Open Journal of Philosophy
2012. Vol.2, No.2, 100-106
Published Online May 2012 in SciRes (http://www.SciRP.org/journal/ojpp) http://dx.doi.org/10.4236/ojpp.2012.22015
100
Equilibrium in Classical Confucian “Economy”
Shirley Chan
Department of Internatio nal S tu di es , Macquarie University, Syd ney , Australia
Received March 1st, 2012; r evised March 30th, 2012; accepted April 10 th, 2012
In a modern economy, “equilibrium” means that supply and demand is equal. It is at this point that the al-
location of goods and services is at its most efficient, this being because the amount of goods and the
amount of goods in demand are equally balanced. The market equilibrium therefore is determined by sup-
ply and demand. This paper looks at the concept of “equilibrium” in some of the early Confucian texts
and its possible implications in economic activities. In the Confucian context equilibrium, or what can be
termed as the ultimate equilibrium, is to be understood in a broader sense where balances and harmony at
different levels (e.g. individual and society) need to be sought in order to achieve a model of sustainable
development. The ultimate equilibrium may provide an alternative approach to social welfare and eco-
nomic prosperity creating universal harmony and better living for humans. In Confucian ideology, gov-
erning for the welfare of the people is not merely a question of increasing personal income and wealth; it
requires implementation on a priority basis, taking into consideration the formation of an orderly society
based on the enforcement of moral and ethical standards with the existence of a benevolent government
which appropriates things according to the principles of harmony and order to achieve what can be termed
as the “great equilibrium”—equilibrium that is not simply defined by balanced economic forces as in
modern economic theory; but rather is used to suggest an ideal state of harmony in self fulfilment and
socio-political order through incentives and by appropriate means.
Keywords: Equilibrium; Economy; Confucianism
Introduction
In a modern economy, “equilibrium” means that supply and
demand is equal. It is at this point that the allocation of goods
and services is at its most efficient, this being because the
amount of goods and the amount of go ods in demand are equally
balanced. The market equilibrium therefore is determined by
supply and demand. This paper looks at the concept of “equi-
librium” in some of the early Confucian texts and its possible
implications in economic activities. In the Confucian context
equilibrium, or what can be termed as the ultimate equilibrium,
is to be understood in a broader sense where balances and har-
mony at different levels (e.g. individual and society) need to be
sought in order to achieve a model of sustainable development.
The ultimate equilibrium may provide an alternative approach
to social welfare and economic prosperity creating universal
harmony and better living for humans.1
The modern Chinese term for economics, jingji 經濟, does
not appear until the end of the nineteenth century. The words
jing 經 and ji 濟 have been respectively taken from the
Zhouyi 周易 (Book of Changes) and the Xici 繫辭 (Com-
mentaries on the Hexagram) to give the connotation of jingji
經濟 (economy) in a Confucian context: jing 經 is understood
as “sorting things out properly” or “governing” as in the state-
ment “The superior man adjusts his measures of government as
in sorting the threads of the warp and woof,” (君子以經論)
(Wang: p. 34) and ji 濟 is depicted as “helping” as in the sen-
tence “His knowledge embraces all things, and his course is
[intended to be] helpful to all under the sky” (周乎萬物而道濟
天下)2 (Wang: p. 267).
One may doubt the relevance of the term “jingji” 經濟 in
Early China—and even in a considerably large part of pre-
modern Chinese history—to that of “economy” in its modern
sense.3 It is not my intention to provide a detailed discussion of
the distinction between the two. This would require us to trace
the development of the connotation of jingji down to the point
at which it began to circulate as a term for economy in its sig-
nificantly recognizable modern sense. The meanings of jing and
ji in classical Confucian texts, nevertheless, serve to highlight
my point, that is, economic activities have not been a separate
component in government administration—the combined read-
ing of the two characters signifies the administration of one’s
government for the benefit of the people (jing shi ji min 經世
濟民), and indicates the wider area of a Confucian ruler’s re-
sponsibilities and duties in satisfying the varied purposes of
human existence; it involves more than the use of scarce re-
sources in the provision of goods to satisfy wants, as is meant
by the modern term “economic activities”.4 In Confucian ide-
ology, governing for the welfare of the people is not merely a
question of increasing personal income and wealth for mate-
rial good; it requires implementation on a priority basis, taking
into consideration the formation of an orderly society based on
2See, (Chen, 2002: p. 9).
3It is to be noted that as late as the Han Dynasty, the term with relatively
strong relevance to economy was “huozhi” 貨殖, as seen in Sima Qi an ’ s 司
馬遷 Records of the Gran d Historian.
4A similar term also appears in the Baopuzi (《抱樸子·審舉》) dated to the
Eastern Jin period. It is said: “故披洪範而知箕子有經世之器, 覽九術而
見範生懷治國之略.” Then in 《晉書·殷浩傳簡文(司馬昱)答書》: “足下
沈識淹長, 思綜通練, 起而明之, 足以經濟.”
1The word “Classical” in the title suggests most primary texts used and my
scope of exploration are based on classical Confucian t exts.

S. CHAN
the enforcement of moral and ethical standards with the exis-
tence of a benevolent government which appropriates things
according to the principles of harmony and order to achieve
what we can term as the “great equilibrium”—equilibrium that
is not simply about achieving a state of balance between the
economic forces of supply and demand; but rather is used to
suggest an ideal state of balance through incentives and by
appropriate means that strives for the harmonious coexistence
of all things, for prosperity, and for the general wellbeing of the
people.
