What Happens When an MBA Student Raised in Communist China Reads Hayek

Commentary from Barry Brownstein on FEE.org (April 19):

Imagine being born during the bloody Cultural Revolution in China and growing up in a country with little economic or personal freedom. Few Chinese citizens had the knowledge that human rights are not granted by government, and those few who knew could not say. Few knew that government is not the source of economic progress; and again, those who knew could not fully share their understanding.

Now imagine you’re thirty-something years old, traveling to the United States to begin your MBA studies. In the spring of 1999, I taught an MBA economics class to a cohort of 30 such Chinese students.

The class was split between students from Beijing and Shanghai. Students from Shanghai—having more experience with the beneficial impact of liberalizing markets—were much more willing to embrace the ideas of classical liberalism.

Beijing students were more likely to believe in a larger role for government. This split between the Beijing and Shanghai students was most evident in a class discussion after the class read Hayek’s The Use of Knowledge in Society; the reading led to a discussion of central planning.

A student from Beijing was emphatic, “This theory is not applicable to China—China is a relatively poor country, and in a poor country the government needs to plan.”

An exasperated Shanghai student responded, “You miss the point, central planning is precisely why China is comparatively poor.”*

Hayek’s ideas were so provocative that soon the entire class had joined in; the two factions began shouting at each other in Mandarin. Someone, concerned about the din, called campus security. The students lowered their voices, but Hayek’s ideas had left their mark. I feel certain those students carry an indelible memory of that class. [read more]

*Bingo! The Shanghai student is right. Not only is he right about China but same could be said about N. Korea, Cuba, Venezuela and the old Soviet Union. Now Mexico is included in this group since they now have a socialistic president. Keep in mind Marx called communism scientific socialism. In China’s constitution they say they are a socialistic country.