Yasheng Huang: China's Examination System and its impact on Politics, Economy, Innovation — #45
Welcome to Manifold. My guest today is Professor Yasheng Huang. He is EPIC Foundation Professor of Global Economics and Management at the MIT Sloan School of Management. Professor Huang is an expert on the Chinese economy. At MIT, he founded and heads the China lab, as well as the India lab.
His research areas include human capital formation in China and India. His 2023 book, The Rise and Fall of the East, How Exams, Autocracy, Stability, and Technology Brought China Success and Might Lead to its Decline, is published by Yale University Press. Yasheng, welcome to the show. Thank you, Steve. Very happy to be here. As I was telling you before we started, I've listened to many, talks you've given over the years because I've found you to be one of the most balanced and well informed, analysts, I would say, of the Chinese economy, both its prior development and then also maybe its future development.
I was hoping you could tell us a little bit about your childhood. And how you came to your broad set of intellectual interests. Yeah. Okay. So thank you, Steve, for saying that I, at least as a professional, I try to be balanced and try to be as a scholar, as academic, I try to be as much empirically driven and data driven as possible.
And also don't go for sensational claims, about the issues that I, that I examine. And, you know, sometimes it's actually frustrating because, in the area of Chinese economy and Chinese politics, it is sometimes the case that if you make sensational claims, you know, you get more famous or something like that, right? So in terms of my own upbringing, I grew up in China and came to sort of intellectual development and in the in the in the 1970s China, right China was at the end of the Cultural Revolution, the educational system was quite problematic. But I actually enjoyed the freedom from the classical Chinese emphasis on memorization, on regurgitation of knowledge. There was very little of that in the 1970s. There was a lot of emphasis on politics and ideology of Mao Zedong, but there was very little emphasis on classical education, and the Chinese classical education is basically about memorization.
So I read widely, mostly outside of the, my formal education. I read Western books, read Chinese books. And, it was a, it was a sort of a liberal arts education in a very illiberal country and at a very illiberal time. so I always found, found it more interesting to think about. issues and come up with your own answers rather than accepting answers given to you by your parents and by your teachers.
I had, ideological debates with my parents and they were more, supportive of a communist ideology. And I had clashes with my teacher, so I always had a, at least by Chinese standard, a more, more or less, sort of an independent approach toward, toward the world. But the formal education was actually quite bad because China then didn't really have, you know, they didn't have the, exam system that China became very famous for, before the Cultural Revolution and since the Cultural Revolution.
But I have to say, I, I really appreciate growing up at a time when you could be liberated from a classical Chinese education. So am I correct in thinking you graduated from Harvard in the 80s? Is that correct as an undergraduate? So how did you get, it was rather rare at that time, right? For PRC students to come as undergrads to the U. S.
yeah, there were three people, I think. in my class, Harvard, Harvard is very, methodical, I would say they, they had graduate students from China at the time in the early 1980s, almost all of them studied sciences. The Harvard is known humanists. So they actually went to China to recruit students who would study social sciences and humanities. And, they set up a recruitment process on their own. It was really remarkable and, um, in the early 1980s.
And they did that for a number of years, specifically targeting undergraduate students and undergraduate students who have. Interest in social science and humanities because they received science students from China anyway, at the graduate level, they didn't really need to go out and cultivate the pipeline, but they felt that they needed to do that on the undergraduate level. And I was fortunate and lucky enough to be, to be admitted.
Yeah, that's an incredible story. And was your English already good at that time? Well, good was probably not the right description. I, one of the enjoyable things that I did outside of my formal education was learning English. We listened to VOA, The Voice of America, and I read, books in English as much as I could. So my English was, you know, probably compared with my contemporary. Classmates was, was good, but as soon as I arrived, I recognized my English was horrible.
the writing was really, really poor, the speaking was really, really, really poor, and I couldn't really understand what was going on. And, and also there was a big cultural gap between China and the United States. There's a cultural gap now. But at least the students who grew up in China now, they can watch TV, they can watch, go on to the internet. Even though they live in China, they know what United States is like. When I came to the U.
S., I had absolutely no idea what U. S. was like. I never saw a highway in my life. And the first plane, plane ride that I had, was the one that took me out of China.
That was, for the first time in my life, I, flew in an airplane, and that airplane flew out of China. I hardly had any knowledge of ice cream. and it was just the cultural shock and the gap were devastating.
And, quite a few of us felt really, really alone and out of touch with what was going on. It was pretty miserable, actually. At a personal level. At an intellectual level, it was, it was fantastic. I can't help but ask what you thought of ABCs. There must have been a bunch of American born Chinese in your class at Harvard.
What did you think of, Oh, well, okay, to be honest, I had no knowledge that there were Chinese... In America, I really didn't, and when I saw other Chinese, I was genuinely puzzled, and I said to myself, I thought they only admitted three students from China this year, how come I saw it? And then, when I found out that they, you know, they were born in America and they, many of them didn't really speak Chinese. And that really, introduced to me the heterogeneity of America, right? So you have Chinese Americans. You have African Americans, you have many, many different ethnic groups. I mean, you, you, you just, if you could put myself, put yourself in my situation, growing up in China in a 100 percent homogeneous society, right? And not having much contact with people from different racial and political, ideological backgrounds.
It was a shock to see this level of diversity and, and, you know, frankly speaking, we didn't know how to deal with it. and, and also there was a, you know, I no longer have that view. There was a long, tradition and implicit belief on the part of many Chinese that somehow the ability to speak Chinese and the appreciation for Chinese food. These are almost like a genetic, so you, you look like that, you should speak Chinese, you look like that, you should like Chinese food. And we know this is total, totally untrue.
