. Today, we invited the speaker is truly the Professor Chen Zhiwu. there lecturing Professor Chen Zhiwu, please!
Chen Zhiwu (Yale School of Management tenured professor of financial economics):
This year, the U.S. financial crisis triggered by the global economic crisis, whether in the United States or in China or other countries, are more popular by the government to rescue the economy, government intervention to save the world in the name of economic activity, large-scale intervention in the market. At this time, We can not forget that many assets held by the state, too much control of economic resources, including the right of approval on the industry and business access to the right of intervention and control, in addition to bring some economic consequences, but also of far-reaching constitutional rule of law impact.
If we look into the recent history can be found, all countries have had public history, constitutional and social systems are not their basic characteristics, such as the former Soviet Union and former Eastern Europe, the planned economy of China. Phase than under the more reliable that the constitutional rule of law, private ownership of the countries are countries. why? This should cause us to think. Of course, I'm not saying that private property will inevitably lead to constitutional rule of law, private ownership is not a sufficient condition for constitutional rule of law, but the state-owned or public ownership will inevitably lead to the absence of constitutional rule of law. Why is it so?
multi-national experience has demonstrated that the former state-owned economy
addition to the experience of countries, we can sample from a larger, more general sense State-owned economy on the constitutional point of view the impact of the rule of law. That is, I used the new quantitative methods of political economy, from 1970 to 1991 in accordance with each country's investment in state-owned enterprises accounted for the proportion of GDP, to 64 countries divided into three equal parts group. The results, I found that the state-owned enterprises to invest in the higher proportion of GDP, the country, the lower the index of the rule of law, constitutionalism, the lower level. In 72 countries collected the data, I found that the proportion of GDP, government expenditure The higher the level of the lower rule of law. with our words, the government poorer countries, the rule of law, the higher the level. a country's level of constitutional rule of law, the government can spend with their income is inversely proportional to! in the 72 countries, I also found that the proportion of government spending relative to GDP, the higher the corruption is more serious. This is well understood, if the Government has no money, even if officials wanted to corruption and corruption is not up, there is no basis for breeding corruption.
This large sample of data based on statistical methods, compared to a simple case analysis, the more it is scientific. because the case study method may sometimes be absurd conclusion. For example, the blind Bing is blind, so he more sensitive to sounds, he composed well, erhu also was very good. If you use a simple case analysis, we may draw a conclusion: In order to better erhu, first of all make your eyes blind. < br> However, the large sample data analysis, the results are sometimes feels too abstract. in the end the rule of law with the state-owned economy has increased the level of inverse correlation is a statistical chance? Or is there a theoretical necessity? if its causal relationship is not accidental, then the transmission mechanism is how?
To answer these questions, we first have to figure out what is the state-owned enterprises? state-owned enterprises with private enterprises or enterprises that government of the people what is the difference? state-owned enterprises with the government of the people business The biggest difference is: the national state-owned shareholders behind. countries that we ordinary people have no advantage or private: State can control the National People's Congress, the right to change the law. If the state rules that a negative state-owned enterprises, can change the rules the state-owned enterprises in a dominant position. In addition, countries also explain the power of law, judicial authority and administrative law enforcement powers. If a stockholder-owned company behind the legislative power, the power to interpret the law, jurisdiction, enforcement power and the power of the legitimate use of violence , how could the company and other market players equal it?
Some economists argue that state-owned or private enterprises have little, more important is that the market economy countries and non-market economy country, they said as long as the market The logic be respected, as long as the market rules for state-owned enterprises, private enterprises are the same for all countries or private ownership, is not important. I have to say, the problem here, state-owned enterprises and private enterprises from birth, the starting point to inequality: to play a leading role in state economy country, not a market economy. The first principle is that the market economy rules of freedom of choice and equality for all participants, everyone is equal before the law. However, because the shareholders of the national state-owned enterprises, which makes the state-owned enterprises in the legal more superior than the private enterprise before. non-state enterprises, private not enforceable in law and equality before with state-owned enterprises. a country if one day using the state-owned system, over time, even if the first is the rule of law, but also corrosion after transformation.
