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Kit-Chun Joanna Lam says that a “basic challenge facing modern Confucians is how Confucianism is going to respond to a moral evil of the knowledge economy—the growing economic disparities among different countries and among different groups in the same country.” It has been apparent for some time now, and there is much evidence to conclude that “inequalities are growing in knowledge economies.1” Income inequality is rising both within and between nations in the international community. Confucianism and Capitalism both continue to exist as major contemporary world ideologies. However, Confucian principles may need to be explained for many western readers who may be unfamiliar with Confucian ideology. The philosophical problem that exists involves identifying how, or if, these two ideologies might potentially face-off against one another. How can contemporary Capitalist ethics work in the face of a much older Confucian style of ethics? Can these two ideologies co-exist for much longer with a rising Asian presence in the world economic order? Many Confucian practices, as anyone travelling Asia or spending time in an Asian culture extensively would realize, are still very apparent in modern Asian societies. For instance, the idea of the group takes precedence over the idea of the individual, i.e. Individuals serve the needs of the group first and themselves as individuals only if it does no harm to the group. In order to make this cross-ideological comparison, I will attempt to provide a working definition of contemporary Capitalism; highlighting the inequalities of wealth distribution that occur within this system. I will also attempt to demonstrate how the current Capitalist system is fundamentally anti-Confucian in its very nature. I posit that changes would need to be made to Capitalism if Confucian values are to be upheld; but, that such a change would result in something fundamentally unCapitalistic. First, I will provide an overview of some of the main tenets held by both Confucians and Capitalists. Where I see possible conflict between these two ideologies, I will attempt to highlight it in order to critically analyze the contemporary situation within the contemporary Capitalist global economy.

Before I attempt to describe Capitalism as it exists today, I feel it is necessary to introduce Confucianism in a more broad and general sense; and also in a more case specific sense. Most westerners are increasingly familiar with the tenets of capitalism and its problems. For instance, it has become a rather astonishing fact of Capitalism that roughly 80% of the worlds wealth and resources are found in the hands of merely 20% of the worlds population.2 However, it is much less the case that westerners understand what is meant by Confucianism. Since this paper pertains to both issues, introducing Confucianism works best at the beginning in order to avoid any possible confusion any reader unfamiliar to the topic may have.

Confucianism, in a general sense, is designed as a sort of guide to a socially harmonious society. While it stresses a socially patriarchal hierarchy (the state is the head of everyone, the man or the master is the head of the household), an idea that many western countries have fought to rid society of, the purpose is clear in Confucianism: It is about establishing a certain set of norms to abide by in the pursuit of a society free from social chaos. Following tradition; understanding one’s place in society; understanding that the individual exists in, and has a responsibility to, the group; and a strict set of moral values and virtue ethics, are the core foundations of Confucianism. While this general explanation might appear to be slightly compatible with some western idealism, the west tends more to view the individual as a powerful, autonomous, and independent entity who works for the betterment of him or herself. The west, to a much lesser degree, stresses the importance of social unity and duty to the group; and, instead, stresses the importance of the individual. This idea will be revisited in more depth in the pages to come. For now, differences will be set aside in order to further expose Confucian idealism.

The introduction of several Confucian terms will help to establish a further understanding of the topic at hand. After I introduce several important Confucian terms, I will attempt to illuminate where there may be contrast with contemporary Capitalist ideals, the reader may have already noticed where contrast is apparent (and possibly problematic) between Capitalism and Confucianism. The following list of terms is incomplete for a full examination of Confucianism; however, once each term has been explained with primary textual reference, it will provide a grounding enough for a general understanding of key ideas espoused within Confucian philosophy. The terms that will be introduced are: Dao, Tian, Ren, Xin, Li, and De. Once these terms have been introduced, I will provide a working definition of Capitalism and compare the two ideologies at that time. Introducing these terms should provide sufficient grounds to base a comparison of the differences in values held between Capitalists and Confucians.

Dao is perhaps one the oldest concepts in recorded history. It is intended to mean the “the Way”. This “Way” is the path on which one leads his or her life. This path is a culturally conditioned “proper” way to live life and go about one’s affairs. While the path is a sort of culturally produced way of travelling through life, it is also about the path that the individual walks. It is “the Way” the person chooses to live. As Dao is explained by Ames and Rosemont, “to realize the dao is to experience, to interpret, and to influence the world in such a way as to reinforce and extend the way of life inherited from one’s cultural predecessors. This way of living in the world then provides a road map and direction for one’s cultural successors.3” It is about a constant effort to live up to cultural ideals; as well as it is about trying to create new cultural ideals. A most fitting example of dao from the Analects of Confucius reads: “The Master said, “People who have chosen different ways (dao) cannot make plans together.”4 By this logic, Confucius himself says that Capitalism and Confucianism, since they follow different dao, are incompatible. We will revisit this idea in the final comparison of Capitalism and Confucianism. For now, the other terms need to be explained.