It's just, it's nonsense. but then, you know, I had that belief, many, many people in China today still have that belief. and it is, it is, it is really a, Interesting experience of being thrown in the middle of this incredible diverse environment from the situation, from the environment that I grew up in. I think, you have the basis for a really interesting memoir. If, if someday after you're retired, you feel like writing your memoir of coming to America, I'm sure it would be fascinating.
Well, okay, so that, that, that's an interesting suggestion. And also another element to this is I came from a family that had, two generations of loyal communists, right? My grandfather was a, was one of the earliest members of the Communist Party in China and my father was a loyal communist and I totally betrayed them, right, in terms of my own ideology. And I have to say I betrayed them not as a result of coming to the U. S.
I disagree with, well, my, my grandfather passed away, but I disagree with my father even before I came to the United States. I just didn't believe in communism, and I didn't believe in one party system, and, and even back then. You know, my father and also my mother's family were all in the KMT, so they were fighting your ancestors. And, My father went to college in Kunming during the war, where, Oh, yeah, yeah, yeah, and then he, he came over for graduate school.
And when I was growing up, I used to say things to him, like, well, at least the communists are making China strong again, or something, and he would, he would just shake his head and tell me how terrible the communists were, and the Cultural Revolution was going on at the time, so he, he, he, he, he was on the complete opposite side of this. Issue from me. So I guess fathers and sons often disagree about things. yeah, that, so the, the politics run deep and wide in China.
On my mother's side, we had relatives. who came more from the KMT side of the political divide, although they were, left wing. They were left wing within the KMT.
On my father's side, it was, primarily from the left wing side of the communist movement. that was another reason why I have always been extremely interested in history, politics, values. And also how these things connect with economic development and successes and failures of the country. I mean, after the Cultural Revolution, the debate that people inside of China had And the debate that we had when we were students at Harvard was about why China failed the way it did, right? So that question has persisted to this day.
Right. So I haven't followed your work for some time. I'm really glad that you're allowing yourself now that you're, you know, obviously a senior figure in your own field, you're, you're allowing yourself to try to address some of these big questions like why China failed to industrialize what, what explains the deep patterns of Chinese history. maybe this is a good time to segue, to your book. so maybe you could just, give my audience just a short, pre see of, of, of what your new book is about.
Yeah, thank you, Steve. I think one of the pleasures of growing old is that you can go back to the things that you were interested in when you were younger. Yeah, right. So, and you know, when you are in graduate school, when you are a struggling assistant professor, you kind of need to tackle quite well defined questions and technical issues. so, so you're absolutely right. Now, I, I can sort of sit back and think about these big questions, that in a way that maybe, A young assistant professor cannot.
So in terms of the major theme of the book, so the title has East in it, but East doesn't stand for geography. It stands for exam, autocracy, stability, and technology. The main claim of my book is that, to understand the nature of Chinese political system, to understand the pattern of Chinese technological development, I would also argue economic development, we need to go back to the 6th century when China invented and then began to scale the civil service exam system, right? So that's why the Yi comes at the, at the, at the head of the framework. So essentially how the exam system, the way it was implemented, the way it was designed, the way it was operated, how that has shaped Chinese politics, Chinese economy, the values and the norms of the Chinese people, and how it explains The way China is today, right, and we can go into some of these things later on, but one of the striking characteristics of Chinese political system is how one, how autocratic it is, and secondly, how persistently autocratic it is, it's just, it doesn't go away. it has survived catastrophes, It has also survived, in a very curious sense, incredible economic successes, right? So there's a theory in political science and economics that says that autocracies tend to fail when their economy begins to develop. You know, look at South Korea, look at Taiwan, and others.
So, Huntington's theory about third wave of democratization, second wave of democratization, that has been true for many, many autocracies, but so far it has not been true for China, right? China has had just incredible economic performance, and many people 30 years ago predicted that China would become more democratic. That has not happened. In fact, exactly the opposite has happened, and it has become more autocratic.
Right, so there's something really, really interesting and special about how persistent that autocracy is. And I try to trace that back to sixth century and to look at the civil service exam system. So I, I think there are probably some people in my listening audience that aren't that familiar with how the system worked, say in the 6th century and afterwards. Could you, could you just give a, a very brief summary? Yes, sure.
So let me, first of all, let me just say that, in my own view, although, you know, maybe people in the audience, would know more in my own view that. It was Chinese who invented the exam system. So if you look at Roman Empire, for example, you climb up through military performance.
In the other parts of Europe, you climb up or you maintain your privileges. through a bloodline that you have, right, nobility, aristocracy, the royal, household, and things like that. And then later on, we have commerce, we have religion, but the Chinese invented the examination system that evaluated human capital on a very narrow set of metrics. So the ability to memorize classics, Confucian classics.
And there's a lot to memorize. One estimate is that Confucian classics comprise of something like between 300, 000 characters and 400, 000 characters. So essentially, it's a selection system, predicated on memorization, this kind of raw ability to memorize. And to memorize one particular ideology, one particular, set of values.
So, so that's kind of the broad feature of that system. And the other features of the system are just also incredibly impressive. It was very advanced, right? Again, we're talking about sixth century. by historical standard, it was anonymized, right? So, you know, you and I are academics, so we are familiar with double blind review.
