Introduction to Propriety Economics

After spending many years deeply immersed in the world of “critical thinking,” the author has achieved proficiency in critiquing various schools of thought and perspectives but had somewhat neglected the aspect of “critical creating.” Critical thinking, which is distinct from critical creating, often involves passive and negative analysis. As a result, the author developed a strong desire to make a positive and constructive contribution to economic research, specifically by writing a comprehensive monograph on propriety economics—a subject that has been overlooked for far too long. This decision was spurred by the challenging times of the COVID-19 pandemic, motivating the author to turn this long-held aspiration into reality and leave an original mark in the academic arena.

Recognizing the interdisciplinary nature of propriety economics, this book employs historical research methods to examine the differences and similarities between Eastern and Western cultures. It explores how the concepts of moderation and propriety in the East and the West have interacted and transformed over time, drawing insights from philosophy to trace the development of propriety economic ideas within Western economic thought. Additionally, it incorporates knowledge from the natural and social sciences, including physics, biology, computing, logic, psychology, political science, and sociology, to enhance our understanding of propriety economics.

The narrative embarks on a comprehensive literature review on economics, starting from the era of Adam Smith and documenting the interdisciplinary evolution that has shaped this field. It delves into the idea of balance in classical economics, the equilibrium of neoclassical economics, the impartiality of institutional economics, the subjective aspects of behavioral economics, the shared values of cultural economics, and the integration of humanistic and complexity economics. The book introduces readers to the triangular model of propriety economics and supplements it with propriety diagrams and curves as a tool for synthesizing ideas. The book also embarks on the journey of policy design and clarifies the criteria for implementing policies inspired by propriety economics. Additionally, it examines macroeconomic case studies, shedding light on the historical processes of modernization in both the United States and China. Drawing from 2,500 years of economic thought, it advocates for economics to progress towards relative, partial, limited, and rational propriety, fostering evolutionary consolidation, innovative synthesis, and inclusive integration.

Consequently, this book emerges as a multidisciplinary, interdisciplinary, and cross-disciplinary exploration at the intersection of history, philosophy, and economics. It represents a dedicated effort to harmonize these fields to shed light on the concept of propriety economics and bridge the perspectives of East and West.

It is important to note that propriety economics is a subject that cannot be easily quantified or mathematically modeled. Therefore, this book can only propose a framework of thought, provide theoretical approaches, discuss research methods, and outline policy principles from the perspective of economic philosophy. Its aim is to encourage collaboration among scholars to establish a new school and discipline of propriety economics.

The concept of propriety economics aligns with the views of many Western economists, even if they have not explicitly articulated it. The book’s chapters are outlined as follows:

Chapter 1 (Introduction): Analyzes the contemporary need to develop the concept of propriety economics, highlighting the challenges of understanding and practicing moderation. It delves into the academic foundations for the creation of propriety economics and explores links to evolutionary economics, the Goldilocks economy, and the economics of good and evil.

Chapter 2: Summarizes the ideas of Chinese moderation and Western propriety, drawing comparisons to discern their roles in guiding economics. It introduces the six elements of propriety philosophy proposed by the author, including middle range, ordinariness, subjectivity, historicity, neutrality, and relativity, which provide guidance and regulation for the composition and development of propriety economics.

Chapter 3: Provides a literature review focusing on classical and neoclassical economic thought in order to discover, collect, and evaluate hidden points related to propriety economics. In particular, the chapter discusses the role of balance in classical theory and equilibrium in neoclassical theory in inspiring the idea of economic appropriateness.

Chapter 4: Discusses the contributions of institutional economics and behavioral economics to propriety economics, including the functional neutrality, value relativity, and historical evolution revealed by old and new institutional economics. Chapter 4 also addresses the bounded rationality, subjectivity, and psychological effects studied in behavioral economics.

Chapter 5: Examines the relevance of cultural economics to propriety economics, discussing shared values, regulatory diversity, and multifaceted distributions. This chapter integrates the six elements of propriety philosophy and draws insights from the five major economic schools, defining propriety economics based on five key characteristics: balance, equilibrium, evolution, rationality, and sharing.

Chapter 6: Proposes the triad theory as the core theory of propriety economics. It validates the interdisciplinary applicability of propriety economics across the humanities, social sciences, and natural sciences and introduces the triangle paradigm as an analytical framework for understanding propriety economics.

