Learning from the Past to the Present: The Enlightenment of the Development of Ancient Chinese Economic Thought to the Development of Contemporary China's Economy

introduction

The economic ideas nurtured by the 5,000-year-old Chinese civilization are like a galaxy, and their wisdom transcends the boundaries of time and space, and continues to inject vitality into the economic development of contemporary China. From Guan Zhong's material basis theory of "Cangli is practical and knows etiquette", to Sima Qian's "theory of good causes" has a deep insight into the market mechanism; From the Confucian concept of "hiding wealth from the people" to the wisdom of state regulation and control displayed in the "art of light and heavy", the thinking of the ancient sages has never been far from our current economic practice. In the journey of building Chinese-style modernization, these ideological essences have been creatively transformed and innovatively developed, and have become important spiritual resources for handling the relationship between the government and the market, promoting common prosperity, and achieving high-quality development. The purpose of this paper is to sort out the core essence of ancient Chinese economic thought, analyze its profound reflection in contemporary China's economic practice, and extract valuable enlightenment from both positive and negative aspects.

1. The core essence of ancient Chinese economic thought

Ancient China's economic ideology was broad and profound, and a number of far-reaching basic principles were formed around core issues such as national governance, people's livelihood and well-being, and resource allocation.

1. The unification of "rich country" and "rich people": the foundation of a strong country

Ancient thinkers were deeply aware of the intrinsic link between the prosperity of the country and the prosperity of the people. "Guanzi Herdsman" begins with a clear meaning: "Cangli knows etiquette, and food and clothing know honor and disgrace", and regards material abundance as the premise of social morality and order. Confucianism further put forward the people-oriented ideas of "the people are the foundation of the state, and the state is solid" ("Shangshu") and "the people are precious, the society is secondary, and the monarch is light" (Mencius: Dedication to the Heart), emphasizing that "hiding wealth from the people" is the solid foundation of political power. Although the Legalists placed more emphasis on "enriching the country and strengthening the army", such as Shang Ying's policy of "ploughing and warfare", they also realized that the burden of the people needed to be considered ("The people are better than the government, and the country is weak; The government is better than the people, and the soldiers are strong". This laid the ideological tone for ancient China's pursuit of the dialectical unity of national wealth and people's wealth.

2. Dialectical Thinking on Government Regulation and Market Mechanism: The Prototype of Governance Wisdom

With regard to the role of the state in economic activity, ancient thought shows remarkable dialectical thinking. The "art of light and heavy" represented by "Guanzi" advocates that the state should use price leverage ("adjustable high and low"), establish a standing position system to regulate supply and demand, and implement the equalization of losses to intervene in circulation, so as to achieve the goal of "controlling the power of the important and the industry of the mountains and seas", stabilizing the economy, curbing mergers and acquisitions, and increasing fiscal revenue. Sang Hongyang's implementation of the salt and iron official camp in the Western Han Dynasty and the equalization of losses is a large-scale practice of this idea. In contrast, Sima Qian put forward the famous "Theory of Good Causes" in the "Historical Records: The Biography of the Goods and Colonies": "The good ones are the causes, followed by the good way (guide), then the teachings, the second neat, and the lowest ones fight with them." He highly respects the spontaneous power of the market ("therefore"), advocates that the government should take advantage of the situation ("profit guidance"), prudently intervene ("tidy"), and opposes direct business for profit and competition with the people ("competing with it"). Together, these two seemingly opposing lines of thought constitute the most enlightening discussion of the relationship between the government and the market in ancient China.

3. The Evolution of "Heavy Agriculture" Thought and the Re-understanding of Agri-Business Relations: An Exploration of Industrial Coordination

"Agriculture, the foundation of the world, do not do great things" (Emperor Wen of the Han Dynasty's edict), "heavy agriculture" was the basic national policy of the previous dynasties, and both Legalists (Shang Ying, Han Fei) and Confucianism emphasized that agriculture was the foundation of wealth creation ("Benye"). However, with the prosperity of the commodity economy in the Tang and Song dynasties, the reflection on "emphasizing agriculture and suppressing commerce" gradually emerged. Ye Shi of the Southern Song Dynasty criticized "suppressing the end of the thick foundation, and the non-orthodox theory", pointing out that "the four people handed over to their use, and then governed the prosperity, suppressed the last thick foundation, and the non-orthodox theory", affirming the positive role of industrial and commercial exchanges and promoting the flow of wealth. Qiu Jun of the Ming Dynasty also advocated that the state should protect normal commercial activities and "make the people their own city". This reflects the early understanding of ancient thinkers on the coordination of agriculture and commerce and the balanced development of industry.