It is well known that the Confucian gentleman’s ultimate
goal is the pursuit of the Way and morality, and that the general
welfare of the people has never been a separate task from the
inculcation of moral sensibilities in the people. By applying the
principles of appropriateness (yi 義), it imposes a kind of order
that sustains the prosperity and general wellbeing of the ruled.
This can be deemed as an alternative model of social welfare or
polity, firmly grounded on the Confucian concepts of equilib-
rium, correctness, harmony or balance and with the objective of
governing and bringing prosperity to all. The implementation of
these principles is through education and cultivation of the
minds of the people so that they might regulate and refine their
desires in a way appropriate to the search for and enhancement
of satisfaction.
An Alternative Model of Social Welfare and
Economic Prosperity: Profit vs Morality?
In classical Confucian texts, the need of material welfare and
the quest for a better life is acknowledged.5 The emphasis is
often placed on the ruler and his government’s parental role in
caring for the common people. Natural resources generated by
Heaven and Earth are not for the exclusive use of any particular
individual or group of people, but for the benefit of as many
people as possible. The ruler should distribute the wealth in
such a way that goods and materials can be properly utilized.6
Any form of monopoly should be condemned as an act of rob-
bery.7 The fulfilment of the people’s need to be fed, clothed,
sheltered, and of their need for a prosperous life is thus deemed
as an integral part of a system of social welfare. The imple-
mentation of the system of welfare, however, is part of the ho-
listic continuum of social order and cosmic harmony under
Confucian government.8 The Book of History defines the obli-
gations of a virtuous government to be the nurture of the peo-
ple:
The virtue [of the ruler] is seen in [his] good government,
and that government in the nourishing of the people.
There is water, fire, metal, wood, the earth, and grain;
these must be duly regulated. There is the rectification of
[the people’s] virtue, [the tools and other things] that sup-
ply the conveniences of life, and the securing of abundant
means of sustenance; these must be harmoniously at-
tended to (德惟善政, 政在養民. 水, 火, 金, 木, 土,
谷, 惟修; 正德, 利用, 厚生, 惟和.)9
The Confucian nostalgic yearning for the practice of the an-
cient sage kings points to the ultimate role of the government as
one of civilizing the people, and of establishing social institu-
tions based on proper human relations: mutual respect, division
of labour, pluralism, natural hierarchy and most importantly,
peaceful coexistence.10
In the ideal Confucian society of harmonious coexistence, a
promising future of personal wealth and social economic
growth is expected. However, in terms of the quest for personal
interest or profit, how far one should go, and what sorts of
regulations should there be emerge as key questions? Accord-
ing to Confucian ideology, it is about the practice of the prince-
ple of appropriateness based on ethical values. The government,
in principle, makes economic decisions based on the moral
order and is oriented towards serving the common good.
Confucius believed social disruption and economic poverty
was largely due to moral inadequacy resulting in improper at-
tainment of individual benefits. In other words, the ba sic rule in
the art of governing is to find a balance between individual
rights and public interest and to reconcile the tension between
individual desire and social harmony in a humane way.11 In this
sense, ren 仁 (humanism [humanity?]) and yi 義 (appropri-
ateness) have often been emphasized over li 利 (profit). The
following is the opening passage in the Works of Mencius, in
which King Hui of Liang 梁惠王 asks Mencius for counsel to
profit his kingdom:
8For instance, when Zi Gong 子貢 asked about the art of governing, Con-
fucius replied “The requisites of governing are that there be sufficiency o
f
food, sufficiency of military equipment, and the confidence of the people in
their ruler.” (子貢問政. 子曰: “足食. 足兵. 民信之矣.”); “What he (that
is, the ruler) attached chief importance to were the food of the people, the
duties of mourning, and sacrifices. By his generosity, he won all. By his
sincerity, he made the people repose trust in him. By his earnest activity, his
achievements were great. By his sincerity, he made the people repose trust
in him. By his earnest activity, his achievements were great. By his justice,
all were delighted.” (所重: 民, 食, 喪, 祭. 寬則得眾, 信則民任焉, 敏則
有功, 公則說.) (Lunyu, “Yaoyue”). For Mencius, governing the people
does not end in providing good living condition. Rather, material livelihood
serves as the main base for committing people to moral principles that will
reinforce social stability; he was awar e that the common people need to be
assured of good living conditions before they can develop morality. When
the Duke of Wen of Teng 滕文公 asked Mencius about the way of gov-
erning a kingdom, Mencius replied “The way of the people is this: If they
have a certain livelihood, they will have a fixed heart; if they have not a
certain livelihood, they have not a fixed heart. If they have not a fixed heart,
there is nothing which they will not do in the way of self-abandonment, o
f
moral deflection, of depravity, and of wild license.”
9The “Dayu Mo” (Counsels of the Great Yu), the Book of History.
