So today we begin to look at individual subjects, individual domains of the modern period. And as always, we'll rely on specific chapters of the authors in the book <i>Modern Chinese Religion II</i> and we start with economics. Why economics? Because economics as we will see is perhaps the central discipline of, the defining discipline of the modern era, and we're going to be relying here on the chapter by Prof. David Faure, who teaches here in the History Department and is also director of the Center for China Studies where I teach myself, "The Introduction of Economics in China, 1850-2010." Few domains illustrate more perfectly than economics the meaning of secularization in the current paradigm shift. First, in the West as in China, it was a domain inseparable from pre-modern orthodoxy. I quote: "In Europe, economics as a body of thought came about when 18th-century thinkers escaped from the Church to look for a natural order of human behavior." And in China, still quoting, "The knowledge and applications that would have fallen within the ambit of economics through the Ming and the Qing dynasties would have come (under) theories of administration." Administration, that is to say government, political control of the economy. That is, in both cases, economics had to achieve an autonomous existence as a distinct domain —a "science", the "market"— with its own values and laws. Moreover, unlike the natural sciences, the moral and social implications of market economics could not leave anyone indifferent, least of all those who had hitherto sought to define their respective polities in moral terms—moral, spiritual, religious terms. What was ultimately at stake was succinctly expressed by Cyril Lin in an article published in 1981: 1981, that is to say after the beginning of Opening and Reform, <i>gaige kaifang</i> 改革開放, an article quoted at length by Prof. Faure called "The Reinstatement of Economics in China Today." And I quote now following Faure from that article by Cyril Lin: "The emphasis on objective economic laws, and on the Law of Value in particular" —we'll talk more about that in a moment— "implies a new economic mechanism whose entire logic and modus operandi are premised on certain rationality criteria —a new economic mechanism operating" —listen!—"'scientifically' and against any 'subjective' or 'feudal' practices." So here we see the same opposition that we saw in the introduction between religion and science as between the subjective and the objective, the feudal and the modern being applied also to economics as a typically modern autonomous domain. In a way almost more interesting than that is a quotation that Faure gives of Robert Skidelsky writing as the biography of one of the greatest economists of the 20th century, John Maynard Keynes, who says that the place of economics in contemporary modernity —the most unique thing about it— is that it has produced its own "clergy." So "Robert Skidelsky," says Faure, "put his finger right on the change, when he said, referring to the increasing tendency to absorb academics into government service, that the Keynesian revolution was part of a 'continuing revolution in government'," and now listen carefully, "a return to the medieval practice of involving the clergy in the affairs of state'." So it may not be feudal, but there's some things that make it look like medieval times. "Economists emerged in the popular press and within government as theorists who had authority to make predictive statements on the state of the economy." Predictions—that's what already back in the Shang dynasty was being done by people consulting the oracle bones, so that role of prediction has been central to the definition of values and practice, structuring values and practice of religious practice. No other academic group, be it scientists or sociologists, has such a guaranteed audience both inside and outside government, to the extent that we could say that the defining domain of secularized value is not science but economics. So now we're going to talk about an absolutely central issue in the area of economics—the market or the state? Consistently, over the last 150 years, it has proven very difficult in China to accept market autonomy and relinquish administrative control of the economy, and we see that right down to the present day. I quote from Faure: "Despite the debate on currency devaluation, economic theory disappeared in China in the 1840s and 1850s when the coterie of <i>jingshi</i> 經世, statecraft" —that is to say administration, the study of administration, precisely what has always dominated, according to Faure: the place of economics controlled by statecraft administrative officials— so they [statecraft officials] "were removed from office (at that time) for having brought about and bungled the Opium War. Comparison of subsequent editions of the <i>jingshi wenbian</i> 經世文編 would show that (statecraft) scholarship had not picked up on the independence of the market discovered in (the debates of) the 1820s, but (in fact) had reverted to administrative control as its instrument for the nurturing of economic well-being." I quote from Faure: "The dominance of government in any matter economic was such that only by the 1910s with the return of a generation of economists trained abroad" —and notably Ma Yinchu 馬寅初, whose dates are 1882 to 1982; we'll be talking about him later again— so: "the return of a generation of economists trained abroad and the establishment of university departments of economics staffed by them and foreign teachers (only then) did the signs of a shift emerge." He then quotes from Paul B. Trescott, <i>Jingji xue</i> 經濟學. <i>The History of the Introduction of Western Economic Ideas into China, 1850-1950</i> and it's this Paul Trescott who notes that Yan Fu 嚴復—there he is again— "Yan Fu's translation of Adam Smith" —the defining author on the nature of capitalism, okay? — so that "Yan Fu's translation of Adam Smith was skewed towards greater government involvement in the market than the original text would warrant." Fast-forward to Sun Yat-sen. His "nation building argument" is said by Faure to have had some influence in the 1930s. Indeed, Trescott says that Sun was, I quote, "skeptical of private enterprise and urged a centralized, collectivist approach to economic policy… He envisioned a vast network of state-owned and state-dominated enterprises." We're in China of 2017! "China should make all the national industries of China into a great Trust owned by the Chinese people." So here we see the extraordinary continuity not just in the 20th and into the 21st century but going back to the tradition of administrative control. Hence, the difficulty of the market and economics becoming an autonomous domain. Then the Anti-Japanese War led the Kuomingtang to move "essential industries" inland, to Chongqing, where they "were run by state-directed enterprises… Their organization," says Faure, "had early indications of the 'work unit'," the <i>danwei</i> 單位 as it was called, under the Communist Party, "which controlled production and consumption within the same establishment. The Chinese Communist Party in Yan'an at the time followed similar planning under the rubric of (socialist control)." Moving now to the post-1949 period, between 1957 and 1963—this is the time of the Great Leap Forward— Sun Yefang 孫冶方 (1908 -1983), led a debate as to "whether gross output value targets were sufficient as guidelines for the maximal use of resources… His proposal was that, in order for planning to be effective, enterprise 'profit' should be given its rightful place in the planning process… As the state put away the economists who voiced their objections, it fell back on the means of calculation it knew best from Yan'an days, namely the party cell and party loyalty, the use of models and campaigns. The experience," says Faure, "is almost a textbook example of how these means of popular mobilization do not work in the long run." So throughout, in effect, the ancient tradition of "statecraft" —of administrative control of the economy—prevailed.