Confucius on Central Planning

The natural Universe maintains order without giving commands, and the ruler should do likewise, remaining motionless like the North Star and letting the people revolve spontaneously around him. If you yourself are correct, even without the issuing of orders, things will get done; if you yourself are not correct, although orders are issued, they will not be obeyed.

Did Confucius detect the inherent fragility in central planning? That is, that the pushier and more micro-managerial that rulers become, the more they elicit big unwanted side-effects? The relevant example, of course is Mao’s Great Leap Forward. Mao sought to bring the entirety of Chinese society under his yoke, and drag China quickly forward to equal Western industrial development that had taken place organically at a much slower pace.

From Wiki:

Before 1949, peasants had farmed their own small pockets of land, and observed traditional practices connected to markets—festivals, banquets, and paying homage to ancestors.

By 1958 private ownership was entirely abolished and households all over China were forced into state-operated communes. Mao insisted that the communes must produce more grain for the cities and earn foreign exchange from exports.

While collectivisation was eventually achieved (though not without resistance), the largest unsolicited side effect in this case was mass starvation.

Dutch historian Frank Dikötter explains:

The Great Leap Forward began by collectivising rural farms. Farmers were no longer allowed to grow food for themselves and for profit; instead, they grew it for the collective and the nation. Kitchens were also collectivised; in many places, people were not allowed to own pots and pans because they were required to take all their meals in community dining halls.

To boost crop production, planners took people who once grew grain and put them to work on new irrigation projects. Other farmers were told to work on community iron smelters, thousands of which were built in the campaign to overtake Britain. To produce “steel,” party leaders required many villages to melt down all metal in the community, including farm tools. The resulting pig iron was often of much poorer quality than the source metal.

The lack of incentives to work combined with the lack of people and, in some cases, the lack of farm implements led almost immediately to reduced crops. But provincial leaders who were rewarded for meeting targets didn’t want to admit declines to the central party, so they reported great successes. The national government appropriated 25 to 33 percent of the reported crops for export and to feed the cities. But with actual crops much less than reported, this didn’t leave enough to feed the villages, who in many cases were forced to eat the seed reserved for next year’s crops.

Given that collective farmers had no positive incentives to work, party officials quickly began using negative ones, namely violence against anyone not working hard enough. One county leader considered violence a “duty” and told people working for him, “having a campaign is not the same as doing embroidery; it is impossible not to beat people to death.” Another county leader told cadres, “There are so many people working, it doesn’t matter if you beat a few to death”.

The people who passed out food in the community dining halls knew who worked and who shirked; they would dip to the bottom of soup pots to provide the former with meat and vegetables while the latter would get a watery gruel skimmed from the top. Eventually, some people were denied access to food at all and beaten if they were found with food. One boy who stole a few ounces of grain was stripped, bound, and thrown into a pond where he eventually died of exposure. In some regions, as many as 10 percent of the deaths were due to violence, not food shortages.

If the steel mills were failures, the poorly engineered irrigation projects were no better, often actually reducing the productivity of the land. Within a few years, thousands of poorly built dams collapsed. The failure of one set of dams during a storm in 1975 led to floods that killed 230,000 people.

It is hard to understate how far Maoism was a departure from Confucianism. And it is telling that China only dragged herself out of her great slumber when she ditched Mao’s regressive centralism and returned to a closer approximation of Confucianism under Deng Xiaoping, and to a greater extent under Wen Jiabao’s present regime.

Readers trying to understand the present clash between two factions of the Chinese Communist Party, would do well to see it in terms of Wen’s Confucian faction being challenged by Bo Xailai’s Maoist faction.

