The Price of Blurred Borders: A Market-Liberal Critique of China’s 75-Year "Commons"
From the perspective of a synthesized school of Chicago School pragmatism (Friedman), Misesian praxeology, and Hayekian information theory, the history of the People's Republic of China is not just a series of policy errors—it is a 75-year laboratory proving that without clearly defined, transferable private property rights, "tragedy" is the inevitable default.
The Diagnostic: Why China Collapsed into the Commons
Whether it was the starvation of the Great Leap Forward or the "Cancer Villages" of the 1990s, the root cause was the "Illusion of Ownership."
The Calculation Problem (Mises): In the Mao era, by abolishing the market, the state destroyed the price mechanism. Without prices, there was no way to know the true value of grain or steel. The "Commons" was exploited because there was no economic calculation to signal scarcity.
The Incentive Gap (Chicago/Friedman): "If everyone owns it, nobody owns it." The 承包 (Contract) system failed environmentally because it decoupled use rights from residual claimancy. Farmers were "renters" of the state. As any Chicago economist knows, a renter has every incentive to extract maximum value today and zero incentive to invest in the soil's health for tomorrow.
Fatal Conceit (Hayek): The central planning of urban spaces and the "Bike Sharing" boom failed because planners suffered from the "Fatal Conceit"—the belief that they could manage the "Commons" better than the spontaneous order of the market. The result was massive capital malinvestment (Bicycle Graveyards).
Lessons for Global Economies: Avoiding the Trap
To avoid the Chinese cycle of depletion, other nations must adopt three fundamental pillars:
Total Privatization of "Residual" Rights: Move beyond "contracts" or "leases." Only when an individual owns the future value of a resource (land, water, or air rights) will they preserve it.
Pricing the Externalities: Where a "Commons" must exist (like the atmosphere), the Chicago approach suggests market-based pricing (Pigouvian taxes or tradable permits) to internalize costs that are currently being dumped on the public.
Decentralized Knowledge: Trust the local "man on the spot" (Hayek). Environmental management should not be a top-down decree from a capital city but a result of local owners protecting their own asset values.
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