Yu Yongding, male and from the Han nationality, born in November 1948, is a native of Nanjing, Jiangsu Province and a member of the Communist Party of China. In August 1994, he graduated from the department of economics in Nuffield College of Oxford University and became a doctor. He serves as director, researcher and PhD student advisor of the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, and President of the Chinese Society of World Economy. From July 2004 to July 2006 he was a member of the Monetary Policy Committee of the People’s Bank of China. His academic expertise is world economy and Macro-Economics. Since 1995, he has started to enjoy a special allowance awarded by the State Council. In 2005, he won the “Overseas Returnees’ Achievement” prize.
My Experience on Pursuit of Studies
Li Zhongmin (hereinafter referred to as Li): Mr. Yu, thanks for your precious time in taking our interview and it’s a great pleasure for us to have such an opportunity to learn from you. Okay, let’s begin.
Yu Yongding (hereinafter referred to as Yu): Okay.
Li: could you briefly introduce yourself a little?
Yu: okay, I worked as a worker for 10 days in the Beijing Heavy-duty Machine Manufacturing Factory after graduating from technical secondary school in 1969. Since I came to the Institute of Global Governmental Affairs, I got a Master’s degree in CASS and a doctorate in the UK.
Li: what reasons pushed you to CASS from the Beijing Heavy-duty Machine Manufacturing Factory?
Yu: well, I think there were many, but mostly two: first, I never failed to learn new knowledge for a single moment, in particular Marxist theories, before I came to the institute in 1979; second, I got help and recommendation by older generations such as QianJunrui, the Dean, QiuQihua, the vice dean, Mr. Qin Guoqiao and many enthusiastic scholars.
Li: does your 10-yearsof working in the factory have any influence on your current research?
Yu: sure, sure. I got to know many friends back in the factory days, many of whom are still in regular contact with me, and many have been laid off. I can learn about the lives of different social groups from this. For a long while after I came to CASS, I considered myself as a worker but also an ‘intellectual’.
Li: from your experience, I can see that your interests in research started early. Would you please talk about your academic life?
Yu: In the pre-order of my book Wang Wei, a good friend of mine, mentioned an article about people in high school back in 1968 when I was a Grade-one Student. Back then, we had been thinking about philosophical issues a lot and many of our puzzles and perplexities came from philosophical books, such as what the necessity of history is, what the relationship between individual fate and historical necessity is and important issues we paid attention to such as methodology. I spent two years reading Das Kapital starting from 1967, from the philosophical perspective of hoping to find the historical necessity so as to ‘elevate to the country of freedom from the country of necessity’. After strolling in the realm of philosophy for a couple of years, I began to ‘return to particularity from abstraction’ and began learning maths, physics, psychology and some technical knowledge. My major motive for learning economics was interest. I am into music and once took lessons in piano but gave up due to lack of music talent. I also tried other disciplines but in vain. Learning economics does not require genetic talent, but it demands comprehensive knowledge and strong logic capacity. Well, I am not bad in these two aspects. Meanwhile, I kind of sensed that economics could provide questions that I once sought for. So I began to devotemyself to western economists around 1975. I started from the tenth edition of the Economists by Samir Hudson translated by Mr. GaoHongye. Later under the help of a friend working in Beijing library, I read many teaching books in economics. Afterwards, I read the English version of Analysis Foundation of Economics by Samir Hudson. . My learning process during the fourteen years around ‘Cultural Revolution’ was harsh but it was a lot of fun. Luckily for me, I got help from many scholars. For example, I started learning English since
In 1979, I was allocated to the theory research office. During the period I worked there, my major work was purely theoretical. First, under the direction of Mr. QiuQihua, I embarked on research on state monopoly capitalism; then, under the guidance of Mr. LuoChengxi, I began comparative research on different schools of western economics, such as the ‘battle of two Cambridge’ etc. I did not pay much care to discussions about various reforming schemes during the initial period of reform and opening up. I did not think it was not important, but since many people were already working in this field, I did not have to take a hand in it. In October 1988, I went to Cambridge University, UK, to pursue my doctorate. The six-year-study in Cambridge gave me a systematic view of the theories and methods of western macro-economics. After I returned to our country on graduating from Cambridge in 1994, I began to pay attention to actual issues in macro economy, currency policies, international finance and other realms. Learning can bring a sense of satisfaction to people, and to apply what one has learned to analyse and solve actual problems might bring people more satisfaction. Admittedly, economists should be public intellectuals who should be responsible for the society, so when you discuss political matters, your essays and addresses should go beyond your individual realm. You must ‘have no consideration for your post, profit-making and favour your boss’.
