Wu Huilin: Chapter 35 Taiwan’s Free Economy “Mentor” – Mr. Xia Daoping

In Taiwan today, following the “economic miracle” and the realization of the “political party alternation” in 2000, it seems to have created another “political miracle,” which specifically signifies the implementation of “democratic politics.” The residents of Taiwan today can be said to enjoy a considerable degree of freedom, with no taboos in “freedom of speech,” which is not only unrestricted but also abused due to a lack of necessary democratic literacy. While there is still some distance to go before reaching the ideal democratic state, the achievements are remarkable. The realization of these achievements today did not come naturally but through the sacrifices and efforts of many predecessors over a long period. Among these revered figures, Mr. Xia Daoping, who passed away on December 23, 1995, is undoubtedly one of the most important.

Although the economic miracle has become Taiwan’s pride, and its foundation dates back to the first wave of liberalization at the end of the 1950s, the implementation of liberalization was only carried out halfway after the passing of Mr. Yin Zhongrong in 1963. As a result, by the mid-1990s, Taiwan’s economy faced extreme downturns. In response to the situation, and to rejuvenate Taiwan’s economy, a second wave of economic liberalization was seen as the solution to the crisis. This was embodied in the basic spirit of the “Asia-Pacific Operations Center,” referred to as a project crossing the century. Looking into its significance, it is essentially “free economy.” However, the progress of this correct direction’s work did not proceed smoothly. Not only did the legislative department struggle to cooperate, but even the government agencies, personnel could not effectively promote it, ultimately leading to a stalemate. Following the political party alternation, since the second half of that year, Taiwan’s economy also plunged into a quagmire due to global economic downturn, only beginning to turn around by the second half of 2003, followed by concerns of overheating, almost without a stable long-term “medium-term” situation. The root cause was the implementation of a free market economy, while the lack of a free market ideology was fundamental. The reason the first wave of liberalization was only carried out halfway was also due to the lack of free market concepts. Over more than forty years, the situation has continued, demonstrating the power of “ideas” and illustrating the difficulty of establishing, transmitting, and changing ideas. Philosophers have said: “Removing a belief is more painful than pulling a tooth, and we do not have an anesthetic of knowledge.” This is indeed true. While removing a belief is undoubtedly difficult, establishing a belief is even more challenging. In Taiwan, the work of establishing the free market ideology is a hundred times more difficult because our mentors in the free market economy are indeed too few, and among the scarce individuals, Mr. Xia Daoping is undoubtedly one of the important figures.

The relationship between liberal democracy and economic freedom is extremely close, yet individuals who possess both characteristics are extremely rare. Mr. Xia Daoping is exactly such a figure. Although Mr. Xia is not widely known, his knowledge and patient dissemination of democratic politics and free market economic principles have had a profound and lasting impact, arousing our interest in his journey of enlightenment and his lifelong adherence to consistent beliefs. His ability to uphold the principles of a free market economy even during tumultuous times and White Terror era without falling into the tragedies faced by others is truly remarkable. It makes one wonder how he accomplished such a typical feat.

Born in May 1907 in Bao’an Town, Daye County, Hubei Province, in a large family where he was the only son, Mr. Xia grew up in a town with less than a thousand residents, all engaged in shop businesses for a living. His family was considered wealthy in the town, belonging to the landlord class, and able to afford private tutors. Among four teachers, Mr. Du Xingfu from Tongcheng, specialized in poetry and essays, had the most enlightening impact on Mr. Xia. Mr. Xia’s writing in classical Chinese and vernacular Chinese, with meticulous layout, structure, and word choice, was developed through this mentorship.

In a serendipitous meeting, Mr. Xia entered a new school with “equal qualifications.” In 1929, he entered the Wuhan University Department of Economics at the Faculty of Law after graduating in two years. Initially taught economics by a professor who had just returned from Germany, he was instructed in the socialist economics popular in Germany at the time. By the third year, this professor introduced him to economic policies from the Iron Chancellor Bismarck onwards. Consequently, Mr. Xia felt misdirected towards a “non” economics path when starting his studies in economics, later realizing the misconception.

