A Chinese Gentleman and the Conscience of a Generation

Nothing is so contagious as example; and we never do any great good or evil which does not produce its like. - Francois de la Rochefoucauld (1613-1680)

Heroes for liberty are not peculiar to any region of the world or to a particular time period or to one sex. They hail from all nationalities, races, faiths, and creeds. They inspire others to a noble and universal cause—that all people should be free to live their lives in peace so long as they do no harm to the equal rights of others. They are passionate not solely for their own liberty, but for that of others as well.

In my last book, Real Heroes: Inspiring True Stories of Courage, Character and Conviction, I wrote about 40 individuals whose views, decisions, and actions served this cause in various ways. That book planted the seed for this new weekly series to be published each Thursday at FEE.org: Heroes of Liberty from Around the Globe. But this time, others from around the world will do the writing, and I’ll be content to do the editing. It is my hope that when all is said and done some months from now, the literature of liberty will be greatly complemented by this collection of short biographies. The authors will be writing about heroes for liberty who are (or were) citizens of each author’s own country.

The subject of this first essay is Mao Yushi from China, whom I had the honor of meeting and interviewing in Beijing in 2004. I fully agree with the author, Ma Junjie, that in Yushi, we have a superb first subject for this series!

       - Lawrence W. Reed, President, Foundation for Economic Education

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Mao Yushi (茅于轼) has been through a lot in nearly nine decades (he turns 89 on January 14, 2018). He is celebrated as a great mentor, a role model, a stand-up scholar, and a gentleman by many leading Chinese economists, most of whom belong to a younger generation. He has also been dismissed as a filthy traitor, a politically naive pseudo-expert, and a malevolent character by many common people, most of whom do not appreciate the basics of economics.

The Economist called him a “wise man;” The Prospect praised him as a “global thinker;” the Cato Institute awarded him for advancing liberty. He never takes a good reputation for granted, nor does he ever defend himself or argue with those who disagree. He is a man of controversies, a teacher, and a gentleman. But most importantly, he is a hero.

According to the ancient Greeks, a good tragedy requires a common man to fight for a doomed cause, a good cause, even though he knows he is predestined to fail. That’s what makes a classical tragic hero. Mao Yushi is such a hero. He has dedicated his whole life to teaching people of the importance and value of being economically productive, but he is never a selfish man. He speaks up for wealth-creators and solves concrete problems for the poor, but he has never held any office.

At the age of 88, he is banned from publishing, but he keeps writing and speaking about the urgency of eradicating all personal cults of power, restating the case for the market economy, abolishing public ownership, and restoring private property. His fight at the moment may be failing, but hope for the future is what animates him.

Early Life

Born in Nanjing, China into a family with means, Mao Yushi led an easy life as the eldest son followed by two younger brothers and a sister. His father was an engineer and his mother was a scion of a prominent family. He was brought up with a good home education that he later recalled as “liberal, equal, open-minded, and science-loving.” He was exposed to music, arts, classical literature, and foreign language at an early age. He survived the Japanese invasion of the 1930s and got his education first from Nankai Middle School in Chongqing and later in Shanghai Jiaotong University.

The four years in college had the biggest influence on him. He developed his language skills, loved sports, and mastered engineering, mathematics, thermodynamics, and physics. A black-and-white photo features him, a tall and slim young man in white sporty shorts, running a torch relay in 1948, a year before a communist China emerged.

His refusal of the herd mentality would lead to more unpleasant encounters than merry occasions. The humanistic environment also cultivated his independence, curiosity, and critical thinking. A story he likes to share to entertain younger listeners is about eating on airplanes. Yushi would always follow his daily routine and wait until it’s time to eat instead of having meals as they are served by the flight attendants. He attributes this to the early years of conscious nurturing of independent thinking. Another more elaborate story concerns his argument on the search for a thoroughbred horse that travels a thousand li a day (千里马) in Han Yu’s classic essay. His refusal of the herd mentality would lead to more unpleasant encounters than merry occasions.

After graduation, Yushi was assigned to coal locomotives in a war-destroyed Northeast China. Despite the harsh environment, he applied what he learned from college to work and attempted his first academic endeavor: to publish a paper on raising the energy efficiency of locomotives. This paper also marked the inception of his later landmark work in economics. In the meanwhile, muddling through hardships of reality, a fond appreciation from years before and a long-time correspondence blossomed into love and then a marriage that has lasted through thick and thin.