10One of the most succinct accounts is in the Works of Mencius: “…But
men possess a moral nature; and if they are well fed, warmly clad, and
comfortably lodged, without being taught at the same time, they become
almost like the beasts. This was a subject of anxious solicitude to the sage
Shun, and he appointed Xie to be the Minister of Instruction, to teach the
relations of humanity: how, between father and son, there should be affec-
tion; between sovereign and minister, righteousness; between husband and
wife, attention to their separate functions; between old and young, a proper
order; and between friends, fidelity. The high meritorious sovereign said to
him, ‘Encourage them; lead them on; rectify them; straighten them; help
them; give them wings - thus causing them to become possessors of them-
selves. Then follow this up by stimulating them, and conferring benefits on
them.’ When the sages were exercising their solicitude for the people in this
way, had they leisure to cultivate the ground?” (…人之有道也, 飽食, 煖衣
逸居而無教, 則近於禽獸. 聖人有憂之, 使契為司徒, 教以人倫: 父子有
親, 君臣有義, 夫婦有別, 長幼有序, 朋友有信. 放勳曰: “勞之來之, 匡
之直之, 輔之翼之, 使自得之, 又從而振德之.” 聖人之憂民如此, 而暇
耕乎?) (Mengzi, “Teng Wengong I”).
5This can be confirmed from a statement in Lunyu 論語, “Riches and hon-
ours are what men desire,” and it is reinforced by another statement in the
same text in which the Master claims that he would become agroom with
whip in hands to gain riches and success. Throughout this paper, I will adopt
Legge’s translation for the early texts unless stated otherwise.
6夫利, 百物之所生也, 天地之所載也, 而或專之, 其害多矣. 天地百物,
皆將取焉, 胡可專也?... 夫王人者, 將導利而布之上下者也, 使神人百
物無不得其極. (Guoyu, “Zhouyu Shang”).
7匹夫專利, 猶謂之盜, 王而行之, 其歸鮮矣. (Guoyu, “Zhouyu Shang”).

S. CHAN
Mencius replied, Why must your Majesty use that word
“profit?” What I am provided with, are counsels to be-
nevolence and righteousness, and these are my only topics.
If your Majesty says, “What is to be done to profit my
kingdom?” the great officers will say, “What is to be done
to profit our families?” and the inferior officers and the
common people will say, “What is to be done to profit our
persons?” Superiors and inferiors will try to snatch this
profit the one from the other, and the kingdom will be
endangered. In the kingdom of ten thousand chariots, the
murderer of his sovereign shall be the chief of a family of
a thousand chariots. In the kingdom of a thousand chariots,
the murderer of his prince shall be the chief of a fa mily of
a hundred chariots. To have a thousand in ten thousand,
and a hundred in a thousand, cannot be said not to be a
large allotment, but if righteousness be put last, and profit
be put first, they will not be satisfied without snatching all.
There never has been a benevolent man who neglected his
parents. There never has been a righteous man who made
his sovereign an after consideration. Let your Majesty
also say, “Benevolence and righteousness, and let these be
your only themes.” Why must you use that word “profit?”
(“王何必曰利? 亦有仁義而已矣. 王曰 “何以利吾國”?
大夫曰 “何以利吾家”? 士庶人曰 “何以利吾身”? 上
下交征利而國危矣. 萬乘之國弒其君者, 必千乘之家;
千乘之國弒其君者, 必百乘之家. 萬取千焉, 千取百焉,
不為不多矣. 苟為後義而先利, 不奪不饜. 未有仁而遺
其親者也, 未有義而後其君者也. 王亦曰仁義而已矣,
何必曰利?”) (Mengzi, “Liang Hui Wang I”)
One may tend to take the above as a view of the dichotomy
between righteousness and profit, a cliché of the Confucian
denunciation of material gain as moral failure. However, this
fails to make the distinction between individual gain or self
regarding interest (exemplified by the word wu 吾) and the
common good based on benevolence and appropriateness. Fur-
thermore, following on from the emphasis on the common good,
one should set the pursuit of material goods within the bounda-
ries of moral standards and the principle of appropriateness.
Profit should only be sought based on the application of rules of
propriety. Appropriateness in the Confucian tradition is imbued
with ethical values, which reframe the perception of the word
“profit”. Mencius affirms that if self profit were to be privi-
leged over appropriateness, all would not be satisfied without
snatching all. For the same reason, a ruler and his government
should exemplify by orienting their motivation towards be-
nevolence and propriety when attending all affairs.12 Mencius is
not objecting to economic activity, but rather reducing the
king’s concern with improving his kingdom to a blind pursuit
of selfish advantage that will lead to the breakdown of social
harmony. This suggests that there are two kinds of profit. One
is small profit (xiaoli 小利), which acts out of egoism and is
immediately tangible and beneficial to personal welfare. The
other is great benefit or common good (dali 大利 or tianxiali
天下利), which takes the welfare of the people as its point of
departure and is embedded with the concept of appropriateness
and with the inculcation of ethical values.13 Obviously, the
“great profit” in a Confucian tradition implies the benefits that
are of interest to the people and the human community. There-
fore, a benevolent ruler should “make more beneficial to the
people the things from which they naturally derive benefit,” (因
民之所利而利之) (Lunyu, “Yaoyue”) and “confer extensive
benefits on the people and be able to assist them” (博施於民而
能濟眾) (Lunyu, “Yongye”). Li (benefit) has its moral validity
and is considered as an exercise of benevolence if it generates
wealth and contributes to the wellbeing of the people.
11For instance, Confucius once said “Riches and honours are what men
desire. If it cannot be obtained in the proper way, they should not be held.”
