Every successful system of
government in history knew how to balance politics and development. The
Confucian political economy was not different. According to Magagna (2017),
Confucian political economy is based on the belief that moral markets is the
essential commodity that makes the human lives possible. Without the social
production, system of governments would never work. Balancing the efficiency of moral behavior in
the Confucian system of government was key to the political economy. Profit and
proper order were also highly regarded in the Confucian political economy.
Under the Confucian system of government, cooperation between the business
world and social activities was given priority. It was believed that the
businesses are there for man and not man for the businesses. At one point, those who were in positions of
power expanded their economic prowess significantly. With the continued growth,
sustaining the growth became a huge problem. The only way sustain it was to
take advantage of the social production. This led to the misuse of the working
individual as they worked in extremely harsh conditions and their remuneration
was not adequate. Under the Confucian political economy, there were various indications
of a commercial civilizations. These included growth of markets and increase in
the flow of money.
The Confucian political economy
cannot be adequately addressed without touching on the problem of moral markets
and the Confucian consensus. The necessity of markets was a big question to the
people both in power and those no in position of power. The markets were found
to be important if at all they integrated with the locals. The markets could
only be necessary if they changed the lives of the people both the political
class and the ordinary people. While the necessity of markets was accepted by
the majority, a new issue in the Confucian economy emerged. The moral markets
were faced by a number of potential risks. These risks included conflict,
corruption, and the paradoxes of rationality (Magagna, 2017).
Under the Confucian political
economy, the moral markets created a possibility of having major conflicts. As
the group of elites carried on with their business, some people would feel
disenfranchised. This had a potential to escalate to a conflict. Conflict
between the owners of factors of production and the people was inevitable. This
group of people in order to sustain the economic growth they had realized
started misusing the ordinary people. This became a potential source of
conflict which had to be mitigated by the authority.
Every time there is some
economic growth, corruption is always a key concern. As the moral markets
continued to grow, allegations of corruption among government official were the
order of the day. With economic growth comes competition. Some people could not
take the competition lightly and had to corrupt the system, so as remain at the
top of the food chain.
Paradox of rationality is the
belief that rational decision making lead to poorer result as compared to
decision made naively (Magagna, 2017). The moral market believes in doing thing guided
by the intuition. In the Confucian political economy, rational thinking was not
given priority. This brings the potential risk of the market falling one
morning. Rational thinking while it may be associated with slow decision
making, it considers all factors and leads to strong structures of doing trade.
Core policy consensus was also
a problem in the Confucius political economy. This reintroduces the necessity
of markets but ties it to household survival and to proper order. A society is
deemed poor and at the verge of collapse of it lacks household survival.
Household survival is of great importance to any political system. It is one of
the factors that had to be considered in promoting moral markets. Had the
household survival been jeopardized by the markets, then action against the
markets could have ensued.
Proper order was also a
critical concern in the Confucian political economy. According to Magagna “Proper
Order in Confucianism and as practiced in East Asia, is the conceptual theory
that shows how men can reach their greatest capacity of moral and material
soundness” (2017). The
rise of markets could, therefore not be allowed to interfere with the possibility
of the ordinary people realizing their full potential. Proper order demanded
that popular management, regulation, and politics be balanced. This would
ensure sustained economic growth not only for the elites, but for all.
The Confucius political economy
had similarities and differences to the modern political economy. These
similarities and differences can be discussed under convergence and divergence
factors to the modern economy. The converging factors included: price
formation, scarcity of products and the role in supply and demand, the role of
money as the store of value, and the role of money as the means of exchange.
Price formation was controlled
by the scarcity of products (Magagna, 2017). When the products were plenty in the
market, sellers would drop their prices so as to have buyers purchasing their
product. The effect of this is that commodities sold at low prices when they
are in plenty. When the commodity was scarce, sellers would hike the prices
knowing all too well that people would still buy from them. In fact, some
people preferred those sellers with exorbitant prices thinking that they sold
goods of a higher quality. Price formation was also controlled through hoarding
of products. Once there was an artificial scarcity of products, sellers would
now bring their products to the market. This is the exact situation in the
contemporary world. The price of commodities is determined by the interplay of
supply and demand.
During the Confucian system of
governance, the use of money became rampant. They could exchange products for
money. This activity facilitated trade. This was unique to the Confucian system
of government considering the time this system of government existed. Money was
also used as a storage of value (Magagna, 2017). The used money as an item which could be
saved, retrieved and then used to exchange for another product having maintained
the value it had when it was being stored. Tis practice perfectly mirrors what
is happening in the world today. People use money both as a store of value and
as a means of exchange.
In the Confucian political
economy, government induced monetary inflation was experienced. The government would
control the flow of money in its economy. When there was too much money, the
government would put up measures to reduce the flow of money. This would
include measures such as taxation which would remove a sizable amount of money
from the economy. The system of government also invented the se of paper money
(Magagna, 2017). In
the contemporary society, governments have the sole responsibility of
regulating the inflation levels. They use different methods at their disposal.
