| In the new century, the Chinese government has shown great concern for two major problems---- three-dimensional rural issues concerning agriculture, countryside and farmers and social harmony. In the process of industrialization and urbanization, agriculture is increasingly becoming a weak industry and farmers are becoming a weak group. Rural stability and development has gradually become the focus and key to further economic and social development."Three Rural Issues"is closely related to building a harmonious society. Its solution will be helpful to the social harmony and sustainable development. At present, China is a harmonious society on the whole, but there are still a lot of unfavorable factors affecting social harmony such as constantly widening of urban-rural income gap, serious imbalance in the regional development, lagging-behind of the social security system and a lot of potential unemployment. Among all of these issues and factors,"Three Rural Issues"is the major one which has effect on building a harmonious society because of its fundamental and overall characteristics. Its solution is also related to the relationship of interests from different quarters.Since"Three Rural Issues"is closely related to the policy and distribution of interests, re-adjustment of the system arrangement and the distribution of interests becomes the key to effectively solving"Three Rural Issues"and enhance the social harmony. In modern countries which applies market economy, there are two patterns of interests'distribution: one is the distribution of investment contribution, that is, the more one invests, the more one benefits; the other is the distribution of power, that is, the government makes distribution in different cliques, social strata and groups. The former is the conventional practice in market economy which helps stimulate economic growth, but results in the fact that the weak group in the society can only live on social assistance and financial payment of the government. The later helps realize the social equity and justice and narrow the gap. China is now in dilemma of balancing its economic growth and social equity. Farmers, the majority of weak groups,due to a lower level of human capital accumulation and the marginalization of policies, have less possibility and chances to independently get effective resources under the condition of market economy and narrow the gap between urban citizens and them. In this case, the government plays an indispensable role. Government's positive positioning and careful planning becomes the key to solving"Three Rural Issues".When we see a majority of peasants'efforts to increase income can only bring little effect after the implementation of policies to increase incomes one after another, we understand why"Three Rural Issues"exists and why there is a gap between cities and countrysides. The famous economist Schultz once said,"Whoever farms, as his forefathers did, can't produce a large quantity of food no matter how fertile the land is and how hard he works, while those who master the scientific knowledge of soil, plants, animals and machinery can make rich products even in barren land."These words are undoubtedly an fundamental enlightenment for us to solve"Three Rural Issues", promote rural development and build a harmonious society.Then whether Chinese agriculture, countrysides and farmers now have the traditional characteristics as Schulz said? How to reform and solve it? They are problems in economics reflected by a growing number of scholars in recent years. Comparing Schulz's human capital theory of agricultural development with domestic scholar's thinking and views of urbanization and agricultural modernization, we can see their views tend to seek instant success and quick profit. China is a large agricultural country with a large population. If rural people are simply transferred from rural areas, not only the pressure on urban employment but also the area of wasteland will increase, which will be not conducive to the development of agriculture. However, the remaining laborer power must shift away in order to develop a modern industry and realize the urbanization. It appears to be a paradox. The key of the problem is what measures we should adopt to solve it. In recent years, Chinese government and academic circles have a consensus: economy can't have a sustainable growth without farmers, and only to increase farmers'income steadily and constantly can stimulate effective demand and promote stability and development of investment and economy.So, how to increase farmers'incomes? There are a lot of specific solutions and measures such as adjusting income distribution, exempting from agricultural taxation, reducing or dispensing with tuition and fees of compulsory education in rural areas, increasing the government's payment of rural financial transferring, and adjusting taxes and tax rates, curbing the corruption, controlling the industrial monopoly. However, we can easily find that these measures and methods have a clear defect, that is, to increase farmers'incomes relies more on the outside force (or the government). This dissertation tries to look for solutions to the problem of"Three Rural Issues"itself, that is, to search for programs and methods to narrow the gap and build a harmonious society from the perspective of the rural investment in human capital improvement of farmers'ability to get incomes. Of course, the concrete implementation is still inseparable from the positive activity of a government.At the turn of the century, many new changes and situations has happened in the domestic economy and social development. From the economic point of view, from 1978 to 2008, economy in China has had a sustainable growth for 30 years, with the average annual GDP growth of more than 8.9%, and the sustained time of growth is also rare. However, it is the rapid economic growth rather than a balanced one that results in the serious imbalance of the distribution of economic interests in space and population. In terms of regions, (1) the regional economy develops with imbalance, particularly with the widening gap between the west and east; (2) economy in urban and rural areas develops with