Chinese invented the double blind review, and I wonder how many people know that. they, they scratched the names of the examinees so that examiners didn't know who the examinee was. They also anonymized the examiners, so the examinee didn't know who the examiner was. And there was a concern that the examiner might get information from the handwriting by the examinee. So each round of the exam, they hired, you know, 600 people to copy the exam papers to disguise the handwriting. So it's, it's essentially.
a, a, a peer, not a peer review, but there's a review process that depended crucially on anonymization. Historians sometimes say, oh, it didn't quite work. They cited examples when the examinees. Cheated, but let's put that view in some sort of perspective. You know, each round of the exam, you could have millions of people taking the exam.
You know, you may have one, two, or three infractions, but it doesn't mean that the system as a whole didn't work. We actually did statistical work to examine whether or not anonymization actually worked, and we drew the conclusion it actually worked in the way that it was designed to work. So you couldn't really tell whether or not the the examinees came from rich families, from poor families, and that was quite impressive, right? Thinking, going back to 6th century, 7th century, and 8th century. The third characteristic of the exam system was the broad Socio economic base of the pipeline, so it reached way beyond the elites, right? So there were studies that showed that the people who succeeded at the exam, many of them came from families that didn't have, didn't have relatives or fathers and uncles who succeeded at the prior rounds of the civil service.
Exam, right? And that's incredibly impressive result. If you think about the U. S. education system today, many people who, who end up at colleges came from families who with parents who graduated from college, right? So essentially, they are, they, they, they, they, they sort of get the benefit of the human capital built up by their parents. In the Chinese history, after they implemented the civil service exam, more than half of the people who succeeded at the exam came from families that had no prior history of exam success.
So I would say that the fourth characteristic, it was, maybe not explicitly designed that way, but it had that effect. The effect was that it was extremely good at both selecting people as well as good It excluded the people who had independent sources of wealth, who had independent bases of power. So these, essentially the exam system served as a way to consolidate the power of the emperors. so we, I use that to explain why the Chinese autocracy was so strong because the emperors didn't really have any other competition. And it wiped out the aristocracy.
So if you look at how democracy emerged in Europe, it emerged out of power struggles between the royal households. And the aristocracy, that's basically how democracy happened. They struck a grand bargain, right? So the royal, households, the sovereigns will gave the aristocracy, gave the bourgeoisie certain set of rights. In return, the bourgeoisie and aristocracy will surrender, obligations to the, to the state. And that's basically check and balance, rule of law, rights.
Things like that, that's how that came about. Whereas in China, you didn't have any of these other forces of competition and contention. Emperors are the only actors left in the country. They didn't have to share the power.
They didn't have to compete with anybody else. The last long lasting effect of the civil service exam system is the value and the norm that it incubated. It was a pro autocracy value. It was a set of values that, that was terribly bad at questioning the authority, right? conformity, emphasizing collective, interest. At the expense of individual interest, right? so just, just sort of imagine that these characteristics being implemented for 1, 500 years on a consistent, systematic basis. So, let me, let me also say that the civil service exam system was only open to the male gender.
It was never open to the female gender. But, because you have to prepare very early, and there, there's research that suggests that sometimes the preparation began at the age of three or four, so the female members of the family also acquired literacy in order to educate their young boys, right? So the penetration was, of the society, was Incredible by historical standard. It reached every corner of the Chinese society, not just the male part of the population, but incidentally also the female part of the population. I have to say I can't, cannot think of another institution that had this level of penetration into the society, this level of persistence over this long period of the time, and this level of ideological and political consistency, right? I, I, at least I cannot think of any other institution That rivals the power of, of this institution. Can I ask a few questions about the nature of the exam? you were emphasizing how much it emphasizes memorization.
are the questions just asking you to, you know, regurgitate the, you know, some aspect of the Confucian texts? Or is it asking you to write something more complicated or imaginative, like an essay based on some content in the Yeah, yeah, so the exam had three levels, three tiers. At the first tier, and to some extent also at the second tier, it's, it's, it's pure regurgitation. it began with, essentially providing answers to the missing text. Right, so you have to sort of fill in the missing words. And then, you also have to provide narration and interpretation of the Confucian classics according to a specified, curriculum.
Right, so you can't sort of write your own interpretation. You have to write the interpretation according to the specified. curriculum.
At the last stage of the exam, you were asked to write policy essays. And there you have more freedom, to put forward your, your points of views, to comment on the issues that you wanted to comment on. But here's the key thing, right? Because essentially, at the last stage, you are a survival, a survivor of the first two stages. And actually, even before the first stage, you had preparation exams that you took at the local level, and you have to survive that.
Essentially, there were three hurdles you have to, you have to overcome. So by the time that you are at the final stage, Your values and mindset are already substantially shaped by the Confucian ideology and Confucian curriculum. So essentially, even though you have the technical freedom to, we can come back to that, but I don't think you actually have the full technical freedom. But theoretically speaking, you do have some technical freedom to write, policy essays.
but you, you, you write it as a confusionist. Right, because you obviously use you survive the prior rounds of the exam. But the other thing is that the final stage of the exam was presided over by the emperor. Right? So he was your examiner. you better think twice before writing something that will offend his, his values and his, his, his ideas.
So even that technical freedom was not there, And, and the subset who were able to sit the third stage is tiny compared to the, really. Oh, timing. Yeah.
