The key to a successful future for China is the adoption of a constitution that protects persons and property against arbitrary government power and lays a framework for freedom under the rule of law. Just as Adam Smith articulated the principles of liberalism in the West, so the wisdom of Lao Tzu can play a similar role in China’s transition from market socialism to “market Taoism.”

James A. Dorn is Vice President for Monetary Studies at the Cato Institute, Editor of the Cato Journal, and Professor of Economics at Towson University.
AsiaDefense and Foreign PolicyInternational Economics and Development
Other Independent Review articles by James A. Dorn
Winter 2004/05 Red Capitalists in China: The Party, Private Entrepreneurs, and Prospects for Political Change