25 October 2017

Salt and irony

Huan Kuan 桓寬

Time to revisit an old hobby-horse of mine: explaining why the entire concept of ‘Confucian capitalism’ is basically anachronistic bunk peddled by Westerners and West-friendly neo-Confucians in the mid-’90’s as a way of reconciling the Sage with his critic Max Weber (as if such a thing were necessary, let alone desirable).

First of all, it appears I owe an apology to Huan Kuan 桓寬. I took Long’s characterisation of Huan Kuan’s Discourses on Salt and Iron (Yantielun 《鹽鐵論》) at face value and didn’t look at the source myself. That’s a terrible ‘my bad’. The first nineteen chapters of the source text are available both in Chinese and in its partial English translation here. If we were to go by the scanty treatment of the Yantielun offered by Long, we would conclude – erroneously – that the discourse was primarily for the sake of arguing against price controls and proliferation of laws. That’s a fact so partial (and so partizan) as to obscure the entire meaning of the text.

The text itself takes the form of an argument between the ‘Literati’ (wenxue 文學) and the ‘Lord Grand Secretary’ Sang Hongyang 桑弘羊, who represented (roughly) the Legalist tradition, over a broad variety of topics ranging from the state-run salt and iron monopolies, monetisation and warfare to general governance policies. This debate takes place in the wake of the rule of Han Wu Di 漢武帝, who implemented a number of these Legalist policies; the Regent who succeeded him put these policies up for review and invited critiques from the Literati and defences from the Legalists led by Sang Hongyang. It is worth noting that neither side argues that the government should stay out of the œconomy altogether. The Literati themselves are emphatic about the proper rôle of government as being moralistic:

The Literati responded as follows: It is our humble opinion that the principle of ruling men lies in nipping in the bud wantonness and frivolity, in extending wide the elementals of virtue, in discouraging mercantile pursuits, and in displaying benevolence and righteousness. Let lucre never be paraded before the eyes of the people; only then will enlightenment flourish and folkways improve.
This is emphatically not ‘laisser-faire’ as we’re used to thinking of it – certainly it is not the wonted mode of argumentation among the Austrians. Little wonder Long only included one brief and partial quote from the Yantielun. Looking through the Yantielun, one will start to see a very different pattern of œconomic thinking begin to emerge. Indeed, the very opening statement of the Literati’s ‘basic argument’ (benyi 本議) states that the rulers do have some very specific and very active duties in governance that extend well beyond the Daoist idea of wuwei 無為. And not only that, the Literati state from the outset in this disputation with the Legalist Sang Hongyang that one of the duties of government is to ‘discourage mercantile pursuits’ and to prevent the ‘parade’ of ‘lucre’ before the eyes of the people.

Looking further down, the objection the Literati had to these monopolies is that ‘the Government has entered into financial competition with the people’ (yu min zheng li 「與民爭利」), and as a result, ‘few among our people take up the fundamental pursuits of life, while many flock to the non-essential’ (「百姓就本者寡,趨末者眾」). Immediately this is clarified. The Literati wished that ‘rural pursuits may be encouraged, [and] people be deterred from entering the secondary occupations, [so that] national agriculture be materially and financially benefitted’ (「進本退末,廣利農業,便也」). The Literati – the proto-Confucians – had a much more interesting argument here than is being portrayed in the ideological post-Weberian literature! It was not so much government interference on the whole that they object to. It’s that they objected to profiteering and rent-seeking behaviour on the part of private actors in collaboration with the government. This lent the Literati in the Yantielun a stance in opposition both to government monopolies, and to the speculative and rent-seeking private interests which benefit from the government’s actions. They sounded, not so much ‘laisser-faire’, but suspiciously distributist or even syndicalist. The Literati could be remarkably localist in their sympathies, as here in ‘Hindrance to Farming’ 《禁耕》:

Now in Qin, Chu, Yan and Qi the quality of the soil differs. There is variety in the methods of cultivation of heavy and light soils. The use of large or small, the suitability of straight or curved ploughs, are different according to districts and customs. Each has its convenient use. But when the magistrates establish monopolies and standardise, then iron implements lose their suitability, and the farming population loses their convenient use. When the tools are not suited to their use, the farmer is exhausted in the fields, and grass and weeds are not kept down. When the grass and weeds cannot be kept down, then the people are wearied to the point of despair.
However, this is not an argument against government per se. On the subject of currency, the Yantielun has a remarkably nuanced view given the technical constraints of the time. The Legalists and the Literati were in agreement that currency needed to be regulated: the question was how. Sang Hongyang favoured a system whereby the money supply was constrained by an official centralised minting policy. The Literati recognised the problem but were not so concerned with the existence of independent moneyers and mints. The Literati perceived, astutely, that anything, even tortoise shells and cowries (or even bits of paper? naaah), could be used as a medium of exchange, regardless of scarcity, as long as it was backed by law. The problem of undervalued and counterfeit currency could be solved, therefore, not by limiting the money supply, but instead by ‘proper laws [against] coining bad money’ (「偽金錢以有法 」): that is to say, by indirectly regulating interest rates.

