The Institutional Economics Implications for China’s and Western Civilization Evolution
Jun Wang; Doctor Candidate; The Finance Research School of The People’s University China
Suzhen Jin; Doctor; The Literature Research Institute of China’s Academy of Social Sciences
Meng Luo; Doctor Candidate; The Finance Research School of The People’s University China
Abstract
The representative of Eastern Civilization-China’s Civilization, only Greece’s Civilization as the representative of Western Civilization can be compared with its depth and magnitude. But simultaneously, there are many different aspects within these two civilization systems. In this paper, those differences are investigated in institution, industrial origin and development, human relation, the relation between human and land and human desire etc. The authors endeavor to derive causes for those differences in terms of terminology of institutional economics. In economic views, these causes for those differences due to the induced evolution resulted from agricultural development and the compulsory evolution induced from the industrial policy imposed by the authorities. Obviously, to comprehend and master those differences and their causes is conducive for us to further our comprehension of the evolution law of Civilization history.
Key Words: China’s Civilization, Greece’s Civilization, Induced Evolution, Compulsory Evolution
Some researchers said that the Western as the wise enjoys in water and the Eastern as the virtuous enjoys in hills. Whether it is true or not? China’s civilization, in terms of its origin, depth and magnitude, only Greece’s Civilization can be compared with; the others cannot be comparable with it. Despite for Greece’s Civilization, there are faults happened in its long history. Not only for Aristotle’s the politics, but also for Homer’s Iliad and Odyssey, their depth and magnitude expressed in these masterworks can not be comparable with Book of Changes of Shang Lv’ and the Analects of Confucius. The logistic and terseness of those masterworks cannot be comparable with that of China’s masterworks.
But simultaneously, with making a thoroughly review and comparison for China’s Civilization and Western Civilization (especially Greece’s Civilization), someone will discover that there are some differences among them such as following:
Not only in myths, but also in jurisprudence masterworks and politics masterworks, the double sides of one thing including both good and bad sides (even for their gods) are generally expressed within Western Civilization; but it is generally expressed in singular side for one thing in Eastern Civilization, especially for good figure, it always hided ones wrongdoing and praised his good deeds and decorated as more benevolent and less ferocious. Though those expressing methods in Eastern Civilization are conducive for instruction and propagation, it is hampered for us to make the thorough judgment for objective things.
The institutional civilization within Western world is manifested as the relative thriving of jurisprudence system and grass-root characteristic of its drawing agents; the institutional civilization in Eastern is represented as the relative abundances of moral rules (the abundances of Rites and Music) and the super stratum characteristic of law-drawing agents. In the more than five thousand years’ history of China’s Civilization, moral rules (rites and music) was more often dominated in social order, and law was draught in terms of imperatorial speech. But in the early stage of Western Civilization, there were curia and boule, and there were also archon and civilian protector; and the drafting, explanation and execution of law was the result of the game of the multiple opposing entia.
Compared the wars depicted in masterworks of Western Civilization or China’s Civilization, it is found that: the atrocity of the war depicted in Western masterwork is less than that of the war depicted in China’s masterwork. Even as for the war between Yan Emperor and Huang Emperor, there were thousands countries coming into extinction and the blood so much being shed as to float the pestles; the consequence of the war depicted in Western masterwork was the opposing side didn’t come into extinction, but ultimately the two opposing sides conceded and compromised to agree for new politic system in which its ecologic chain lengthened after the ablution of blood and fire. In China’s masterwork, the feeble side of the war no longer existed and there were new central politic system coming into formulation in which the centralization degree deepened and magnified.
Compared the industry history of China and the Western, it is found that to encourage farming and discourage marketing was always approved by China’s authorities and salesman was regarded as humble man while technique was labeled as queer dexterity. But the business and technique development was always emphasized in Western world. The Emperor Alexander was on loan when he did his war and there were businessmen swarming where he were. On some extent, the property of business is its openness and the property of agriculture is its relative closeness. Then autarky economic system based on closely agricultural production system was formed in the long history of China; while business-dominated economic system was formed in Greece world and the sequent Roman world. The autarky agricultural system is relatively stable while it is relatively close; and business system is relatively unstable and of more potential while it is relatively open. The relatively stable autarky agriculture system was more suitable for the development and exploitation of productive force under the circumstance of limited market-demand and laggard productive method. But at the middle of 17th century, namely at the end of Min Dynasty and the begin of Qing dynasty, due to the expansion of out sea market and amelioration of productive organizing method (the emergence of corporation) and improvement of productive technique derived from Industry Revolution, this autarky economic system based on close agriculture showed its foible more and more. Considering with the rapid expansion of bureaucracy system in Min dynasty and very low efficiency of administration while productive pattern and technique remained in the old mode, then China’s situation deteriorated rapidly and lagged in the world more and more.