Li: you just mentioned the western economics as a tool and method, could you please talk about your views on this subject?
Yu: I have gone through a long explorative process, well, they may be wrong but I would share them. Chinese economists must carefully learn the Das Kapital of Marxism and Dialectics and Historical Materialism, that is without doubt. But they must also carefully research mythology in western economics. Western economics feature strong pragmatism and its research targets or research perspectives and methodology are drastically different from the political economics described by Marxism. Engels described dialectics by Marxism as:“this method starts from the initial and simplest relationship in both history and reality…as a relationship, it shows that it contains two closely-related aspects. We would research each aspect respectively and hence get the properties of their mutual connection and their mutual interaction and thus contradictions needing to be solved emerge…on researching this method, we found that it is solved by building new relations while the two antithesis in this new relationship need to be illustrated now.’ The most fundamental research method in western economics is the same as that in theoretical physics. This method is hypothetical-deductive Method. The hypothetical-deductive Method is a fruit of the Newton Era but I don't think it has been outdated. This method usually contains the following steps:
The first step, a very important step, is to correctly put forward questions. Just as what Pope put forward: ‘all scientific discussions start from a certain question (P1) and specific to this question, we have raised various tentative answers and a tentative theory (TT) and then put forward remarks on this theory while modifying the theory of EE (elimination of error) and its criticism helps give rise to the new theory (P2).
The second step is to raise suppositions. The supposition as the central proposition will become a creative academic result once it is ‘certified’. While the second category of suppositions is built on theoretical results (set regulations) widely accepted or observance of facts. The necessity of the second supposition is to build a complete framework of reasoning, or one would make the logical error of ‘being able to get the result’. To build a logical framework comprising of suppositions, definitions and fundamental setsof regulations, or the so-called building of an economic model, is the most challenging work in economics. Everyone would form a certain ‘prior’ structure in attempting to discover and find problems, which is what we call ‘a thousand people would have a thousand minds’. It is very important to suppose that economic theories used by economists would seize an important position in the realm of natural science discipline. Einstein once said:“the completed system of theoretical physics comprises concepts, fundamental regulations taken as effective and conclusions obtained from logical regulations’. Moreover, he holds these concepts and fundamental suppositions as the most fundamental part of theories. ‘The most fundamental part of theories is those basic concept and suppositions with possibly lower quantity and no possibility to be further simplified’.
The theoretical structure of Western Economics is more or less like that. For example, in consumption theories, budget constraint and maximum supposition of residents’ utility fall into such a category of concepts and fundamental suppositions. Once these concepts and suppositions are determined, the consumption behaviour of residents is actually determined as well. What economists need to do is to logically deduce the consumption behaviour of residents contained in the fundamental concept and suppositions through solving a conditional extremum question.
The third step is to find a proper mathematical method when difference equations and simultaneous differential equations fall into this category. Admittedly, this is a small part. In Western Economics, numerous mathematical methods used in syllogisms and speculations exist. For example, only after mastering the necessary mathematic tools and starting from the ratio of governmental loan balance to GDP, financial deficits to GDP and economic growth rate and a few suppositions can we deduce the dynamic path of governmental loan balance to GDP.