China Industry case
to make my data without the abstract mentioned above, I cite the following five cases.
Case I: 18 years ago, a man named Tao Ling depositors in the state-owned agricultural bank deposits 1,000 Mengcheng Yuan, deposit agreement, after 18 years receive a monthly interest rate 15.793%. In this way, 18 years later, 1,000 will become 34 thousand yuan. But 18 years later, the bank refused the request of depositors that the monthly interest rate is too high not in line with central bank regulations; In addition, the bank said that China is not 18-year time deposits, or compliance. Thus, a customer dispute with the bank has outstanding. Mengcheng Xiemou Agricultural Bank of China governor, told reporters Mengcheng current financial order is not standardized, Tao Ling's experience is
wins this reason, of course strong self-management, and why customers do not know the year to fraud, the order of these regulations it? period of the previous provisions of interest and not only today's.
in China, the rule of law is to protect state-owned banks, regardless of people's rights. If depositors stolen by online banking, the bank is not responsible, responsibility to depositors body. If the bank give the money, the depositor is bound to refund. However, the bank less to the money, leaving behind the counter savers , the bank is not responsible. From here we can see that the rights and obligations of both sides are asymmetric. the most extreme case, a bank teller machine failures give the money, Guangdong, ATM machines from Xu Ting took 10,000 dollars more , was sentenced to life imprisonment. In contrast, the Guangdong Kaiping Bank embezzled 400 million, only the sentence of 12 years. these unequal rules of the bank concerned with the state monopoly.
Case II: We now see the fuel stations either in the oil, either Sinopec. However, by 2002, is not so. In 1999, the national total of nearly 80,000 private gas stations, more than 80% market share. According to by the Government, through the rule changes, and in the petroleum, petrochemical regardless of the cost of acquisition, the end of 2002, the independent gas station has dropped to 48% share of the. in the name of rectifying the market order, June 5, 2001, the State Council Three ministries notice: August before the Economic and Trade Commission approved the gas station without all closed, and those owned by the two major oil companies in completing the formalities, may be retained. Thus, in the oil and petrochemicals through personally involved in the development of the State monopoly of the new regulations the market, either their own private gas stations all close, or take the initiative to sell the oil, or Sinopec.
this case we can see, any one industry, if private enterprise was only then, after the state-owned enterprises involved in , the rules will become unequal, the rule of law will be destroyed. The state should do to run a business, when both the referee and a player, role conflict is very prominent.
Case III: In 2003, Northern 15 counties, worth 7.0 billion of private oil assets by the government to rectify the ground, taken away without compensation. extension of their respective fields in Shaanxi Province, central-owned Changqing Oil Field is the About 60,000 private entrepreneurs and farmers contribution, down the drain. NPC Professor Hessler, Professor Mao Yushi of 6, 3 sent a letter to the NPC chairman, to promote its supervision of local government according to law, but in vain. Shanxi government has also caught Feng Bingxian behalf of investors, etc., and sentenced to imprisonment, the Beijing lawyer Zhu Jiuhu commissioned by the field of private investors, to the northern survey in 2005, was in police custody for 5 months. From here, we can see, when the state both for the rule-makers Also, when the shareholders of the fundamental equality before the law to have much impact on the rule of law.
Case Four: Private steel magnate Dai Guofang, in 2004, had previously been a very successful private entrepreneur .2004 years, Dai Guofang established private enterprises , invested 500 million, covering 10,002 acres; and expansion, and private enterprises must stop. Why discriminate?
told me today is an important point: the establishment of the ideal of the rule of law is very beautiful, but as long as there are a lot of state-owned enterprises, the rule of law can only be a wish!
