If I had been asked more than 30 years ago, which I would prefer, a planned economy or a laissez-faire free market, I would have chosen the latter as the best pick-me-up for the country's abject economic condition at that time. But if asked the same question today, I would not hesitate to say that I would accept neither if they were presented in their extreme versions.

I do not necessarily agree with all that David Harvey says in his book, A Brief History of Neoliberalism, about the rise of neoliberal economics as "a state apparatus whose fundamental mission" is to "reflect the interests of private property owners, businesses, multinational corporations, and financial capital". However, the Asian financial crisis in 1997 and the financial crisis on Wall Street with its ensuing global economic meltdown testify to the truth of much of what Harvey says about the nature of neoliberalism.

Harvey writes that the rise of neoliberal economics since the late 1970s has mainly benefited the wealthy. In the United States, the richest 1 percent now control 15 percent of the wealth as opposed to 8 percent at the end of World War II. Harvey also points out that the aggregate economic growth during the decades between World War II and the 1970s was greater than during the neoliberal era.

But I would have accepted the free market fundamentalism of neoliberalism in the late 1970s, because at that time China was on the verge of bankruptcy. What the country needed then was free market competition to reverse the dire economic situation brought about by the extreme planned economy, which had almost choked to death the dynamism of economic development.

I believe that many in the country must have felt the same way. We over-emphasized the pros of laissez faire while completely ignoring the cons. Our worship of the market economy was blind devotion. We thought that way because we were narrow-minded and not well informed at the time. We believed that a market economy would lead us to the same prosperity as that enjoyed by our developed counterparts, though we knew little about what was happening in the developed countries.

Back in the 1970s we never thought about the downsides of modernity. We saw the convenience of cars, but we never considered the exhaust emissions that would pollute our air. We only thought of the profit big factories - no matter what they produced - would bring us, and never thought of the pollutants they would discharge during the manufacturing process. We had our eyes fixed on the role of free competition in stimulating the enthusiasm of labor, but failed to realize there would be those willing to seek illegal or unjustifiable profits.

The gap between the haves and have-nots in the country has been widening rapidly in the past three decades. Given the country's per capita income is just over $4,000, that China will likely overtake Japan to be the biggest luxury goods consumer in the world speaks volumes for the ever-widening income gap.

What China has achieved over the last 30 years justifies the economic road the country has followed in the past three decades. Yet, the state of the global economy shows that laissez faire can be a bad thing when carried to extremes and it is high time that we in China rethought the role of laissez faire in the country's economic development. The blind worship of free competition without accepting its drawbacks will be as detrimental to the country as the stubborn adherence to the planned economy was in the decades before the late 1970s.

More than 2,000 years ago, Chinese philosopher Laozi warned that it was important to guard against going to extremes, because he realized that it is very difficult for people to see both the good and the bad of something at the same time.

Using the good parts of something and getting rid of the bad is the wisdom of our forefathers, and it is wisdom that should also be applied to economic principles.

The author is a senior writer with China Daily.