VOLUME III, SEMESTER 1, CHAPTER 6, SECTION 1
The Year 81 Before the Common Era, the Quarrel That Broke Out in Court
The last three chapters, Guanzi, Mencius, Sima Qian, were all about how the ancestors set one position after another down. This chapter is different. This chapter is about a quarrel that truly broke out. In the year 81 before the common era, on the court floor of the city of Chang’an, a crowd of men went at it to each other’s faces, and the subject they went at is one still being fought over today.
First, set out the shape of the meeting
Emperor Zhao of Han had not long been on the throne, and the court held a great meeting. More than sixty men of learning, put forward from every region of the realm, were brought to the court floor to debate, face to face with the high official then in charge of the state’s finances, one great matter. Should the state hold the important trades, salt and iron and the rest, in its own hand, or should it not.
The record of this debate was later put in order and edited into a book, in the first century before the common era, by a man named Huan Kuan, and that book is the Discourses on Salt and Iron.
Think first how rare the thing itself is. A policy debate of more than two thousand years ago, set down line by line, handed down, handed all the way to today, and you can still open it and see how those two sides shot each other’s lines back at each other. Not many civilizations in the world have left a thing like this.
Why this quarrel broke out
To see the debate you first have to know how it was pent up.
Across the several decades Emperor Wu of Han sat on the throne, to wage his wars, to fill the huge holes in the military budget and the treasury, he pushed through the whole realm a full set of measures for the state to go down into the economy itself. Salt made a state monopoly. Iron made a state monopoly. Ale brought under state control. And the price-stabilizing, the state stepping in to level the prices of goods. And the equable transport, the goods of the various regions bought up together, allotted together, shipped together.
Mark this. That set of measures is exactly the enlarged version of Guanzi’s line from the last chapter but two. Light and heavy, the state store, the hand of the state reaching into the market.
This set of policies ran several decades, and by the year 81 before the common era it had piled up three things. One, a considerable income for the treasury. One, an administrative apparatus spread ever wider. And one, a considerable weight of public discontent and political criticism.
What the court faced was a very solid question. This set of measures, keep it, mend it, or scrap it.
This matters most, they held account books, not notions
See this layer clearly, for it is where this chapter differs most from many a later debate.
Every argument thrown out in this quarrel was not speculation spun out of thin air in a study. They were things that had already run in real policy for several decades, checked by the effect of the administration, checked by how much the common people could bear, checked by the reaction of society.
Sang Hongyang says the monopoly can fill the military budget, and he has the accounts in hand. The men of learning say that under the monopoly the goods turn worse and the prices turn dearer, and they have accounts in hand too. They come from every region, and what pot the people there use, what salt they buy, they have seen with their own eyes.
This is a different thing from later ages deducing a theory in a study. This one grew up out of the ground.
Which subject this quarrel is really fighting over
Peel the words of both sides back, and underneath there is one subject only. Should the hand of the state reach into the market, and up to where does it reach.
Mark this, for the subject is fought over right up to today. Hayek, Keynes, those twentieth-century names, argue back and forth, and it is still this one subject. One says the hand of the state should draw back, the other says the hand of the state has to reach out.
The position this volume sets is this. Neither side is right by birth, neither side is wrong by birth. Each stands on a real position, and each has seen a real thing.
What Sang Hongyang sees is this. Left to turn on its own, the market will throw up chaos on things like salt and iron that every household must use, and wealth heaped into the hands of a few great merchants will turn back and warp the governing itself. What the men of learning see is this. When the state goes down and does the trading itself, the officials will grow corrupt, the goods will turn worse, the prices will climb, and the moment the state fixes its eye on money, the governing itself turns rancid.
Now ask, which of these two is false.
Not one is false. What both sides see is true.
So this chapter is not out to rule who won and who lost
Here the position of the chapter must be set in stone, or the two sections after will be read crooked.
This volume hands down no verdict on this debate. It does not say Sang Hongyang is right, and it does not say the men of learning are right.
Because these two sides are not one right and one wrong. They are two hands, each pressing down one end. The end Sang Hongyang presses is that a market failing will cost lives. The end the men of learning press is that a power reaching in will rot.
Both ends are true, and neither will disappear. And so this quarrel has not been fought out in two thousand years, and will not be fought out to come. It should not be fought out. Let it stop, and one side grows sole and great, and once one side is sole and great, the trouble at the other end arrives.
Set this layer against this book’s law that the four institutions complete one another. Put together, they complete one another, and at the same time they mind one another and pull one another back, so that no one of them grows sole and great and wrecks the whole hand. This quarrel is itself one check and balance.
Set this quarrel back beside you
How far off from you is this two-thousand-year-old subject.
A grave illness. Who fixes the price of the medicine, who runs the hospital. Let the state take it in hand, and the poor can afford to see a doctor, but the line is long to wait and the good doctors leave. Hand it all to the market, and there is no line to wait, but the one who cannot pay can only go home and lie down.
A sack of rice. The state buys to hold the floor, and the farmer is not left to work a year for nothing, but the grain in the store may also rot, and the officials may also take their cut from top and bottom. Hand it all to the market, and the price goes as the market goes, and in a fat year the farmer weeps and in a lean year the poor weep.
A unit of electricity, a train ride, a schoolroom, a house. Every one of them is salt, is iron.
Those more than sixty men of learning and that one great official, two thousand years ago, were quarreling over the very things you met on your way out the door this morning.
What this section set up, and the turn to the next
This section did one thing. It pushed open the door of that court floor in the year 81 before the common era, to see clearly who stood inside, and why they quarreled.
It set up three things.
The first. The subject of this quarrel is whether the hand of the state should reach into the market, and up to where. Two thousand years on, it is still being fought over, and it has not stopped for one day.
The second. Behind every argument in this quarrel is pressed a real account book of several decades, not a deduction on paper.
The third, and it matters most. What both sides see is true. This volume does not rule who won and who lost. This quarrel should not be fought out. Let it stop, and one side is bound to grow sole and great.
Then what exactly did each side say. Where are their arguments hard, and where are they soft. The next section spreads both sides out on the table, one line at a time.
Credit to the ancestors; the mistakes are mine: Tiger Lyon.
SECTION 2. Sang Hongyang’s Side, and the Side of the Worthies and Men of Learning