Case Five: It is According to Chongqing Shi Shangwei statistics, the end of last year, Chongqing has all kinds of waste recycling enterprises 550, trash more than 8,000, annual income of up to 6.8 billion! In addition, the number of renewable resources, recycling more than 30% average annual growth rate, see the Municipal Corporation, whose goal is to incorporate income shortage of artisans. The new regulations is to make these state-owned enterprise unified training, uniform dress code, unified management of collection of waste of the people and let them close to the waste to designated collection points at recycling prices unified decision by these state-owned enterprises. This year's purchase and sale of food policy in rural areas is similar in rural areas of Chongqing is equal to repeat the tragedy of the year. collection of waste in the area, have been the least the Government should intervene in the area, as these could have been those who can not have anything else, no other income, income opportunities for the people of the last, but even this did not miss the opportunity to earn a living. you can imagine, what the industry can be spared from the emergence of open government?
Here, we quote Professor Li Yining's words about what is before the law for all inequalities. means that state-owned enterprises lost a lawsuit, you can do, can not perform, but to no kind of private enterprise. taxes, the state-owned enterprises can not yet, but if you do not also private enterprises, the boss will be caught. Mu Qizhong, the Rand Corporation in bankruptcy court, staff quarters were vacated auction, the state-owned enterprises to court, have not heard of workers to be moving.
br> From an academic perspective, these and similar cases is not surprising, when shareholders are behind the national state-owned enterprises, state-owned enterprises into which the industry, that industry can not have rule of law and equality. The inevitable, and ultimately corrosive socio-cultural, anti-rule of law spirit. in front of the conclusions based on cross-country data, From another perspective, the government too much money, the Government is too rich is not conducive to the implementation of the rule of law. I just wrote the article said, the poor increase in government bonds, gave birth to democracy and the rule of law more. Now I talk about from a historical perspective talk about this issue.
Britain, France, through the development of democratic constitutionalism why different?
we can put the power of government and civil rights of the rule of law throughout the game as the two parties. constitutionalism is to standardize the government the power to Bu Zhiyu easily violated civil rights. If the government is too rich, private businesses or individuals with the Government when the game will be in a very inferior position. For example, the planned economy, both rural and urban, all the work is done by the State , collectively, we are all country people. When only the State can provide jobs, citizens can talk to government about how the rights? when you have no money, no food, you can not have emboldened to assert your rights because once the specific representatives of state power mm absolutely relevant.
contrast, if the Government does not state-owned assets, there is no surplus income, the government would have money from the hands of the people, the kind of state, people are more likely to assert their rights.
First, we look at a rough experiment, that is, 1600 AD, when we divided into two groups of countries. A group is saving the state treasury in many countries; a group of countries is very little money. when India Golden Treasury gold number is 62 million, Turkey 16 million gold bullion, gold Ming China is 15 million, Japan 10.3 million gold. The other group is heavily indebted countries of Western Europe, such as Britain, Italy, the Netherlands, Belgium, .400 years ago This two governments varied considerably richer. So, the development of a democratic rule of law who was it? ago a group of countries only Japan, the Meiji Restoration through the late 19th century changed the path of development, slowly embarked on a constitutional democracy the road, several other rich countries when the Government did not develop a constitutional democracy to. And then a poor country governments, and now the best of democratic constitutional rule. From this perspective, the poor government is not a bad thing.
poor government gave birth to the most classic example of democracy and the rule of law is the development of democratic constitutional process of the United Kingdom. saw British history, I found such a problem: the King of England in 1215 signed the democratic constitutional system was in 1688 poor birth of democracy and the rule the Government to increase public debt. causality in the end what is it? study of British history from the, I think my conclusion is more tenable.