(富與貴是人之所欲也, 不以其道得之, 不處也; 貧與賤是人之所惡也,
不以其道得之, 不去也.) The Master said, “The object of the superior man
is the Way. Food is not his object. There is ploughing—even inthat there is
sometimes want. So with learning—emolument may be found in it. The
superior man is anxious lest he cannot attain the Way; he is not anxious lest
poverty should come upon him.” (子曰: “君子謀道不謀食. 耕也, 餒在其
中矣; 學也, 祿在其中矣. 君子憂道不憂貧.”) And, The Master said,
“With sincere faith he unites the love of learning; holding firm to death, he
is perfecting the excellence of his course. Such a one will not enter a totter-
ing state, nor dwell in a disorganized one. When right principles of govern-
ment prevail in the kingdom, he will show himself; when they are prostrated
he will keep concealed. When a country is well governed, poverty and a
mean condition are things to be ashamed of. When a country is ill governed,
riches and honor are things to be ashamed of.” (子曰: “篤信好學, 守死善
道. 危邦不入, 亂邦不居. 天下有道則見, 無道則隱. 邦有道, 貧且賤焉,
恥也; 邦無道, 富 且貴焉, 恥也.”) Also, Lunyu: “Riches and honours
acquired by inappropriateness are to me as a floating cloud,” (不義而富且
貴, 於我如浮雲.) For instance, Confucius has reminded us that “A man
who aims to be a man of complete virtue in his food does not seek to gratify
his app etite, nor in his d welling place does he seek the appli ances of ease;”
(君子食無求飽, 居無求安, 敏於事而慎於言, 就有道而正焉, 可謂好學
也已.) “The mind of the superior man is conversant with righteousness
(appropriateness); the mind of the mean man is conversant with gain;” (君子
喻於義, 小人喻於利.”), and, “He who acts with a constant view to his own
advantage will be much murmured against.” (放於利而行, 多怨.) Further-
more, it is said somewhere in the Analects: The Master seldom spoke on
profitableness. He approved only the Mandate of Heaven and humanity. (子
罕言利, 與命, 與仁.) Name ly, a man of noble character acquires his wealth
b
y honourable means implemented by ethical values, in which the prevailing
ideology is the virtue of benevolence or humaneness (ren 仁), a subject
matter, which Confucius himself seldom spoke about in accordance with
profitableness and the mandate of Heaven.
The Implementation of the Principle of
Equilibrium
It is not possible to improve the livelihood of the people—a
crucial concept in Confucian economics—without a proper and
legitimate political process for enriching and cultivating the
people. Underlying this goal is the concept of equilibrium and
centrality as attested in various Confucian texts.14 A Confucian
ruler is expected to provide moral guidance through clearly
displaying his moral excellence which is to maintain the cosmic
balance and the all important harmony between all things. He
12When Song Keng 宋牼was about to go to Chu to seek for a ceasefire
agreement with the scope of trying to persuade them the unprofitable course
in the war, Mencius proposed that Keng should start from the ground o
f
benevolence and appropriateness rather than profit taking. (Mengzi, “Gaozi
II
”).
13The term “tianxia li” appears in the Xici: “崇高莫大乎富貴, 備物致用,
立成器以為天下利, 莫大乎聖人.”Confucius has reminded us that “one
should not be desirous to have things done quickly; should not look at small
profits. Desire to have things done quickly prevents their being done thor-
oughly. Looking at small profits prevents great affairs from being accom-
plished.” (無欲速, 無見小利. 欲速, 則不達; 見 小利, 則大事不成.)
(Lunyu, “Zilu”).
14These include, for example, the “Doctrine of the Mean” of the Liji (the
B
ook of Rites), attributed to Zisi (or Kong Ji), Confucius’ grandson.The
discussion of the concept of equilibrium and centrality also appears in the
newly discovered bamboo text of the Baoxun (Admonition for Preservation)
dated to the Warring States (475-221 BC) period, acquired by Tsinghua
University in 2008.
102

S. CHAN
does this not only by rectifying his mind but also through set-
ting up social institutions, regulations, and measurements which
enable him to put things in good order and with their correct
names. The ruler is responsible for engineering and ensuring
the smooth operation of social institutions and the cosmic order.
This is achieved through satisfying the common people’s de-
sires by reigning humanly and providing care and regulations.
The ultimate function of social institutions is to bring harmony
among all things between Heaven and Earth, in accordance
with their natural characters, so that all can coexist and en-
dure.15 Equilibrium and harmony are thus considered the source
of all life and creativities. When things are harmonized, their
nature and relationships with others are well defined and recog-
nized, so that they can live, transform, and develop to their full
potential without transgressing the principles of balance and
propriety. Ensuring harmony and coexistence of all things re-
quires proper order and regulations underlying this ultimate
goal. Equilibrium in a Confucian context is closely related to
putting things in proper order. Indeed, by means of setting
himself as an ideal exemplar situated in the centre, the ruler will
draw people from different directions to him by providing
proper guidance with the principles of correctness and harmony;
the ruler should exemplify the principle of equilibrium by not
exerting undue pressure nor interfere in the workings of the
cosmos in a violent and disproportionate manner; his activities
will only remain satisfactory so long as he conforms to the
principles of equilibrium, bringing harmony and balance to the
natural order of creation. He should take positive steps to con-
trol violence and avert disruptive change. His sole intention is
to maintain the balance in the socio-political world. This proc-
ess, which serves to promote and balance the wellbeing of the
individual and society, is also reflected in a conversation be-
tween Confucius and Zizhang:
Zi Zhang asked Confucius, saying, “In what way should a
person in authority act in order that he may conduct gov-
ernment properly?” The Master replied, “Let him honour
the five excellent, and banish away the four bad things;
then may he conduct government properly.” Zi Zhang
said, “What are meant by the five excellent things?” The
Master said, “When the person in authority is beneficent
without great expenditure; when he lays tasks on the peo-
ple without their repining; when he pursues what he de-
sires without being covetous; when he maintains a digni-
fied ease without being proud; when he is majestic with-
out being fierce.” Zi Zhang said, “What is meant by being
beneficent without great expenditure?” The Master repli e d,
“When the person in authority makes more beneficial to
the people the things from which they naturally derive
benefit—is not this being beneficent without great expen-
diture? When he chooses the labours which are proper,
and makes them labour on them, who will repine? When
his desires are set on benevolent government, and he se-
cures it, who will accuse him of covetousness? Whether
he has to do with many people or few, or with things great
or small, he does not dare to indicate any disrespect—is
not this to maintain a dignified ease without any pride? He
adjusts his clothes and cap, and throws a dignity into his
looks, so that, thus dignified, he is looked at with awe—is
not this to be majestic without being fierce?” Zi Zhang
then asked, “What are meant by the four bad things?” The
Master said, “To put the people to death without having
instructed them, this is called cruelty. To require from
them, suddenly, the full tale of work, without having
given them warning, this is called oppression. To issue
orders as if without urgency at first, and when the time
comes, to insist on them with severity, this is called injury.