imbalance. Farmers'incomes grow slowly, and the gap between urban and rural areas continues to widen. Gini Factor of urban and rural citizens'incomes per capita has approached the warning point. In terms of population, (1) the social wealth tends to accumulate among a small number of people, and the differentiation of social classes turns to be more obvious; (2) the employment pressure is tense, and the invisible and potential population of unemployment becomes visible and makes a one-way flow towards cities with the surplus rural labor resulting in the tense employment pressure in cities. In terms of society, (1) the gradual widening of economic income gap and the lagging behind of system reform lead to the gradual socialization of unfair distribution; (2) such unreasonable income distributions as corruption lessen the social acceptability so that the psychology of some social members, especially weak social groups, transforms in a way not conducive to social stability and harmonious. According to the international experience, China is in the period of opportunity of strategic development. the course of development in some countries and regions shows that after the per capita GDP exceeded﹩1,000, the economic and social development entered a critical stage. This phase has two possibilities: First, economy and society will develop by properly handling problems and contradictions in economic development; Second, the society goes into the high-risk stage with its tense social structure and social contradictions resulting from the simple pursuit of economic growth and the ignorance of plus problems and contradictions in economic growth.From an international perspective, we are confronted with the tremendous pressure of obvious economical advantages of science and technology in developed countries. On the one hand, today's world is facing the great changes and reforms. It is true that multi-polarity of the world is irreversible, economic globalization further develops, global and regional cooperation is also in the ascendant, states relate to each other more closely, the balance of international powers develops in a direction conducive to the world peace, and the international situation is generally stable. Those above provide external conditions for our country to gain more time and better environment of development. On the other hand, the accelerate revolution of science and technology and the obvious advantages in developed countries lay enormous stress on us. More seriously drastic changes in the Soviet Union and Eastern Europe make the international communist movement suffer tremendous setbacks. Afterwards some western hostile forces don't yet give up the attempts of "Cold War" and "Peaceful Evolution", in addition to the tendency of closer economic exchanges, which disquiets various trends of thought and so has a major impact on people's values. The existence of such problems makes us vigilant in peace time after we have achieved a lot and clearly recognize that the complicated and changeable international situation at the beginning of the new century bring us challenges in the national security. We can truly maintain and lengthen the important"period of opportunity of strategic development"and realize the great historic cause of rejuvenization of the Chinese nation only by carefully clarifying, correctly understanding and properly dealing with these challenges.The Communist Party and the government, standing high and seeing far and having innovative ideas, put forward and make some strategic objectives and planning such as building a new socialist countryside and building a socialist harmonious society. Therefore it is a useful theoretical exploration to study the harmonious society from the perspective of human capital and it has a practical significance.Since the birth of economics, the relationship among nations, governments and markets has become an eternal topic. With the function of market mechanism rather than of government, weak groups in the society will be marginalize by the interests resulting from economic growth, which unavoidably cause problems such as"Three Rural Issues", gap of incomes, unfairness of society and imbalance of economic efficiency.Then what are the focus points and entry points for governments to solve the problems above? This dissertation takes the theories of investment in human capital and accumulation as explanatory tools and means, and the present condition of investment in human capital and accumulation in our rural areas as a basis, on the assumption that there are only two groups of urban and rural citizens in China and they have different levels of human capital accumulation and scales of investment .By applying the laws of investment and profit, the dissertation will testify that the widening of the income gap between urban and rural areas resulting not only from the questions of history and policies, but also from the lower level of human capital accumulation and smaller scale of investment in rural areas than in urban areas, as one of the main reasons.Therefore, this dissertation is a highly practical and challenging task by basing itself upon the problem of rural human capital accumulation and investment issues under the new trend of building a socialist harmonious society.In terms of structure and logic relationship, this dissertation is divided into five parts: Chapter One or Introduction belongs to the first part, raising questions and research perspectives; Chapter Two and Three belong to the second part, raising the theoretical and practical basis of assumption; From Chapter Four to Chapter Seven belong to the third part, making a series of empirical and practical analysis of theoretical assumption; Chapter Eight belongs to the fourth part, probing into the basic experience and practices of the foreign investment and accumulation in rural human capital; Chapter Nine belongs to the fifth part, putting forward the restructuring of the investment and accumulation in rural human capital and the implications of the policy.Chapter One Introduction. It includes the present background at home and abroad where problems are raised and the basic thought, significance, main methods and logic structure