by Ying-shih Yü
them. No. 21 refers to the “marketplace” meeting at dawn as going very fast,
which agrees exactly with the account given in the case of Lord Mengchang of
Qi, discussed above.23 No. 26 speaks of the state of Wei in the late third century
as being in possession of “seventeen large- sized xian
(counties) and more
than thirty small- sized xian with marketplaces.”24 It is very signifi cant that the
busine s s c ul t ur e a nd c h ine s e t r adi t ions 231
author of this text should fi nd it necessary to mention, specifi cally, “market-
places” in connection with small- sized xian. It seems to imply that the po liti cal
and economic importance of a xian was to be judged by whether it included
marketplaces or not. We can also assume the mention of “marketplace” to-
gether with the administrative unit of xian is an indication that an offi
cial mar-
ket system more or less along the lines described in the Rites of Zhou must have
been in existence in most, if not all, of the states prior to unifi cation.
To bring our discussions of the ancient period to a close, let me now turn to
the intellectual tradition. It is my assumption that the mere use of things re-
lated to the market for analogical, illustrative or some other purposes on the
part of thinkers and scholars during the period from the sixth to the third
century attests to the importance of the market in their everyday lives. It is be-
side the point whether their views with regard to commercial pursuits were
sympathetic or antagonistic.
Zigong
(Duanmu Ci
) is the only disciple of Confucius who has
an entry in “Huozhi liezhuan” (The Biographies of the Money Makers) in the
Rec ords of the Grand Historian. According to the Grand Historian, in his capac-
ity as a wealthy merchant he was always treated by the feudal lords as an equal
when he visited them. It was also due to his eff orts that Confucius’s fame was
spread all over China.25 The authenticity of this account is fully corroborated
by Confucius’s Lunyu (Analects). Confucius once made a contrast between
the poverty- stricken Yan Hui
and the wealthy Zigong in these words: “Hui
is perhaps diffi
cult to improve upon; he allows himself constantly to be in dire
poverty. Ci (Zigong) refuses to accept his lot and indulges in money making, and
is frequently right in his conjectures.”26 This is one of the very controversial
passages in the Analects. Deeply biased against the merchant class, many tra-
ditional commentators tend to read it as a criticism of Zigong.27 We need not
be concerned about the controversy itself, however. The impor tant point here
is rather that Confucius prob ably owed his knowledge of the market to his
student- turned- merchant.
Two conversations between Confucius and Zigong in the Analects may be
cited in support of this point. On one occasion, Zigong asked his teacher: “Poor
without being obsequious, wealthy without being arrogant. What do you think
of this saying?” Confucius said, “That will do, but better still poor yet delight-
ing in the way, wealthy yet observant of the rites” (1.5). I strongly suspect that
when Zigong was asking this question, he must have been either already rich
or on his way to becoming rich. Moreover, he may well have had in mind, spe-
cifi cally, the contrast between Yan Hui and himself, which also seems implied
in Confucius’s answer. This interpretation is defi nitely not far- fetched in view
of the controversial passage (11.19) quoted above. The second conversation is
even more in ter est ing. It runs as follows: “Zigong said, ‘If you had a piece of
beautiful jade here, would you put it away safely in a box or would you try to sell
it for a good price?’ The Master said, ‘Of course I would sell it. Of course I
232 busine s s c ul t ur e a nd c h ine s e t r adi t ions
would sell it. All I am waiting for is the right off er’ ” (9.13). Here, Zigong’s ques-
tion is about the scholar’s ac cep tance of a government appointment but veiled
behind the language of the market. It is not entirely clear, however, whether the
question is formulated generally as a matter of princi ple or raised specifi cally
with re spect to Confucius or himself. Commentators are agreed that in this
case, Zigong was urging his teacher to take offi
ce because Confucius’s answer
clearly referred to himself. However, there is another possibility, namely, Con-
fucius showed his good sense of humor by imitating the typical expression of a
jade merchant— hence, the repetition of “sell” as well as the last sentence.
What ever the case may have been, it is nevertheless unmistakable that both
teacher and disciple were speaking the merchant’s language. I would also like
to point out that it was a general practice in the market of the day that valuables
such as jade and pearls were put in a “box.” One ritual text mentions: “the mer-
chant opens the box to take out the jade.”28 In the Hanfeizi
, there is also
a famous story about a merchant of Zheng who bought a pearl with a beauti-
fully decorated box from a merchant of Chu. More fascinated with the box than
its contents, the former ended up by buying the box without the pearl.29 Jade and
pearls were prob ably the most profi t- making businesses in ancient China, as
shown in Lü Buwei’s conversation with his father, quoted earlier. Was Zigong a
trader in jade and pearls? One won ders.
