by Ying-shih Yü
title of shiling further lends support to the historicity of sishi in the Rites of Zhou.
Since concrete descriptions of the relationship between the state and the market
in ancient China are extremely rare, I believe it justifi able to quote the story in its
entirety:
One time King Zhuang, deciding that the coins then in use were too
light, had them replaced by larger ones, but the people found the new cur-
rency incon ve nient and all of them abandoned their occupations. The
master of the marketplace came to Sun Shu-ao and said, “The market is
in complete confusion! The people are milling around restlessly and no
one knows where to set up shop.”
“How long has it been this way?” asked Sun Shu-ao.
“For the past three months,” replied the Master of the Market.
“You may go now,” said Sun Shu-ao. “I will see that things are put back
the way they were.” Five days later Sun Shu-ao appeared at court before
the king and said, “Some time ago the currency was changed because it
was thought that the old coins were too light, but now the master of the
marketplace comes and tells me that the market is in complete confusion
and that the people are milling around restlessly and cannot decide where
to set up their shops. I beg that things be put back the way they were
before.”
The king gave his consent, and three days after the order was issued
the market had returned to normal.8
I must hasten to add that there is no guarantee that the event actually happened
in the sixth century b.c.e., or even in the state of Chu, for that matter. However,
we may assume that it can be taken as a repre sen ta tion of the state of aff airs
226 busine s s c ul t ur e a nd c h ine s e t r adi t ions
perhaps in the late fourth or early third century when urbanization and com-
mercialism reached their peak. The story reveals both sides of the relationship
between the state and the market. While the state always interfered with the
operation of the market, the market, by the early third century b.c.e. at the lat-
est, had already generated its own forces vast enough to resist the arbitrary inter-
vention of state power.
It is truly remarkable that as the market was growing in an ever- increasing
pace from the sixth century to the third, Chinese statesmen, thinkers, and mer-
chants also gradually discovered that certain market laws must have been at
work. Let me give one or two examples. I am quite sure that they grasped the
notion of “supply and demand” in its rudimentary essentials. In 538 b.c.e., the
Duke Jing of Qi asked Yan Ying, a famous statesman, whether he knew any-
thing about prices in the market since his residence was close to a marketplace.
It happened that the Duke had recently punished numerous people by cutting
off their toes. In a remonstrative mood, Yan Ying replied: “Shoes for people
whose toes have been cut off are dear, and other shoes are cheap.”9 This re-
minds us immediately of what Adam Smith says when he discusses the varia-
tions in the market price of commodities: “A public mourning raises the price
of black cloth. But as the demand for most sorts of plain linen and woolen cloth
is pretty uniform, so is likewise the price.”10 Here, of course, Smith is enunciat-
ing the princi ple of supply and demand. Needless to say, I am not in the least
suggesting that Yan Ying could compare with Smith in his understanding of
this princi ple. It is nevertheless unmistakable that he was linking market price
to the law of supply and demand in an elementary way. As time went by, their
understanding of market laws also deepened. In the early fi fth century, a man
named Ji Ran in the southern state of Yue elaborated the art of manipulating
the market for profi t as follows:
The fundamental princi ple of accommodations and storage is to make
sure that articles are paid for in full, in order that money will not cease
[to circulate] for profi t. Let articles be exchanged the one for the other; no
merchandise for consumption that is perishable should be retained
[for long in storage], and one should not risk storing it for high prices [to
come]. By taking into consideration over- supply and under- supply [of mer-
chandise], then one will know whether [merchandise will be] cheap or
dear.