So, so in the Ming Dynasty, and we have better data on Ming Dynasty than other dynasties, so each round of the exam, by the last stage, you have. Something between 300 and 400, when millions of people started at the preparation level. 4 million people, 5 million people, and in the end, 400 people survived into the last round.
so, my understanding is in the Republican era and also with the communists, there was a very strong anti Confucian, sense that, you know, if China were to modernize and become a strong nation, they had to give up or overthrow these kinds of Confucian ideas. But then somehow now we've arrived at a very test centric Gaokao system in China. So maybe you can flesh out how, how did that all work? It seems like they're back to using exams, although not as, maybe not as based on rote memorization, but, it still seems to be a very exam focused culture. Yeah, so, so, the, the Chinese name for that system is Keju, right? Keju was abolished in 1905 by the Qing dynasty. Itself, because over the end of the Qing Dynasty, there was debate and, and, and reflection on why China fell behind the West, right? so the Opium War. the imperialist invasions of China really woke up the Chinese intellectuals, and also they began to study the West, study technologies, study science, study economics.
And they blamed one factor more than others. That was the exam system, the curfew system. some of these intellectuals were still pro, the imperial system. They didn't want to give up. imperial autocracy, but then they assign the blame to the, to the, to the exam.
You know, we can question whether or not that was the right diagnosis. You're absolutely right that the KMT and the communists, to repurpose the exam system. they obviously moved away from the Confucian classics. They substituted the curriculum with math, physics, chemistry, Chinese language, history, and crucially during the communist period, Chinese communist ideology. So that part of the Keju system survived using the exam system.
Not just to select people, but to make sure to inculcate, inculcate values that were friendly to the regime, right? So, you know, if you want to get into Peking University, if you want to get into Tsinghua University, you obviously have to do well on the math, but you better do well on the ideological component of the high education exam as well. So, Essentially, autocrats find it very useful to use this format to cultivate the values that they, that, that they find useful for their purposes. Thank you. For purposes, right? And this is why during the Yuan Dynasty, Yuan Dynasty was, by the Mongols, you know, there was nothing like Keju in the culture of the Mongol civilization.
And then they began to use the, the Keju system. During the Qing Dynasty, there was nothing, like that in the Manchurian tradition. But then they used and repurposed the curfew system. I think autocrats find it extremely useful to cultivate autocratic values, to cultivate support among the population, and to select the right human capital.
So I think that's why KMT and communists began to really feel that this is an instrument they should not give up. It is very useful to them. Can you differentiate at all between the two separate, goals? One is to select strong human capital, people who would be. Very competent, intelligent bureaucrats versus indoctrination in a kind of political or ideological thought.
Is there any sort of reflection on which of those 2 goals is more important or, you know, was the priority at the time? well, so those two goals were, happily for the autocrats, almost completely overlapping with each other, right? So the way that they designed the system to do these things is that they chose an ideology that was very difficult to memorize. Confucianism is a wordy ideology. It has, you know, 300, 000, 400, 000 characters. In my book, I also examined the number of paragraphs in the Confucianist classics compared with classics of other ideologies and Confucianist classics had far more paragraphs as compared with legalism, Daoism. So it's a difficult ideology to master, right, or to memorize.
I, I don't, the idea is not that complicated, right? Confucianism as an idea is actually quite simple idea. It's not that complicated. But to master the nuances, to master the every tenant in the ideology, that is actually very difficult, right? So that's the human capital selection effect. Essentially, those people who excelled at the Kudzu system are, are for sure very good at memorization. And, you know, there's a crude correlation between memorization and maybe cognitive capabilities.
You know, the correlation may not be perfect. But there is some correlation. And then, in terms of ideology, what you do is you design the curriculum in such a way that it only teaches pro orthocratic values, right? And that's also Confucianism, right, Confucianism, especially Neo Confucianism, which was adopted, during the Yuan Dynasty, but also scaled to a much bigger degree by the Ming dynasty, that was a very, very pro autocratic ideology.
So, so those two things reinforce each other, right? You have a difficult ideology, you have a pro autocratic ideology in one set of values, in one set of ideas, right? And, and they coincide with each other, right? So it's a perfect software to run the system. If you need two softwares, that may be problematic, but here you just need one and they happily reinforce each other. In your book, I think you alternate chapters. One chapter is more historical in nature, focus, and then the other is more kind of the modern day and looking forward. Do you, is the E the same E? So the, the Gaokao or whatever exam system is in place today, do you, do you view it as more or less functionally having the same impact as the exams in the past? Yeah.
So, well it goes beyond the kudzu, right? And it has that element of value cultivation, pro autograduate value cultivation, for sure, the Gaokao, the college entrance exam. But that's only one part of the parallel with the Curzio system. If you think about the Curzio system, it is a metric driven system. Right. So I would also argue that Chinese invented KPI, right, Key Performance Indicator, and using a consistent set of performance indicators to promote, to recruit human capital. And in the modern days, during, I will argue during the reform era, since 1978, The equivalent to that is the GDP metric.
It is a systematic metric. There are falsifications, and there are, there are gimmicks, and here and there. But by and large, it is a very systematic set of metrics by which local officials are evaluated by the central government.
And this is kind of the, the essence of meritocracy. So, it is, in that sense, I see a parallel between the Kudu system, a metric based, systematic, systematic, set of indicators, and the GDP driven system, which is also metric driven, which is also systematic. Right. Subject to falsification and other things. Right. so it is much more, it's larger than just the call call system.