A typical Suzhou (苏州) lady, Zhao Yanling was elegant and charming. Her portraits were put on exhibition in the three most famous photo studios in Wangfujing, a shopping area that’s still popular today in Beijing. The young Yushi was joyous and mesmerized when Ms. Zhao showed up at the cold winter train station. He later thought of a line in Friedrich Schiller’s “Love and Intrigue,” that reads, “Wem der Teufel ein Ei in die Wirthschaft gelegt hat, dem wird eine hübsche Tochter geboren.” (There is an old saying that where the devil keeps a breeding-cage he is sure to hatch a handsome daughter.) Zhao Yanling’s family was in business, and she was never worried about material life. Yushi loved her not only for her charm but for her perseverance and tenacity through the Cultural Revolution when the whole family was victimized.

Academics and Ostracization

Never equivocating on his opinion, Mao Yushi was first purged as a “rightist” in 1958, expelled to  Shandong Province where a near-starvation experience ensued, and later persecuted during the Cultural Revolution. What did he say that brought the authorities down on him? He merely proposed an increase in the pork price in order to solve a shortage of pork. Such disobedient thought could not be tolerated, but compared to the “unorthodox” thoughts he harbored later in his life, it amounted to nothing.

It was in 1976, when Mao Yushi was transferred to a research department of the railway system, that he started independent research in economics. Drawing from years of working experience and continuous thinking, he independently developed The Theory of Optimal Allocation in a closed country, an achievement that was overshadowed by his social activism and economic educational work.

Yushi was harassed during lectures at auditoriums and by midnight hateful phone calls came to his home. As the mad years came to an end, Mao Yushi’s talent for economics was rediscovered and put to good use. He was transferred to the Institute of American Studies at Chinese Academy of Social Sciences (CASS) in 1984. He traveled abroad on business trips, lectured in Australia, and researched at Harvard University. For anyone with access to such privileges, these experiences can be easily shrugged off. But Mao Yushi was 53 years old when he made his first trip abroad to the UK in 1982. Eleven years later, he co-founded the most prominent independent and private think tank in China (Unirule Institute of Economics) upon his retirement from the Chinese Academy of Social Sciences.

Unirule is the brainchild of three economists: Zhang Shuguang, Sheng Hong, and Mao Yushi. From an early idea of capitalizing on their knowledge to a later commitment to serving Chinese society by providing good ideas to the public, Yushi articulated his belief in the rule of law, private property rights, human rights, the market economy, and the wealth-making mechanism which is commonly called “capitalism.”

This is where the controversies began. He defended the market mechanism, published research in food security and fertile soil preservation, persisted on exposing the Great Famine of 1958-1961, and stripped away the mythology surrounding the supreme leader Mao Zedong. Following his line of logic and relying on his critical and independent thinking, Mao Yushi is convinced of the importance of taking what really happened in history head-on, debunking a hidden crime with facts and records, and staying true to one’s conscience.

The reaction from the authorities and the innocent majority was furious and ferocious. When I joined Unirule in 2013, the think tank’s zenith seemed to have passed: budget for research was low, its reputation was in jeopardy, and people were told not to attend its seminars. Yushi was harassed during lectures at auditoriums and by midnight hateful phone calls came to his home. However, he never backed down. To this day, he keeps sharing with us his observations, thoughts, and optimism at our Monday meetings.

Changes in China

Among the missions of Unirule, disseminating market economy ideas weighs the most. By the end of the 1970s, social unrest and top-down control finally proved unsustainable and led to China’s opening-up and many economic reforms. However, an iron-hard planned economy had taken deep root in the country and the people’s minds. A lively debate over the economic system took place in the 1980s and the decade that followed.

A state-underpinned ideological fallacy is still haunting China. As a result, a Chinese Economic Miracle featuring a two-digit growth rate (which was widely recognized as a work of “the invisible hand”) is now considered more of a “Chinese Path” that somehow owes its success not to markets, but to top-down control and the wisdom of the political leaders. The power of the market is under-appreciated as the state re-emphasizes, once again, the dominance of the public sector. State intervention is a pandemic. Tax burdens for private enterprises are almost unbearable. Rent-seeking is everywhere. The public needs an economics toolkit to understand how their tax money is spent and how their wellbeing is arbitrarily controlled by someone sitting at a desk behind a closed door.

Well into the 21st century, even with the accumulation of great wealth and a general rise of people’s livelihoods, a state-underpinned ideological fallacy is still haunting China. And the huge gap between the haves and the have-nots really begs the question: Is the wealth of the rich justifiable?