When high prices have risen to the apex, then comes the turn down-
ward to low [prices]; when low prices have fallen to the antipode, then
comes the turn upward to high prices. When [merchandise] is dear, one
should get rid of it as if it were [as worthless as] dung or dirt, but when it
is cheap, one should gather it as if it were [as valuable as] pearls or jade. It
is desirable that media of exchange [including money], should be circu-
lated as fl ows water.11
busine s s c ul t ur e a nd c h ine s e t r adi t ions 227
Then, about a century later, came Bai Gui, a native of Zhou, who was univer-
sally acknowledged as the foremost leading expert on economic aff airs. Not
unlike John Maynard Keynes, Bai Gui was not only a theorist but also made a
fortune in the market. His neat formulation, “What others throw away, I take;
what others take, I give away,” which may be inserted into the text of the Laozi
without ever being detected, has become one of the most often quoted of
ancient sayings up to this day. What he originally intended to say is prob ably
the idea “buy cheap and sell dear.” A saying so generally formulated obviously
has much wider philosophical applications, however. He is said to have been
very watchful of the opportunities presented by the changes of the times in the
market. When he wanted to increase his money supply, he bought cheap grain,
and when he wanted to increase stock, he bought up high- grade grain. He said
that he would invest his money in grain when the harvest year was good and
sell silk and lacquer, but he would reverse the course when the harvest year was
bad.12 The following statement based on his personal experience in the market
particularly deserves our close attention:
I manage my business aff airs in the same way that the statesmen Yi Yin
and Lu Shang planned their policies, the military experts Sunzi and
Wuzi deployed their troops, and the Legalist phi los o pher Shang Yang car-
ried out his laws. Therefore, if a man does not have wisdom enough to
change with the times, courage enough to make decisions, benevolence
enough to know how to give and take, and strength enough to stand
his ground, though he may wish to learn my methods, I will never teach
them to him.13
Here, he is not speaking as a moral phi los o pher explaining to us the meanings
of Confucian ideas such as “wisdom,” “courage,” “benevolence,” and “strength.”
Instead, he is talking in the capacity of a “worldly phi los o pher” in the sense as
Robert L. Heibroner has used it.14 In this remarkable statement, we fi nd a cal-
culating mind who is actually trying to enlighten us about how to ride with the
tides in the vast ocean of the market by relying purely on cold reason. Drawing
on the analogies of po liti cal action, military deployment, and legal enforce
-
ment, he is unmistakably promoting what in substance is referred to as “instru-
mental rationality” by Max Weber without that term.
Now, I wish to relate the market to the larger world. Due to space, I can only
briefl y indicate, fi rst, the general impact of the market on human relations in
the po liti cal domain, and second, the way of life arising from the market as re-
fl ected in the philosophical thinking of ancient China. Both may be considered
as impor tant aspects of what we call business culture, but as far as I know, have
not been adequately dealt with in modern historical scholarship.
Max Weber made an in ter est ing observation on the impersonality of the
market as follows:
228 busine s s c ul t ur e a nd c h ine s e t r adi t ions
The market community as such is the most impersonal relation of practi-
cal life into which humans can enter with one another. . . . The reason for
the impersonality of the market is its matter- of- factness, its orientation to
the commodity and only to that. Where the market is allowed to follow its
own autonomous tendencies, its participants do not look toward the
persons of each other but only toward the commodity; there are no ob-
ligations of brotherliness or reverence, and more of those spontaneous
human relations that are sustained by personal unions. They all would
just obstruct the free development of the bare market relationship, and its
specifi c interests serve, in their turn, to weaken the sentiments on which
these obstructions rest. Market be hav ior is infl uenced by rational, pur-
poseful pursuit of interests.15
As usual, Weber is speaking of an ideal type pushed to its logical extreme; it is
nowhere to be found in any real market community. Moreover, he has in mind,
specifi cally, the Western market in its fully developed modern stage, which
does not readily apply to ancient China. However, his notion of impersonality is
relevant to our discussion here, for we do fi nd in the market relationship in the
late Warring States Period (481–221 b.c.e.) a touch of impersonality.
Around the middle of the third century b.c.e., a new concept called “market
way” ( shidao
) suddenly emerged. The well- known general Lian Po of Zhao
was rehabilitated as fi eld commander after having been dismissed for over a
de cade. All of his former followers (“guests” or “retainers”) abandoned him
upon learning of his dismissal. Now, with his reinstatement, they returned to
him to off er their ser vices. Not yet recovered from his deeply hurt feelings, he
ordered them to leave, but one of them said to him: “How come your lordship
discovers things so late? In this world of ours, people build their relations with
each other according to the market way ( shidao). When your lordship is in power,
we follow you, and out of power, we leave you. This is a generally acknowledged
princi ple. Why have a grudge against us?16 A few de cades earlier, a similar case
also happened to Lord Mengchang of Qi, best known for his generosity in keep-
ing thousands of “guests” under his patronage. When he was reappointed
prime minister of Qi in the early years of the third century, his “guests” all re-
quested to see him for employment. He then privately told the only protégé he
trusted that he would humiliate them when they arrived. The protégé gave him
the following counsel:
The wealthy and power ful attract many followers, while the poor and
lowly have few friends. This is how things naturally are. Don’t you ever
see those who go to the market? At dawn, they turn sideways to get into
the gate, and at dusk, they don’t even care to give it a glance as they pass
by. It is not that they like the market at dawn and resent it at dusk. It is
because the profi table goods they look for are no longer there after dusk.
busine s s c ul t ur e a nd c h ine s e t r adi t ions 229
Now it is only natu ral that all the guests left you when you lost your posi-
tion. It is therefore not worthy of you now to hold grudge against them,
thereby cutting yourself off completely from all those who want to be your
guests.17
Lord Mengchang is said to have found this argument utterly convincing.