And, generally, in the giving pay or rewards to men, to do
it in a stingy way, this is called acting the part of a mere
official.” (子張問於孔子曰: “何如斯可以從政矣?”子曰:
“尊五美, 屏四惡, 斯可以從政矣.” 子張曰: “何謂五
美?” 子曰: “君子惠而不費, 勞而不怨, 欲而不貪, 泰
而不驕, 威而不猛.” 子張曰: “何謂惠而不費?”子曰:
“因民之所利而利之, 斯不亦惠而不費乎? 擇可勞而勞
之, 又誰怨? 欲仁而得仁, 又焉貪? 君子無眾寡, 無小
大, 無敢慢, 斯不亦泰而不驕乎? 君子正其衣冠, 尊其
瞻視, 儼然人望而畏之, 斯不亦威而不猛乎?” 子張曰:
“何謂四惡?” 子曰: “不教而殺謂之虐; 不戒視成謂之
暴; 慢令致期謂之賊; 猶之與人也, 出納之吝, 謂之有
司.”) (Lunyu, “Yaoyue”).
When the principle of equilibrium applies in economic ac-
tivities, it means moderation and appropriation in expenditure.
Confucius opposes extravagance and excess and promotes the
idea of “being moderate in expenditure, and showing love for
men; mobilizing the employment of the people at the proper
seasons” (節用而愛人, 使民以時) (Lunyu, “Xue’er”). Like-
wise, the ruler’s priority is to help the unfortunate rather than
add to the wealth of the rich.16 After Confucius, Xunzi also
urges “strengthening the root and moderating the use of goods”
(彊本而節用) and “ensuring food supplies and moving in ac-
cordance with the seasons” (養備而動時) (Xunzi, “Tianlun”).
That is, resources should be expended only for the benefit of
the people, and that the people should be mobilized in accor-
dance with the seasons so that agricultural production will not
be interfered with. In the Chapter of “On Enriching the State”
(Fuguo) of the Xunzi we have:
Moderate the use of goods, let the people make a gener-
ous living, and be good at storing up the harvest surplus.
Moderate the use of good by means of ritual principles,
and let the people make a generous living through the ex-
ercise of government. Such moderation in the use of
goods will cause overflowing surpluses and allow the
people to make a generous living. If the people are al-
lowed to make a generous living, they will become rich. If
the people ar e rich , thei r fiel ds wil l be fat be cause t hey are
well cultivated. If the fields are fat and well cultivated,
they will bear a harvest a hundred times over… (Knoblock,
1990: p. 122). (節用裕民, 而善臧其餘. 節用以禮, 裕民
以政. 彼裕民, 故多餘. 裕民則民富, 民富則田肥以易,
田肥以易則出實百倍.) (Xunzi, “Fuguo”).
Enriching a state is not simply achieved through increasing
16Zi Hua being employed on a mission to Qi, the disciple Ran requested
grain for his mother. The Master s aid, “Give her a fu.” Ran requested more.
“Give her a yu,” said the Master. Ran gave her five bing. The Master said,
“When Chi was p r oceed i n g t o Qi , h e had fat h o r s es to his carri ag e, an d wore
light furs. I have heard that a superior man hel
p
s the distressed, but does not
add to the wealth of the rich.” (子華使於齊, 冉子為其母請粟. 子曰: “與
之釜.” 請益. 曰: “與之庾.” 冉子與之粟五秉. 子曰: “赤之適齊也, 乘肥
馬, 衣輕裘. 吾聞之也, 君子周急不繼富.”
15In Confucian tradition, putting things in order is closely related in harmo-
nizing the relationship between things. As pointed out by Confucius’ disci-
ple You Ruo, the harmonization functions of li is the [most valued]. (Lunyu,
“Xue Er”).

S. CHAN
economic power; sustainable development lies in establishing
ethical practices in a society through the observance of the rules
of propriety, through proper labour division to ensure a balance
between producers and consumers, and through maintaining the
distinction between “root” (ben 本) and “branches” (mo 末)
and applying the principle of source and outflow—moderation
in expenditure and in the opening up of sources (Knoblock,
1990: pp. 134-135).