That's the point I'm trying to convey. Yes, I understand. So would you say, I mean, it's tough for someone who's not really familiar with the system to know whether this is true. Would you say that in the promotion of a bureaucrat, say, a mayor or deputy mayor of a tier two city? The system really is judging that individual based on some indicators like the local GDP. Yeah, so it's actually functioning in that way. Yeah.
So, so there's quite a bit of research on that question, precisely as social science research on that question, essentially looking at the patterns of promotion of local officials. And try to see which predictor, which indicators will predict their mobility path. And I would, and I would say that the, the, the research findings are mixed.
Some papers show that there is a correlation between GDP performance and the upward mobility. other papers, would, control for more things and then that effect would disappear. Right? So I'm not going to say that the research, social science research conclusively and uniformly shows that there's a connection. But that's actually not that important.
What's important is what the local officials in China believe or not, whether GDP performance is driving their promotion. That's actually a more important, important fact than whether or not GDP actually drives their, their mobility, their promotion. Because that's a revealed fact, right? Rather than, that's a fact that happened after the performance, rather than a, something that motivates you to perform. If you talk to the Chinese local officials. they overwhelmingly believed that GDP performance was the factor that would affect their performance, their, their promotion.
So that's the subjective belief that's important, because that's really about motivation and incentive. So in that system, you had the incentive to perform, and you believe that the system was our objective, because it was based on GDP rather than something else, right? And that's quite similar to the country system. When, as a young boy from a poor family, You know, just think back to 6th century, 7th century, when you take out a male member of the family out of the labor force, right, because the exam required a lot of preparation. was very costly to that household, right? Because you essentially cannot use that the person for economic purposes. So they have to believe that the system was legitimate and objective for them to be willing to invest the energy and the time, and also financial resources in preparation. So it is that legitimacy factor that is also a.
a point of similarity between the curfew system and the meritocratic system run by the Chinese Communist Party. And I want, just on that, I want to make sure that I say this. When I say that the GDP was used as a systematic metric, I was mainly talking about the period from 1978 to 2018. And I think under Xi Jinping, that system has been degraded. so I'm not talking about the sort of the last five years of the Xi Jinping era. I'm talking about mostly the period before that.
And that was the period when Chinese economy was taking off. Right, so what one, maybe a way to summarize that is the E in East means persistence of a kind of transparent meritocratic system, which even if it in actual terms isn't working that well, people believe it's working. I think it is a subjective belief that is crucial, rather than the objective fact that everything was based on merit.
Because you have to have that belief to elicit investments of energy, investments of your, intelligence, investments of your efforts, investments of your resources toward this particular activity. Yes, so I think one of the things you write about is the impact of the exam system on innovation and Maybe you could talk about that a little bit. Yeah.
So, so I see if you and I talked about this briefly, Thank you. There's a famous, debate among historians of science, why Chinese technology collapsed, right? That was the famous question posed by Joseph Needham, and Needham was, was, was the British historian by biochemistry, by training, by historian, by, by, By his, achievement who compiled 27 volumes of Chinese signs and, and technology. And it was incredibly interesting observation by him and others that China probably led the world during much of the human history. And then it simply disappeared as a technological and scientific power. So there have been many, many debates about.
What is known as a Needham question. So about six, seven years ago, we set out to construct a database so we can use data to exam Needham question rather than kind of debating the question at a sort of philosophical level. And the results of that are. Really, I mean, at least to me, are really striking, which is that when China began to introduce the Keju system, technology, the way we measure technology, began to decline. The correlation by historical scale, on historical scale, So close with each other. Right.
And it is difficult, and it is also difficult to think of another factor that coincided with the decline of Chinese technology that could lead to such a big effect. and, and lots of other factors or, or or cyclical rather than permanent. So, so you have to have a factor that is.
Long lasting, that is strong, that is permanent, and could your system satisfied these criteria, right, and the correlation is quite close. You know, obviously this is not a statistical causal analysis because we just don't have the kind of bandwidth to do that, but the correlation is so close. And, and then also another striking finding is that. The Chinese technological decline happened about a thousand years before the timeline that many historians have, have, have, have taken for granted, have accepted.
Right? So, just, just as a piece of historical research. Establishing that fact alone, I believe, is significant, and to trace it to the curfew system, in such a sharp way, I also believe is significant. So just to explore that a little bit. So there's one empirical claim that by looking at I think what you used was the list of inventions that are found in Needham's work that there was a deceleration, a decrease in innovativeness starting already in the 6th or 7th century A. D.
which is about 1000 years earlier than I guess the consensus opinion is. China that that didn't happen until roughly the 16th or 17th century. Is that Yeah. Yes. So so there's an empirical claim here, which I agree with you is incredibly important, right? Because if it's if it's true, you're you're revolutionizing some kind of important description of Chinese history over a thousand years and then secondly, there's the hypothesis that this is actually linked to the rise of the Kudzu system I, I think, so, so let me add another historical piece to it. There's a common claim among historians that The Tang Dynasty and the Song Dynasty represented the peak of Chinese technological achievements.
Definitely in our data set, Tang and Song are impressive, but they're not nearly as impressive as the period before the 6th century. so roughly in our measure, roughly speaking, the index declined by about one fourth to one third of the of the value. Right? So they, they are not the peak. They are the, you know.
Maybe the second peak, but they're definitely not a peak. They're probably the third, actually their third peak. So, so that's another kind of just pure factual, hopefully, contribution to historical studies. And, and when I say could you, here, I just don't mean the exam system narrowly defined. It's really the exam system broadly defined. It has to do with the nature of the political system, the level of competition, political competition, economic competition.
