The economics of the division of labour in early Chinese literature: With particular comparison to the ancient Greek thought

Abstract

Like their Greek counterparts, a number of Chinese thinkers of the “Axial Period” wrote extensively on the division of labour. In particular, Kuan Chung, Hsün Tzu and Ssu-ma Ch’ien explicitly discussed economic issues related to the division of labour, contributing sophisticated analysis on the subject. In this article, we first examine Kuan Chung and his followers’ fairly interesting analysis of the economies of agglomeration of specialists, and Ssu-ma Ch’ien's deep insight into the Taoist invisible hand of the market in coordinating the division of labour. The common ground between them is a sound understanding of the role of market exchange in facilitating the social division of labour, but the latter goes much further in appreciation of the spontaneous market order. We then turn to Hsün Tzu's profound scholarship of specialised learning or doing and his Confucian theory of the origin of social division, highlighting, in particular, his Confucian notion of natural equality and utilitarian account of the formation of society. Similarity in profundity and influence notwithstanding, of greater interest, appears to be the remarkable differences between the Chinese scholars and the philosophers of classical Athens in respect of their study of the division of labour, and we therefore investigate how and why the Chinese treatment contrasts thus sharply with the Greek/Europeans.

Keywords:

• Kuan Chung
• Hsün Tzu
• Ssu-ma Ch’ien
• agglomeration
• social classes
• specialisation
• Confucianism
• the Taoist invisible hand

Acknowledgements

The writing of this article draws on the author's ongoing research project on the history of ideas about specialisation and the market process, and some passages in the introductory section were derived from his newly published book (Sun, G-Z, The Economics of the Division of Labor: A History. London and New York: Routledge, 2012; Chapter 2, Section 2) that offers, for the first time, a systematic narrative of the evolution of the ideas about the division of labour in economics over the past two and a half millennia. The author is grateful to John Smyth, Michael Springer, the managing editors of this journal and especially two anonymous referees for helpful comments on an earlier draft and suggested changes that considerably improved the paper. Any errors that may remain are of course entirely his own.

Notes

¹ See e.g., Gordon (1975, chapter 2, especially pp. 17–29, and p. 41, Lowry (1987, pp. 16–8), and Sun (2005: chapter 1, especially pp. 5–6, chapters 2–4). We shall devote space below to elaborate comparison of the early Chinese scholarship of the subject with that of classical Athens.

² Of course, since then there have emerged quite some speculations on why the Axial Period took place as it did. One case in point is that made by Hsu and Linduff in their study of the origin of the Chou civilisation of ancient China (Hsu and Linduff 1988, pp. 64–6). They suggested that a cooling period around 1,000 BC, which had been well documented by climatologists’ research, caused a massive migration, dispersed from Central Asia and spreading across the Eurasian Steppes, especially southward. Should that be true, it must be closely related to the Axial Period phenomenon.

³ It is perhaps not without interest to note the striking resemblance of Guanzi's exposition of knowledge spillover arising from concentrated settlement to Alfred Marshall's well-known description of the same matter as one primary part of the benefits arising from agglomeration of specialised workers and firms. When people of the same trade become neighbours to one another, “(t)he mysteries of the trade become no mysteries; but are as it were in the air, and children learn many of them unconsciously. Good work is rightly appreciated, inventions and improvements in machinery, in processes and the general organisation of the business have their merits promptly discussed: if one man starts a new idea, it is taken up by others and combined with suggestions of their own; and thus it becomes the source of further new ideas” (Marshall 1920, p.: 271).

⁴ It should be pointed out that similar observations had been made even in the earlier literature, dated back to the Bronze Age. For instance, it is noticed in I Ching (The Book of Changes) that “(the sage Shennong) had markets held at midday, bringing all people under heaven together and assembling all commodities under heaven. They bartered and returned home, every one having got what he wanted” (The Book of Changes, p. 421).

⁵ It is worth noting that Kuan Chung, as a successful public administrator who displayed a masterful use of the market mechanism in administration over his long holding of the prime ministership of the state of Qi, is perhaps best known for his policy of state monopoly of salt and iron production and price stabilisation through controlling money supply. Also remarkable is his strong orientation toward foreign trade. As a matter of fact, he is justifiably considered a mercantilist, if such a term may be used to describe historical figures literally, beyond application to the Europeans of the recent centuries. We do not, however, intend to examine here all the nuances of the thoughts of this complicated figure, for that goes far beyond the scope of the present article.

