VOLUME V, CHAPTER 11, SECTION 1
Present-Day America, Four Tools in the Struggle over Scarce Resources
The sections up to here have run from ancient times through reform, staying inside history. This section lands in the present, looking at one of the countries with the highest output, the strongest rule of law, and the strongest commitment to equality anywhere, the United States. The more a country is like this, the more clearly it shows how stubborn this root, the strong legislating to hold scarcity alone, truly is, because its tools are the most refined and the packaging the most handsome, and yet the root has not changed. The patent, the credential, real estate, and the political contribution, four tools, laid out one by one. Said plainly up front, this section passes no judgment on America and takes no side, it only lays out the facts, and lets the reader see through to the pattern himself.
One. First, the Patent
At its founding, the United States wrote into its constitution that Congress shall have the power to secure, for limited times, to inventors the exclusive right to their discoveries, to promote the progress of science and useful arts. This sounds fine, protecting invention, encouraging innovation. But set it into position, and the essence of a patent is that law grants one group the exclusive hold, for a set period, over one piece of knowledge, today that period being twenty years, during which no one else may use it or copy it, except by paying for the right.
The most important layer sits here. Knowledge, by its own nature, can be copied without limit, it is not scarce, one person who knows how to bake bread teaches another, and now two people know how, with nothing at all taken from the first. Patent law takes exactly this kind of knowledge, one that could otherwise be copied endlessly, and makes it artificially scarce by force of law. A certain leukemia drug, sold by its original manufacturer, has been priced at more than a thousand dollars a month, more than a hundred thousand dollars a year, while an Indian generic version runs about two hundred dollars a month, a difference of tens of times over, and Indian courts have ruled this kind of patent invalid within the country, making India a pharmacy for the poor of the world. The same drug, the same effect, and the price differs by tens of times, the entire difference sitting in one piece of law, the patent, leaving the poor unable to afford the original and left simply to wait for the patent to expire. Today, software, business methods, even gene sequences can be patented, and a handful of large companies hold hundreds of thousands of patents between them, a new age's version of land, taking a cut on every phone sold through chip patents alone. This is enclosure for the digital age, taking something abstract, knowledge, and fencing it by law into ground that can be rented out. Han Fei's line, that people today fight not out of baseness but because goods are scarce, adapted a little, becomes, people today fight not out of baseness, but because patents are scarce.
Two. Next, the Credential
America's elite schools admit on the surface openly, and in fact run a refined filtering system, a handful of top private universities together with the Ivy League serving as the entry ticket to the elite, with an acceptance rate running roughly three to five percent. But hidden inside are several quiet doors, preference for the children of alumni, preference for the children of major donors, athletic recruitment tilted toward sports like rowing, fencing, and equestrianism that a poor family's child could never afford to train in, and a dedicated pipeline running through elite private boarding schools charging sixty or seventy thousand dollars a year in tuition.
Add these four quiet doors together, and the position of the elite school is locked, generation after generation, inside elite families. But on the surface, the law forbids nothing, it does not stop a poor family from applying, and it does not require preference for the rich, the law simply hands the standard of admission to the university, and the university's standard is set by the very group already holding an elite position. This is exactly Huang Zongxi's the law of a single family, not the law of all under heaven, playing out today inside the elite school, only that single family has shifted from an emperor's house to an entire class of hereditary elites. The credential's scarcity is not because America lacks universities, it has thousands of them, it is because the elite's entry ticket must remain scarce, since only scarcity gives it value, and only that value lets the old elite families hold their position, exactly as with the ancient imperial examination, position was always limited in number, and a gate always had to be built to keep most people out.
Three. Next, Real Estate
From the 1930s through the 1960s, America ran a practice of grading neighborhoods, commonly called redlining, in which federal agencies rated city blocks by race and economic status, marking the lowest grade in red, mostly Black neighborhoods, where banks would not approve mortgages, insurers would not write policies, and government would not invest in infrastructure, a practice not abolished until the Fair Housing Act of 1968. But its effect has carried forward to today, the median wealth of Black American families sits at roughly one tenth that of white families, a gap rooted, at bottom, in decades of difference in accumulated property.