The result of the curfew system is that it eliminated all these other things, right? So, if you kind of think about this, Curfew may be the ultimate variable, but there are a whole set of intermediate variables that immediately explain the decline of technology. But you want to trace these intermediate factors to their ultimate cause, and one of which, and I believe is probably the most important one, is the curfew system, right? So, so this is the way that I think I reason about the effect of the curfew. So, the curfew has a narrow effect, which is eliminating creativity, cognitive diversity. It definitely has that, and modern research shows that inventiveness critically depends on exposure to different ideas. To diversity, right, to contentions and, The economist at Northwestern University uses the term contestability, right? How Contestability contributed to industrial Revolution.
So there's a long established view among social SC scientists that inventiveness is a function of diversity, it's a function. creativity is a function of. Being exposed to different ideas, Ke Jue eliminated that. But at a larger level, Ke Jue also eliminated political and economic competition. And those, factors have an independent and separate depressing effect on inventiveness. so we need to kind of decompose the question into separate and more discrete elements of the analysis.
So, first a question, the, the big, the big famous inventions like gunpowder, compass, paper. Those were all in place by the time the decline started, or did some of those happen after the decline? Yeah, that's an excellent question. So one reason why Song Dynasty is viewed as a, as a, as a peak of Chinese civilization and technology is because Song Dynasty was responsible for three out of the four great Chinese inventions, gunpowder, printing, and compass.
Those three inventions happened after the Kodji system. So, so let me be very, very transparent and clear about that. So, you do have breakthrough inventions after the Kodji system was introduced. And, and, and during the time when Kodji system was in full.
Operation. But the measure we look at, so let me say two things. One is the aggregate measure, and the other is the weighted measure. The aggregate measure is very clear, right? If you don't distinguish inventions that are breakthroughs and from the inventions that are just kind of ordinary inventions, then there's no question that Song dynasty is not as inventive as the period before the 6th century. But the additional thing we did, and by the way, we are writing a book on the Needham question, and I didn't go into that in my, current book, but we are going. into this question now.
So we also have a weighted measure. So we say, okay, probably this measure, unweighted measure is unfair to Song, because Song invented, you know, these important technologies, right? Compass, printing, and gunpowder. So, so essentially, if you treat those as the same as other inventions.
You are kind of underestimating the song Dynasty. Okay. So we compiled, research from historians and we come up with a list of, something like 100, about 100 most important inventions in Chinese history.
And then we weigh them by 50 factor or 50 a factor of 100, and then see if the pattern. That is established by looking at the unweighted measure remains the same, and the measure looks exactly the same. You still have a decline of technology beginning in the 6th century, whether or not you use the weighted measure or you use the unweighted measure. So the importance of technologies didn't change the overall pattern because we, the weighted measure essentially takes into account. The importance of the technologies. The third thing I want to say about, about this question is that, in many ways, the unweighted measure is actually the right measure.
Remember the question we're trying to explain. The question we're trying to explain is why industrial revolution didn't happen in China. Industrial revolution is about economic deployment of technologies. When China didn't have industrial revolution, it means it didn't have economic deployment of technologies.
Usually, the way that we measure technology is not to say, Oh, computer is somewhat intrinsically more important than a car, right? I mean, that, that, that's just not, not the way we, we, we think about technologies. It's really, we're looking, we're looking at the economic contributions of computer vis a vis economic contributions of Of cars. So by that definition, every single technology that Chinese invented has zero economic value because they were not deployed.
Obviously, I'm making an extreme statement, right? So that, that, that, that it's not quite true that that Chinese technology was not deployed in the economy, but clearly it was not deployed In the economy to a level sufficient to launch industrial revolution, right? So, in that sense, the unweighted measure is actually not a bad measure. just one quick clarification. did you say paper was invented in song? I thought paper was No, no, no, no. Printing, Printing, sorry. I print, yeah. Paper was invented in the Han Dynasty.
People like Francis Bacon and other European intellectuals, they lumped paper and printing together. They didn't separate the two, yeah. Well, you couldn't have had Quechua without paper, probably, right? That, that might have stopped other cultures from having a bureaucracy because they had, they didn't have good ways of recording information. Yeah, that's a good point.
Yes. you know, I, I think, I just want to make the point that although I think what you guys are showing empirically is that the rate of innovation slowed down, it was still true that there were very non trivial inventions, right? the, the, the ships that Zheng He used or the amount of steel produced in China, that they were in great excess relative to other places, right? At the same time, still a very advanced civilization, but, somehow the rate of innovation was going down. I think that you're absolutely right, that the rate of innovation went down, even though there were significant inventions, the shipbuilding and navigation, but think about the difference between Soviet Union and the United States, right? So Soviet Union had significant inventions. the weapons, the laser, and there's a book about that, about Russian, inventions. what Soviet Union didn't have was this broad based innovations, broad based, mass driven, you know, spontaneous inventions.
The way that the United States has had, right? Private sector driven and, you know, inventions that came from all corners, right? Some came from government labs. Some came from private companies. Some came from the garages of, of a few individuals. Right? So, so I, I do want to make a distinction between these two types of Process processes that produce, inventions and, and, and technologies, and I want to argue a country that has this kind of a mass based, spontaneous, innovations is probably a more productive country as compared with the country that only has a few innovations and many of these few innovations.
came from the government only, right? So this is not trash in government. You know, there's not a hint of that. But if all you have is coming from the government, rather than from any other sectors of the society, I don't think that's a very innovative society. Shipbuilding during the Ming Dynasty, that was completely funded by the government. The production of the ships... of, of the navigation, technology that was all run by the Unix.