1215 years widely accepted at the conscious level. but the What move it? Britain before 1688 do not establish a logical and consistent operation of the constitutional structure, so the history of Britain before 1688 is in a constant flux of.
a Western European countries with China and India do not the same places, they appear very early parliamentary. the late Middle Ages, appeared in the Spanish Parliament in 1188. In fact, the emergence of parliament is to provide convenience to the king, let the king have enough money when the Parliament voted through the introduction of new taxes or increase tax rates . But the problem is, the king can dissolve parliament at any time. The king, after the adoption of the new tax law, no parliament, they can dissolve parliament. At that time, both the British or the Spanish parliament, basically a Because Parliament, regardless of the preferences of the king.
how much property from the British royal family, we can see that when the British royal family will be very autocratic, and when not so authoritarian .17-century ago, the British royal family in general is very rich. Royal has a lot of land, estates and other property, there will be a lot of income, generally past the king by their own income and taxes that can be financially independent, do not need to go through parliamentary taxation, but operations in the UK with other countries only when necessary introduction of new taxes to convene Parliament.
Overall, 1688 years ago in England, only parliament can control the pockets of the King when the King will Jiufan Yu Council requirements, to accept the constraints of the monarchy, otherwise it will expand the powers of the king ; royal independent income the higher the proportion of total government revenue, the more the king do not need Parliament, the Parliament the power to the weak; the contrary, the more subject to the Council.
1640 years ago, the King of England has over 13 years, to convene Parliament. beginning to suppress the rebellion in Scotland, the King Charles I summoned Parliament to consider Beverages, the result was rejected by the Parliament. then, Charles I dissolved the parliament. (and thus, the parliament named , and then in the same year at the end of King Charles the new parliament to convene. (this session of Parliament has become famous to pass the motion, eliminating the government officials appointed by the King, eliminating the power of the king control the national army. The motion to Charles I think too much, he left London in 1642, then triggered the civil war royalists and the parliamentary faction of .1648, the Karen Will (Oliver Cromwell) of the Revolutionary Armed Forces of victory. The following year, Charles was sent to the guillotine. Oliver Cromwell during the British administration, the royal land, forest massive auction, further reducing the royal family's property.
after the Civil War , United Kingdom in 1660 to restore the monarchy, Charles II became king. At this time, the Royal is running out of their income. To this end, the Parliament passed a motion to Charles II, 1.2 million pounds a year's allowance budget, thus supporting the Royal and government civil service expenditure. As the conditions of this grant, the Parliament set up a not only save a large scale expenditure on the royal family, but also greatly improve the efficiency of taxation. to the death of Charles II, before many of the British royal family's money, so, too parliamentary monarchy and was a boy, so in 1679, Charles II once again breach the dissolution of Parliament. From here, we see that the royal family when money was not taken seriously in the Parliament. Charles II died in 1683, Charles's brother James II succeeded to the throne mm, the new king to convene a parliament, parliamentary expenses to the Royal to 185 million pounds. the money later, James II, was immediately dissolved parliament and return to autocracy.
but this time the independence of members has been very strong, and they do not let go .1688, the Council sent to James II out of England, by his daughter Mary, son William and the Netherlands take place. as a condition, the new queen and the king received a series of new bills, including the just the opposite experience, and the United Kingdom. from the 14th century, when the King of France to increase taxes, but also to convene parliament, and bound by the latter. However, in the Hundred Years War with Britain in 1439, Parliament passed a bill to tax regulations rests entirely with by the King to master. to 1484, the French king too much wealth, no longer need to Parliament, Parliament was dissolved on the way. In addition to the latter half of the 16th century, a period of time outside parliament until the French Revolution of 1789, nearly 300 years France no longer had to convene parliament, parliamentary monarchy is not restricted. In addition, when the King of France, always take the oath of accession to the throne: in any case, can not sell Crown land. Thus, in the 16th to the 17th century, the French King is the richest in Western Europe, authoritarian rights are almost the highest. truth is different with the British, the French royal family without the financial assistance in the parliament.
similar to the Spanish experience with the French. Spanish Parliament launched in 1188, constrained by the royal Council. Spanish parliament is the world's the earliest. However, in 1492 Columbus discovered America, and in the 16th century, brought back to Spain after a lot of gold and silver, the role of the Parliament gradually disappear, becoming an absolute monarchy. Spain to democracy in 1978, only constitutional government, constitutional government in Western Europe last democratic country!
