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To start with the thesis, what I want to point out is that the situations are so complex that it is hardly to analyze distinctly and definitely on some certain point as a result of their wide social connections on a high level. Certainly, we cannot try to treat such a serious question in isolation, so in order to void the influence caused by synthetic effect, more normative analysis will be used to put to the proof rather than positive factors.
Having not broken away from the framework of planning economy, the Chinese financial system has faced more difficulties with the development of market and the ability of production. As a social background, Chinese had been affected very deeply after nearly 2,000 years ruled under monarchy, and had been accustomed to the culture of being controlled. Being fettered by tradition, in a rather part of people’s view, the government performs have nothing to do with affairs themselves, or should obey the rules only.
The indifference and one-sided acceptance were for the reason partly that the financial system had not been so transparent enough to make the public understand their rights and obligations, especially the former. Obligations had been stressed far more than rights from law to taxation for a long time. For instance, the taxpayers having been used to calling “obligatory taxpayers” emphatically, nevertheless, the public rights having seemed to be neglected by both government and citizens. Don’t they know the rights themselves are the very bases of obligations?
Nowadays, more and more experts had been awaken to all sorts of irrational practices had aggressed upon citizens’ rights, such as the unreasonable actions of taxation. But it is really not enough to remain the problems on such a low standard of which the most central debate was focused on the endless dispute on whether the rate present should be higher or lower. There are still more fundamental questions should be studied more deeply.
It is not doubtful that Chinese government had made great developments and improvements on financial system since it was founded in 1949, it is also undoubted that it gained success in the early days, but it is rather sure that the current situations indeed be far away from the standard to match a modern nation, which still exits a long distance from the average level in the western countries, with such a increasingly growing demand of justice and efficiency.
Section two what we had found out from the fact
In the light of the arguments above and the forward theory in finance, it seems to be that the thought that to construct the framework of public finance and to operate it normally as early as possible should be the best solution obviously. However, is it practicable in China? Will it really take effect or how much effect it will take? Nobody can offer a certain answer.
Every area has special situations itself. China is not an exception, either. Always, at the beginning of each revolution, various obstructions will come from all round, far and near, in particular traditional directs, which might be more serious in China. In fact, the transition is necessary and imperative at all events. So the key to settle the difficult problem had been turned to find out an acceptable way to run it up without conflicting to the acute taboos directly.
Section three the ideological method
Two famous financiers and their theories will be mentioned in this section, with the ideologies they implied in their doctrines of the most importance, although they formed two contrasting visions of the state finally: public finance and public choice.
James M. Buchanan, who won the Nobel’s prize as the great contribution on public choice theory in 1986, believed in free-market economy that led his methodology to individualism. Public choice as a vision of the politics, purposed to regard as people identically wherever they had been set a limit to economic area and political area, different from the general thinking that considered the aim of the former as maximizing the public benefits comparing with the latter as the maximum of private benefits.
Within the theory there are two obvious characteristics, one is the use of catallactics, the other one is the assumption of homo economicus. In his liberalism philosophical ideology, the center is the extremely distrustful attitude towards to the governmental role and their more and more limit on individual behaviors and appealing to prescribe a limit on government and the departments belong to it as quickly as possible by the power of constitution as a conclusion.
Buchanan laid more stress on the regulation than the outcome and placed on his hopes on formulating a new policy to resolve the problems such as market failure and externality rather than the government invasion because of the thesis that external observers have no access to gain the individuals’ subjective judgment that known by their own only. At the same time, the argument that anyone who observed externally can manage to make sure the situation of social welfare was also negated for its mistaken materialistic point to treat the cost and profit of both individual and society which are beyond measure.
Richard A. Musgrave, held the just opposite vision that the outcome played a mainly role in his theory that had been leading the tendency in western countries after the World War Ⅱ. He believes that the marrow of democracy roots in the advisable management by government. Three functions of government had been defined in his theory: allocation, stabilizer and distribution function with the allocation function also had been divided into the function of satisfying the social demand and profitable demand, which also had been proved successfully by the author that the difficult and chaotic problems could be well solved under the principle.
Section four analysis guided by the method and suggestions Relating to us
Equality
Buchanan preferred the equality on the starting point and regulation to which on the outcome against the invasion in market with fair distribution as an excuse. In the revolution on Chinese system worried about the efficiency would be damaged by the aim to pursue equality on distribution after had learned some theories from western economists such as the equality and the efficiency have some substitution effect. But the equality here means the equitable result not the rules. So in my own opinion, only the fair starting point and the regulation that put the whole process under control leads to more active during competition, just like the 100-metre race. If thinking about the problem on this view, Chinese distribution, whose inequality mainly comes from the chaotic rules in the area of first-time-distribution and the market competition in total disorder.
Equality, in fact needs an inequality as a premise, namely uses different standards to treat someone has some congenitally deficiencies. In other words, in order to reach the factual fair, the formal equality must be broken down. Under such a vision, Musgrave stands for distribution should major depend on one’s efforts not one’s contributions. Upon his concept of horizontal equality, tax should be imposed in accordance with consumption rather than income, because the former treat everyone with same surroundings fairly, but the latter, criminating deposit.
Constitutionalism
Both Buchanan and Musgrave are complete constitutionalists. Government, whether should invasion the market or not, must be limited from power to scope whatever happens.
The situations in China are not so optimistic. The level of specialization, effects by history, corrupt and incompetent in government and Party, outmoded views and so on limited the process seriously. Under the shock by the international economy, how to establish a new framework of economy and politic might be the greatest challenge. Constitutionalism should be the last correct solution to improve the situation present, in my view.
Utilitarianism
Buchanan is a utilitarian of rules. Musgrave is a utilitarian of outcome. Both of them regard benefit or profit as the basis when they think through the most equitable method to improve the living standard over the society, although they have fundamental disagreement on the way to put the theory into practice.
Utilitarianism had been acknowledged and accepted in the whole developed countries and had resulted in the improvement on social welfare with the help of new regulations designed by government. Obviously, even if you think it has a little vulgar style, everyone couldn’t void its great contribution to the whole economic society that be bound up with every citizen.
I can’t understand Chinese government admits the economy is the basis of the realm of the superstructure on the one hand meanwhile ignores the individuals’ basically economic benefits on the other hand. I really have no access to know the reason that Chinese government concentrated the attention on enhancing the political domination to make sure to gain the citizens’ always support without putting the projects that increasing the individual position and benefit on the major agenda. With the level of political consciousness rising, more and more doubts will appear against the government’s attitude nowadays. I’m sure the period of utilitarianism will come earlier or later and bring a change in social ideology first and then in economy.
That’s all. Thank you for appreciation.
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