And Unix run these, production enterprises on behalf of the government. Right. So, I, I guess the, the point is somehow, could you somehow suppress the actions of individual market oriented invention? Is, is, is that the claim? Okay, so I, that, that's something for us to think about. I, I don't know if our data are nuanced enough for us to look into that question. I think what the, I, I, I think there are several effects of Kudzu.
One is that it reduced the overall rate of. Inventions, right? So that's very clear in our pattern. and, because because your system was also detrimental to market economy, so essentially it took away some of the inventive activities in the market economy in the private sector. And the country system strengthened the government, right? The monopoly, the political monopoly, the economic monopoly of the government. So to the extent you have any innovation at all, it would come from the government because the government was the only, only entity, powerful entity that was left, right? So I could make that case. Whether or not I can support that with our data, I'm not quite sure, but I can make that case.
Got it. So, if, if I were to contrast with the current situation, so, I think in, in, in the, the current book you're saying, East, while it maybe had some positive benefits, it could in the future also lead to the decline of China. in the current system, the, the descendant of could you is pretty science and technology stem oriented. The students are forced to learn lots of actually kind of useful stuff. And then still, even under Xi Jinping, there's still a pretty dynamic market economy. So lots of entrepreneurs and technologists trying to.
Build useful stuff, and funding coming both from private and public sources. It seems quite different from the regime that You're describing between, say, 600 A. D. and 1600 A.
D. So, so, in my book, and in the title of the book, I have never used the word collapse to describe the current situation. There was a collapse in the historical situation.
In the Ming Dynasty and Qing Dynasty, basically technology collapsed. Because our index... Was trending towards zero, basically. so there was a collapse. But to describe the current situation, I never use the word collapse. I do use the word decline, at least speculatively speaking, right? And I think what's impressive about China 45 years was the broad based Successes that they have achieved, right, in e commerce, in hard tech, in data, and also in scientific publications, right, across the board.
I think I'm willing to predict, as the collaborations, and in my book, I have a chapter on the current period, is essentially the way that I view... collaborations with the West as a form of, diversity, as a, as a source of diversity, as a source of academic freedom. You know, you may not be able to, to, to have the academic freedom at Tsinghua University, but when you come to Stanford and, and, and MIT, You essentially have that, right? So that's the way that I argue why China could innovate, even though it is under a strong autocracy, because parts of the system are being outsourced to the system outside of the autocratic control. My argument is that as we see that space of collaborations, Going down, declining, the rate of innovations is going to go down. And, you know, again, going back to Soviet Union, Soviet Union had science. Soviet Union had some impressive pieces of technology, right? But it's just that range was narrow.
Much of it came from the government sector rather than independently from, from private sector, right? And the economic benefits... Or quite modest. And, and, and the other prediction I'm willing to make is that when the collaboration space is shrinking with foreign countries, with Western countries, when you don't have, you know, foreign direct investments going to China, foreign capital, going to China, academic change programs, close collaborations between Chinese companies and foreign companies. When you don't have those. You may still be able to innovate, but at a much higher cost than, than, than the case before, right? Collaboration, let's remember, collaboration is a way to economize on the resources.
I mean, this is going back to Adam Smith. you, you don't really need to have all the elements of the innovation ecosystem. You only need to have a portion of it, and then you collaborate with a party that has the other components, right? I mean, that's a way to economize on the resources that you have and reduce the cost of innovation. I think China can still innovate.
But at much higher cost than before and then the range of innovations is going to become narrower. Yeah, I see. Well, I certainly agree with what you're saying.
I mean, the ability to collaborate with, Western universities and Western companies is, is still a huge benefit to Chinese, science and technology. And, The necessity to compete against foreign companies, in both domestic and international markets also is obviously a huge benefit. so, so to the extent that there is decoupling and things like that, it's definitely going to hurt, the rate of innovation in China and also in the West. Yeah, also in the West, too.
Yes, but I think in comparing to the Soviet experience, I think the main difference is having a, you know, to the extent that even under Xi, there is a. At least quasi well functioning market system, it is still quite different, right? There's still an outlet for entrepreneurial energy and ideas, you know, scaling up ideas because you have access to capital and investment, et cetera. so, so I, I, I, yeah, so that's a very important observation and let me make it very clear. when I say, when I, when I mention Soviet Union, I don't mean to say at all China today is like Soviet Union. All I'm saying is that relative to what China was before, it is now moving in the direction of the Soviet Union, right? It hasn't gotten there, right? But it is moving in that direction.
And often in economics, it is not so much the level that matters, it is the direction of your movement that matters. And if you're moving towards Soviet Union rather than toward, a more open system, It's going to affect the rate of the innovations because you are going to be more like Soviet Union than like a open system, right? And, and therefore the rate is going to decline, even though. It may not be the case that the innovations are, are, are all, have all disappeared.
I mean, even Soviet Union had innovations, right? So even if you are at the Soviet level, you, you, you still could have, innovations. But my point is that, you know, China has so much going for it, right? If it moved in the other direction, right? Toward more open system, toward more collaborations with the West. rather than moving to a more closed system. I mean, the debate in China now is whether or not the Chinese movement is, is designed by the Chinese or designed by America. Right? So that's a separate debate because, some people feel that even if China wanted to move, closer to the west, the west would not take China back.
but, but that's a, that's more of a debate about. policy makers, rather than about the environment for innovations. Yeah, I, I, I like the balance that you just, inserted into the discussion there because. For sure, I, I agree with you the, to the extent that Xi is making the system more autocratic and, de emphasizing market forces, obviously it's not good for the development of China. But on the other hand, it, it does seem to me that once China reached a certain level where it became, in a sense, threatening to Western planners, a lot of what happened was really instigated by the United States, not necessarily, by Xi.
