This chapter, serving as the introduction, begins by posing a series of pivotal questions to engage the reader and by providing a summary of the key points. The section on institutional divergence paints a broad, motivating picture of the divergence in institutions since the late nineteenth century between Japan on the one side, and Russia and China on the other. Both Russia and China initially emulated Japan’s efforts toward a constitutional monarchy. After outlining the nature of China’s institutional evolution, the chapter then emphasizes how the concept of institutional genes, stemming from both China's imperial legacy and the institutional genes transplanted from Soviet Russia, can be utilized to explain the rise and development of communist totalitarianism in China.

This chapter explores the keju system – the imperial examination system, and Confucianism as essential components of imperial governance and societal structure in China, examining their origins, evolution, and impact on the development of China's imperial system. The keju system, which persisted from 124 bce to 1905 ce, served as an institutional gene that fused Confucian ideology with state governance, thereby solidifying the emperor’s absolute ideological dominance. It established a societal hierarchy and unconditional obedience that suppressed individual rights and paved the way for the introduction of totalitarianism. In contrast, the Church in Western Europe, while influential, preserved a clear separation from state functions.

This chapter addresses the origins and evolution of the fundamental institutional genes in Chinese society that aligned with and supported the adoption and establishment of totalitarianism in China. Based on the analysis here, Chapter 9 explains the reasons for the failure of the constitutional reforms and Republican Revolution in China; and Chapters 10 through 12 expand on how these institutional genes and their variations allowed Mao Zedong to adapt Soviet-style classic totalitarianism into a uniquely Chinese form – regionally administered totalitarianism (RADT).

This chapter, addressing the methodological issues in the book, begins by defining the primary components of the institutions under study: human rights, property rights, and collective decision-making power. Inspired by mechanism design theory, the chapter then introduces incentive-compatible institutional change as an analytical framework. Building on this foundation, it delves into the concept of institutional genes, including its connection with path-dependency theory.

The final chapter reiterates the challenges posed by totalitarianism. By conducting coherent theoretical and empirical research into the origins and expansion of totalitarianism, this work strives to address these significant challenges that Mises warned about decades ago. This chapter summarizes the key insights drawn from both the empirical evidence and the theoretical framework of institutional genes that constitute a comprehensive methodological approach. The literature review distinguishes this book from other works in the fields of China studies, institutional analysis, and social science methodology. The two most extensive sections of the chapter examine the institutional genes and their evolution in Taiwan and in the former Soviet Union and Eastern Europe (FSU-EE). The former section sheds light on the pivotal role the institutional genes played in Taiwan’s transition from authoritarian rule to constitutional democracy, while the latter section explains the collapse of the totalitarian regimes in the FSU-EE countries and their divergent institutional transformations. The chapter also highlights the implications of the transitions in Taiwan and the FSU-EE countries for China’s future transformations.

This chapter examines the role of property rights as foundational institutional genes influencing social, economic, and political systems. It argues that the distribution of property rights, whether dispersed as those in ancient Greece and Rome or centralized as those in Imperial China, deeply affects the evolution of institutions such as the rule of law, constitutionalism, and democracy. Broadly held private property rights foster the development of these institutions, which become self-replicating over time. In contrast, centralized property rights lead to monopoly power and coercive institutions that not only frequently restrict individual freedoms but can also lay the foundation for totalitarianism. The chapter seeks to clarify the concept of property rights to offer deeper insights into these institutional dynamics.

In the nineteenth century, the Chinese Empire – the longest-lasting empire in human history – was the largest economy on earth with a decent per capita GDP level. But it shrank rapidly after its collapse. Since the founding of the PRC in 1949, China had been one of the poorest economies in the world until the post-Mao reform, which has enjoyed high growth for three decades. But a sustained slowing down since 2009 reminds us of the trend of the Soviet economy since the mid-1970s.