Kempton & Wallace talk Little Emperors: Behavioral Impacts of China’s One-Child Policy

Friday, 25 January, 2013

The news report “One-child policy: China’s army of little emperors – The one-child policy has fundamentally changed the psychology of a generation” intrigued Economic Analyst Wallace Chan and this independent reporter. So tonight, we held a LIVE YouTube chat about the research paper “Little Emperors” and China’s One-Child Policy in two languages. Here are the recordings.

(In English) Kempton & Wallace talk Little Emperors: Behavioral Impacts of China’s One-Child Policy 

(in Cantonese) 經濟分析師陳心田與獨立記者林錦堂講一講 – 小皇帝:中國的”一家一孩”政策對行為的影響

Reference: (1) “Little Emperors: Behavioral Impacts of China’s One-Child Policy” by L. Cameron, N. Erkal, L. Gangadharan, X. Meng

(2) “沒有兄弟姐妹的社會” by 張五常 (Steven Cheung)

Jan 26, 2013 Update: Here is a new Jan 2013 video clip of “Nobel Laureate Ronald Coase on China’s One-Child Policy“. For more (including link to transcripts) see this article.

October 29, 2015 Update: After China initiated its One-Child Policy in 1979, it is finally over today. CBC News, “China to abolish one-child policy, Communist Party says

Professor Steven N S Cheung on Ronald Coase

Monday, 7 December, 2009

Have a read of Professor Steven N S Cheung’s piece – Ronald Coase: My Once and Future Mentor“. Thanks to Gary for posting it.

My special gift to Ronald Coase for his 99th birthday

Saturday, 5 December, 2009

In some sense, my “gift” to Prof. Ronald Coase for his 99th birthday is “special”. More on this later.

For the last 20+ years of my life, many of my thinking has been shaped and influenced by Coase, and yet I have not met him in person. Of course, how much have I actually learned or understood remains a mystery. (big smile) Allow me to share two stories.

I remember some years ago during the first year of my MBA program, somehow the topic of lighthouse came up. And I, quite off-handedly, mentioned to my classmate (he majored in economics, and I majored in computer science) that lighthouse is usually given as an example of a public good but this categorization is actually wrong.

Well, to my surprise, my classmate insisted that, “No no no. Lighthouse is a public good and you cannot charge any money for the use of it.” After a minute or so of discussion, we got back to our schoolwork. To me, from that moment on, I realized I was lucky to have some special insights. I’ve learned Coase’s ideas, including those in “The Lighthouse in Economics” via Prof. Steven Cheung‘s articles in Chinese when I was attending high school in Hong Kong. I have learned the importance in asking questions. And try not to take things/”established facts” for granted.

In yet another MBA class, this time an ethics class. The professor asked a simple question, something like, “Why do we have ‘company’/’corporation’?” In hope to lead to some discussions about ethics (well, it was an ethics course after all). What my professor didn’t expect was me raising my hand and answered, “To reduce transaction cost.” :)

Now, without further delay, allow me to present my “special” and virtual gift to Prof. Coase. Wishing Prof. Coase a very happy 99th birthday (in advance) and good health for many more years to come.

My “special” “gift”

This gift is “special” because I think the best gift to give to someone like Prof. Coase, who has everything he needs in the world and likely every material thing he wants, is to “pay it forward“. Prof. Coase himself doesn’t really benefit from the gift itself, it is the people who may learn from Prof. Coase that are benefitting. So I am “paying it forward” or “gifting” forward.

As you may know, the wonderfully insightful (and often humorous) 2003 Coase Lecture was delivered by Prof. Coase himself. And the full lecture has been available online via Coase Institute for free download and viewing for some time now. Unfortunately, unless the person has an extremely fast internet connection and have patient to wait for an hour or two or more, downloading the 525MB quicktime video file (this is very big) can still be quite a challenge. And for those that have slower regular internet access, viewing the lecture is practically impossible.

So as a “special” gift to Prof. Coase for his 99th birthday, I have taken the initiative and spent most of the night (well, actually last night and now well into the wee hours) to compress and upload the video onto YouTube.

This “gift” is “special” also because I’ve bent quite a few rules. Since this is a gift for Prof. Coase’s 99th birthday, I hope the “deciders” don’t mind and will let me give this “gift”. :)

Hope you enjoy the 2003 Coase Lecture (in 6 parts).