The contemporary world also makes use of paper money, just like in the
In the Confucian political
economy, social opportunity costs were also evident. The society had been made
aware of the importance to sacrifice immediate short gains for the bigger gains
in the future. To this end, the decision to consume or save became common among
the people. This was a unique practice for that time. It perfectly resembles
the contemporary world. Today, there are banks, insurance and other
institutions that encourage people to shelve short-term gains for the sake of a
better tomorrow. The Confucian political economy was also characterized by the
tendency to invest. People would invest in different ventures including working
for the government. This helped people grow economically. This still happens in
the contemporary world. People are hunger to invest today so they can be worth
more in the future.
Mature economies are known to
help workers improve their performance. This is done through incentives.
Despite being in existence centuries ago, the Confucian system made use of
incentives. The government would give rewards to those who produced more products,
this would encourage them to work even harder. It would also assist those who
were lagging behind. In the contemporary society, the government supports
critical sections of the economy. It subsidizes sections of the economy to help
make the sectors profitable and encourage them to keep producing. The Confucian
political economy had similar policies. The Confucian system of government also
applied policies to control trade. One of the policy that the government used
was the prohibition of black market. (Magagna, 2017). This
is a perfect replica of what happens in the global economy today.
Unlike the modern days, the
Confucian political economy saw the persistence on real utilities. There was a
universal human preference. People considered the value of man than they did
the value of money. Family was highly regarded. Many businesses would be ran by
families. This value of human does not exist in the modern days. This can be
seen in the rampant pollution of the environment. People destroy the
environment without considering the future generation will also need a clean
and serene environment.
Today, there is a persistence
on luxury. The highly regarded people in the society today are not the wise,
but those with expensive cars and those who can afford to go for holiday in
expensive cities and restaurants. Many people today spend most of their money
on luxury. In the Confucian economy, there was disapproval of luxury (Magagna, 2017). Living
a luxurious life was seen as wasting resources. A luxurious life was not
possible since there was unity in society. This meant that people took care of
one another. As a result, it would appear wrong for a person to waste resources
while their neighbor was languishing in poverty.
The Confucian economy was
driven by agriculture. There was a general belief that agriculture was the
source of material value. Those who practiced agriculture were one of the
richest people in the society. The political economy of the time listed various
careers according to their importance. The top careers included being a scholar
followed by farmers, artisans, and merchants. These four careers had honorable
status in the society. This is completely different from the situation in the
modern world. Today, very few people want to have a career in farming.
The Confucian political economy
was characterized by moral markets. One of the characteristics of a moral
market is the belief in material and moral incentives (Magagna, 2017). To
encourage people to work, the government would show people the benefits of
working. The benefits included having a safe society free from vices such as
robbery and corruption. The Confucian moral markets were also characterized by
the commitment to moral appeals as market regulation. People considered what
was ethical to be a god practice. Unethical behaviors were discouraged.
The Confucian political economy
made their markets to follow morals. This was done through the embedment of law
and regulations in moral principles. The laws governing trade were based on
what was considered morally right by the society. The regulations also had to
appeal to the popular moral values. For instance, people were required to be
thrifty. This was in line with the disapproval of luxury by the society. Voluntarism
was highly regarded, because of the close ties that people had, it was common
to often see people volunteering in social work as well as in private work.
Food security is some of the
fundamental prerequisites that are essential for the growth of an economy. This
fact ensures that we have a healthy population which is free from malnutrition
but notably has considerable of energy to propel the country into sustainable
and significant growth. Food security is one of the ingredients of a strong
army which is imperative in the development of any nation.
Equality and equity are some of
the fundamental concepts that are embodied in the idea of Confucius. The
concept further purports that a country yields benefits from morally
implemented strategies which are manifestations of well-crafted ideas. In
addition, Confucius explicitly stated that people with high moral go for truth
and not material things. There even ready to endure hardship all with the sole
goal of truth.
Confucius talked equality and
equity; mind you these two words are used extensively by economists, to be
precise development economist. Confucius was of the idea that equity should
come first before the thought of equality. Amassing wealth through the right
channel was one of best thing the society can ever achieve. This proves that
despite having self-interest at heart, the thought of well-being of the entire
society is still part of the individual interests.
Regarding politics intrigue, he
communicated no restriction as well as ethical realism. He criticized the
government in instances which he deemed appropriate; the concept was embodied
in the well-being of people. To this end, Confucius disliked any person who
would surrender without making a fight regardless of how little the efforts
are. Confucius life is considered as an epitome of excellence in political
In conclusion, the Confucian
political economy was not void of problems. It was faced by a variety of
challenges which it dealt with just like many other political economies in the
world today. Despite having existed centuries ago, there are striking similarities
with the modern economy. For instance, the Confucian economy used money as both
as means of exchange and as a store of value practices that are in existence in
the modern economy. One of the most significant characteristic about the
Confucian political economy was the moral markets. Everything was attached to
morality including laws and regulations controlling business.