Book 1 and Book 2 Watch
By Arnold Kling
China and russia in the 1980s offer a unique case study in why some reforms work and others do not. The contrast refutes the notion that a strong, perhaps totalitarian state, is required for successful reform. In the Russian case, a one-party state attempted to impose reform from above and failed. In China, a one-party state opened the economy but resisted grassroots reforms, which it grudgingly accepted after their success could no longer be denied. For decades, a small group of Russian liberals lobbied in vain for reform. They finally got their chance when a reform-minded party leader was elected, but there was no real constituency for reform. In China, there was a massive grassroots constituency which clearly understood reform’s potential benefits. They acted quietly on their own, according to the Chinese saying, “Do more but say less; do everything but say nothing.” The Chinese rural population, as outsiders, had nothing to lose. With more than 80 percent of Chinese people pushing for change, reform could not help but penetrate the social and economic psychology of the Chinese mind.
His thesis is that China’s reforms succeeded because they came from the bottom up, but Russia’s reforms failed because they came from the top down. The issue of decentralized order vs. central plans is a main theme in both Book 1 and Book 2. In From Poverty to Prosperity, we talk about what William Easterly calls the difference between “searchers” and “planners” (and we interview Easterly). In Unchecked and Unbalanced, I talk about the discrepancy between dispersed knowledge and concentrated power. My goal is to interest people in bottom-up reforms.