Yes and no. Those who made a fortune through hard work, entrepreneurship, and innovation certainly have proved they are the kind of elites that are leading others to prosperity. But those who accumulated money by imposing administrative monopolies and rent-seeking political favors are undermining the legitimacy of true markets and stealing from the taxpayers’ pockets. The former should be respected, celebrated, and protected, though in many cases they are overlooked, smeared, and even persecuted. The latter is an interest group, and there should be no place for them in a healthy and decent society.

Blessed Are the Entrepreneurs

Unirule is proving to be a sanctuary for Chinese entrepreneurs. Mao Yushi has always been concerned with how entrepreneurs are treated. He went through eras where there was only the state and no officially upheld market, no entrepreneurs. He understands the horror done in the name of keeping the people’s minds pure and the society in order. His stance towards entrepreneurs irritates many, especially those from the lower class which the state would gladly deny the existence of. He was accused of being a conscienceless man. This cannot be more wrong.

It was the first private fund that serves the rural residents with very humble income. Three years before creating Unirule, Mao Yushi managed to save some money at his post as a lecturer at the University of Queensland. Raised to be a sympathetic soul, the first thing that came to his mind was to donate to a group called Project Hope to fund children from poor backgrounds to get a decent education. His donation led to a before-its-time, innovative venture. He discovered that funding was not going to solve poverty which was the root cause of the lack of access to education.

After brainstorming with his peers and admirers, most of whom have gained more prominence since then, he set up a small foundation that lent money (micro-loans) to local residents in rural areas. A social enterprise that bears the core of philanthropy and economic sustainability, it was the first private fund that serves the rural residents with very humble income.

Concerned with the opportunities of the poor, Yushi spotted another breakthrough to empower them by training jobless and less-educated rural women in domestic services. A “nanny school” called Fuping (which literally means to empower and enrich the common people) was set up in 2002. It has trained over 40,000 nannies, most of whom are from remote rural areas. “There are two purposes in life: to enjoy one’s own life, and to help others enjoy theirs.” He derives great joy in empowering less advantaged people.

His Continuing Legacy

On his 88th birthday, Mao Yushi posted on Microblog, a Twitter-type social media platform, “As elites are migrating overseas, I have done three things in the last three decades: establishing Unirule Institute of Economics in my 60s; creating Fuping Domestic Service School in my 70s; and assembling the Humanism Economics Society in my 80s. All of them are nonprofit, and all of them are successful. This is what a ‘traitor’ did.” (His Microblog account was blocked a day later.)

Established in 2012, the Humanism Economics Society is a budding alliance of top economists — basically the best minds. It has held seminars that drew an audience of hundreds. It is committed to spreading ideas, civil education of basic economics, and academic exchanges. The pro-market hue and personal color of Mao Yushi led to its cautious and slow development. As popular expression goes, “due to reasons that everyone knows,” the voice of a classical liberal/ libertarian alliance is considered troublesome, if not hostile, and therefore, should better be silenced. But he persists.

In success or in failure, Mao Yushi lacks the interest to claim spoils or cry over spilled milk. Mao Yushi has been through it all. He speaks highly of the general improvement of people’s lives through the promises of genuine rule of law, civil society, freedom of speech, etc. China cannot be a top-down centrally planned economy forever. There is a rudimentary fault in public ownership. As Yushi says, “Power cannot be private, and property cannot be public.”

John Locke’s wisdom is among Yushi’s favorites. He implores people to apply their reasoning, for as he sees it, “Logic is the only standard to contest truth, not experiences.” After successfully bringing Mao Zedong back to his human form from the former deity status, his academic take on the very foundation of China’s current system represents an intellectual challenge to the status quo.

In success or in failure, Mao Yushi lacks the interest to claim spoils or cry over spilled milk. He is that rare kind of true gentleman. Approaching 90 and with fewer public appearances, lecture tours, and publications, he finds peace in reading and thinking. He does not give up any opportunity to share his opinions, discuss, and debate. But he does it in such a modest way.

Manners, it’s been said, maketh the man. I always recall him fixing my tie or reminding me of carrying business cards before meeting some diplomat friends. His respect for others and self-composure are a heart-warming mix. I can understand why he gained so many friends among those who share his views as well as those who don’t; old friends and younger friends; rich and poor; friends from home and abroad. What they all share is an admiration for this great man, this conscience of a generation.