As for the comparison of industry origin, there is one question that why the autarky agriculture system maintained as its backbone industry and the other industries were so weak in so long time in China while the difference among different industries in Western world was not obvious as that of China and the business and industry maintained their deserved position with Christianism against feneration though the evolution process of three industries was generally same for different countries in the whole world. Through careful investigation it is found that those terrains in earlier Minoan, Greece, Roman and sequent Portugal, Spanish, Netherlands, and the sun-never-falling England world are narrow and most of their terrains were along the coast. Then it can deduce that the fertile soil feasible for farming was limited in these countries, and these people were compelled to make their sustenance in other industries. This phenomenon can be labeled as the axiom that necessity is the mother of invention.
But why the relatively strong business and industry system was not formed in China? It is well known that at the Spring and Autumn time, the famous Fan Li became the famous businessman Taozhu Gong in his reclusion. It can deduce that business was flourish at that time. But why business declined at later? Certainly, its declination must inevitably correlate with the policy “encourage farming and discourage business and industry” imposed by the authorities. Are there some else reasons for this declination? It is certain that there must be other causes for this declination besides the policy imposed by the authorities. One of the other causes is called as induced evolution in terms of terminology of institutional economics. That is, due to the relatively thorough agriculture system and its autarky product, there is no need for exchange and thus cannot facilitate the business development. The original momentum for business development is the demand for business and its progress are boosted with the expansion of the demand for business and improvement of business creation capability. On the one hand, the demand for business was impaired due to the induced evolution derived from the relatively flourishing of agriculture system (the relative flourishing of autarky agriculture leading to the relatively deficiency of the demand for business). On the other hand, due to the compulsory evolution derived from the policy (the authorities restrained the business development), the creation capability for business was tethered. Then, business in China did not keep in its deserved position.
But why the authorities controlled the business development? Whether it was true or not that business led farmers to abandon land and idle turbulence as the authorities said? Maybe it is not true. The real reason for the authorities controlling business development is that it attempted to maintain its sovereign. As early as in Spring and Autumn, Guan Zhong made out the policy “scholars, farmers, artisan and salesmen not living together”. Though the policy encouraged different industries’ development, simultaneously it also reinforced the surveillance and control of different industries. Then in Tang and Song Dynasty, there are “Fangshi system” and curfew etc. systems to restrain business development. Liquidity was emphasized for business activities. On the one hand if business relatively thrives, it will impose more difficulties and costs for the authorities’ surveillance; on the other hand the digital administration capability was lower for every dynasty in China in terms of terminology of Western researchers. Thus, the authorities would restrain business in feasible scope to maintain its sovereign not only due to the cost but also due to its capability. But till the middle at 17th century, why China still remained in its old development orbit while the other powers in the world started revolutionary industry and business reform and simultaneously “Cultural Renaissance”? Why there was no the upper or the lower to expedite industrial and cultural revolution? It must be very complex for the reasons accounting for this question. One of the reasons is the path-dependence derived from the old productive mode. The substance civilization in China always was in advance in the world in the past because the old productive mode was fitful for the development of productive force under the old technique and organizing conditions. Thus the upper and the lower in China cultivated the dependence inertia for the old productive mode and did not recognize the vitality clearly derived from the new productive mode. Simultaneously, the plebeian in China in publicly was inaccessible to discuss politics and only made paean for the authorities or idle talk, prate and mysterious talking due to idea suppress made by the authorities of every dynasty after the First Qin Emperor burning books and burying Confucian scholars alive though at once there was resplendent contention of a hundred schools of thought and as all flowers were in bloom at Spring and Autumn time. On the other hand, the Western world always laid importance on research and utility of natural law since the Old Greece and labeled as some mechanism. Till the middle of 17 century, the scientific and rational development of academic research was made big progress with emergence of Bacon’s experimentalism and Popper’s falsificationism. Therefore the ultimate result was that Confucius was famous as Aristotle but there was no person famous as Newton and Einstein. It can be found one cultural difference derived from thought difference: as for thought mode, Chinese express something concealing, abstruse and briefing while the Western express something candid, special and logistic; then Chinese emphasized particularly on exploration of human culture while the Western emphasized particularly on exploration of logos and natural law. Thus, China’s civilization is manifested more as human civilization while Western civilization more as substance civilization.
