On the afternoon of May 22, Zhang Taisu, Global Chair Scholar at Peking University Law School and Professor of Law at Yale University, gave an academic lecture on the topic of "Diversion of Law and Modern Economic". The lecture was hosted by Zuo Yilu. Professors Li Qicheng and Ge Yunsong of Peking University Law School, Long-term Associate Professors Zhang Yongle, Dai Xin and Yan Tian and Postdoctoral Fellow Wu Jingjian served as interlocutors.

This article presents the core points of the lecture as a transcript.

I. Economic diversion and its existing research

The Great Divergence was the historical period when the Western world overcame its development limitations and overtook Eastern countries such as China and India in the 19th century. Economic diversion is the main manifestation of the great diversion. In recent decades, it has been widely concerned by the academic community, and related studies have emerged endlessly.

As to why economic divergences occur, the current mainstream research method is to make horizontal comparison and determine the core influencing factors and mechanisms.

II. Diversion and convergence

Existing research can only explain why the United Kingdom was the first to emerge, creating a diversion, but it cannot explain why countries such as China came behind, creating a convergence. We cannot ignore the history of catching up and convergence when we talk about the history of preeminence and diversion. An element can be called a truly important element of influence only if it can explain both the diversion and the convergence.

III. State capacity, capital accumulation and the legal system

In the process of China being diverted by the West and then completing the convergence through its own development, what has changed in the Chinese legal system? I believe the main ones were the modernization and reform of the judicial system, changes in the corporate system, reform of the state tax system, and reform of family law. While these four changes have not significantly strengthened the stability of private property rights, they have led to a significant increase in the state's capacity for amassing and judicial control. According to the assertions of existing research, this should have been detrimental to China's rapid economic development. However, reality has shown that the above changes have actually facilitated China's industrialization process and economic rise. To explain this paradox, we cannot just look at how Britain led the way, but also focus on how China completed its industrialization. In other words, we need to look at modern nation-building as a cause of economic convergence rather than diversion.

IV. Cultural diversion behind economic diversion

It is precisely because the traditional Confucian culture emphasizes benevolent governance and opposes competition for profits, does not tolerate excessive plundering of the mass, settles the land and emphasizes the feudal and patriarchal model of ordering of the young and the old in the governance of property that the traditional Chinese regime and the officials and people under its rule did not have the incentive to engage in capital accumulation and their economic development was comparatively slower. On the contrary, since there was no particularly heavy moral burden, the Western countries dared to engage in capital accumulation through colonization, plundering the people and supporting land annexation. As a result, these Western countries were the first to complete capital accumulation and achieve economic development. It is also in this sense that economic diversion can be seen as a cultural diversion.

 

Zhang Taisu

Discussion session

Li Qicheng: According to Prof. Zhang Taisu, the judicial control of our country in recent times has been increasing. But whether it is strong or not, the essence also depends on the authority of the judiciary. In this regard, the situation actually does not seem to be good. In addition, Confucianism in the Qing Dynasty was actually not only seeking righteousness, but also affirming people's normal desires.

 

Li Qicheng

Zhang Taisu: The new system cannot necessarily accomplish successfully what civil law can accomplish However, the latter can indeed do what the former cannot. As for the issue of the distinction between righteousness and profit, in the Qing Dynasty, Confucian scholars transformed the distinction between righteousness and profit from a debate at the purely moral level to a discussion that was more inclined to the level of pragmatism and the use of the world.

Zhang Yongle: How to evaluate the impact of the international system and the world market system on the diversion and convergence? Since the European powers had not established a colonial domination system over China before the 19th century, the influence of modern colonialism on diversion seems to be relatively easy to assess. However, with the establishment of the colonial domination system in the 19th century, how to assess the influence of colonialism on convergence has become more complicated.

 

Zhang Yongle

Zhang Taisu: The impact of the international system and the world market system on diverging and confluence is obvious. However, Western countries claim that China was only able to achieve modernization because it was influenced by the West during the colonial process. But in fact, no country in the world has risen during the colonial period.

Dai Xin: Many of the things that the West has done in the past seem to emphasize decentralization, but behind the scenes, they are also strengthening state capacity. Moreover, state capacity is not only the capacity of arbitrariness, but also includes many basic capacities such as information capacity and absorbing capacity. In addition, broadly speaking, law is part of the cultural system, but modernization is the process of separating "law in the cultural sense" from "law in the normative sense". Therefore, the relationship between law and culture requires further attention.

 

Dai Xin

Zhang Taisu: Since this lecture is mainly about industrialization, I have simplified state capabilities to those related to industrialization. It's a little more flat, but it's also more focused.

Yan Tian: Scholars of sociology and political science found that around 1930 China was in no condition to study labor law at that time. If they studied the West, the development of China's national industry would come to a standstill. Therefore, they preferred to develop the national industry with the state's ability first, and then discuss the labor law later. This is the idea of "why does China converge".

 

Yan Tian

Wu Jingjian: My question is mainly related to the company system. First, whether the positive correlation between corporate system and national capacity can be proved; Second, how can the positive interaction between capital concentration and capital allocation be achieved?

 

Wu Jingjian

Zhang Taisu: My interpretation is that the operation of the corporate system requires strong cross-regional law enforcement and judicial capacity as a guarantee. Such capabilities only emerged with the rise of the modern state.

Ge Yunsong: Industrialization may involve many aspects. Is it too monolithic for Prof. Zhang Taisu to simplify it to capital accumulation? If we travel back a few hundred years, is it true that if China has capital accumulation, it will definitely be able to achieve industrialization on its own?

 

Ge Yunsong

Zhang Taisu: Industrialization is relatively instrumental and functional, and there may not be so much involvement with other elements, which can be discussed separately.

At the end of the lecture, Assistant Professor Zuo Yilu presented a commemorative poster to Professor Zhang Taisu on behalf of Peking University Law School. The lecture ended successfully with warm applause.