What Happens When an MBA Student Raised in Communist China Reads Hayek

In the spring of 1999, I taught an MBA economics class to a cohort of 30 Chinese students. The class was split between students from Beijing and Shanghai. Students from Shanghai-having more experience with the beneficial impact of liberalizing markets-were much more willing to embrace the ideas of classical liberalism.

Beijing students were more likely to believe in a larger role for government. This split between the Beijing and Shanghai students was most evident in a class discussion after the class read Hayek's "The Use of Knowledge in Society;" the reading led to a discussion of central planning.

A student from Beijing was emphatic, "This theory is not applicable to China-China is a relatively poor country, and in a poor country the government needs to plan."

An exasperated Shanghai student responded, "You miss the point, central planning is precisely why China is comparatively poor."

Hayek's ideas were so provocative that soon the entire class had joined in; the two factions began shouting at each other in Mandarin. Someone, concerned about the din, called campus security. The students lowered their voices, but Hayek's ideas had left their mark. I feel certain those students carry an indelible memory of that class.