arrangements of the study. It points out the seriousness of"Three Rural Issues", the importance of solving this problem and its effect on building a socialist harmonious society. Since the opening up and reform in China, the fundamental reason why the income gap between urban and rural areas continue to widen and farmers can't increase their incomes effectively is that"Three Rural Issues"has been marginalized gradually by reform achievements under the government-led reform mode. The way-out is to change the government's short-term activity in solving"Three Rural Issues"and form the strategic route to solve it, that is, to enlarge the scale of investment in rural human capital and transform the extensive rural development policy (increase rural citizens'incomes by depending on external power) into the intensive rural development policy (increase rural citizens'incomes by depending on its own human capital accumulation).Chapter Two, relevant basic theories and research framework. The theoretical research framework in this dissertation is posed on the basis of a general statement of present studies of the relevant basic theories at home and abroad. The early thinking of analysis of investment in human capital theory mainly focuses on the following two aspects: the relationship between the human capital and economic growth and between the human capital and income distribution. The former clarifies that the way of the investment in human capital and the stock of human capital plays an important role in economic growth and wage income; the latter makes a study of income distribution by applying the method of investment in human capital, and establishes a interests model of investment in human capital, and puts forward interests Function of human capital, and thinks the income gap among laborers related to the time of their education and work experience, and proposes the concept of "catching up with" the period when inspecting the effect of job-training on lifelong income modes. Domestic studies of investment in human capital highlight in the impact of the income gap, which generally considers regional disparities, the gap between urban and rural areas, and the gap between East and West closely related to the investment in human capital. According to the logic thinking during the early study of investment in human capital theory, this dissertation develops and further puts forward the effect of investment in human capital on a harmonious society.Chapter Three, a comprehensive study of the investment and accumulation of rural human capital in present China. Theoretical research can not be made without practice. The present conditions of investment and accumulation of rural human capital in China provide the basis and foundation for the research of this dissertation. First is the unreasonable mechanism of accumulation and investment in human capital, which is based on the differentiated government policies of investment and accumulation of human capital in urban and rural areas. Rural citizens invest and accumulate human capital almost completely by depending on its limited resources, while urban citizens can get more supports from the government. Second, the accumulation of human capital stays at a low level for a long time. Limited supports of government, coupled with rural citizens'inadequate ability, the accumulation of rural human capital stays at a low level for a long time, as well as a small stock and a small increasing amount.Chapter Four, influence of rural investment in human capital on building the harmonious society from the aspect of the income gap of investment in human capital between urban and rural areas. It will mainly reveal the effect of low-level accumulation of rural investment in human capital on the income gap between urban and rural areas. Since the investment in human capital is proportional to profits, the level of accumulation, the economic chance and the profits increase with the bigger investment. Therefore even if the government rearranges the institution for the purpose of benefiting rural residents, the income gap between urban and rural residents is still in the first stage of Kuznets'inverted "U" hypothesis ---- non-expanding stage. Chinese government attaches great importance to the increasing income gap between urban and rural areas and has taken such measures as reducing or exempting agricultural tax to increase farmers'incomes. But the result is less effective. This article holds that the fundamental reason lies in the fact that policies can only produce external functions to increase farmers'incomes; however, only relying on external forces is only a short-term activity and will not help fundamentally solve the problem of income gap between urban and rural areas. Governments must stand on a strategic height, take educational input as an entry point, and enlarge investment in human capital in the rural areas so as to get twice the result with half the effort and ultimately defuse factors of disharmony triggered by the widening income gap.Chapter Five, influence of rural investment in human capital on building the harmonious society from the aspect of the economic efficiency. It mainly reveals the impact of a low-level accumulation of human capital in rural areas on economic efficiency. Studies of the impact of a low-level accumulation of human capital in rural areas on economic efficiency in current theoretical fields focus on the loss of economic efficiency. Because of the great gap between the low-level accumulation of human capital in rural areas and that in urban areas, the income gap widens constantly. On the basis of Consumption Function Theory, rural citizens, unlike urban citizens, play a role in limiting the growth of economic efficiency in terms of consumption structures and levels. Savings increase, while consumptions decrease. Deformed pulling models take place in economic growth, that is, domestic demands are in the shortage (particularly from rural residents'living consumption), while investment and exporting go up. The result of empirical analysis is generally identical with that of observation by means of experience.Chapter Six, influence of rural investment in human capital on building the