How China Became Capitalist

China has taken an extraordinary, and often unanticipated, journey in transforming itself from a closed agrarian socialist economy to a powerful economic force in the international arena. Coase and Wang persuasively argue that the reforms implemented by China’s leaders during the past 35 years did not represent a concerted attempt to create a capitalist economy, and it was “marginal revolutions” that introduced the market and entrepreneurship back to China. Lessons from the West were guided by the traditional Chinese principle of “seeking truth from facts.” How China Became Capitalist challenges received wisdom about the future of the Chinese economy, warning that while China has enormous potential for further growth, the future is clouded by the government’s monopoly of ideas and power. The authors argue that the development of a market for ideas — which has a long and revered tradition in China — would be integral to bringing about the Chinese dream of social harmony.