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The beginning of the article through Section Eight treats political reform, and I have written on the historical facts. This portion of the article consists of informal writing and should be regarded as a review of background material. However, I must announce that because I was in a hurry to finish the article, I did not have time to review certain materials and check them carefully. I cannot guarantee the accuracy of the article, therefore, and it is only for reference. The Section on "Merits and Demerits" is directly related to the conference discussion. I am grateful to the conference organizers for the inclusion of my talk at the conference. My topic is "The Merits and Demerits of Twenty-three Years of Reform." I want to introduce the materials and opinions that I provided to the Central Committee of the Chinese Communist Party and the Central Government. For scholars at this conference I want to include in this talk my experience of Chinese reform, and the facts and ideological materials ...

In a socialist country, the strategy of economic and social development is formulated by the Marxist party, which leads the country, and by the central government, which governs the country. Together, they implement the strategy. To this date, no country seems to have ever made public such a plan in a special document. As a rule, the strategy is shaped in the state plans, as well as in official and party documents. This is the procedure pursued in China as in other socialist countries.

It is imperative to have a scientific, comprehensive understanding of the meaning of economic efficiency. The key to this issue lies in raising efficiency. This guiding principle is derived from the summing up of China's historical experience in economic construction and from the analysis of its present economic conditions. The ways to raise economic efficiency are precisely to enhance labor productivity and increase the labor force. Of the two, raising labor productivity is primary, and increasing the labor force is secondary. Enhancing labor productivity involves much work. It must rely on science (including both natural and social sciences), the correctness of policy, and timely economic reform.

This is an old manuscript. In 1963 I had intended to write a book on economic effects in the production of material values under the condition of socialism. I only wrote about a hundred and several tens of thousands of words, but did not finish the book. This is the first part of it. In addition to this, I still have on hand the second part called "Gezhong jingji xiaoguo zhibiao" [Various Indices of Economic Effects]. All the rest of the manuscript has been lost.

When the current economic readjustment is completed, is it feasible for the provinces and municipalities that have the ability to begin conducting research on economic forecasts? We failed in the past to treat economic forecast as a branch of science. This is one of the primary reasons why we were unable to carry out our economic work with great precision. Can we start now to build step by step such a forecast system? We would suggest that some provinces and municipalities begin to forecast the economic events that may occur in the provinces and municipalities after the implementation of the economic readjustment. Such scientific inferences can only be looked upon today, in terms of the prevailing state of the art, as experiments. We should not expect nor demand too much of such experiments. The purpose of forecasting at this juncture is merely to learn through practice. Once the forecast work is started, however, it is viable that through continuous practice and incessantly acquiring experience, a perman...

Note: This is an article I wrote in 1953. In recent years there have been new developments in the "debate between man and machines." Machines can "understand" what man says and do things according to human commands, facts that I did not know possible at the time. However, I believe that the ideas contained in this article concerning the views that only physical or material forces can effect changes in the state of matter and that there are two kinds of matter do not need to be revised because of these developments. — Author.

The concept of economic effect varies with the differing natures of social production. The goal of capitalist production is to create surplus value for the capitalist, whose means for achieving this goal is to advance a certain amount of capital.** Because of this, the economic effect, as defined in capitalist production, cannot but be a ratio between the surplus value the capitalist gained and the capital he advanced. As far as the capitalist is concerned, to produce the same amount of surplus value with a smaller amount of prepaid capital means a larger economic effect, while a larger amount of prepaid capital means a smaller economic effect. The reverse is also true. With the same amount of advanced capital, the economic effect is greater when more surplus value is created, and the economic effect is smaller when lesser surplus value is created. In capitalist production the maximum economic effect is achieved when maximum surplus value is extracted with a minimum of advanced capital. This is precisely ...

Today, the National Commission for the Reform of the Economic Management System and the Economic Research Center of the State Council are mobilizing all economic research institutes and economic associations in the national capital to study the theories on the reform of the economic management system. Indeed, I think this study is absolutely necessary.

Agriculture is the foundation of our national economy. The improvement of labor productivity in agricultural production and the growth of the total output of agricultural products are prerequisites to the rapid growth of the entire national economy. In order to build our country into a powerful socialist state with modernized agriculture, industry, national defense, and science and technology, we need efforts from all sides. However, technological innovation in agriculture deserves our full attention.

In our daily life there are various inputs and outputs. The fact that, under certain conditions, different products have different values gives rise to difficulties in our investigation of the returns on investment. To expedite our study, let us now simplify the problem: We first investigate how things would stand when products are temporarily assumed not to take any special forms; later we can drop this assumption and discuss the returns on investment with the special forms of products being taken into consideration.**