4. Fiscal Thinking and State Governance: The Quest for Sustainability and Equity

Finance is the cornerstone of national governance. "The Book of Rites: The Royal System" proposes that "the family dominates the country, and it must be at the end of the year, and all the grains are entered, and then the country is used... Spending within one's means" has established the principle of frugal finance of "living within one's means." However, in a specific period (such as Emperor Wu of the Han Dynasty's counterattack against the Xiongnu and Wang Anshi's reform), in order to meet the huge expenses, there was also a practice of "living within the limits of income". In terms of taxation, "thin taxation" ("Analects") and "taking the people's ownership system" (Mencius) are the mainstream demands, and many thinkers of the past dynasties have opposed arbitrary taxation and pursued fairness and simplification of tax burdens, such as the "one whip law" in the Ming Dynasty and the reform attempt of "apportionment into the mu" in the Qing Dynasty, all of which aimed to reduce the burden of the landless poor and embody the idea of fairness.

5. "Distinguishing between righteousness and profit" and economic ethics: the moral cornerstone of market operation

The Confucian "distinction between righteousness and benefit" has profoundly affected the ethical boundaries of economic activities. Confucius emphasized that "the gentleman is in righteousness, and the villain is in profit" (Analects of Liren), and advocated "seeing the benefit and thinking of the righteousness" and "righteousness and then taking". This has laid the mainstream notion that economic activities need to be subject to moral and ethical constraints. Later thinkers, such as Chen Liang and Ye Shi of the Yongjia School in the Southern Song Dynasty, and Huang Zongxi and Gu Yanwu in the Ming and Qing dynasties, emphasized the "unity of righteousness and benefit" and "application to the world", believing that the pursuit of interests in line with morality ("People are not born without profit, and they are unspeakable?"). "Li Jing) is legitimate and necessary. This provides ideological support for a healthy business ethic.

2. The reflection and enlightenment of ancient thought in contemporary China's economic development

The essence of ancient Chinese economic thought is not sealed in history, but profoundly reflects and enlightens the economic development path of contemporary China.

1. Enlightenment 1: Adhere to the "people-centered" and pursue the people-oriented inheritance of common prosperity

The ancient ideas of "enriching the people" and "people-oriented" are the profound cultural genes of contemporary China's "people-centered" development thinking. The battle against poverty that "no one should be left behind on the road to a well-off society in an all-round way" is a modern interpretation of the concept of "the way to govern the country must first enrich the people". The rural revitalization strategy is committed to narrowing the gap between urban and rural areas and improving the well-being of farmers, echoing the focus on the basic status of agriculture and farmers' livelihoods in the "heavy agriculture" tradition. The goal of "common prosperity" currently being promoted is a sublimation of the ideal of "hiding wealth from the people", aiming to solve the problem of unbalanced and inadequate development. The core challenge lies in how to effectively balance efficiency and fairness, avoid egalitarianism, and ensure that the fruits of development truly benefit all people through coordinated institutional arrangements for primary distribution, redistribution, and tertiary distribution in high-quality development. This requires continuous optimization of the income distribution pattern, strengthening the social security system, and reflecting the "people-oriented" practice in the new era.

2. Enlightenment 2: Construct a governance model that combines "efficient market" and "promising government".

The ancient dialectical thinking on state regulation ("light and heavy theory") and market mechanism ("good cause theory") provides a valuable mirror for contemporary China to explore the relationship between the government and the market under the "socialist market economy" system. Inheritance of the wisdom of macroeconomic regulation and control: Contemporary China has established a huge grain reserve system, and its core function of stabilizing grain prices and ensuring supply is the institutional inheritance and development of the ancient idea of "always closing" to stabilize prices. In the face of economic fluctuations, the Chinese government has flexibly used fiscal policy (e.g., large-scale infrastructure investment, tax and fee reductions) and monetary policy (e.g., interest rate adjustments, reserve requirement ratios) to carry out countercyclical adjustments, reflecting the modern version of using the power of the state to stabilize the macroeconomy. Deepening and Boundaries of Market-oriented Reform: Since the reform and opening up, from the rural household contract responsibility system to the establishment of a modern enterprise system, and then to the current deepening of the reform of market-oriented allocation of factors (land, labor, capital, technology, data), the core logic lies in respecting and giving full play to the decisive role of the market in the allocation of resources, which is the profound practice of Sima Qian's "theory of good causes" - respecting market laws and reducing improper intervention. At the same time, the regulation of the monopoly of the platform economy and the disorderly expansion of capital, as well as the prudential supervision of finance, data security and other fields, reflect the historical lessons of "competing with the people" and strive to draw a reasonable boundary between the government and the market, with the goal of building an economic system with "effective market mechanisms, vitality of micro subjects, and moderate macro control". Case Study: In the wake of the global financial crisis in 2008 and the pandemic in 2020, the Chinese government quickly rolled out a large-scale economic stimulus package, which effectively cushioned external shocks, stabilized employment and growth, and demonstrated strong macroeconomic control capabilities (a modern application of the "art of light and heavy"). At the same time, we will continue to deepen the reform of "delegating power, delegating power, delegating power, and improving services", significantly reduce administrative examination and approval items, and continuously optimize the business environment, precisely in order to better play the "good cause" effect and stimulate the vitality of hundreds of millions of market entities.