Finally, I make a conclusion: First, from the industry, from a social point of view, the more state-owned enterprises, the rule of law within the industry, the more unfavorable to the rule of law culture. The first Second, the Government of wealth, the more share of income, the greater the threat to the constitutional rule of law. Third, the straight, the right would be difficult to uphold; and production by the state to obtain information. If it was the British state to implement a comprehensive system, I believe that the British king at the time that the UK will be like heaven to him, because then, he had no need to seek Parliament. no institutional arrangements more favorable than the overall state system, the king they wanted. Therefore, we should see that the privatization of state-owned enterprises is not only a question of economic efficiency, it is a matter of the issue of constitutional democracy. From this sense, Marx said that the economic base determines the superstructure, it makes sense. From this point of view, you can say, Zhiwu is a Marxist.
the end of my speech. Thank you! (Applause.)
Cai Jian (China University of Political Science Professor of Constitutional Research Institute):
Professor Chen Zhiwu from an economic point of view, gives us a different perspective of constitutional interpretation. Professor Li Shuguang, please comment below.
Li Shuguang (China University of Political Science Professor Graduate Dean):
Professor Chen Zhiwu I prefer to see an article, vivid, and to the terms of the rule of law here. In recent years, there is a very interesting phenomenon, a lot of very good economists are studying the rule of law. This is a very good sign.
two important today, Professor Chen conclusion: the more state-owned enterprises more unfavorable for the rule of law; the government more money, the greater the threat to the rule of law. The two concluded that the case with the data and launch it, and I very much agree. But I do not entirely agree with some of the case. For example, the court said the state-owned enterprises and private enterprises are often the private sector fails, which I do not agree. we are seeing now is that the private sector tend to use money to bribe judges, and people can not control the state-owned enterprises, Finally, the private sector to win.
I would like to interpret from a different angle Professor Chen's two points. The more chaotic state property, the lower the level of the rule of law. In our study found that when state-owned assets law, not state-owned enterprises and state equate system. China's problems, to some extent, that is the question of state ownership is not clear. In the case of the planned economy, state-owned system, set system, the concept of public ownership are bold aesthetic. I think the reform and opening thirty The process is in the process of reform of state-owned system. in the transition process, we found that state ownership is a very big concept. China's state-owned assets is by far the world's largest state-owned assets. most European countries, the state-owned company's assets probably only a few hundred million euros. Italy 1,000 million euros. France to the highest of 540 billion euros. In Europe, the largest state-owned enterprises with the United Kingdom, the United Kingdom has 80 state-owned enterprises, including 24 central enterprises.
State-owned enterprise assets in state-owned assets only a small part. In China, companies are now owned by SASAC tube is .80 more than 138 ministries and more than 6,000 below the central level, not owned by SASAC tube. where the State Council ministries and commissions in addition to composed of departments, including total, youth, women, disabled, overseas and so the ministry. In addition, China has 110,000 state-owned enterprises to the local SASAC tube. the number of state-owned enterprises in reform is reduced, Therefore, a reduction from the number of terms, we are still optimistic the rule of law in China.
state-owned enterprises is only a small part. economics assets include operating assets and non-operating assets and resources of the assets. We talk about the assets of state-owned enterprises only operating assets only. the Government's non-operating assets, including government buildings, institutions, assets, historical and cultural heritage, this non-operating assets is huge. resource assets would be greater, including oceans, forests, minerals, mountains, grasslands, wastelands, beaches and other natural assets. The valuation of assets no one to it, such as the land value is a lot of money, too few developers to give money, the Government should not sell. a lot of state-owned assets are not in possession, which give some government departments or individuals seeking a great space. This is a tragedy of the commons. Therefore, I think, Chen today, the concept of state-owned enterprises should be extended to the concept of state ownership up. This is me today, Professor Chen's first inspiration.