Read the rest of this entry »

Steven N. S. Cheung’s original insight on common property rights is unfortunately overlooked (re 2009 Nobel Prize in Economic Sciences)

Tuesday, 13 October, 2009

I have been reading the ideas of Steven N. S. Cheung for many years and have even written a few blog entries about him and his ideas. So it is my pleasure to repost my professional economist friend Zhaofeng Xue‘s English comment here in my blog. If you read Chinese, also read Zhaofeng’s longer posting “今年诺奖忽视了张五常的原创贡献” (evidences are the same).


Repost from Zhaofeng Xue‘s English comment (Oct 13th, 1:56pm)


I think Steven N. S. Cheung’s original insight on common property rights is unfortunately overlooked. The idea Nobel committee awarded on the basis of Ostrom’s 1990 publication can be clearly seen in Cheung’s earlier publication in 1974 and 1987. See the following four piece of evidence. (Zhaofeng Xue, Ph.D. from Mason)

Evidence 1:
Scientific Background on the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2009

Elinor Ostrom (1990) has challenged the conventional wisdom that common property is poorly managed and should be completely privatized or regulated by central authorities. Based on numerous studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, Ostrom concluded that the outcomes are often better than predicted by standard theories. [Ostrom, E. (1990): Governing the Commons: The Evolution of Institutions for Collective Actions, Cambridge: Cambridge University Press.]

Evidence 2:
Ostrom, Elinor. “tragedy of the commons.” The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 11 May 2009 doi:10.1057/9780230226203.1729

Policy analysts tend to look for certainty and want to know whether the tragedy of the commons theory is either right or wrong. A more productive approach is to ask under what conditions it is correct and when it makes the wrong predictions. In settings where there is a large group, no one communicates, and where no rights to the resource exist, Hardin’s theory is supported by considerable evidence. There are many settings in the world where the tragedy of the commons has occurred and continues to occur – ocean fisheries and the atmosphere being the most obvious.

Contrary to the conventional theory, however, multiple studies have demonstrated that users have overcome social dilemmas to craft institutions to govern their own resources (National Research Council, 1986; 2002; McCay and Acheson, 1987; Ostrom, 1990; 2005). The possibility, however, that the users would find ways to organize themselves was not mentioned in basic economic textbooks on environmental problems until recently (compare Clark, 1976, with Hackett, 1998). The design principles that characterize robust, long-lasting, institutional arrangements for the governance of common-pool resources have been identified (Ostrom, 1990) and supported by further testing (Guillet, 1992; Morrow and Hull, 1996; Weinstein, 2000).

Evidence 3:
Cheung, Steven N. S. “A Theory of Price Control.” Journal of Law and Economics, 1974, 17(1), pp. 53-71.

Proposition 2: Given the existence of non-exclusive income and its tendency to dissipate, each and every party involved will seek to minimize the dissipation subject to constraints. This will be done either through seeking alternatives in using or producing the good so that the decline in resource value is the lowest, or through forming alternative contractual arrangements to govern the use or production of the good with the least rise in transaction costs, or through the least costly combination of the two procedures.

Evidence 4:
Cheung, Steven N. S. “Common property rights,” M. M. John Eatwell, Peter Newman, The New Palgrave: A Dictionary of Economics. Palgrave Macmillan, 1987,

In the real world, the complete dissipation of rent is rare indeed. … Attempts to reduce rent dissipation go far to explain why common property in its ‘pure’ form is seldom observed. … What is useful and important from the standpoint of economic explanation is to view whatever rent dissipation does occur as necessarily a constrained minimum becasue, under the maximization postulate, each and every individual has an incentive to reduce that dissipation.

Panda Economics – Lessons from 看熊猫 & 红烧熊猫

Saturday, 7 February, 2009

First off all ladies and gentlemen, this is a post about Panda Economics and NOT Prada Economics (which should an interesting post in itself). (HT: 張五常 教授’s blog entry “本博客管理员新春日记“) I hope you will have as much fun in reading this entry as I had in writing it. I have two panda economics observations.