For Confucians, the socio-political problem stems from lack
of morality and improper distribution of goods and services.
Hence, economic equilibrium in the Confucian mind is less
concerned with scarcity of goods but more with uneven distri-
bution, less with poverty but more with discontent. Therefore,
“the lord of a state or a family concerns himself not with scar-
city but rather with uneven distribution, not with poverty but
with discontent. For where there is even distribution there is no
poverty, where there is harmony there is no scarcity, where
there is contentment there is no overthrowing. Thus when the
people afar are un-supporting bring them round through civil
culture and virtue. Having brought the people round, make
them content.” (…有國有家者, 不患寡而患不均, 不患貧而
患不安. 蓋均無貧 , 和無寡, 安無傾. 夫如是, 故遠人不服,
則修文德以來之. 既來之, 則安之) (Lunyu, “Jishi”).17 Here,
the core value of equilibrium is expressed in the words jun 均
(equitable), he 和 (harmony), and an 安 (settled, content).
Equilibrium is not simply a matter of equalizing the share of
goods and services, but rather of ensuring contention and cre-
ating peace and harmony through cultivating and manifesting in
the people with civil culture and virtue. With the objective of
expanding the wealth of people, equalizing the wellbeing of
people, and benefiting the needs of people, it creates a harmo-
nious interaction between the state and its people and a bal-
anced coexistence among all, thus the integrity of moral culti-
vation and economic prosperity is sought.
Education and Observance of Li as Means of
Regulating Human Desires and Proper
Distribution of Goods and Services
As mentioned above, harmony and balance is essential to the
source of life and all activities and is rooted in innate centrality
and equilibrium. Manifest in human character, equilibrium and
harmony are an inner state in which human sentiments and
feelings are properly cultivated and expressed.18 To realize
harmony within and without, individuals are required to play an
active and creative role when interacting with the world and
manifesting their own nature. In terms of economics practice, it
is necessary to adjust the desires of the people and to achieve
equilibrium between the individual’s desires and social benefit
through cultivation and education. It is the government’s re-
sponsibility to educate people as well as to increase populace
and to enrich them. Once the people’s physical needs have been
fulfilled and their personal welfare has been increased, the next
stage in the Confucian welfare scheme is to teach and cultivate
in order to seek a balance between personal and state interests.19
What our heart desires and what makes us content are the
most natural and strongest motivational forces. Believing that
self motivation is the ultimate source in driving one’s decisions
and actions, early Confucians urge us to cultivate proper atti-
tudes and mental states.20 Emotions and feelings can be morally
desirable or undesirable. They can lead us astray, just as they
can set us on the path towards moral development. Rather than
concluding from this that one should marginalize emotions in
moral life, Confucius accepts emotions, feelings, and thoughts
for the role that they play in moral development, as well as
demanding proper acquisition, control, and direction of emo-
tions and feelings. Confucius points out that one’s emotional
and evaluative responses to one’s moral development are cru-
cial in accomplishing the task of cultivation. Confucius’ ideas
on moral emotion stress motivation and commitment in moral
principle, expressed, for example, in terms of “joy” (yue 悅),
“feeling at ease” (an 安), or “taking pleasure” (yao 樂).21
Therefore, although the Confucians acknowledge man’s natural
desire for food and his basic welfare needs, they believe that
such desires can and should be modified so that one can make
appropriate decisions and achieve balance in the distribution of
material goods and access to resources; it is assumed that men
can manage impulsive detrimental desires if they are made to
realize the “preferred desire” or incentives for a long term, or
greater benefit, reward. This process of self control is not about
becoming zealous and suppressing all desires; rather it is about
the ability to go in a different direction, and live up to some of
the other preferences that we have. Thus this can involve what
can be called “pre-commitment,” “anticipation,” and “delayed
gratification”.22
To the Confucians, the function of li (rules of propriety, ritu-
alized practice) is to nurture appropriate desires and stimulate a
subjective willingness to participate in the economy according
to one’s proper role, abiding by ethical standards and avoiding
social crises while basic human needs are being met. Xunzi
gives a detailed schema evolving around the conflict of material
scarcity and excessive human desire (for material gain) (欲多而
物寡) (Xunzi, “Fuguo”). He realized that such a desire tends to
excess and has no clear end and eventually compels us to com-
pete, creating strife and social disorder. Poverty arises from
unregulated desires which lead to contention and disorder. In-
stead of denying desires it is necessary to adjust men’s motiva-
tion (including yang 養or nurturing the proper desires) by pro-
viding correct guidance. When the balance and equilibrium
between men’s desires (demand) and the provision of material
(supply) to satisfy these desires is achieved, goods are put to
19Thus when the Master went to Wei, You acted as driver of his carriage.
The Master observed, “How numerous are the people!” You said, “Since
they are thus numerous, what more shall be done for them?” “Enrich them,”
was the reply. “And when they have been enriched, what more be done?”
The Master said, “Teach them.” (子適衛, 冉有僕. 子曰: “庶矣哉!” 冉有
曰: “既庶矣. 又何加焉?” 曰: “富之.” 曰: “既富矣, 又何加焉?” 曰: “教
之.”) (Lunyu, “Zilu”).