harmonious society from the aspect of social equity. It mainly reveals the effect of a low-level accumulation of rural human capital on social equity. In fact, a low-level accumulation of rural human capital not only damages economic efficiency but also hits the social equity. In the thirty years of opening-up and reform, we basically follow the philosophical thinking mode of maximizing the social welfare by "giving priority to efficiency with due consideration to fairness". In general, the overall level of social welfare has indeed been significantly improved. However, the relative welfare of rural citizens decrease under the condition of increasing absolute welfare, and a considerable number of rural residents go into the cycle of "syndrome of relative poverty"unconsciously. The normal balanced social mobility is broken and the mobility of social strata tends to be rigid, resulting in a series of social contradictions and conflicts of interests and producing a profound impact on the fairness and justice and on the building-up of a harmonious society. The fairness of the starting point of paying attention to the accumulation of rural human capital is more important than that of the process and of the result. There are three factors involved in examining the negative impact aroused by the low-level cycle of accumulating rural human capital from the aspect of social justice: one is to make a historic investigation of the documentary heritage relevant to social equity; second is to prove the relationship between rural human capital accumulation and social equity; third is to focus on the negative effect of rural human capital accumulation on social equity.Chapter Seven, the empirical research on the relevance of the rural investment in human capital and harmonious society. It mainly reveals the effect of investment and accumulation of rural human capital on the building-up of a harmonious society under the functional mechanism of income gap. The factors arousing social conflicts and instability are complex and intertwined. However, the fundamental conflict is that of interests, and other conflicts are subordinate to it. Based on the conflict of interests, it is proved from the empirical observation that the social psychology changes along with the income gap and finally damages the social harmony by applying such methods as analysis of economic activity and chess-playing.Chapter Eight, the practice and application of foreign mechanism of accumulating rural human capital. China is a large agricultural country with farmers in the vast majority of the population, and the social economy in rural areas is relatively backward."Three Rural Issues"concerning the hardship of farmers, the poverty of countryside and the danger of agriculture has become the biggest obstacle of restricting our process of industrialization, urbanization and modernization. Our country can make a faster and better development only by developing the industry and agriculture at the same time and learn how to walk in two feet. Though different countries in the world have different social systems and different levels of economic development, it has been recognized by economists that some countries especially advanced countries attach great importance to agricultural development. They also attach great importance to the development of rural education except that they give preference to rural areas in institutions, policies and welfare and gain the precious experience in speeding up the accumulation of rural human capital. It has a great practical significance to enhance the rural education and the level of accumulating rural human capital in our country by studying and borrowing the experience of those countries especially advanced countries in agricultural education and accumulation of human capital. This chapter makes a comprehensive introduction of the basic practice of accumulation mechanism of rural human capital in five types of countries as the developed countries in Europe and America, Latin American countries, the Asian newly industrialized countries, countries in transformation and less developed countries. Among them, there are two opposite approaches worthy of our attention, first is the highly attention-giving to basic education in the developed countries in Europe and America (on the parts of legislation, financial supports and so on); second is the ignorance of basic education in Latin American countries and less developed countries (financial resource of education give preference to education in colleges and in urban areas).Chapter Nine, restructure and policy implications of investment mechanism of rural human capital in China. It is a strategic task raised by our government to build a socialist harmonious society according to the new situation of economic and social development. Experts in different disciplines and fields put forward many useful suggestions on how to realize the strategic task. It is a new attempt to think of measures to increase rural investment in human capital from the perspective of building a harmonious society. The basic purpose of applying the investment in rural human capital as a tool lies in clarifying the important function of rural human capital accumulation in the process of building a harmonious society, so as to increase our concerns about the importance of rural human capital accumulation. The important frame of the investment mechanism of rural human capital in China includes subjects of investment, channels of investment and incentive mechanisms. In terms of subjects, great importance should be attached to the cultivation and development of rural economic cooperative organizations; in terms of incentive mechanisms, great importance should be attached to the combination of policy incentives and financial supports. Moreover supports of aided grants and scholarship should be given to rural students (including college students from rural areas) in a larger scale. Based on those above, suggestions on increasing input of rural education, raising farmers'incomes and reforming rural policies have been put forward.The innovations of this dissertation can be summarized in several aspects as follows:1. Innovative topic selection. The