Was Confucius into laissez-faire economics? What are Confucian economics like?

by cronos844
beepybeetle

Confucius never outlined a strict policy of economic thought per se, but a form of economic thinking can be deduced from his philosophies. Very basically, the ideal Confucian society was composed of 5 strata of people: The scholars at the top who worked with their minds and who governed with reason, the gentleman-farmer who worked the land and provided sustenance for his family and his state, the artisan who created cultural items and the tools needed for the farmer, the merchant who was perceived almost as a scoundrel as he made money by selling things he could not personally produce while contributing nothing to the economy, and the group of people who worked immoral jobs; filled 'untouchable' occupations, like prostitutes. This wasn't a rigid caste system like in India, instead this was a sort of way the Confucian ideology ranked people based upon their occupation. Merchants for instance were ranked low on the scale of social desirability but could very obviously rise to very influential areas of society through their sheer wealth. But again directing our attention to the merchants: Clearly, Confucian and even neo-Confucian thought (think Zhu Xi of the Northern Song) regarded merchants as economically counter-productive and this form of 'primitive' or misguided economic thought demonstrates that Confucius was clearly not an economist. Nevertheless his rigid ideal provided the basis for a form of implied economy with a heavy emphasis on agrarian economies.

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One key element to Confucian economic thought was the focus on the family. Whereas modern Western economics (if we exclude behavioral economics) likes to focus on the rational consumer who understands market forces and the concept of scarcity perfectly to position themselves for the most gain, Confucius believes in the moral individual. This is a person who will work to the benefit of their family and the market as a whole, but not necessarily being the individual who gains the most from transactions.^(1) The idea of morality also extended to the state and its responsibility to the people. For instance, Confucians commented on the salt monopoly the Imperial Chinese government held at various times in history, often proclaiming that high salt prices and heavy salt taxes placed undue hardship on the regular citizens of the government, and therefore the government was morally obliged to reduce the state's revenue flows in order to help alleviate the misery of the commoner. This was actually heeded by Imperial ministers to some extent, as the Tang dynasty for instance reduced some of their salt fees and supplemented their tax revenue through land taxes instead.^(2) The government of China also didn't take an entirely hands off approach to managing the economy either. To help maintain this sense of moral harmony, sometimes bureaucrats would issue edicts to offer regional or national economic reform, which may or may not have resulted in economic disaster or salvation for the government.^(2 3) The Imperial government also messed around a lot with tax reform in particular, and especially during the late Imperial Era (Ming/Qing) and if you're really interested, you can read up on that topic. The economics of China is a huge and extremely complicated and my answer offers only a small glimpse into the complicated nature of economic theory being blended with a social/political theory.

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Sorry for any typos I'm typing this at 2 in the morning

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[1] K. Z. Poznanski, "Confucian Economics: The World at Work"

[2] R. Smid, "The Responsible Society as Harmony"

[3] L. Hickman, "John Dewey, Institutional Economics, and Confucian Democracies"