A Critical Analysis of the Austrian School and Its Dissemination in China

Yanan Wang ()
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Yanan Wang: Xiamen University

Chapter 41 in The Basic Theory of Chinese Economy, 2026, pp 307-323 from Springer

Abstract: Abstract This section clarifies what is meant by “Chinese economics” and argues that the term is not a claim of a separate national science, but a problem of application: economic laws are general insofar as societies share comparable relations and conditions of production and exchange, yet their practical use is constrained by each country’s specific historical and institutional setting. From this premise, the section diagnoses a persistent misapplication of imported economic doctrines in China and identifies Austrian economics as a paradigmatic case of “metaphysical” theory—one that abstracts the individual from social relations, elevates consumption psychology and marginal utility to the foundation of value and distribution, and then rationalizes profit, interest, and wages through a time-preference logic (present vs. future goods). It then explains why such a framework achieved global diffusion—through naturalistic premises, covert borrowing from classical categories, common-sense plausibility reinforced by mathematical formalism, and, most fundamentally, its ideological function as a defensive response to capitalism’s crises. The section shows how these traits made Austrian economics especially transmissible into semi-colonial contexts, shaping Chinese textbooks, research agendas, and policy thinking while obscuring structural constraints. Finally, it contrasts this influence with Sun Yat-sen’s Principles of People’s Livelihood, emphasizing land reform and historical stages as prerequisites for modernization, and concludes by outlining economists’ responsibilities: uphold academic freedom, adopt critical contextual reading, and re-anchor economic analysis in China’s real social foundations.

Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-95-6330-2_41

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DOI: 10.1007/978-981-95-6330-2_41

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