20I discussed this in my conference paper “Confucius’ View on Human
N
ature and Moral Cultivation: A Discussion on the Analects,” presented at
the 15th International Conference of Chinese Philosophy held in Wuhan
University, China, in 2007. Confucius, Mencius and Xunzi all share the
view that we should direct our desires towards moral principles, although
different terms are used in their texts. Confucius emphasised ren, Mencius yi
and Xunzi li.Here, one can argue that early Confucians did not take
self-int er es t b y i t s elf as “ b ad ”. I t i s , however, when weal t h i s i n conflict wi th
moral principles that the latter should become the priority. Mencius’ “fish
and bear paw” metaphor makes this explicit; he declares that he would love
to have both wealth and rightness, but would give up wealth for rightness i
f
he had to make a choice.
21Also see (Liu, p. 178).
22See, Daniel Akst, We Have Met the Enemy: Self Control in an Age o
f
E
xcess.
17While Legge took that the word “gua” to mean small number of people, it
makes more sense to refer to sc arcity of goo ds and resourc es.
18“When th ese feelings are aroused and each and all attain due measure an d
degree, it i s called harmony.” (Chan, 1963: p. 98)
104

S. CHAN
their best use and men are content.23 Xunzi’s discussion of the
function of li explains this:
How did ritual principles arise? I say that men are born
with desires which, if not satisfied, cannot but lead men to
seek to satisfy them. If in seeking to satisfy their desires
men observe no measure and apportion things without
limits, then it would be impossible for them not to con-
tend over the means to satisfy their desires. Such conten-
tion leads to disorder. Disorder leads to poverty. The An-
cient Kings abhorred such disorder; so they established
the regulations contained within rituals and moral princi-
ples in order to apportion things, to nurture the desires of
men, and to supply the means for their satisfaction. They
so fashioned their regulations that desires should not want
for the things which satisfy them and goods would not be
exhausted by the desires. In this way the two of them, de-
sires and goods, sustained each other over the course of
time. This is the origin of ritual principles (Knoblock,
1994: p. 55). (禮起於何也? 曰: 人生而有欲, 欲而不得,
則不能無求. 求而無度量分界, 則不能不爭; 爭則亂,
亂則窮. 先王惡其亂也, 故制禮義以分之, 以養人之欲,
給人之求. 使欲必不窮於物, 物必不屈於欲. 兩者相持
而長, 是禮之所起也.) (Xunzi, “Lilun”).
The rules of propriety are not only applied to the distribution
of goods and services but also establish a system of social hier-
archy and occupational classification, so that distinct roles will
be played by members of society. Making distinctions in indi-
vidual roles is necessary in the first place to prevent disorder
and confusion: It is inborn nature that human beings find it
impossible not to form societies. If they form a society in which
there are no class divisions, strife will develop. If there is strife,
then there will be social disorder; if there is social disorder,
there will be hardship for all. Hence, a situation in which there
are no class divisions is the greatest affliction mankind can
have. A situation in which there are class divisions is the most
basic benefit under Heaven. (人之生不能無群, 群而無分則爭,
爭則亂, 亂則窮矣. 故無分者, 人之大害也; 有分者, 天下
之本利也.) (Knoblock, 1990: p. 123). When men recognize
their positions and duties, guided by the rules of propriety, they
are expected to fulfil their roles and make contribution to the
economy. By doing so, order, coexistence, and abundance will
be ensured. When this happens, not only the economic problem
of scarcity is essentially solved but through it men gain satis-
factions through fulfilling their roles properly. This is what
referred to as “perfect peace”:
To be as honoured as the Son of Heaven and to be as
wealthy by possessing the whole world—this natural hu-
man desire is sha red by all men alike. But if all men gave
free rein to their desires, the result would be im- possible
to endure, and the material goods of the whole world
would be inadequate to satisfy them. Accordingly, the
Ancient Kings acted to control them with regulations, rit-
ual, and moral principles, in order thereby to divide soci-
ety into classes, creating therewith differences in status
between the noble and base, disparities between the privi-
leges of age and youth, and the division of the wise from
the stupid, the able from the incapable. All of this caused
men to perform the duties of their station in life and each
to receive his due; only after this had been done was the
amount and substance of the emolument paid by grain
made to fit their respective stations. This indeed is the
Way to make the whole populace live together in har-
mony and unity. Accordingly, when a humane man occu-
pies the highest position, farmers labour with all their en-
ergy to exhaust the potential of their field, merchants
scrutinize with keen eyes to get the utmost from the goods,
the various artisans use their skills to the fullest in making
utensils and wares, and the officials, from the knights and
grand officers up to the feudal lords, all execute fully the
functions of their offices with humanity, generosity, wis-
dom, and ability. This may be called “perfect peace.”
(Knoblock, 1988: p. 195). (夫貴為天子, 富有天下, 是
人情之所同欲也; 然則從人之欲, 則埶不能容, 物不能
贍也. 故先王案為之制禮義以分之, 使有貴賤之等, 長
幼之差, 知愚能不能之分, 皆使人載其事, 而各得其宜.
然後使穀祿多少厚薄之稱, 是夫群居和一之道也. 故
仁人在上, 則農以力盡田, 賈以察盡財, 百工以巧盡械
器, 士大夫以上至於公侯, 莫不以仁厚知能盡官職. 夫
是之謂至平.) (Xunzi, “Rongru Pian”).