Ren (Authoritative conduct) is about acting in accordance with, and valuing, other human beings. Ren is about realizing that one should act in a way that is best for society. Acting in a way that is best for society is living in accordance with nature or the heavens (Tian) (This notion of heaven is more akin to harmony in nature than to the Judeo-Christian conception of heaven).Living with authoritative conduct means realizing that the self involves the recognition of other human beings; and acting for the benefit of the whole rather than merely acting alone for the individual. The self is dependant upon other people. A harmonious community or a community that follows Tian is one in which individuals realize that they are required to act in accordance with the community that they belong to. This is authoritative conduct and how it relates to Tian. In a major regard, Ren is about acting according to societal customs, morals and a shared code of ethics (li). For instance, Analects 2.1 demonstrates that Ren is about acting morally towards other people: “As for filial and fraternal responsibility, it is, the root of authoritative conduct.” In other words, authoritative conduct comes from realizing the responsibility of the “self” toward other people. While Ren is a somewhat recognized philosophy in the western world, cold war rhetoric did much to tarnish this philosophical standpoint. Such thinking immediately strikes up anti-Communist sentiment in many westerners to this day; an idea that will be revisited.

The next Confucian term that needs to be defined is Xin. Xin is most closely translated as heart and mind. To act with Xin might make sense as acting with compassion. A saying that comes to mind form the Judeo-Christian tradition is: ‘Treat your neighbour as you would like to be treated”. For the most part, the Analects says of Xin that it is about not going back on one’s word; it is about honouring agreements, and following through on promises to others. Confucius says in Analects 17.6, “if you make good on your word, others will rely upon you.” In order for any kind of social harmony to occur, Xin is required of people. Without Xin social chaos would very likely ensue.

Confucian ritual propriety (li) means conducting ones state of affairs in accordance with ritual and custom. In some regard, social harmony and social cohesion requires people to act according to established customs and shared ways of behaving. It is about behaving morally but also about behaving in a way that is considered proper in society. Li are sets of customary values in personal conduct that can be found in all sorts of acts like waiting for the head of the household to begin eating first; or something as simple as holding the door open for someone. Li is about practising good values and respecting others in society (even respect for the deceased is considered ritual propriety). Li is about conducting oneself in a well mannered way.

The last Confucian term that I wish to acknowledge in this paper is de. De is best translated as virtue. Virtue can be understood as acting to the best of ones ability. Since Confucianism stresses that people attempt to live according to all of the terms that I have introduced, a truly virtuous person would attempt to live according to all of these Confucian principles; not merely some of them. A quote that relates to de (as well as Capitalist ethic to a degree) is expressed when Confucius says in Analects 12.21: “Get only once you have given—is this not accumulating excellence?” My ideal form of Capitalism would see this as a statement of truth about Capitalism. However, in so many cases, Capitalism is about profit seeking: Capitalism, it often seems, is about getting the most profit for the least amount of effort. Capitalism according to de, would involve giving something in order to obtain something. The accumulation of wealth, unfortunately, all too often involves exploitative means of wealth appropriation.

Capitalism involves a different sort of ethic than Confucianism. In order to highlight this difference in ethic, I will revisit each of the six Confucian terms introduced and place them in light of Capitalism. In so doing, I hope to both establish a critical view of Capitalism; and to demonstrate how the two ideologies differ. Along the way, I will highlight how Capitalism would have to change in order to allow Confucianism to flourish. Unfortunately, the result will look less like Capitalism than Communism; an ideology hugely destroyed by the Cold War. Perhaps, the harmonious society sought by Confucianism cannot exist with Capitalism in the mix.

When speaking of the dao, Confucius said: “People who have chosen different ways (dao) cannot make plans together.” The dao that Capitalists have walked is different than the dao that Confucians have walked. By the logic of Confucius, people following Capitalist ideology cannot work with people who follow Confucian ideology. In fact, the result of following Capitalism is a completely different world view. Capitalists are profit seeking. The individual is the measure of his or her own success. The Capitalist system is not so much about about the success of everyone as it is about the success of the few over the many. To illustrate this point I can refer back to the fact that one-fifth of the world’s population holds four-fifths of the world’s wealth. Confucians would view this kind of lifestyle as greedy. In Capitalism, there appears to be a lack of moral servitude that is found in Confucian authoritative conduct (Ren).

How is it possible, in a system that values individual profit seeking, to act according to authoritative conduct? The answer is that it is not possible. Authoritative conduct, itself, stresses acting for the betterment of the whole of society (rather than merely acting for the individual). An argument can be made from the Capitalist perspective that acting for what is best for the individual is acting for what is best for society. However, this argument easily falls apart once put to scrutiny. If the result of Capitalism is starving masses and a gluttonous few, there is no sense of authoritative conduct within the system. Acting for the individual results in social disharmony. The dao of Capitalism, in this regard, does not follow Tian.