⁶ An account of the life of this man is found in Watson (1958).

⁷ That Ssu-ma Ch’ien remained profoundly influenced by Taoism in the composition of his masterpiece has long been recognised and is well documented; see, e.g., Crawford (1963) and Spengler (1964), especially Section III of the latter, on the historian as an exponent of the Taoist laissez-faire.

⁸ We will not delve here into the subtle relationship between Ssu-ma Ch’ien's economics and Taoism in general, a topic beyond the scope of the present article that has been dealt with, albeit superficially, in Spengler (1964).

⁹ The idea of “born similar but made different” was of a long tradition in Confucianism, in which the importance of education was famously emphasised, and could be indeed dated back to Confucius himself: “By nature, men are nearly alike; by practice, they get to be wide apart” (Confucian Analects, Book 17, in Legge 1994; Vol. I, p. 318). But it is Hsün Tzu who substantially developed it in his own social philosophy of ritual and justice. For more discussion on this point, see below.

¹⁰ Throughout his writings, Hsün Tzu repeatedly pointed to learning (polishing, exertion, effort, etc.) as the only effective channel for rectifying the shortcomings of the inborn nature. To him, learning is the road to virtue. Remarkably, Xunzi opens with the sentence, “The gentleman says, ‘learning must never be concluded’” (Xunzi, Vol. I, Book 1, An Exhortation to Learning, p. 135). Systematic elaboration on this thesis is provided in the chapter that focuses on the idea that human nature is evil and that any good in humans is acquired through conscious exertion (Xunzi, Vol. III, Book 23, Man's Nature Is Evil). For that matter, it is perhaps not without interest to note the affinity between, one the one hand, Hsün Tzu's ethics of learning and, on the other, the central element in the ethics and philosophy of Socrates that goodness depends on knowledge (refer to, e.g., Socrates’ Apology, in Plato 1997).

¹¹ Indeed, Hsün Tzu lunched an explicit attack on Mencius’ theory (Xunzi, Vol. III, Book 23, Man's Nature Is Evil, pp. 152–6).

¹² The same point is further elaborated from a slight different angle elsewhere (Xunzi, Vol. III, Book 21, Man's Nature Is Evil, pp. 158–9).

¹³ The notion that everything existing is governed by some rule knowable to human intelligence is of a long tradition in the Chinese philosophy and literature. For instance, it is written in Shih Ching (the Book of Odes) edited by Confucius, that “Heaven, in giving birth to the multitude of the people, to every faculty and relationship annexed its law” (the chapter of Chingmin, in Legge 1994: Vol. IV, p. 541). Another case in point is the well-known statement in the Confucian text, The Great Learning, “Things have their root and their branches. Affairs have their end and their beginning. To know what is first and what is last will lead near to what is taught in the Great Learning” (Legge 1994: Vol. I, p. 357). See also “the Great Plan” in Shu Ching: The Book of History (see Legge 1994: Vol III; Waltham 1972), and I Ching (Zhouyi): The Book of Changes (especially Appendix Dazhuan pp. 404–33).

¹⁴ Excellent expositions of the utilitarian elements of Hsün Tzu's political theory are found in Fung (1937), pp. 195–6 and Hsiao (1979), pp. 182–94.

¹⁵ We have examined Hsün Tzu's philosophy of natural equality in certain details in Section 3, and shall shortly compare it with Plato's idea of natural inequality below.

¹⁶ It is worth noting that, up to the medieval age, the term “politica” stood for inquiry into the management of the polis (community), especially cooperation between members of the community, while “oeconomica” (economics) referred to the study of household affairs. It is no wonder then that in the Aristotelian scholarship the treatises on “politica” rather than those on “oeconomica” often contain the most profound thoughts and the most thorough analysis of what today are considered economic issues (see, e.g., Aristotle 1921; Tusi 1232 and the annotation on Tusi in Sun 2008). Also of interest is the fact that even already in the 1760s, Adam Smith lectured on economics in the course of Jurisprudence he taught at Glasgow University under the heading “police” (politica) (Smith 1978).

¹⁷ Later on, in the same chapter of the book, Plato wrote that “each … was to work all his life at a single trade for which he had a natural aptitude and keep away from all the others” (Republic, Book II, 374c; emphasis added). Similar observations are made on several other occasions: “each … is to be directed to what he is naturally suited for, so that, doing the one work that is his own, he will become not many but one” (The Republic, Book II, 423d). Also see Book IV, 433a; Book IV, 443c; and Book V, 453b.