Lessons from Joan Robinson on China

Pervez Tahir’s latest book ‘Making Sense of Joan Robinson on China’ is not an airport read, nor it is an elementary textbook on China. But it is an important reference read for those who wish to take a look at how one of the leading Anglo-Saxon economists saw China as an outsider during the days when China hadn’t yet arrived at the centre stage of modern world economy.

Joan Robinson herself was quite a star. Students of economics can perhaps best recall her through her original work on the theory of monopsony. But as the name suggests, in this book, Pervez, who is a former Planning Commission chief economist, mostly focuses on Joan’s work on China, where of the many useful insights, two stand out in particular.

First, Pervez’s review of Joan’s work informs us how Chinese economic thought evolved over the course of years, and how there was a constant tinkering and feedback loop. “She always believed that underneath the Chinese ideological verbiage existed an unfailing sense of economics as the art of the possible. Variously she described it as trial and error, scientific method and social experimentation. She was impressed by what she described as the Chinese way of pushing policies and programmes to the limit and then withdrawing while learning from the mistakes made during practice,” notes Pervez.

For those thinking about reforms in Pakistan, ‘trial and error’ is an important lesson. Indeed, there is abundant evidence that even private sector businesses, let alone governments, don’t have a perfect single-dose solution to every problem or opportunity. This implies that Pakistan’s state ought to develop an in-house capacity to be able to constantly tinker with the policies, instead of opting for one-time implementation of policies, often developed by consultants and donors.

But since Pakistan’s political setup is more democratic than China, the ‘trial and error’ mindset also demands more public awareness campaigns, more inclusiveness and far more transparency to be able to gain confidence of the public, and to cushion against failures on the way. (See also BR Research’s Reform needs strat.comm. managers Jul 9, 2019, & PTI must communicate better, Oct 17, 2018).

The second most important insight is how the Chinese started taking the population problem rather seriously as early as mid-50s, even as actual family planning programme did not begin much later. Pervez notes that “population growth, though restrained over the seventies, had held back economic growth, especially in the rural sector.”

Writing in 1980, Joan wrote that “one important change is that the new leadership has woken up to the fact that the population of China is already much higher than is convenient from a strategic, economic and political point of view and is still growing. Strategically, it is a weakness to have to import food. The more investment has to go into creating cultivable land, in the heroic manner of Dazhai or in large-scale river control schemes, the less is available for raising standards of consumption and reducing toil. ‘Modernisation’ more readily raises output per man, saving labour, than output per hectare, saving land. Politically, a conflict of interest between city and countryside is more immediate than class war in the usual sense.”

She had earlier criticised that “the Maoists were never serious about population control…by discouraging outmigration, they made the demographic distribution worse. In addition, food security worked as an incentive for higher dependency ratios.”

That last observation also warrants research in the Pakistan context. Pakistan’s obsession with food security has led to policies (such as support price and strategic reserves) that may be justified in the short term, but in the long term it has disincentivised efficiency and efficient allocation of resources, and also perhaps created incentives for higher population dependency ratio.

But Pervez’s review of Joan’s work isn’t only about China. The book also forces one to think about academia and the pursuit of knowledge.

Pervez notes that Joan did not write anything on China in the scholarly economic journals, except for book reviews, but she was still considered one of the leading voices on China. And although she had no special knowledge of Chinese history, nor was statistics and other weapons of math destruction her forte, she brought her intellectual curiosity and a ‘readiness to reconsider’ (and in fact evolve) her views to the table. Joan, whose peers saw her as a Nobel worthy economist, also used to emphasise on the importance to teach “analysis, not doctrine”. “Just as important to warn our pupils against new bad mental habits as against the old ones,” quotes Pervez.

And therein lies a lesson for the Higher Education Commission, and Pakistani academia at large who barely observe and write about ‘bazaars’ across the street they work, and other socio-economic realities, and rely on readymade datasets to write hundreds of regression-based journal articles in a year instead.

Lastly, as an unintended consequence, this book brings to light an important gap in Pakistan’s economics bibliography: the gap being an understanding of the history and evolution of economic thought of leading Pakistani economists, whether they worked in public sector, donor agencies, academia or the private sector, and both in terms of their original contribution to economic thought, and how their thoughts and action shaped Pakistan’s economy. Perhaps that should be Pervez’s next item on the agenda.