Outline of Public Finance

Author: Zhang Xin
Editor-in-Chief: Lu Yuanshou
Publisher:
Publishing Date: 2004-10-01
Features:
Fragment: When practice gradually shifts toward "publicness," proposing a target model for public finance is clearly permissible. At this point, raising the question "What is public finance?" can both summarize and reflect on the past 20 years of fiscal reform practices, and through theoretical elevation, better guide further reforms in China's fiscal system, thereby comprehensively updating China's fiscal theory in the process. Therefore, it can be said that addressing the question "What is public finance?" is timely. In reality, people's theoretical summaries and conceptual definitions of many emerging phenomena often lag behind the development of objective reality. This is not only true for the "public finance" issue but also for many concepts now widely familiar, such as "market economy," "capitalism," and "socialism." Anyone who pays slight attention to theoretical trends knows that the academic community remains deeply divided on these concepts, with no unified or clear conclusions. Regarding this, Huang Renyu's discussion on the term "capitalism" is quite thought-provoking. He points out that while most writers believe capitalism emerged as an economic phenomenon first appearing in the Italian Peninsula between the 13th and 14th centuries, the term "capitalism" itself was coined centuries later. [French historian Fernand Braudel's research shows as follows:] In fact, it was not until the early 20th century that the term "capitalism" was fervently debated in political forums as the opposite of socialism. Naturally, this term never used by Marx was included in his framework. From then on, slave society, feudalism, and capitalism were regarded as the three stages of evolution in The Capital.① Turning to China, the term "socialism" has also been the subject of intense debate regarding its definition and connotations, and in this sense, it can be considered "unclear." Yet, no one has denied the objective existence of "socialism" based on this. As for the term "market economy" before it was recognized in China, it faced fierce and even exaggerated opposition, with one of the main reasons being its "uncertainty." All these concepts—whether "capitalism," "socialism," or "market economy"—have yet to be theoretically resolved in terms of "what they are." However, since terms like "capitalism," "socialism," and "market economy" are reflections of certain objective realities, they have been widely accepted by most of China's theoretical community. Thus, the "uncertainty" of these concepts does not hinder people from forming a general consensus about them, allowing them to be used in practical work and theoretical analysis. The public finance issue China currently faces is no different. This is because China's practice of fiscal publicization has moved ahead, while the theoretical community remains deeply divided. Therefore, what needs to be resolved now is not whether "public finance" exists but rather how to better summarize and understand China's unique "public finance" and its theory. So, what is public finance? In my view, "public finance" refers to the allocation or economic activities of the state or government① providing public services in the market. It is a fiscal type and model adapted to the market economy. These points will be analyzed and introduced in the main part of this book's fifth and sixth chapters.