The above two stories in the Rec ords of the Grand Historian may well have
been exaggerated or even fi ctionalized, but there can be no doubt that they rep-
resent the Chinese perception of a new social real ity closely associated with the
ever- growing importance of the market from the sixth century to the third.
Two core ele ments emerge clearly from the above account. First, the relation-
ship between a feudal lord and his followers seems to have under gone a change
from personal to impersonal. It was the impersonal forces of wealth and power,
not personal ethics of trust and loyalty, that ultimately determined their mutual
relations. Second, the paradigm of this impersonality was believed to be pro-
vided by the market relationship— hence, the new term market way ( shidao).
On the one hand, the so- called “guests” thought of their ser vices in terms of a
commodity and off ered them to a feudal lord as such. On the other hand, a
feudal lord who kept “guests” under his patronage was also not really diff er ent
from a customer who made business transactions in the market.
It is extremely revealing that the Legalist phi los o pher Han Fei (280–233
b.c.e.) even defi ned government offi
ces in market terms. He quoted a father’s
instructions to a son in the following words: “A prince sells his government of-
fi ces and rank just as a minister sells his intelligence and work. So you depend
on yourself, not others.” A Japa nese commentator explains this passage thus:
“A person obtains offi
ce and rank through his intelligence and work as if it were
a business exchange in the market.”18 Han Fei further elaborated this idea else-
where. He said: “A minister makes a market deal ( shi
) with a prince by work-
ing to the utmost of his ability for him and a prince makes a market deal ( shi)
with a minister by bestowing on him rank and emolument. The relationship be-
tween prince and minister is not a natu ral one as between father and son. It is
based on mutual calculations.” According to a commentary, the last sentence
means: “The prince calculates the ser vice rendered by the minister while the
minister calculates the emolument received from the prince.”19 Thus, we see that
offi
ce, rank, intelligence, and work were all transformed into goods for exchange
in the po liti cal market.
But most astonishing of all, by the third century, even the throne was con-
ceived as a commodity. This is vividly shown in the rise of Lü Buwei
(290–235 b.c.e.) from wealthy merchant to prime minister of Qin. Lü had been
engaged in long- distance interstate trade between Qin and Zhao with consider-
able success until he met a hostage prince from Qin in the capital of Zhao. His
sharp business sense immediately told him that this prince was “an extraor-
dinary commodity worth hoarding” ( qihuo kezhu
) . He then went
; 230 busine s s c ul t ur e a nd c h ine s e t r adi t ions
home to seek advice from his father. The following is said to be the resulting
conversation:
lü: How many times of profi t can be gained in agriculture?
fat her: Ten times.
lü: How many times in the trade of pearls and jade?
fat her: A hundred times.
lü: Then how many times in putting a king on the throne?
fat her: Numerous.
Thereupon Lü made the most critical and decisive move in his life from the
economic market to the po liti cal market.20
Again, the details of Lü Buwei’s phenomenal rise to po liti cal prominence
have long been questioned.21 However, the basic fact about his merchant back-
ground remains undeniable. The conversation between father and son may
have been a fi ction and the remark about the prince as an “extraordinary com-
modity” may also have been put into his mouth. Nevertheless, for social history
of ideas in general, the evidential value of such stories can hardly be exagger-
ated. There can be no doubt about these ideas being dated to the late third
century prior to the unifi cation. Moreover, it was rather common among schol-
ars at that time to think of power and honor in market terms as amply shown in
the writings of Han Fei, quoted above.
The reason is not far to seek. With the unpre ce dented prosperity of the mar-
ket in the third century, the merchant class also became interested, more than
ever, in investing their money in power and honor. Here again, Han Fei is our
best guide. He said:
Nowadays, however, if a man can enlist the private pleading of someone at
court, he can buy offi
ces and titles. When offi
ces and titles can be bought,
you may be sure that merchants and artisans will not remain despised for
long; and when wealth and money, no matter how dishonestly gotten, can
buy what is in the market, you may be sure that the number of merchants
will not remain small for long.22
It is an unexpected good fortune for us that the above observations about the
market are further confi rmed by newly discovered texts from the famous
Mawangdui silk manuscripts. In a collection of third- century texts belonging
to the School of zongheng
Strategists, “market” is mentioned in two of