selection of topics is the key to write a good paper and make an innovation. Perspectives can be diverse in studying how to build a harmonious society. At present, most makes their studies in the perspective of the distribution of benefits, institutional arrangements, the ruling party's ability to govern and so on. The present thinking of the theory of investment in human capital is about the relationship between human capital and income distribution (or economic growth) within the limitation of the inspection and proof in other countries. To include human capital in the study of building a harmonious society-----the relationship among human capital, income distribution (or economic growth) and a harmonious society ---- will expand the theory of investment in human capital and the perspective of research on a harmonious society2. Innovative theoretical system. The present logic of research on the theory of human capital investment and accumulation is the relationship between human capital and economic growth, between human capital and income distribution. Based on that logic this dissertation builds a huger theoretical research system----the mechanism of human capital acting on the harmonious society: the conclusion is drawn that the level of rural human capital accumulation makes an important impact on building a harmonious socialist society with the interrelation and interaction between human capital and the income gap, economic efficiency and social equity and so on.3. Innovative views.①Human capital investment in rural areas has dual characteristics: It is conducive to improving the quality of farmers and to the social stability and harmonious development. In this sense, investment and accumulation of human capital in rural areas are public products. Therefore, investment and accumulation of human capital in rural areas are not only concerning individual farmer, but also the government's responsibility and obligation. Having recognized it, the government will changed from a passive one into active.②With the increasing level of rural human capital accumulation, scientific and cultural quality and moral quality of farmers will increase constantly. Farmers can not only create the folk arts and culture loved by them but also offer intelligence supports to the scientific guiding ideology and policies and systems made by governments through farmers'practice and experience. At the same time, the eliminated ideological discrimination due to the equality of ability is conducive to further strengthening cooperation and communication between the urban and rural residents. To realize the harmony of social psychology and interpersonal harmony has an important effect on enhancing social cohesion.③Investment in human capital in rural areas is the fundamental requirement and approach to build a socialist harmonious society. The equity of systems is an important condition for building a harmonious society. If farmers'incomes still has a great gap with urban citizens under the condition of fair and reasonable system, equal competitive process, we must look for the root from the fair beginning ----whether the level or the ability of human capital accumulation is equal.④Innovative proposals of policies. At present, the government should take rural education as an entry point and increase its input and innovate its policies concerning the policy of investment of human capital in rural areas ---- implement a series of bundling plans of the rural education, rather than simply give subsidies to farmers, transform extensive policies of rural development ----relying on external forces to promote the growth of income of rural residents, into intensive policies of rural development ---- relying on its own human capital accumulation to promote the growth of income of rural residents.⑤In Chapter Nine, the view of"it hasn't formed into scale that social forces participate in the rural investment in human capital"is put forward concerning the main issues of the investment and accumulation of human capital in rural areas. In our country, the function of market hasn't been fully realized and the function of organizations such as companies is almost nothing in the rural human capital investment due to the low level of organizing and market of agriculture. To build new accumulation mechanisms of rural human capital, companies function in rural human capital investment should be brought into full play. Therefore it's the top priority task to realize the high industrialization and organization of agriculture. If the high industrialization and organization of agriculture has been realized, the new origin and subject in rural human capital investment will be discovered, that is, the enterprise by organizing farmers, which will make investment in human capital for their employees or farmers in order to seek maximum profits and face the external competitive pressures. Generally the investment in human capital of enterprises is realized by training farmers at work, so that the relation of investment interests comes into being. Training farmers not only improves quality and ability of farmers, but also bring potential advantage for the development of enterprises. Enterprises will take more responsibilities with its development, such as building schools on their own, assist the education and donate money. In the following period, one major task of investment in rural human capital is to highly develop co-operational organizations of rural economy and form the contract relation between farmers and organizations so as to fill the blank of researches on the subjects of investment in rural human capital.⑥C This dissertation will combine Capacity Analysis Method (by Amartya Sen) with the theory of human capital investment, and regard the great gap of the human capital investment as the basic reason (ignorant of other reasons such as heredity) why rural and urban citizens have different capacities. Since the capacity by nature symbolizes the equality of the starting point, if the capacity can't be fully guaranteed the gap will unavoidably widen so as to have negative impact on economic efficiency, social mobility, and social harmony.
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