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Source link: http://archive.mises.org/5383/ancient-chinese-historian-recognized-the-market-as-a-beneficial-spontaneous-order/

Ancient Chinese historian recognized the market as a beneficial spontaneous order

July 26, 2006 by

Reading Don Lavoie and Emily Chamlee-Wright’s Culture and Enterprise, I was struck by the following percipient and eloquent observation by Chinese historian Ssu-ma Ch’ien (c.145-86 BC), over two thousand years ago, regarding the coordinating capacity of the market process:

There must be farmers to produce food, men to extract the wealth of mountains and marshes, artisans to process these things and merchants to circulate them. There is no need to wait for government orders: each man will play his part, doing his best to get what he desires. So cheap goods will go where they fetch more, while expensive goods will make men search for cheap ones. When all work willingly at their trades, just as water flows ceaselessly downhill day and night, things will appear unsought and people will produce them without being asked. For clearly this accords with the Way and is in keeping with nature.

The passage can be found on page 48 in:

Lavoie, Don and Emily Chamlee-Wright. 2000. Culture and Enterprise: The Development, Representation, and Morality of Business. New York: Routledge, A Cato Institute Book.

And page 477 in:

Ssu-ma, Chi’en. 1961. Records of the Grand Historian of China. Translated from the Sih Chi of Ssu-ma Ch’ien. New York: Columbia University Press.


Jim Simpson July 26, 2006 at 10:41 pm

Take a look at Murray Rothbard’s Austrian Perspective on The History of Economic Thought, Roderick Long’s paper “Rituals of Freedom: Austro-Libertarian Themes in Early Confucianism,” or Justin Ptak’s “The Prehistory of Modern Economic Thought: The Aristotle in Austrian Theory.”

Geoffrey Allan Plauche July 26, 2006 at 10:53 pm

Thanks. I’m aware of all three, although I haven’t gotten around to reading the latter two. I don’t remember seeing this passage in Rothbard’s books though. Does this passage appear in any of them?

Geoffrey Allan Plauche July 26, 2006 at 11:09 pm

Nevermind. I found the passage on page 61 of Long’s essay, but with a different translation. Ptak’s article also cites it on pages 16 and 17. I still don’t know if the passage is cited in Rothbard’s work though.

David July 27, 2006 at 7:04 am

It is indeed cited : this comes from Rothbard ( culled from the Mises daily article archives), and it includes part of (a different translation of) the passage that started this thread:

‘Since Ch’ien thought very little of the idea of limiting one’s desires, he was impelled, far more than the Taoists, to investigate and analyze free market activities. He therefore saw that specialization and the division of labor on the market produced goods and services in an orderly fashion:

Each man has only to be left to utilize his own abilities and exert his strength to obtain what he wishes … When each person works away at his own occupation and delights in his own business, then like water flowing downward, goods will naturally flow ceaselessly day and night without being summoned, and the people will produce commodities without having been asked.’

To Ch’ien, this was the natural outcome of the free market. “Does this not ally with reason? Is it not a natural result?” Furthermore, prices are regulated on the market, since excessively cheap or dear prices tend to correct themselves and reach a proper level.

But if the free market is self-regulating, asked Ch’ien perceptively, “what need is there for government directives, mobilizations of labor, or periodic assemblies?” What need indeed?

Ssu-ma Ch’ien also set forth the function of entrepreneurship on the market. The entrepreneur accumulates wealth and functions by anticipating conditions (i.e., forecasting) and acting accordingly. In short, he keeps “a sharp eye out for the opportunities of the times.”

Finally, Ch’ien was one of the world’s first monetary theorists. He pointed out that increased quantity and a debased quality of coinage by government depreciates the value of money and makes prices rise. And he saw too that government inherently tended to engage in this sort of inflation and debasement.

gene berman July 27, 2006 at 9:00 am

Interesting–very. But not in the slightest surprising. As a matter of fact, the idea of “spontaneous order” would, in all likelihood, be the far more accepted theory of popular economic thinking if it were not for the ubiquity and long history of authoritarian interventionism as well as the ubiquity and long history of the scribbling of apologists on behalf of such intervention.

Geoffrey Allan Plauche July 27, 2006 at 9:20 am

Thanks, David. I didn’t have access to the books while at my dorm, but now that I’m back at the Mises Institute I was able to look for the passages you cite. They appear in Chapter 1.10, pages 26-27, of Volume 1.

Gene, I’m not so sure. I think Hayek was right when he pointed out that a recognition and understanding of spontaneous order requires a certain amount of abstract theorizing, and it’s much easier when we have someone already who has pointed it out to us. The incentives for interventionism also certainly serve to make this more difficult.

In any case, I can’t speak to the relative accuracy of the different translations of the passage I cited, but I think the version cited in the Lavoie book is the more eloquent one. I especially like its conciseness and elegance, how it manages to pack so much insightful information into a single paragraph.

gene berman July 27, 2006 at 6:57 pm


I give the piece all of the same praise. However, the level of abstraction necessary to see the signs of order are not nearly so elusive: that an idea be capable of conception is prima facie evidence that it might have been capable of such conception at an earlier time, even despite some ideas seeming to have arisen as the result of more rudimentary, preparative understandings. I might point out that, similarly, much earlier men were prompted, through reflection on their own existence and observation of that of others and of the world around them, to conceive of the categories, “cause” and “effect” and to further conceive theistic and monotheistic accountings.

The element most necessary for the conception voiced by these wise men is a relatively advanced division of labor (and the emergence of money or, at least, more barterable goods would provide a strong assist). It is, indeed, difficult to imagine such ideas arising in hunter-gatherer societies or in those depending on predation of one sort or another.

Geoffrey Allan Plauche July 29, 2006 at 9:54 am

Gene, I’m not convinced. Certainly some insightful individuals discovered the basic principles of the market even as far back as two thousand years ago. But if it was really so easy, why aren’t these principles more widely recognized today? Or, for that matter, through much of human history over the past two thousand years? I don’t think it is just because mercantilists and socialists came along and obscured the truth of these principles with their sophisms. I think that their sophisms are more easily and widely accepted precisely because they are easier to formulate and propagandize while bearing on the surface at least a superficial appearance of truth. Moreover, many of these sophists honestly believed the nonsense they were spouting.

gene.berman August 10, 2006 at 5:45 am


Wanted to continue this at some time–when I have more time.

I’m not interested in an argument for its own sake. Rather, I think that a more correct take on the matter may be helpful to all-’round understanding of the difficulties some better ideas have in achieving ascendancy at any time–and for all time.

Can’t say when I can do it; send me your e-mail address and I’ll try when I’ve got a little time.

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