Edited and Translated by People's Daily Online
One subject of the World Economic Forum held in Davos of Switzerland in 2012 is "reforming the capitalism," which reminds me a joke: If first-class economists exist, then the first-class economy will not exit. This joke actually reveals a fact: The current economic crisis faced by the West is a crisis of the West's mainstream economic theory and also a crisis of the Washington Consensus based on the theory, because the core of the Washington Consensus is the "market fundamentalism."
The market fundamentalism believes that market — the "invisible hand" — can automatically promote the economic balance thus any governmental interference is unnecessary. As the economic crisis is spreading and deepening in the West, the "market fundamentalism" has become notorious.
In fact, regarding relations between the market economy and governmental interference, China's general designer of the Reform and Opening-up Deng Xiaoping had a very deep insight. In his South Tour Speeches 20 years ago, he said firmly and confidently, "Planning and market forces are not the essential difference between socialism and capitalism. A planned economy is not the definition of socialism, because there is planning under capitalism; the market economy happens under socialism, too. Planning and market forces are both ways of controlling economic activity."