A little something this week on how Confucian thought relates to modern economic practice. The China Daily web link is here. Full text below the jump.
Confucius was no capitalist
By Sam Crane(China Daily)
Updated: 2006-08-18 08:15
We sometimes hear that the dramatic growth of East Asian economies, from Japan to Singapore to China to South Korea, has been enabled by Confucian values and social practices.
While there may be some truth in this sweeping claim, there are also glaring contradictions between Confucius's own writing and the self-interested materialism that fuels the industrial and post-industrial success of "Confucian capitalism."
In its most general form, the description of Confucian capitalism runs something like this: Close family relationships allow investors to pool the resources and labour of relatives and friends, providing start-up capital and staff for enterprises. Sacrifice for and reinvestment in the firm is, thus, a form of family solidarity. This provides strong incentive for hard work and competitive energy.
Education also plays a key role. Confucius, of course, emphasized the importance of schooling, and societies that take that duty seriously stand a better chance of developing the human capital necessary for success in rapidly changing global markets.
Social networks, hard work and education these things certainly have contributed to the accomplishments of contemporary East Asian economies. But before we trumpet the virtues of Confucian political economy we should recognize the fundamental inconsistencies here with Confucian morality.
Confucius famously abhorred the profit motive. There are many telling quotes in the Analects, but my favourite on this topic is passage 7.12:
"The Master said: 'If there were an honourable way to get rich, I'd do it, even if it meant being a stooge standing around with a whip. But there isn't an honourable way, so I just do what I like."
Could stooges with whips be the Confucian critique of modern business management?
He also believed that social relationships should not be manipulated for material gain. Mencius is most clear on this point when he argues against encouraging sons to serve their fathers for profit, or brothers so serving brothers: "When these relationships become a matter of profit, the nation is doomed to ruin." So much for the efficacy of relationship economics.
And as to education, its purpose, for Confucius, should be moral improvement. Analects 7.25 tells us that "the Master taught four things: culture, conduct, loyalty, and standing by your words." He did not offer courses on finance, marketing, accounting and global strategy. A Confucian MBA is an oxymoron.
All of this is not to deny that historical and cultural factors have influenced the rise of East Asian economies, mostly recently including China's; obviously they have.
I am, rather, simply trying to detach the "Confucian" adjective from the "capitalist" noun. Chinese culture, and the cultures of other countries in the region, have always been more than simply "Confucian." In the economic realm in particular, the commercial impulse that has long been evident in East Asian societies has never fit comfortably with Confucian ethics. If there are traditional antecedents to today's economic dynamism, we should look for them in other facets of history besides Confucianism.
Were he somehow able to come back today and take a tour of the great cities of the region Beijing, Shanghai, Taipei, Hong Kong, Singapore, Seoul, Tokyo I would bet that Confucius would not want his name used to describe the hard-charging economic growth that he would find.
He would likely ask: Are people taking enough time to live up to their family and social duties? Are elders being properly cared for? Are we doing enough to preserve traditional cultural artefacts? These are questions that are often overwhelmed in today's rush for personal profit.
A great article, Professor.
Posted by: Allan Lian | August 21, 2006 at 12:46 AM
Capitalism as an economic model is amoral. Adam Smith recognized the limitations of capitalism, being a moral essayist, he theorized that the 'invisible hand' of society would overcome an amoral system that could easily become immoral. Yet as we see in the West, when religion becomes marginalized, the invisible hand of Christianity no longer can steer this economic system, and for some, capitalism becomes the religion. I see this as China's greatest challenge in the years ahead, will this amoral economic system be guided by Confucian values (the invisible hand), or will money and greed guide capitalism from amorality to immorality?
Posted by: Bro. Bartleby | August 21, 2006 at 03:47 PM