The Confucians recognized that only a small number of peo-
ple are able to understand fully the meaning and authentic value
of the norms of ritual propriety, and only some persist in pur-
suing moral truth. For the majority of individuals, behaviour
and mental states are responses to social conventions and edu-
cation—men do have innate tendencies but these tendencies are
adaptive i n the time and envi ronment i n which they evolve. It is
unrealistic to expect that all men voluntarily become morally
refined, for even believers can fail to be motivated, acting under
conditions of extreme exhaustion, serious depression, or over-
whelming contrary impulses. For the common people (min 民),
moral guidance is needed, and they tend to follow the good if a
conducive environment is created. The government is responsi-
ble to help the people by economic and social means through
two tract control and guidance, for both moral development as
well as physical wellbeing—so that they can become a com-
plete man (chengren 成人). When it comes to the teaching and
instructing of the people, the rules of propriety (li 禮) plays an
important role in the political schema, for it regulates the con-
duct, cultivates the mind, and inculcates morality in the ruler
and the ruled, which can be discerned from some of the early
Confucian statements.24 Being without proper teaching and
instruction is like “Leading an uninstructed people to war,
which is called abandonment;” (Lunyu, “Zilu”) or “Putting the
23As pointed out by some, while much of human history has been devoted to
dealing with scarcity, the 21st century is posing quite a different challenge –
how to deal with excess. See Daniel Akst, We Have Met the Enemy: Sel
f
Control in an Age of Excess. Scribe Press. It is interesting to relate this to a
film “The Gods Must be Crazy”, which is about an African bushman and his
tribesmen’s experience of a Coke bottle. Xi and his band of bushmen
relatives are living well off the land in the Kalahari Desert. They are happy
b
ecause no one in the tribe has unfulfilled wants. One day, a glass Coke
bottle is thrown out of an airplane and falls to earth unbroken. Initially, this
strange artifact seems to be a gift from the gods. But unlike anything that
they have had before, there is only one bottle to go around. This exposes the
tribe to a hitherto unknown phenomenon, property, and they were soon led
to competition, greed, anger, fights, and violence. Xi decides that the bottle
is an evil thing and must be thrown off of the edge of the world.The story
suggests the necessity of eliminating external factors that may arouse
improper h uman desire.
24“If the people be taught by lessons of virtue, and uniformity sought to be
given to them by the rules of correctness, their minds will go on to be good.
If they be taught by the laws, and uniformity be sought to be given to them
by punishments, their minds will be thinking of how they can escape;”
(Lunyu, “Weizheng”).

S. CHAN
106
people to death without having instructed them, which is called
cruelty” (Lunyu, “Yaoyue”). In other words, governing a state
without proper policy implementation and education is like
“abandoning the people” (qimin 棄民) or “mistreating the peo-
ple” (nüemin 虐民), which are among the “four bad things”
(si’e 四惡) in Confucius’ doctrines (Lunyu, “Yaoyue”). In
matters of gain, a benevolent ruler should think of righteous-
ness (appropriateness) (Lunyu, “Shu’er”). This is what is
deemed in the Confucian teachings as the core principle of
harmonious government, prompting a person first to learn to
govern himself, and then to govern his family, the state, and all
things under Heaven. In other words, seeking a balance be-
tween appropriateness and profit is the true morality in man,
society, and the economy. It is the Confucian ideal of a com-
munity shared by all and that all members of society fulfil their
roles and thus enhance their sense of security and satisfaction.
The ideal of a community shared by all (tianxia weigong 天
下為公) is from the Liji (Book of Rites), in which the word
gong 公, literally meaning “public/common [good]”, denoting
the concepts of equilibrium, correctness, and harmony that
accord perfectly with the principles of the Great Harmony. It is
an ideal of the Confucian tradition, and it declares that:
When the great way (dao 道) prevails, the world would
be a world of the public. The men of talents, virtue, and
ability would be chosen as office holders. Mutual confi-
dence would be fostered and good neighbourliness culti-
vated. Thus men do not regard only their own parents as
parents, nor do they treat only their own children as chil-
dren. A competent provision would be secured for the
aged till their death, employment for the able-bodied, and
the means of growing up to the young. Widows and
widowers, orphans, the old and childless as well as the
sick and disabled would be all well taken care of. Men
would have their proper roles, women their homes. While
they hate to see wealth lying about on the ground, they do
not necessarily keep it for their own use. While they hate
not to exert their own effort, they do not necessarily de-
vote it for their own ends. In this way selfish scheming
would be repressed and found no development. Robbers,
filchers, and rebellious traitors would not show them-
selves, and hence the outer doors would remain open, and
would not be shut. This is what we call the Age of Great
Harmony (Liji, “Liyun”).
Conclusion
We see that the ideal Confucian society under the rule of a
humane government should revolve around the core values of
harmony and sustainability based on the observance of a set of
social ethics. The passages from the early texts elicit a Confu-
cian model consistently seeking checks and balances, a balance
between private and public interests and a balance between
inner and outer worlds, in order to sustain successful and pros-
perous economic development within the human social frame-
work. The principles of harmony and equilibrium not only de-
fine an alternative model of social welfare and economic pros-
perity, but also help to strengthen ethical standards and moral
conduct so that the tension between the individual’s needs and
social order will be reconciled. The biggest challenge in attain-
ing sustainable development is not just the problem of meeting
unlimited human desires through aggressive and unregulated
exploitation, which has the potential of creating devastation, but
more the problem of seeking self fulfilment and developing a
proper sense of creating universal harmony and better living,
that is, to achieve the ultimate equilibrium.
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