3. Enlightenment 3: Consolidate the foundation of agriculture and promote the strategic determination of coordinated development of urban and rural areas

The position of agriculture as the foundation emphasized by the ancient "heavy agriculture" ideology has been fully reflected in contemporary China's food security strategy and rural revitalization. "The Chinese's rice bowl must be firmly in their hands at all times" is the top priority in governing the country, and the No. 1 Central Document continues to focus on the "three rural areas", investing heavily in the construction of high-standard farmland and the development of modern agricultural science and technology. This is not only an adherence to the historical wisdom of "agriculture as the foundation of the state", but also a practical need to cope with the complex international environment. At the same time, the ancient reflection on "suppressing business" and the re-understanding of the relationship between agriculture and commerce have revealed that we must break the dual structure of urban and rural areas. The core of the new urbanization strategy and regional coordinated development strategy (such as the development of the western region, the revitalization of the northeast and the rise of the central region) promoted by contemporary China is to promote the free flow of urban and rural elements, equal exchange and balanced allocation of public resources, and build a unified national market. This requires deepening the reform of the household registration and land systems, smoothing the urban-rural cycle of workers and peasants, and avoiding the imbalance in economic development caused by the inhibition of the flow of factors in the past.

4. Enlightenment 4: Uphold the concept of prudence and build a strong line of defense against fiscal and financial risks

The ancient fiscal thinking of "living within the limits of income" and "taking the people to a certain extent" has a strong warning significance for the prevention and resolution of major risks in contemporary times, especially fiscal and financial risks. At present, we attach great importance to the prevention and control of local government debt risks, emphasizing resolutely curbing the increment, dissolving the stock, and strictly controlling hidden debts, which is a profound memory of the lessons of social turmoil caused by excessive fiscal expansion and arbitrary expropriation in history. The continuous implementation of large-scale tax and fee reduction policies aims to optimize the tax structure, reduce the burden on market entities, and conserve tax sources, reflecting the governance wisdom of "thin taxation" to benefit the long-term. In the financial sector, strengthening macro-prudential management, improving the financial regulatory system, and focusing on preventing and resolving risks such as real estate, local government debt, and small and medium-sized financial institutions are also positive responses to the lessons of financial turmoil caused by excessive credit inflation and lack of supervision in the past. A two-pillar framework of prudent monetary policy and macro-prudential policy is the key to maintaining economic and financial stability.

5. Enlightenment 5: Promote excellent business ethics and build an honest and law-abiding market economic environment

The ancient "distinction between righteousness and profit" emphasized that economic activities should conform to moral norms ("see what is right"), which provides a solid ethical foundation for the construction of an honest and law-abiding market economy in modern times. At present, China is vigorously promoting the establishment of a social credit system, aiming to create a market environment in which "trustworthiness benefits and untrustworthiness is difficult" through information sharing and reward and punishment mechanisms. Cracking down on commercial fraud, counterfeiting, insider trading and other behaviors, advocating corporate social responsibility (ESG), and promoting the formation of a fair competition market order are all modern transformations and institutional implementations of traditional ethical values such as "integrity" and "benevolence". While pursuing economic efficiency, we must adhere to the bottom line of law and morality, and promote the feelings of family and country and responsibility in the entrepreneurial spirit, so as to build a healthy and sustainable socialist market economy ecology.

3. A profound warning from the lessons of history

While absorbing the wisdom of ancient times, its historical lessons are also like a mirror, providing an indispensable warning for contemporary economic development.