Chapter 7: Analyzes various mainstream economic research methods and their alignment with propriety economics’ fundamental requirements. It discusses suitable methods for propriety economics research and presents several propriety diagrams and curves for analyzing economic issues.

Chapter 8: Discusses policy making principles for propriety economics, emphasizing the moderation and rationality expected of policymakers. The chapter introduces principles for evaluating propriety economic policies, designing fundamental policy measures, establishing quantitative indicators for propriety economic performance, and creating mechanisms to prevent and penalize excessive or deficient economic behavior.

Chapter 9: Utilizes four case studies of economic development (colonial economic growth, early industrialization, government intervention in the economy, and the war on poverty) to illustrate the experiential lessons of success and failure in the context of propriety economics in the United States. It also offers a concise analysis of four notable cases in China during the economic reforms of the last two decades of the 20th century (land ownership, township and village enterprises, state-owned enterprises, and urbanization) to evaluate whether China’s economic system aligns with the objectives, principles, and essence of propriety economics.

Chapter 10: Summarizes the novel perspectives, frameworks, methods, and policy making principles of propriety economics. It situates the historical significance of propriety economics within the context of Western economic thought, outlining potential directions for the future development of economics. The chapter calls for an expansion of economic research toward relative propriety, fostering coordination among methods, disciplines, and ideas in an era marked by impermanence.

In contrast to similar monographs, this book exhibits several distinct writing features. One is its structural integration. The chapters are intricately linked and form a cohesive narrative, differentiating it from monographs structured around disparate individual articles, such as W. Brian Arthur’s Complexity and the Economy. The second is its sources. The book, comprising approximately 100,000 words, is rich in resources, drawing from both English and Chinese sources. It is supplemented by nearly 700 notes to substantiate its content. Notably, it references specific page numbers for most citations and provides the original source for important quotations, as well as key academic terms, facilitating reader verification. Third, the content is easy to read and understand. Given the nature of propriety economics, the book relies on qualitative research without complex mathematical models. It employs straightforward language and examples, ensuring accessibility for readers without specialized training in economics or history. Finally, the book maintains a moderate, rational, and neutral tone. It avoids radicalism, extremism, and sensitivity, aligning with the theme of propriety philosophy while upholding scholarly objectivity and balance.

This book originated from the author’s experience teaching a doctoral student graduate course, History of Economic Thought, since 2017. This course was primarily offered to students in a doctoral program in finance and management, jointly sponsored by the Gabelli School of Business at Fordham University in the United States and the National School of Development at Peking University in China. Over the past six years, the author’s interactions with students have provided invaluable academic nourishment, profoundly influencing the genesis and development of this book. Four doctoral students—Dr. Xiangguo Zhang, Dr. Yan Han, Dr. Yuanqu Xu, and Dr. Xinxin Kong—played instrumental roles by actively contributing to discussions and offering constructive comments. The author also drew inspiration from discussions with doctoral students, including Xinyu Yang, Chen Wei, Guangshu Hu, Shencong Ma, Hanbing Dong, and Lili Pan from the class of 2019; Kaiyu Ji and Xiaodong Jin from the class of 2018; Qiyan Li from the class of 2017; and Yan Zhao from the class of 2016, during our book club sessions.

This book’s ideas were further enriched through interactions with professors and experts, such as Qiren Zhou, Zhuang Yang, Miaojie Yu, and Jinjie Wang from Peking University. Throughout the writing process, the author received invaluable assistance from specialists across various disciplines, including Professors Jin Lu and Xing Lu in the humanities; Professors Qin Gao, Guoqiang Tian, and Meiping Sun in economics; and Mr. Weiping Tian, the former editor-in-chief of the University of Macau’s journal, South China Quarterly, who provided editorial guidance for my article titled “Interdisciplinary Evolution of Propriety Economic Thought.” I extend my special thanks to Ms. Sydney Stonner, editor at the City University of Hong Kong Press, for her exceptional assistance and outstanding editorship. She truly deserves my sincere acknowledgment.

Lastly, the author extends heartfelt gratitude to his family. My wife, Professor Lan Shen, served as the first examiner of my pivotal ideas, engaging in spirited debates and resonant discussions that significantly contributed to the book’s completion. My daughters, Nicole Hong and Emma Hong, offered their insights, further shaping some of the book’s concepts. My father, Chuanhao Hong, and my mother, Huiyu Sun, both profoundly influenced my passion for economic history. Naturally, I willingly embrace full responsibility for any shortcomings found within its contents.

Zhaohui Hong