So, like, I don't think she caused them to attack Huawei. I mean, the US really tried to destroy Huawei and, really for crazy reasons. I mean, the, the idea that Huawei 5G is unsafe or, or a security threat is, is really, it's really kind of a Western invention. And in fact, if you study the matter carefully, The British actually did a very careful security review of Huawei 5G and approved it for, you know, at least the edge part of the network in the UK, but then they were forced by the Americans to reverse that position and, and ban Huawei from, UK, telco infrastructure. So a lot of that, I think, can't really be blamed on Xi Jinping.
It's really the West, reacting in a kind of alarmed way. To a more powerful China, just as they reacted to Japan in the 1980s. I, you know, I, I, I have to say I disagree.
I mean, I, I, I think the, the, the, the Japan situation, is purely about economics. Right? So the Japanese model, of development, kind of the, the closed economy. A lot of it is about trade and things like that. There was never, anything about the strategic implications of a rising Japan challenging the United States at a strategic level, right? So Japan was a very important component of East Asian defense against the Soviet Union in the US, kind of policy framework. I, I, you know, I, I, I'm not going to say that the West is, is, didn't contribute to, to this. United States didn't contribute to this.
But I think what has happened fundamentally is with Xi Jinping in power, there's a loss of trust of the country, right? The pandemic and the way that pandemic was handled. and many of the foreign policy measures, the aggressive foreign policy measures, that China implemented, a lot of it aimed at its biggest markets and biggest technology suppliers. I think relative to the expectation that China was going to change politically, right, so maybe we can have a debate whether or not that expectation was realistic or not, but that anchored the diagnosis of what happened in China since 2012, and, you know, China clearly moving in a very different direction beginning in 2012. Thank you.
whether or not that was all there was responsible for the deterioration of the relationship between the West and China, we, we, we can, we can debate, but, but objectively speaking, China did move in a different direction. And that direction was not the one that, that, that, that, that was viewed as, as friendly and that was viewed with a lot of suspicion by the West. Yeah, I, I agree with your distinction between the, the Japan in the 80s situation and China, because obviously Japan was never a geopolitical threat to the United States. It was purely economic and obviously in some people would argue Japan is still a kind of occupied country with U. S.
bases. Yeah, so it's quite a different situation. And I, I take your point that if, if, if there had not been a Xi figure that rose to power. And China just continued to liberalize, still, you know, had very strong economic growth and was challenging the United States in a lot of technological areas. The reaction might have been much more muted.
No, I, I agree with you there. I think if China continued to grow and, but with a different leader, it was going to be a relationship that was, uncomfortable, right? Rather than antagonistic. And in that sense, I would compare that relationship to the relationship with Japan in the 1980s. if, if you have a different leader in China, it is still going to be an autocratic government, autocratic leadership, right? So that, I don't think that's going to change. you know, it is a leader who is, Western oriented, who values economic development, who values the collaborations with Western technological. Companies, you know, he probably doesn't think very much about Western political system, right? But at least he values the Western economic system.
I think that would be a difficult relationship. But I think. It will be fundamentally different from the antagonistic relationship that we are having now.
we're definitely headed toward a bad equilibrium. I will say, yes, Do you have any, predictions for how the U. S.
China relationship is going to evolve, say, in the next five or ten years? yeah, well, my hope, and by the way, I'm spending my sabbatical year in Washington, D. C., and I want to work on some policy issues and want to learn about policy issues. My hope is that the two sides are able to identify the flaw.
Beyond which they both agree that they don't want to crash, right? And I think we, I'm cautiously optimistic. I think the Biden administration has come to that recognition. I wish that they had done it earlier, to be honest. I wish they had done it from the very beginning of the administration, rather than doing it now, right? If you look at number of, American officials visiting China in the, in, in this year, it, it, you know, we, we have quite a few, now they recognize that you can't decouple from China, it, it, it, both mechanically and, and also probably it's not a good idea. and if you allow the relationship to fall further, you may end up with a real war with China, right? Do you really want to do that? and I, and I think the administration has come to that recognition that if they don't handle the relationship well, you could end up With the accidental shooting war with China, right? So, I think I'm heartened by the recent developments, that, that, that, that there are more officials going to China, they're establishing working groups.
If they can identify a floor they don't want to go beyond. I think that's, to me, in my, in my, in my, in my mind, that's progress. Right, and we can, we can hope, I, that's the realistic hope that I can have rather than going back to the projective and beneficial relationship that the two countries had before. Yeah, I agree with you. It's absolutely necessary that they have some floor, because otherwise, obviously, the relationship could, degenerate, in a very dangerous direction. but I, I, I feel like, there are very few voices that I think, you know, within the administration, I agree with you there.
They're really trying to, you know, reestablish some lines of communication with China. That's what all these trips are about, I think, although the trips probably individually are not very successful, but these are professionals in the administration, whereas I think the actual politicians, it seems like everybody's very uniformly negative about China. So I don't hear any voices of actual political figures saying, oh, we s
2023-10-15 02:49