As for civilization categories and differences, Zhun Gu divided the civilizations in the world into two categories: one is continent civilization and the other is ocean civilization. The politic framework under continent civilization is represented as pyramid structure of strong human dependence while the politic framework under ocean civilization as the relatively kinetic trapezoid structure. The reason for that difference is that any person under ocean civilization should compromise to across sea or ocean together with abandoning their original status when they were on sea or ocean for their often migrating or doing business. Thus continent civilization is expressed as human adherence while ocean civilization as interacting dependence. Thus, the agents to make and explain and execute the law are different, and the coercive object and content of law are different, and thus the execution degree is different. In this point, the politic system in China’s history is manifested as authorizing-agency system while the politic system under ocean civilization as corporation system in which every one pursues to maximize his utility to probably optimize the whole utility in that every one shared its destiny of the corporation. But the people under continent civilization always want to get more benefit without any cost. Thus the benefits of client and agent are not unanimous, and surveillance and anti-surveillance activities happen more and more. With the surveillance cost increasing, it is shuffled again at the end. Thus the politic system in China’s history seemed as collective system (the emperor is the top representative of this collectivity), but actually everyone did what he thought is right and bribed greedily under the name of collectivity. Thus in one word, it is said for collectivity but actually for individuality. And the people under ocean civilization seemed to pursue individualism but actually they did their things well to make the cake larger and to pull the boat well on which they embark. In this point, it is said their deeds are not only for individuality but also for collectivity.
As for the relation of population and land, it can find that: the time for the rapid growth of China’s population began at the end of Song dynasty. The causes for rapid growth derived from two aspects, one is improvement of accommodation capability and the other is the promotion of requirement for population. On the one hand, the rapid growth of population symbolized the accommodation level of China’s productive force was higher than that of other countries at that time. On the other hand, the promotion of requirement for population indicated that at that time the strength identification criterion for Chinese mainly depended on the number of kindred population. This judgment criterion was derived from the autarky economic system. In the autarky economic system the people did not recognize the necessity for and the advancement of work dividing and collaboration in that the commodities the people demanded came from the supply of kindred. Thus people’s judgment on strength mainly depended on the number of kindred population. Because for the authorities’ control of the development of other industries, the rapid growth of population led the ownership for land to divide and intensive cultivation to deepen, and thus the autarky smallholder’s economic system was reinforced. Then in turn and return, from rapid growth of population to the acceleration of smallholder economic system and then to the further increase of population, a vicious circle not conducive for mass-production was formulated. But the Western was on the different road. On the one hand, the promotion of trade and marketing led the Western to recognize the necessity for and the advancement of work dividing and collaboration, and thus their judgment criterion on strength mainly depended on whether works were divided and collaborated well or not. On the other hand, because there is no policy to control business development, therefore technique and productive mode revolution derived from Cultural Renaissance led the work dividing and collaboration to further and in turn to promote trade and marketing. Ultimately, the whole worldwide manufactory and market was formulated.
As for human desire, the Eastern civilization can be labeled as inner confinement mode while the Western civilization as out-expansion mode. Chinese always emphasized on introspection of inner spirit world and confinement of substance desire while the Western paid attention to conquest for substance world and occupancy of substance more and more in the process of continuous work dividing and trade and marketing promotion. Relatively, the spiritual civilization in the Eastern flourished more and the substance civilization in the Western flourished more.
In conclusion, there are many similarities among the Western civilization and the China’s civilization but also there are also differences among them. To succeed the essence of our own civilization and simultaneously to absorb the valuable part of Western civilization is an urgent and serious problem confronting Chinese people. To deal with the problem well or bad is correlated with whether Chinese people stands erect in the peoples’ world muchly or not and whether our country flourish muchly or not and whether our people stands in the frontier of the world’s historic tide and doesn’t lag behind the world’s historic tide.
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