28 December 2017

Ha-Joon Chang on Confucianism and development

Ha-Joon Chang

Reading Ha-Joon Chang’s entertaining book Bad Samaritans, I came across an interesting section.

Dr Chang is an old-school institutional œconomist in the mould of Friedrich List and Gunnar Myrdal, though he has taken on a number of Keynesian influences (Hyman Minsky, Nicholas Kaldor, Charles Kindleberger II and, of course, Baron Keynes himself). As such, even though he comes from a country (South Korea) where Confucianism has been critically and even definitively influential and speaks of it with the familiarity of one who has lived within and alongside it most of his life, he is not himself Confucian and often views the Ru tradition with a critical eye; even so, his insights hit the mark with distinct regularity:
Ever since the East Asian economic ‘miracle’, it has become very popular to argue that it was Confucian culture that was responsible, at least partly, for the region’s economic successes. Confucian culture, it was pointed out, emphasises hard work, education, frugality, co-operation and obedience to authority. It seemed obvious that a culture that encourages the accumulation of human capital (with its emphasis on education) and physical capital (with its emphasis on thrift), while encouraging co-operation and discipline, must be good for economic development.

But, before the East Asian economic ‘miracle’, people used to blame Confucianism for the region’s underdevelopment. And they were right. For Confucianism does have a lot of aspects that are inimical to economic development. Let me mention the most important ones.

Confucianism discourages people from taking up professions like business and engineering that are necessary for economic development. At the pinnacle of the traditional Confucian social system were scholar-bureaucrats. They formed the ruling class, together with the professional soldiers, who were second-class rulers. This ruling class presides over a hierarchy of commoners made up of peasants, artisans and merchants, in that order. But there was a fundamental divide between the peasantry and the other subordinate classes. At least in theory, individual peasants could gain entry into the ruling class if they passed the competitive civil service examination (and they occasionally did). Artisans and merchants, however, were not even allowed to sit for the examination.

To make matters worse, the civil service examination only tested people for their scholastic knowledge of the Confucian classics, which made the ruling class scornful of practical knowledge. In the 18th century, Korean Confucian politicians slaughtered rival factions in a row over how long the king should wear mourning following his mother’s death (one year or three years?). Scholar-bureaucrats were supposed to live in ‘clean poverty’ and they actively looked down upon money-making. In the modern setting, Confucian culture encourages talented people to study law or economics in order to become bureaucrats, rather than engineers (artisans) or businessmen (merchants) - occupations that contribute much more directly to economic development.

Confucianism also discourages creativity and entrepreneurship. It has a rigid social hierarchy and, as I have noted, prevents certain segments of society (artisans, merchants) from moving upwards. This rigid hierarchy is sustained by an emphasis on loyalty to superiors and deference to authority, which breeds conformism and stifles creativity...

Confucianism, it can also be argued, hampers the rule of law. Many people, particularly neoliberals, believe that the rule of law is crucial for economic development, because it is the ultimate guarantor against arbitrary expropriation of property by rulers. Without the rule of law, it is said, there can be no security of property rights, which, in turn, will make people reluctant to invest and create wealth. Confucianism may
not encourage arbitrary rule, but it is true that it does not like the rule of law, which it regards as ineffectual, as seen in the following famous passage from Confucius: ‘If the people be led by laws, and uniformity sought to be given them by punishments, they will try to avoid the punishment, but have no sense of shame. If they be led by virtue, and uniformity sought to be given them by the rules of propriety, they will have the sense of shame, and moreover become good.’ I agree. With strict legal sanctions, people will abide by the law out of fear of punishment, but too much emphasis on law can make them feel that they are not trusted as moral actors. Without that trust, people will not go that extra mile that makes their behaviour moral and not just law-abiding. Having said all this, however, it cannot be denied that Confucian denigration of the rule of law makes the system vulnerable to arbitrary rule - for what do you do when your ruler is not virtuous?

So which is an accurate portrait of Confucianism? A culture that values ‘thrift, investment, hard work, education, organisation and discipline’, as Huntington put it in relation to South Korea, or a culture that disparages practical pursuits, discourages entrepreneurship and retards the rule of law?

Both are right, except that the first singles out only those elements that are good for economic development and the second only the bad...
Again, Dr Chang comes at this subject from a point-of-view which I share only in part. As an Orthodox Christian, there are elements of Confucianism that I value and esteem regardless of whether or not they are ‘good’ or ‘bad’ for œconomic development. (It can even be said that the Confucian view of œconomy may prioritise things other than growth for its own sake, which, in my view, is fine.) I don’t mind the preference of virtue to law, and I don’t even mind hierarchy that much. At the same time, it is refreshing indeed to see Dr Chang defend some of its virtue-ethical elements from an œconomist’s point-of-view.

Ha-Joon Chang has performed an even more valuable service, though, one which should be appreciated from a Confucian point of view particularly. He has offered a realistic lens through which Confucianism may be observed from the outside. Just as Chen Duxiu and Cai Yuanpei were wrong to point to what Ha-Joon Chang calls the ‘Mr Hyde’ view of Confucianism, blaming it for all of China’s œconomic ‘backwardness’, it is similarly wrong, unbalanced and inharmonious to present solely a ‘Dr Jekyll’ view of Confucianism which renders it entirely consonant with the demands of modernity and developmentalism. (Against the ‘culturalists’, too, Dr Chang opposes the view that Confucianism, or any other cultural or philosophical-religious formation, is somehow immutable or unchanging, and remarks instead that œconomic conditions and cultural attitudes play off each other in complicated ways.) Dr Chang is, here, being a better Confucian than the more naïve advocates of so-called ‘Confucian capitalism’, because he is doing the actual hard work of ge wu 格物 or ‘investigation of things’ demanded in the Great Learning.


  1. I saw you post on LK's blog. It's sad that though he has an excellent repository of literature on Economics, he falls into Anti-Immigrant hate. What are your thoughts about him?

  2. I'm continually amazed by Lord Keynes' command of his subject; I think on economic issues he is remarkably well-attuned. And he actually has some good arguments on immigration, also - when he sticks to the economics.

    When it comes to cultural analysis he's quite a bit weaker, and it strikes me that he would benefit by reading Dr Chang's chapter on the interplay of culture and economics a bit more carefully. Dr Chang isn't a naive liberal - he acknowledges culture exists and the effects it has - but he is also adamant that culture is more malleable under the influence of economic factors than we're often wont to allow.