From Tom Doctoroff writing in the Huffington Post:

Bo Xilai’s brand of populism was a threat to the nation. He championed the interests of Everyman, but his modus operandi was steeped in Cultural Revolution hysteria. The flip side of massive investment in low-income housing was manipulation of economic insecurity. His anti-mafia zeal, heralded as a campaign against corruption, was a bid to monopolize power within the Party, exacerbating an accountability deficit that tarnishes credibility amongst both rich and poor. His “red song” campaigns, reactionary homages to the Cult of Mao that continue even now to chill both foreigners and mainlanders. To advance his own agenda, he tapped into a latent but enduring impulse to worship, and blindly follow, imperial god-kings, false leaders whose anti-rational policies lead to disaster.

Perhaps then the greatest threat to China — Confucian, not Maoist — as regional and global superpower has just fallen…

22 thoughts on “Confucius on Central Planning

  1. The same happened in Ukraine in the 30’s “Holodomor” or the hungry times. My Great Grandmother lost her plot of land. Certain wheat had to be grown to earn hard currency via export to world markets. Non local seed i.e. communist approved seed resulted in crop failure due to unique climatic conditions.

    Communists are responsible for more Genocide than any other political movement. Liberals/Socialists just cause suffering that is not as physically apparent!

    Confucius, like Buddah & Jesus earned their stripes because the transcended human frailty.

    Statists will never understand their mindset.

    • Certain wheat had to be grown to earn hard currency via export to world markets. Non local seed i.e. communist approved seed resulted in crop failure due to unique climatic conditions.

      Sounds like Monsanto…

      • Yes Monsanto will be the ruin of man. Don’t put all your “eggs” (Genes) in one basket.

        A must watch movie/documentary for all aspiring Communists/Liberal/Socialist/Statist Politicians.

        How to kill 7-10 Million people withoiut firing a shot or lighting a match, or turning on a gas cylinder.

        http://www.holodomorthemovie.com

  2. Have you read the book “Exorbitant Privilage” by Barry Eichengreen? it contains some interesting info:

    “Britain’s troubles resulted from wage increases and the Arab-Israeli War, which led to the closure of the Suez Canal, disrupting international trade and raising the price of oil?and not incidentally leading oil-exporting countries in the Middle East to move funds out of sterling, given that Britain made no secret of its support for Israel.”

    “The decision was announced on a cold and foggy Saturday when the markets were closed. Most Britons learned of it courtesy of the BBC, which, enjoying its broadcasting monopoly, was recycling Midnight Lace, a stale Doris Day thriller, which it interrupted to announce the less than thrilling news of a 14 percent reduction in the currency’s value. “I am quite shocked,” Sir Patrick Hennessy, chairman of Ford Motor Company’s British operations, told the press. “I have personally told my business friends abroad that it would not happen.”

    “The price of gold shot up. Obliged as they were to drive it back down, the remaining members of the Gold Pool sold $1 billion of gold in November and another $1 billion in December. By March U.S. gold losses were running half a billion dollars a day. One Swiss bank reportedly had to strengthen its vault to contain all the privately held gold that was flooding in. Out of options, on Thursday, March 14, U.S. Treasury officials telephoned their British counterparts, requesting that they shut the London gold market.”

    “Closing the market required a proclamation by the queen. Although it was almost midnight, Prime Minister Harold Wilson rushed to Buckingham Palace, where he obtained the consent of Queen Elizabeth to close the market.”

    “After two days of tense negotiations, U.S. and European officials agreed to a scheme devised by Italian central bank governor Guido Carli for a “two tier” gold market. His characteristically clever scheme divided transactions into a market tier on which the price of gold was free to fluctuate and an official tier where central banks would transact with one another at the official $35 price, and therefore the entire Bretton Woods apparatus, remained in place.”

    “Not everyone was impressed. Leonid Brezhnev gleefully saw the decision as signaling “the beginning of the devaluation of the United States dollar” and “the possibility of a profound crisis of the capitalist system.”

  3. “Perhaps then the greatest threat to China — Confucian, not Maoist — as regional and global superpower has just fallen…”

    No! It’s the blindly following either black or white, left or right ONLY mentality that is the greatest threat to China (and everywhere else as well.) Not Confucian.