Today, open racial discrimination has diminished, but new tools for real estate scarcity have risen up in its place. First, zoning law, which restricts certain areas to single-family houses only, forbidding apartment buildings, artificially compressing the supply of affordable housing and driving up prices in luxury districts. Second, property tax, where a good school district carries both a higher home price and a higher property tax, forming a cycle in which only the wealthy can afford to live in a good district. Third, mortgage rates set by credit score, where a lower score means paying several percentage points more, adding up over a lifetime to hundreds of thousands of dollars in extra interest, pushing the poor still further away. Laozi's line, that the people starve because those above consume too much through taxation, adapted a little, becomes, the people struggle because of how strict the zoning above them runs and how uneven the rates. Not one word of the law says the poor may not buy a home, and yet tool piled upon tool, and the poor find themselves less and less able to afford one.
Four. Last, the Political Contribution
America's elections are, on the surface, one person, one vote, everyone equal, but running an election costs money, the average congressional race running ten to twenty million dollars over a cycle, and a presidential election cycle running into the billions of dollars combined between the two parties. Where does the money come from, the political contribution, and those who can afford to give at scale are the wealthy, large corporations, and interest groups. In 2010, the Supreme Court ruled, in a case, that corporations and unions could spend nearly without limit to influence elections through independent expenditures, and one justice at the time wrote a dissent running nearly ninety pages, warning that this would open the floodgates to corporate domination of elections.
What followed has largely borne out that warning, election spending climbed from the hundreds of millions into the billions, reaching, by the 2024 election cycle, well over ten billion dollars combined between the two parties. So behind nearly every member of Congress, every candidate, stands a donor, and the law that member writes, the vote that member casts, can hardly afford to run against that donor's interest. The law says, in name, that everyone is equal, but in practice, one very wealthy person, through contributions, media, and lobbying, can sway the legislating of dozens of members of Congress, while an ordinary voter holds only one vote, a vote that carries almost no weight against money. Legal scholars have exposed this pattern for over a century, and the system keeps running just the same, because the ones running it are the very ones who make the law. Huang Zongxi's the law of a single family, carried into today, and that single family is several great interest groups joined as one.
Five. String the Four Together and Look
The patent fences knowledge. The credential fences position. Real estate fences shelter. The political contribution fences power. Four tools, more market-based, more capital-driven, and more hidden than their ancient counterparts, and yet every one of them favors whoever already holds a position, and every one of them is fair on the surface and unequal underneath.
These four carry entirely different names and entirely different shapes from the ancient categories of land, office, marriage, and learning, and yet the root beneath them is, word for word, the same, insufficient output, scarce resources, the strong legislating to hold them alone, the weak left to accept it, resist it, or step outside it. The root Han Fei named more than two thousand years ago, the root Huang Zongxi named more than three hundred years ago, still runs on the very same logic today, in the most developed country in the world, only dressed now in the new clothes of the patent, the credential, real estate, and the contribution.
Six. The Position Set by This Section
This section sets the thirty-second layer. Contemporary America's four tools, the patent, the credential, real estate, and the political contribution, are the most refined form these four kinds of scarcity have taken today. The more developed a country, the more handsome its tools, and the harder its root of monopoly is to see through, and yet the root has not changed.
Laying out these four is not to say America is bad, it is to say that even the place most committed to the rule of law and to equality cannot escape this root, the strong legislating to hold scarcity alone. This matters, because it shows this is not the flaw of one country or one system, it is the root of insufficient output, growing the very same thing anywhere it takes hold. See these four American tools clearly, and turning back to the rules around you that call themselves fair, you see them with different eyes.
The next section turns to contemporary China, and its four tools for fighting over scarce resources. Having seen America, the next section looks at China, household registration, the school district, the official establishment post, and the inside of the system, four tools, entirely different in shape from America's, and yet exactly the same at the root. Set the two civilizations side by side, and a thousand years of history and ten thousand miles of distance both fail to block the very same logic running straight through. Carry this layer, America's four tools, and walk into the next section.
Credit to the ancestors; the mistakes are mine: Tiger Lyon.
Section Two. Present-Day China, Four Tools in the Struggle over Scarce Resources.