ABSTRACT

An American economist of an institutionalist persuasion, Steve N. S. Cheung [1986], in assessing the prospects of transforming the Chinese economy into a capitalist system, observed (too optimistically, in this authors opinion) that ‘all the officials who would otherwise resist the adoption of private enterprise could perhaps be compensated and put into comfortable retirement with plenty of social gain left over’. However, he regarded the negotiation, enforcement, and other costs as prohibitively high. In this author's view, the proposal is worth pursuing somewhat further. To begin with, two assumptions should be formulated.