Xin is about acting for others and living up to one’s word. It is about respecting people that you come into contact with and make agreements with. There is a certain social contract that people enter into when a society is formed. Societies are formed so that life isn’t, as Thomas Hobbes says in Leviathan, “Nasty, brutish, and short.” But life is still nasty, brutish, and short for many in society; especially if the social contract that is made results in massive social inequality. Tell one of the many who live in dire poverty under the Capitalist social contract that life is not nasty, brutish, and short; the stark reality is just the opposite for this large group. It is rather common knowledge that people who live in poverty situations suffer and die young because of it. Looking out for the best interests of the many is not a part of the Capitalist mentality. For Capitalists, living up to one’s word is about accepting the harsh realities of wage labour: The owners, and the owned. The social contract is meant to ensure that life isn’t nasty, brutish and short: Ensuring that for people in society is what Xin regards. If the many are not looked after in the Capitalist social contract because they live on less than a sustainable income, then no social contract of any inherent value is being lived up to. In order for Capitalism to exist in accordance with Xin, wealth needs to be distributed much more evenly throughout society.

The Li found in the Capitalist society is one that honours profit seeking. What of honouring one another as human beings? What of taking care of the needy? A few wealthy philanthropists and taxation for social programs still does not seem to function according to honouring the well being of all. It appears that the Li of the Capitalist dao, is respecting acts of imperialism in the name of personal profit seeking. Not only is this type of ethic anti-Confucian, it is morally reprehensible.

The last point of comparison is one that I wish to spend considerably more time on. Moral excellence is something that the western Capitalist world is not entirely foreign to. Virtue ethics is found throughout the western world from Plato, to Aristotle to modern day scholarship. Confucian moral excellence (de), however, is unique from contemporary Capitalist ethics. As I mentioned earlier on, my ideal form of Capitalism would see accumulating wealth in a measure sustainable for society’s social harmony. In fact, if Capitalism were to be guided, not by an “invisible hand” as Adam Smith would wish, but by a Confucian ethic of social responsibility, the world would be on a more harmonious path. An economics based on global financial sustainability for global society as a whole would mean looking after humanity. Globally, following the dao, we would be more in tune, so to speak, with Tian. 

While Capitalism, in the form that it exists now, eventually leads to imperialism (as V.I Lenin articulated in Imperialism: The Highest Stage of Capitalism) the goal of Capitalism could be set within limits to allow for a globally sustainable and morally virtuous world economy. Why is it that there is not a wage cap of wealth accumulation? No human needs billions of dollars. It is an unfortunate aspect of human existence that the stronger often brutalize the weaker in war for personal economic gain. While it often appears that even imperialism is what is best for a nation, often only a select few reap the most benefits. After all, as I’ve now twice mentioned, 80% of the worlds wealth and resources rests in the hands of roughly 20% of the population. Capitalism has lead to an income inequality gap that leaves millions starving while it leaves a small group of others like Bill Gates. Is this de? No. Is this following Tian? No. Is this in line with an ethic that concerns humanity or an ethic the serves greed?

Capitalism is not the same as Confucianism. By Confucian standards in fact, Capitalism is a path toward social disharmony. But much of the world still lives by Confucian ethics. Many societies throughout the world aim at working for the group. Most Asian families work for the whole group. For instance, if a friend or family member has no money, the friends with money treat them to the festivities that they all attend. In some Japanese companies, if times are tough companies will take on losses to ensure that employees are not let go. It is seldom if ever the case in the western world.

In the face of Capitalism, which rewards some at the expense of others, Confucianism may lose ground to serve those who wish to gain. Many modes of socialization, such as the mass media, is owned by the most wealthy. The governing class itself, has it’s own best interests in allowing Capitalism to flourish with little restriction. It seems preposterous to assume that those in power would talk badly against a system that rewards them so grandly as individuals. The guns and bombs, the means to socialize the masses, the law, and the world’s resources are in the hands of the wealthy. It is unlikely that those who are pampered by this system would give it up for the betterment of the many.

Unless the world’s majority fights for one another, the Capitalist ethic that harms them will likely continue to flourish. Social Harmony, however, in the Confucian sense will never take form with the Capitalist ethic as the dominant economic paradigm.

1Kit-Chun Joanna Lam. Business Ethics in the Global Knowledge Economy. Journal of Business Ethics. Vol. 43, No. 1/2, March, 2003. 160.

2See Pareto’s principle.

3–. The Analects of Confucius. Trans. By Roger T. Ames & Henry Rosemont, Jr. (New York: Ballentine Books, 1998)

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