1. Excessive intervention and the trap of "competing with the people for profit": Historically, the state was excessively involved in the economic field, such as the salt and iron monopoly in the late Han Dynasty, the liquor and wine industry, and the equalization of losses and losses in the late Han Dynasty, and some of the measures in the Northern Song Dynasty Wang Anshi's reform (such as the Shiyi Law) evolved into the government monopolizing the market and suppressing private commerce, which eventually led to a decline in economic efficiency, boiling public resentment, and intensified social contradictions. This warns the contemporary government that the government must respect the laws of the market and clarify the boundaries of economic intervention, with the main goals of making up for market failures, maintaining fair competition, and providing public goods, avoiding the abuse of administrative power to directly participate in micro-management, squeezing the space of the private economy, and strictly guarding against "competing with the people for profit" and power rent-seeking.

2. The cost of perpetuating the "heavy agriculture and suppressing business": During the Ming and Qing dynasties, the policy of "heavy agriculture and business suppression" was solidified and pushed to the extreme (such as the ban on maritime affairs, mining bans, and restrictions on the scale of industry and commerce), which seriously hindered technological innovation, capital accumulation and the deepening of the social division of labor, stifled economic vitality, and became one of the key factors that caused China to lag behind the West in modern times and miss the wave of industrial revolution. This is a profound warning to the contemporary era that we must unswervingly deepen market-oriented reforms, remove all institutional and institutional obstacles that are not conducive to the free flow of factors and fair competition, vigorously support the development of the private economy, protect property rights (especially intellectual property rights), and stimulate the innovation and creativity potential of the whole society.

3. Negative effects of inadequate protection of property rights: In ancient China, land property rights, especially those of land, were often eroded by royal power (e.g., the arbitrary expansion of imperial estates and official fields, as well as the instability caused by frequent policies of "equalizing land" and "restricting land"), which inhibited the long-term motivation of the people (especially landlords and merchants) to create and accumulate wealth. This highlights the extreme importance of a sound modern property rights protection system (property law, intellectual property law, etc.). Only by clearly defining and strictly protecting all types of property rights can we stabilize expectations, stimulate investment, innovation and long-term operation, and lay the foundation for a thriving market economy.

4. Loss of development opportunities caused by closed self-defense: The Ming and Qing dynasties implemented a strict maritime ban policy for a long time (such as "no slice is allowed to go to the sea"), closed off the country, isolated from the world's economic and cultural exchanges, missed the opportunity for global trade expansion and technological progress after the great geographical discovery, and finally fell into a passive situation in modern times. This has confirmed in the most painful way Comrade Deng Xiaoping's thesis that "construction cannot be carried out behind closed doors," and has also profoundly illustrated the necessity and correctness of contemporary China in adhering to the basic national policy of opening up to the outside world, actively participating in economic globalization, and promoting the building of an open world economy. We must continue to expand high-level opening up to the outside world and make good use of both domestic and international markets and resources.

conclusion

Looking back at the long river of ancient Chinese economic thought, its profound thinking on core issues such as people's livelihood, the relationship between the government and the market, industrial coordination, fiscal stability, and economic ethics is by no means outdated, but contains governance wisdom that transcends time and space. The tremendous achievements made in contemporary China's economic development have a profound historical and cultural logic behind them, and they are a vivid practice of "creative transformation and innovative development" of the essence of traditional thought based on the basic national conditions in the initial stage of socialism. From "people-centered" to the pursuit of "common prosperity", from exploring the better combination of "effective market" and "promising government", to sticking to the foundation of agriculture and promoting coordinated development, to emphasizing prudence and promoting business ethics, we can see the vigorous vitality of China's excellent traditional economic thought in the new era.

However, the lessons of history are equally deafening: excessive intervention stifles vitality, anti-business policies hinder progress, unclear property rights inhibit innovation, and self-isolation leads to backwardness. These profound warnings remind us that on the new journey towards Chinese-style modernization, we must uphold a high degree of historical consciousness, not only draw rich nourishment from traditional wisdom, but also have the courage to eliminate the ideological concepts and institutional mechanisms that hinder development. Only by insisting on emancipating the mind, seeking truth from facts, upholding integrity and innovation, making breakthroughs in inheritance, and surpassing in learning, can we handle the major relationships between efficiency and fairness, government and market, openness and independence, effectively solve the problem of unbalanced and insufficient development, build a higher-level socialist market economy system, and finally achieve the grand goal of high-quality economic development and common prosperity for all people. Learning from the past and learning from the present, carrying forward the past and forging ahead into the future, the light of wisdom of Chinese economic thought will continue to illuminate the magnificent journey of national rejuvenation.