Sure enough, it is not an easy thing to find corresponding mathematical economic methods for the researched problem. More importantly, real economic issues are extremely complicated and in most conditions, the already existing mathematical methods are completely useless. In this case, economists should use the already existing research to seek for the possible methods. The fourth step is deduction and conclusion which is actually easy after completing the aforementioned three steps. It includes solutions on differential equations and dynamic optimizing etc. For economists, it would prove difficult if training is not sufficient. But from the perspective of an economist, this step is simple and mechanical. Oftentimes, I list corresponding mathematical models and ask my wife, who is a mathematics major, to solve it.
The fifth step is to deduct supposition from certain suppositions that require being tested by physical experiments in physics. Economics needs to undergo the so-called ‘experience test’. Some young economists are into raising a supposition first followed by calculations and tests. I think this method cannot be used abusively for it is called ‘tests without theories’. The results would be totally wrong or invaluable through tests required in various measurement economics. In my view, good theories can help answer actual questions and prove to be correct in practice.
Li: well, I would like to know how to raise correct questions when you mention the first step.
Yu: to raise a question would involve two resources: first, find problems in practice. Chinese economists are superior in this field, for China has been undergoing turbulent economic change and practice gives us numerous problems with significance theoretical values. Secondly, you can find problems from literature, which is a method commonly used by Western economists.
One more thing, I just mentioned the hypothesis-deduction method but I would have two points to explain: first, no scientific method can replace inspiration, and inspiration largely comes from practice. You might find the ways for raising or solving problems when the hypothesis-deduction method can help you obtain pragmatic conclusions in the most effective and strictest manner. The second point is on mathematics: although I propose the use of mathematics, abusive use of it would prove to be incorrect.
Li: where does inspiration come from?
Yu: well, inspiration comes from practice but practice can be hierarchical. For example, practice can be categorized into direct experience, indirect experience from research and research of history. For people researching international issues, both indirect and research history are important. For economists, to put forward correct issues would be more important than solving them. But no significant research results can be obtained when one is drenched in complicated mathematical deduction without inspiration or strong problem awareness.
Economic theories and thoughts can normally be tested. On most occasions, you can gradually improve your theories through constant trial and error.
Li: the methods in Western Economics you just mentioned are systematic. I have a minor question; an important step in the hypothesis-deduction method is the hypothesis test. Oftentimes, the hypothesis test is based on the existing theories, then will it limit the generation of conclusions that would undermine the current theories?
Yu: well, yes. Any statements towards objective truth are subjective. Instrumentalists do not pay attention to the ‘correction’ of hypothesis and in my view, instrumentalism is far too extreme, for statements must have a proper acceptability. In the process of actual theoretical research, whether hypothesis have acceptability is not hard to be judged. The goal of theories is to explain the past and predict the future. If this goal is realized, it is not necessary for us to care about what you say. If theories cannot explain the past nor correctly predict the future while we don't discover the logical error existing in the theoretical deduction, we must look back to test the correctness of the hypothesis so as to revise or make a new start on the hypothesis. In this case, we might put forward a subversive conclusion.
Li: in all your essays and masterpieces, which ones are considered most important in your eye?
Yu: well, none of my essays are worth mentioning, but personally, I think Deduction of Aggregate Supply Function has the most innovative points.
Li: you just mentioned that in the past few years, you have been thinking about the theoretical framework of economic sustainable growth in China and macroscopic economic stability, have you made some breakthrough progress?
Yu: An important topic that I have taken up is ‘macroscopic economical policies under the reform and opening up: theoretical framework, international economy and domestic issues’. I hope I can continue my research on ‘Analysis of China’s Macroscopic Economy and Designing of Stable Polices’ back in Cambridge under this topic, so that a theoretical framework in line with the actual situation of China that is suited to analyze the macroscopic economy in China can be formed. Most chapters have been in print and the initial manuscript is soon to be finished, but it still requires further deliberation and processing. Well, I don't think I have obtained any breakthrough progress.
Li Zhongmin, male, born in 1976, doctor in management science. Started work in the economics and politics institute under CASS in July, 2006, deputy researcher; academic assistant of Yu Yongding, member of the Studies Department.
(Translated by Zhfuxiaofei)
Editor: Wang Daohang