Most fascinating of all, however, is to listen to Confucius talk about the mar-
ketplace. He once said: “If wealth were a permissible pursuit, I would be willing
even to act as a guard holding a whip outside the marketplace. If it is not, I shall
follow my own preferences” ( Analects, 7.12). The “guard holding a whip outside
the marketplace” is known as xu
in the Rites of Zhou, the lowest- ranked of all
personnel in a marketplace. Each xu was in charge of two shops and as security
guard, it was his duty to watch the gate as well as maintain order.30 Needless to
say, Confucius never really wanted to abandon his own preferences. However,
his familiarity with the marketplace is truly amazing, perhaps again thanks to
Zigong.
Living in the fourth century, Mencius was not only more aware of the per-
vading presence of the market but also made certain evaluative statements
about it. To begin with, he held a peculiar theory about the origins of taxation
in the market:
In antiquity, the market was for the exchange of what one had for what
one lacked. The authorities merely supervised it. There was, however, a
despicable fellow who always looked for vantage point and, going up on it,
gazed into the distance to the left and to the right in order to secure for
himself all the profi t there was in the market. The people all thought him
despicable, and, as a result, they taxed him. The taxing of merchants
began with this despicable fellow.31
busine s s c ul t ur e a nd c h ine s e t r adi t ions 233
As a historical account, it prob ably cannot be taken seriously. However, two ob-
servations may be made he
re. First, it suggests the recency of taxing the mer-
chants. This is further supported by his talk of the absence of levy at border
stations and marketplaces during the time of King Wen of Zhou (1B.5) and his
proposal to do away with “custom and market duties” altogether (3B.8). Second,
his imagination about “a despicable fellow” is actually a reference to the com-
petitiveness of the market in his own day.
His long debate with a follower of Xu Xing of the Agriculturalist School re-
veals not only his own attitude toward the market but also how other schools
responded to it. Xu Xing wanted to turn the clock backward to the time before
social division of labor had taken place. In such a wholly undiff erentiated prim-
itive society, neither the state nor the market can really be said to have been in
existence. The follower of Xu Xing was convinced that once we succeeded in
reversing the pro cess of social evolution: “ There will be only one price in the
market and dishonesty will dis appear from the capital. For equal lengths of
cloth or silk, for equal weights of hemp, fl ax, or raw silk, and for equal mea-
sures of fi ve grains, the price will be the same; for shoes of the same size, the
price will also be the same.” It seems clear that the Agriculturalist School was
particularly disgusted with the pervading dishonesty with re spect to price in
the marketplace. For his part, however, Mencius took social division of labor for
granted. For him, therefore, the market was here to stay and it was unrealistic
to speak of “one price in the market.” In refuting Xu Xing’s theory, Mencius
argued: “That things are unequal is part of their nature. Some are worth twice
or fi ve times, ten or a hundred times, even a thousand and ten thousand times,
more than others. If you reduce them to the same level, it will only bring confu-
sion to the Empire. If a roughly fi nished shoe sells at the same price as a fi nely
fi nished one, who would make the latter?” (3A.4). What particularly deserves
our attention is his theory of price. As his example about two kinds of shoe in-
dicates, he links the price of a commodity to its intrinsic value. Following
Ricardo, Marx holds that “the value of a commodity is the amount of labor it
has within itself. If it takes twice as much labor to make hats as shoes, then hats
will sell for twice as much the price of shoes.”32 Mencius seems to have a vague
sense of this prob lem. Thus, it may be justifi able to say that on the prob lem of
price, Mencius was diff er ent, at least in emphasis, from many thinkers of the
period who tended to see price being determined more by “supply and demand”
than anything else.
In this connection, I wish to introduce the Mohist view on price. In the Mo-
hist Canons and Explanations, we fi nd two logical formulations that display an
amazingly profound grasp of the inner workings of price mechanism. To avoid
being technical, let me quote A. C. Graham’s summary, which, by virtue of
being terse and to the point at the same time, serves our purpose remarkably
well:
234 busine s s c ul t ur e a nd c h ine s e t r adi t ions
The two Canons on economics show that for him there really is a right
price, the one fi xed by supply and demand. The fi rst Canon approaches it
from the buyer’s point of view, the latter from the seller’s. A price cannot
be too high if the buyer will pay it or too low if the trader cannot sell for
more. The proof that the price is right is that you make the deal, which
requires that both parties want to make it: “ whether it is right or not de-
cides whether people want to or not.”33
These sections show the proper cap i tal ist spirit both in the ruthlessness of the
illustration (for example, people in a defeated state selling their houses and
marrying off their daughters) and in the plausibility of the moral justifi cation.