    Confucian is just a school of thought or opinion. It’s up to the people how much they are getting out it or how to use it.

    If anything that finishes China for the worst it is the extreme corruption China style. That terminal Cancer is already deeply widely metastasized.

    Who are the beneficiaries of central planning: people who are in and close to the power of central planning http://www.bloomberg.com/news/2012-04-13/china-murder-suspect-s-sisters-ran-126-million-business-empire.html

    • No! It’s the blindly following either black or white, left or right ONLY mentality that is the greatest threat to China (and everywhere else as well.)

      Yeah, I suppose so.

      • I more than suppose. Corruption is a cancer that destroys economies. That chinese leaders see no problem with leveraging their power to build massive wealth is a sign of the government’s inevitable downfall, or at least its limitations which must become obvious sooner rather later. That most chinese are industrious will enable the corruption to thrive longer than otherwise.

  4. Times of waning State control (leading to micro-states) have also had some of the highest artistic and philosophic production. The Spring and Autumn period in China, which *Confucius* was a apart of. The period of Ancient Athens before the Peloponnesian War. The Italian Renaissance. The German Confederation in the 19th century.

    Periods of reduced large-scale Statism, and increased intellectual activity.

    (Also increased war …)

  5. You have the prloblem of “how did they get from there to here.” If the Communist Party did all those horrible things to China, how did the same Communist Party bring about the transformation of the last thirty years. You can’t with your analysis get from there to here. Confucianism is about moral order. We lack one in the United States,

  6. This post illustrates for us why 2 or 3 party representative democracy is a failure. All parties want to increase state power and central planning…many of the negative and destructive side effects cannot be measured….so they are ignored as if nothing happened, like in the broken window fallacy…hidden consequences are ignored.

    Governing a great nation is like cooking a small fish – too much handling will spoil it.
    Lao Tzu

    In dwelling, live close to the ground. In thinking, keep to the simple. In conflict, be fair and generous. In governing, don’t try to control. In work, do what you enjoy. In family life, be completely present.
    Lao Tzu

    Confucius and Lao Tzu represent 2 sides of the human will, one is rule bound, external, material, letter of the law…the other is spirit, internal. When the two are in balance there is prosperity when out of balance there is chaos. All societies have this…the west has it and Islam has it, perhaps human beings have never before lived through so much inbalance globally. In the past enlightened people could withdraw and live in the wilderness today this is less possible. We moderns can only enhance the wilderness within our own souls, cultivate our own inner power and strength of spirit to rise above the mass.

    • Maybe Locke and Hobbes would be more appropriate comparisons, with the latter espousing the legitimacy of centralised control versus Locke’s belief in the sovereignty of the individual. Of course, Locke is somewhat anathema to chinese culture, but one could argue the similarities between Locke and Confucius, with legitimacy and respect coming not from authority but truth.

  7. John, great connect. The old master’s really had it down. As did masters older than the ones we know.

    It’s all about scale is it not? You cannot hold together a population (of anything or anyone) if there is no core cohesion in the constituent parts. Same with people and laws and thus the true definition of libertarianism.

    CBs are just another attempt to try this magical cohesion trick through chimeric money and artificial constraints. Fail.

    Excellent to see you get picked up by ZH. Well deserved.

    Vivek

  8. Mencius (a Chinese philosopher, is arguably the most famous Confucian after Confucius himself) said:

    “The reason for disliking those who hold to one extreme is that they cripple the Way. One thing is singled out to the neglect of a hundred others. . . .Holding on to the middle is closer to being wise, but to do this without proper measure & remaining able to react is no different from holding to one extreme”

    Enquiring minds may be further intrigued by this remnant

    “The Benefits & Hazards of Dialectical Discussions”
    tinyurl.com/6w7nq2q

  9. Pingback: Lao Tzu on Liberty « azizonomics

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