First panda economics observation,


My comment here is that while extreme solution like this may solve the superficial problem of visiting time of panda but solutions like this may “hurt” the societal sense of “fairness” or “fair play”. While the allocation of resources may be best and most determined by people’s willingness to pay with money, I submit that impossible to measure sense of “fairness to all” may be equally or more important in a society. And Canada is, I believe and hope, one of the society that respect and have an innate sense of fairness and equality embedded in our beings, and legally our section 15 equality rights. Incidentally in 2005 I had the pleasure to attend a lecture by leading Canadian constitutional expert Prof. Peter Hogg at U of Calgary. Prof. Hogg gave an engaging and insightful lecture about section 15 of the Charter. If you are interested here are two articles written in this issue of U of A Faculty of Law Students’ Newspaper (PDF file).

Anyway, Canadians’ universal health care coverage is the envy of many parts of the world, including many Americans with insufficient or no health insurance coverage. Now, before you think I consider the Canadian system without flaw, I would like to point out I know we have problems. But then I will tell you to go ask those Americans that have insufficient or no health care coverage.

In a very short handed way to touch upon the Canadian paradox, I want to say I enjoy the subversive humour in The Barbarian Invasions by Canadian director Denys Arcand. In the film, while the lead actor Remy is determined to fight his terminal cancer in a Canadian hospital (well, dare it, he paid taxes for it), but the over crowding was horrible, so his option-trading rich-and-handsome American-citizen son proceeds to bribe, negotiate, pull strings to get his father the biggest room, best services, and prompt access to state of the art medical equipment that he wants his father to have.

So in short, I know some of the problems in the Canadian medical systems but I won’t trade it for anywhere else’s health care and definitely not the states. Plus, ah, I enjoy fairness. And I enjoy the fact that former Prime Minister of Canada got the same access as every other Canadians do, no queue jumping, purely depending on equal access and your medical urgency on a case by case basis.

Now, second panda observation,


Now, from the creative fire of “你们这里有红烧熊猫这道菜吗?’”and pushing the idea one step further, I will change the question to “红烧熊猫这道菜多少錢一碟?”

The officials won’t have the answer to this one but some “bad” people may. You see, there are people in the world that will take the legal risk to eat endangered species (animals or plants). Correct me if I am wrong, but I remembering the new year’s favourite “髮菜” is an endangered dessert plant, so the harvesting of it has now been banned. But you see, there are still people selling and buying them for a price.

So the question of “红烧熊猫这道菜多少錢一碟?” has embedded in it the signal of the people’s willingness to take risk and be caught (and probably be executed) to make money. Blood money indeed. You see, for some years, the trading of tusk (象牙) has been banned by countries around the world via a UN convention (I think) but the harvesting and trading for the illegal tusks continued for some years with a price premium (I think).

As Steven had taught me through his articles, I see ‘你们这里有红烧熊猫这道菜吗?’ as a yes/no question. Whereas “红烧熊猫这道菜多少錢一碟?” is a question that has the additional details and hidden signal that a “price” is bringing me.

Cheung on China Four Trillion Yuan (US$586 Billion) rescue plan

Tuesday, 18 November, 2008

Here is an excerpt from Prof. Cheung’s article “北京出手四万亿的经济分析” (emphasis added),

(八)最头痛的问题 ——我要留到好意头的「八」才提出(一笑)——是政府的大手加速项目肯定会扼杀了无数的半生不死的私营(即民营)工厂的生存机会!对工业而言,新劳动法是 「一剑霜寒四十州」,四万亿的政府工程是补加一剑︰私营工业的成本增加无可避免。一般而言,如果政府能成功地挽救经济,新劳动法会顽固起来,挥之不去。但 四万亿这一着多半会协助此新法的撤销。这是因为如果不撤销,在四万亿的推行下,工厂的倒闭潮会一浪接一浪地出现。北京的朋友不可能不知道工业的发展是他们 的米饭班主。

China Economic “Growth” in 2009?

Friday, 7 November, 2008

Steven Cheung ponders China economic “growth” in 2009 may be in doubt in this article,

最近北京公布的经济增长率下降,上季下降至百分之九。明年怎样看呢?某机构的预测是明年 增长九点五,北京说要保九,林毅夫说保八以上不难。我呢?认为保零也不易!是的,我的水晶球说,未来一两年,神州大地很可能出现负增长。说得肯定一点吧: 如果北京依然故我,不洞烛先机地大手应对,负增长一定出现。最近北京公布的数据显示经济的增长率下降得快,但跟我在几个地区见到的工业下跌相比,还是好看 很多。工业是中国的经济命脉,此业遇难,整个国家的经济无可救药也。

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