mind of mencius

If you do not interfere with the busy seasons in the fields, then there will be more grain than the people can eat; if you do not allow nets with too fine a mesh to be used in large ponds, then there will be more fish and turtles than they can eat; if hatchets and axes are permitted in the forests on the hills only in the proper season, then there will be more timber than they can use. When the people have more grain, more fish and turtles than they can eat, and more timber than they can use, then in the support of their parents when alive and in the mourning of them when dead, they will be able to have no regrets over anything left undone.[i]

One of the really difficult aspects of the Mencius to reconcile with our world today, besides all of the problems that arise in translating classical Chinese into modern English, is the agrarian ideal that infuses much of the prose. Little attention is paid to the notions of production or consumption. During the 5th century BC, the idea that China’s vast countryside might fail to produce enough food for the people was preposterous–deficits in grain supplies were the results of poor management rather than demand exceeding peak production.

But Mencius tempers his urgency to allow the people to produce with attention to possible resource exploitation: fine mesh nets, seasonal harvests, etc. That same lens could be applied to a number of modern industries: oil companies’ attempts to drill in national parks or in deep offshore wells, cattle farmers’ destruction of rainforest to create pastures, etc. Tempering extreme behaviour is a central theme in Confucian thought–and one largely absent from today’s neoliberal discussions of a market’s ability to regulate itself.

The extension of Mencius’ urge for moderation to the current financial crisis isn’t difficult, so I won’t get too far into it here… it stands to reason that the practice of money-spinning in terms of packaging and re-packaging debt, what wall street calls “wealth creation”, might fall under this fine-mesh net category.

In Chinese history, governmental change often brought about moderation: curbing Imperial excess, solving economic problems, mitigating the impact of religious or racial conflicts or creating stability (from invasion, natural disaster or civil war). The cycles of dynastic change in Chinese history are testament to the fact that governments become increasingly bad at self-regulation. Problems that were initially small serve as precedents for further bad decisions and subsequently grow to become institutional problems over time. Only regime change, sweeping aside old institutions with the axe of revolution rather than tweaking policy with the pruning shears of reform, rid the government of problematic institutions (rather than the individual problematic practices of problematic institutions).

The recognition that Chinese history is rife with cyclical regime change shows a common problem with regime change: once sweeping reforms are made, the new regime often produces its own problems that will grow to become institutions in the medium- to long-term. And to this, Mencius would probably urge moderation.

Just as the action of tightening the mesh of fish nets will produce higher short-term gains, moving back toward a liberal monetary policy once credit markets loosen up would surely produce a short-term boost to US GDP. But at what long-term cost? We are already seeing, with the current economic crisis, the result of fishing with fine-mesh nets for too long: fish stocks dwindle and habitats become overly dredged to the point where the entire market for fish crumbles. And as the US government recognises the need to continue restriction on fishing practices in our oceans, it should also recognise that financial firms will require similar regulation in terms of solvency and loan practice.

Because if we go back to fishing with fine-mesh nets, the chance of overfishing our waters again rises to almost certainty. Will the government be willing – when the time comes and lobbyists are clamouring in the streets of DC, waving their records of campaign contributions – to forgo short-term gains in favour of long-term stability? We can only hope that that the US treasury department takes a page from the Department of Fisheries, otherwise we might find ourselves caught in a cycle of financial turmoil.

1. Mencius I.A.3|↩|