I want to distinguish between the constitutional and rule of law. constitutional republic is a democratic plus. the so-called democracy is universal suffrage, universal suffrage and majority government. The so-called republic, that is, the upper compromise between. Professor Chen talk about the poor relationship between the government and the people and my own understanding is a little different. To some extent, the process of constitutionalism and the rule of law, there are several paths: the first path is a democratic process; The second path is a Republican, by the Republican to Democratic. In a sense, the Republican is more important than democracy. the rule of law there are four factors: one is the universal participation; the second is the establishment of good law system; third is the responsibility Government and the Government of procedural due process; Finally, the establishment of the legal professional community. I think, through the mechanism of Republican rule easier to achieve the goal. Professor Chen talk about people and the Government today (King) of the game is actually relatively small, in fact, more of a king and the rich or the game between interest groups. At this point, I think that Mr. Yang Xiaokai speak is more right: the Constitution is based on private property, but said that private property is not accurate, more accurate , said the private ownership of land. Britain after the Glorious Revolution, a large number of hands the power to property owners the right to enter the parliament, the king can negotiate, and then form the basis of republican democracy has also been hoped from this.
Cai Jian ( Professor of China University of Political Science, Constitutional Research Institute):
in the rich relationship between the government and the rule of law, and I very much agree with the views of Professor Chen. We did recently in Shanghai Minhang public budget reforms, progress in other aspects too very well. Finally, when the public budget, not progress for three years, because the income of civil servants in Shanghai too high, and are reluctant to open. the welfare of civil servants is high, including a lot of political reform, including reform of the biggest obstacles .
question:
In China, public ownership or state ownership must be dominant, then the level of the rule of law will always be at a low level?
Chen Zhiwu (Yale School of Management tenured professor of financial economics ):
my assessment is: as long as the state-owned economy has dominated the rule of law can only be an aspiration, it is difficult to become a reality. This may let you down.
question:
I think China is now The problem is not the government rich and poor, but rather we have a good institutional arrangements have to understand the Government's money, spent to understand the problem. how do you look?
Chen Zhiwu (Yale School of Management Life Financial Economics Professor):
If you have selected is not, I would choose is a constitutional democracy in a very reliable inside the society and the state to use the money entrusted to the government, this arrangement is much lower than in the absence of democratic and constitutional country to all property to government officials to manage better. Now the government in Beijing to emphasize the concept of the sun, many are also published data on the budget. One area reported that 60% of the budget in no way account for the whereabouts of clear and accurate. In this case, you are willing to put more social wealth to the government to use it? Do not think the money to the government would allow people to benefit, in a sense, we give the government more money, the more the Government holding our nose, the harder the rule of law. you can see in Brazil, Brazil is not a very rich country, but the Brazilian government expenditure in 2007 on public health spending accounted for 10.8% of annual expenditure, but the Chinese far more than not on the figure. people thought that the socialist countries in the livelihood of the people spending more than the capitalist countries, but the reality is not the case.
question:
can not predict what the next two to three years, China's stock market go?
Chen Zhiwu (Yale School of Management tenured professor of financial economics):
I think the whole community and decision-making on the U.S. financial crisis is too pessimistic. U.S. economic recovery faster than we expected good. American history has gone through many times of financial crisis, the Americans stood up to go down the spirit is very strong. I'm still optimistic about the future.
question:
in the reform, progressive therapy or shock therapy is better better? Hayek thought there was not meant the demise of Keynesianism? Please reply to Chen and Li.
Chen Zhiwu (Yale School of Management tenured professor of financial economics):
or shock therapy on the progressive Which is good therapy, I view the views of Mr. and Yang are similar. Now the domestic judge in Eastern Europe is not accurate, a lot of information on domestic are the late nineties. domestic scholars see only the nineties of last century situation, while ignoring the years new developments in Eastern Europe. Now the level of development in many Eastern European countries and Western Europe have been less the same level. They were now no longer interested in talk about the good or progressive shock therapy treatment this problem, because there .. .