Circular Economy:Top Down Versus Bottom Up

Circular Economy was taken for granted as a national strategy to promote ecological civilization,and as a new economic model to achieve sustainable development in China.This research,it points out that the present circular economy development is under a Government-oriented “Top-Down” model.This research is rooted on the last decade‘s circular economy practice and lessons drawn from research experience and social investigation when participating circular economy related programs.In this paper,rethinking on this Government-oriented “Top-Down” model is made,after reviewing tons of western academic literature span over the sustainable development area.in this paper,in a view of Austrian School Economics and Coase new institutional economics,we challenge the market failure theory,which is prevail in sustainable development academic circles.Based on this,in this research,we argue and propose a new paradigm which is Market-oriented “Bottom-Up” circular economy development model with a special important role of enterprises and entrepreneurs.This research examine and provide an extensive theoretical discussion on the incentive mechanism and the related institutional elements that would promote and guarantee circular economy development.This research provide a whole new perspective to look into China circular economy,ecological civilization,and sustainable development,it would hopefully help to give new way of thinking and point to a new way to a good further circular economy development.First,this research gives an extensive discussion to testify that the key institutional elements,such as private property rights,spontaneous order,free to choose,and equal competitive are of vital importance,and show a market-oriented reform path to this institutional construction.Second,this research rethink China circular economy development,and it suggests that the present government-oriented “Top-Down” pattern should better turn to market-oriented “Bottom Up” pattern.Third,this research provides a historical point of view and amounts of evidence to challenge ?market failure? paradigm which is a “taken for granted ” belief in China.This research argues that market failure is of itself a fallacy,having no solid base of root;meanwhile,this research restates that market has been always working as the most efficient economic mechanism,and has been practicing circular economy‘s key notions throughout history.And in this research,a special literature review is given to 19 th century England during industrial revolution period,lots of historical record give us a good understanding of how entrepreneurs spontaneously create wealth out of polluting residuals and emissions in order to improve profit margins.Forth,this research points out a free-market environmentalism path,in a free market institution entrepreneurs and entrepreneurship are inner motive and incentive,and this group needs a better institutional environment to grow themselves,which includes key institutional elements: freedom,fair,and free market.Then under spontaneous order,circular economy development would be sustained.