The Yantielun indeed provides ample evidence of an anti-capitalist slant to the argumentation of the Literati. In the chapter ‘Hold Fast the Plough’ 《力耕》, after citing a ‘utopian’ view that the ancients traded sparingly, out of necessity and only with the essentials of life in mind, the Literati drop these two strident and unequivocal bombshells: ‘Trade promotes dishonesty. Artisans provoke disputes.’ (「商則長詐, 工則飾罵。」) They launch into a diatribe against the ‘secondary occupations’ which convicts them of avarice and greed, and go on to accuse the foreign trade of draining wealth from the interior and from common people in pursuit of luxury goods, in what amounts to a stunningly protectionist argument – in opposition to Sang Hongyang’s argument that the Xiongnu can be impoverished and the Han strengthened through the foreign trade. Instead, the Literati promote the communal well-field system 井田 as a means for redistributing land to encourage productive agriculture. That’s not all – for the Literati, the institution of profit caps is one of the duties of a true and righteous King. Here is what the Literati have to say on the subject in the chapter ‘Circulation of Goods’ 《通有》:

Hence the true King would prohibit excessive profits, and cut off unnecessary expenses. When undue gain is prohibited, people return to the fundamental. When unnecessary expenses are cut off, people have enough to spend. Hence people will not suffer from want while alive, nor from exposure of their corpses when dead.
Interestingly, the Literati of the Yantielun are quite aware of the charges of hypocrisy that might be laid at their door for this stand. Indeed, Sang Hongyang hurls the example of Zigong (who became a merchant) at the Literati in ‘The Poor and the Rich’ 《貧富》 . In response, the Literati go so far as to (mildly) criticise Zigong for engaging in commerce, but hold him up also to demonstrate how much further the rentier class have fallen even from his example by abusing their offices:

[Zigong] secured wealth in the capacity of a common citizen; yet Confucius disapproved of him. How much more would he frown on him who does it through his position and rank!
Tellingly, the Grand Historian Sima Qian 司馬遷 – who, as Long does correctly note at length, is highly favourable to trade in all forms – is cited only by the Legalist in this discussion, Sang Hongyang, and at that in deferential tones as Master Sima 司馬子. The purpose of this quotation is to further accuse the Literati of hypocrisy in criticising the profit motive, which Sima Qian held to be universal and natural (much to the chagrin of the siblings Ban). Sang Hongyang even indirectly cites the Analects (「富貴者士之期也。」) as a way of doubling down on this accusation of hypocrisy. But it’s interesting indeed that Huan Kuan makes reference to the Grand Historian only here, as if (like the Bans later) he wishes to make an indirect criticism of Sima’s views by associating them with Legalism.

On that note: the Yantielun is actually one of the rare examples of discourse in post-classical China where the Legalists and the Literati (proto-Confucians) are seen to dispute with each other on relatively equal terms. Yet here, we see that the Legalists are the ones who favour trade (albeit under strict regulation), whereas the Literati themselves speak of ‘primary’ and ‘secondary occupations’ in a manner similar to the ‘city of utmost necessity’ in Plato’s Republic. This distinction between ‘primary’ agriculture and ‘secondary’ commerce and craftsmanship goes on to prefigure, and undoubtedly influence in a more direct way, the hierarchical ordering of the Four Occupations in the Book of Han. The proto-Confucian hierarchical ordering of the occupations is in contradistinction to the Legalist mode of thought, which disparages agriculture but praises pursuits which build power and wealth.

Touching briefly on Huan Kuan’s attitude to war with the Xiongnu – it’s enough to quote directly from the ‘Basic Argument’:

The ancients held in honour virtuous methods and discredited resort to arms. Thus Confucius said: If remoter people are not submissive, all the influences of civil culture and virtue are to be cultivated to attract them to be so; and when they have been so attracted, they must be made contented and tranquil? Now these virtuous principles are discarded and reliance put on military force; troops are raised to attack the enemy and garrisons are stationed to make ready for him. It is the long drawn-out service of our troops in the field and the ceaseless transportation for the needs of the commissariat that cause our soldiers on the marches to suffer from hunger and cold abroad, while the common people are burdened with labour at home.
Looking at the Yantielun as a whole, then, it becomes clear that the Literati of the Han Dynasty – including the Yantielun’s transcriber and compiler Huan Kuan, who belonged to the same ‘institutional’ Gongyang tradition that Dong Zhongshu did – were still wrangling against the not-so-distant legacy of Qin Legalism at the same time as they were advocating for more agriculture-friendly and poor-friendly policies in government.

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