Money and grain are each the price of the other, money is constant in quantity
but grain variable, so that their relative values fl uctuate inversely with the harvest;
in time of scarcity you pay more, but in money which will buy less.
The Mohist Canons ( jing ) are of a late date, some even as late as the end of
the third century. Now I wish to turn to an early Mohist text for an example to
make my point. In the “Gongmeng”
chapter, Mozi is reported to have said
something to the eff ect that one cannot count the “indentations” on other
people’s tallies as if they were one’s own wealth.34 The original sentence is too
brief to be comprehensible. As a late Qing commentator rightly pointed out, its
full meaning can be grasped only in light of the following story in the Liezi
:
“ There was a man of Song who was strolling in the street and picked up a half
tally someone had lost. He took it home and stored it away, and secretly counted
the indentations of the broken edge. He told a neighbor: ‘I shall be rich any
day now.’ ”35 The “tally” ( qi
) was a most commonly used document in busi-
ness transactions in the ancient period. It was a sort of “contract” or “agree-
ment” divided into two halves held by buyer and seller, respectively. Money or
goods can be collected only when the “indentations” on the two half tallies fi t-
ted each other perfectly. The very fact that Mozi used this analogy so readily
in a debate with his Confucian rival Gongmeng attests to his familiarity with
the market language. It is relevant to note that the same “tally” also appears
in the text of Laozi: “The sage, holding the left- hand tally, performs his part
of the covenant.”36 In the Zhuangzi
, however, “left- hand and right- hand
tally” is replaced by “inner part and outer part of a juan”
which, according to
commentators, performs the same function as the tally ( qi). Hence, the text
says, “one [who holds the outer part juan] with his mind wholly set on the hoard-
ing of goods is a mere merchant.”37 Without getting too technical about it, I
need only to point out that qi or juan “tally” as a legal document was a compo-
nent part of the offi
cial market system in ancient times. According to the Rites
of Zhou, the market system included a special offi
ce in charge of these legal
documents for prevention of litigation related to business transactions.38
It is in ter est ing to note that if we take the story in the Liezi as a text of pos-
si ble pre- Qin origin, as I now do, then the Daoists were equally knowledgeable
busine s s c ul t ur e a nd c h ine s e t r adi t ions 235
about the market in spite of their otherworldliness in philosophical orientation
relative to other schools. To illustrate my point a little further, I would like to
remark briefl y on the text of Laozi. We are still not sure about its date. To the
best of my knowledge and judgment, the text may have gradually evolved from
the fourth to the third century. What strikes me as particularly noteworthy is
the fact that in this 5,000- word text, huo (“goods” or “hard- to- get goods”) appears
no less than fi ve times, qi (tally) once, and shi (market) once. The sentence involv-
“Fine words may lubricate business”). In this case, the Heshanggong Commentary
is very illuminating. It says, “Fine words alone are adequate to the marketplace . . .
Because the buyer is anxious to get the commodity while the seller is anxious to
sell it.”39 If this interpretation is correct, the author of the Laozi text must indeed
be recognized as an unusually keen observer of business culture of his day. As a
matter of fact, there is good reason to believe that Heshanggong is prob ably right.
In his biography in the Rec ords of the Grand Historian, Laozi is credited with the
following quote: “A good merchant is deep in concealment that gives the appear-
ance of emptiness,” which has become proverbial to this day.40 This is a worldly
wisdom whose discovery requires a spirit as otherworldly as the author of the
Laozi to discover.
The three intervening centuries between Confucius and Han Fei witnessed
the expansion of the market, the growth of the merchant class, and the emer-
gence and evolution of business culture in China. As shown above, practically
all philosophical schools responded to changes resulting from these new devel-
opments to varying degrees, and each in its own way. None of these schools
may be characterized as wholly positive about these new developments, but the
diff erences among them seem very vast. To conclude, let me single out the
question of state- versus- market for a brief comment. Contrary to the conven-
tional view that Confucianism has been mainly responsible for the traditional
attitude known as “emphasizing the importance of agriculture at the expense
of commerce,” during this early period, Confucians actually recognized the
importance of the market more than any other school. Of course they also
considered agriculture to be a more fundamental occupation, but defi nitely
not at the expense of commerce and trade. Mencius’s wholehearted ac cep tance
of the princi ple of social division of labor committed him to a favorable view of
trade. Thus, he said: “If people cannot trade the surplus of the fruits of their
labors to satisfy one another’s needs, then the farmer will be left with surplus
grain and the women with surplus cloth. If things are exchanged, you can feed