It is not uncommon for high school history classes to introduce China as the world’s longest standing state. Aside from a short stint under the Mongol empire (and maybe British opium merchants), it has carried different names but the political entity that we know as China has existed independently and continuously for over six thousand years. Such continuity is remarkable, given China’s officially recognized 56 ethnic groups and numerous dialects – which are incomprehensible to each other in spoken form.
What’s even more remarkable is that all those dialects share a single, common writing system, the Han Zi. All 5,000-plus characters.
This context presents an interesting test for the famed Coase theorem, which states that as long as property rights are assigned, accompanied by rule of law, and easily transferable, only transactions costs prevent a society from reaching its optimum resource distribution. In today’s China, the country’s oldest lifeline is under threat of dissolution.
Few waterways capture the soul of a nation more deeply than the Yellow, or the Huang, as it’s known in China. It is to China what the Nile is to Egypt: the cradle of civilization, a symbol of enduring glory, a force of nature both feared and revered. From its mystical source in the 14,000-foot Tibetan highlands, the river sweeps across the northern plains where China’s original inhabitants first learned to till and irrigate, to make porcelain and gunpowder, to build and bury imperial dynasties. But today, what the Chinese call the Mother River is dying. Stained with pollution, tainted with sewage, crowded with ill-conceived dams, it dwindles at its mouth to a lifeless trickle. There were many days during the 1990s that the river failed to reach the sea at all. Read more from this article in National Geographic >>
The tilling and irrigation hasn’t stopped. Instead of feeding the million soldiers guarding the Great Wall, today’s Huang He Valley feeds the skyrocketing urban populations around Beijing, Tianjin, and across northern China. What’s missing from this picture, are formal property rights for the farmers in the region, to leverage against state- and privately- owned factories that threaten to wipe out their crop yields.
The common writing system melps to mitigate the typical transactions cost barrier of organizing such a wide diversity of ethnicities and dialects. The coase theorem predicts that in such an environment, the introduction of clear, transferable property rights will lead either to factories adopting cleaner technologies for fear of legal retribution, or to the farmers communally covering the cost of adopting cleaner technologies for fear of losing crop yields. Again, all that’s assuming a healthy Huang He is best for China.
Published Date: August 15, 2008