Fortunately, in the second and third years, Mr. Xia was timely guided by several professors returning from the London School of Economics, especially Professor Ren Kainan, who taught Western economic thought and western economic history. He was also Mr. Xia’s dissertation advisor. After graduating from Wuhan University, Mr. Xia stayed on as a teaching assistant at the university, hoping to read more books, learn foreign languages and prepare for the public-funded study abroad exams. However, two years later, the Anti-Japanese War broke out, leading to disruptions. Throughout the turmoil of eight years, the university moved to Sichuan, and Mr. Xia followed but couldn’t escape the fate of severe bombings. After several narrow escapes, he realized there were no distinctions between front and rear in modern warfare. Consequently, he resolutely left the university and served as a civilian military officer on the front lines in Luoyang, returning to Chongqing later in the war’s latter stages, working for the “National Political Council.” It was during this period at the National Political Council that Mr. Xia embarked on the path of free market economy.

The “National Political Council” was the central public opinion body during the Anti-Japanese War, where the government-appointed councilors were indeed representatives from various sectors and parties, especially eminent scholars known for their frank discussions. Most of the academic and educational elite who upheld impartial decisions were also part of the council. In this political institution, as long as the personnel were open-minded, they naturally absorbed some antibiotics against various anti-free political myths. Mr. Xia worked in a unit called the “Economic Development Strategy Advancement Council,” whose members were several councilors who regularly presided over council affairs, with Deputy Secretary-General Lei Zhen largely in charge. Mr. Xia’s position at the time was the director of the council’s research office. The so-called research at that time consisted of reviewing appeals and petitions from the people, along with proposing opinions for handling them. Although he gained a better recognition of the flaws in economic control due to his work, Mr. Xia did not grasp the inherent harm of economic control at the time.

It was Mr. Lei Zhen, his superior at the National Political Council, who truly led Mr. Xia on the path towards free market economics. Mr. Lei Zhen, who was Mr. Xia’s boss at the council, was also the founder of the influential “Free China” semi-monthly magazine that deeply influenced Taiwan’s democratization. Since Mr. Lei did not put on airs of superiority, Mr. Xia, as a subordinate, befriended him. After the war, they both went to Nanjing, where Mr. Xia met Mr. Hu Shi at a dinner hosted by Mr. Lei Zhen, both of whom were the backbone of “Free China.” The relationship between Mr. Xia and “Free China” was established during his tenure at the National Political Council.

“Free China” semi-monthly magazine was born in Taipei in November 1949, with a lifespan of eleven years (banned in September 1960). The political climate in Taiwan at that time, described by Mr. Xia as “as dim as the weather, with incessant crowing of roosters,” was different from the thunder and fury of the time in China and the tricky twists of the Taiwanese transition. “Free China” published a total of 249 issues, with 429 editorials, including 116 written by Mr. Xia himself, as well as several others he translated or wrote under his real name or a pseudonym, along with some short reviews published earlier. Overall, Mr. Xia was a prolific contributor to “Free China.” Although “Free China” was hugely popular at the time and had a significant impact on public opinion, as it is still highly praised today, Mr. Xia was relatively overlooked compared to Mr. Yin Haiguang. This was because Mr. Yin was deprived of his teaching rights at National Taiwan University, faced difficulties going abroad, and later succumbed to cancer, his later life filled with hardships, making his role as a commentator highly visible. In contrast, Mr. Xia remained relatively calm in temperament, and after the end of “Free China,” he continued to engage in teaching and research work, albeit with some setbacks, but managed to sail smoothly through them. Consequently, his political commentary from that period did not receive the attention it deserved. In fact, Mr. Xia’s writings had had groundbreaking impact.

In January 1989, urged by friends, Mr. Xia compiled his articles from “Free China,” based on historical materials and issues that were still unresolved at the time, into a book published by Yuan Liu Publishing Company titled “My Time in ‘Free China’.” One article in the book titled “