Self-Preface: Start University Life with The Great Learning
III
Contents VII
Chapter I. Introduction: China Has Its Own Original Economics
1
1. Why China has its original economics? 4
1.1 Historical facts reveal the principles 4
1.2 Historical data disclose the principles 5
1.3 The marvelous principles originate from nature 7
2. Why recent Chinese people not know their original economics?
16
2.1 The historical reason 16
2.2 Reason of the unique cultural system 17
2.3 Reason of the unique learning way 20
3. What distinguishes Chinese classic economics from western
economics? 23
3.1 Differences between Chinese classic economics and western
economics 23
3.2 Significant meanings of Chinese classic economic in present
day 25
3.3 A review of “common knowledge in western economics” in the
framework of Chinese classic economics 29
3.4 Theoretical problems to be solved for rebuilding Chinese
classic economics 39
4. Main ideas of the book 41
4.1 The meaning of “Jing Ji” in Chinese classics 41
4.2 Main theoretical clues of Chinese classic economics 45
4.3 Basic principles of Chinese classic economics 49
5. Some reading suggestions 57
Chapter II. Fundamental Concepts of Chinese Classic Economics
63
1. View of universe: Created from self-nature 65
1.1 The concept of self-nature in the Chinese classics 67
1.2 The concept of self-nature in modern physics 71
1.3 Interpretation from the perspective of general relativity
theory 82
1.4 The process of “the One brings forth all” in historical
culture 86
2. View of life: Nature and man are One 91
2.1 Life shaped by oneself 92
2.2 Ten qualities: Dao, virtue, benevolence, righteousness,
propriety, wisdom, trustiness, bravery, strength and harmony
101
2.3 Ethical principles outside reflect the Five Elements inside
132
2.4 Explanation of life with the Integral Calculus 139
3. View of value: Wealth is the fruit of the virtue tree
141
3.1 Wealth and virtue are twins 141
3.2 One common misconception: “Of the honored and exalted there
are none greater than he who is rich and noble” 146
3.3 The false proposition: Debates over righteousness and
benefit 148
Chapter III. Fundamental Axioms of Wealth in Chinese Classic
Economics 154
1. Axioms on the nature of wealth 155
1.1 Ethics originates from nature 155
1.2 Virtue is the root of wealth 157
1.3 Wealth is gained from good virtue 160
2. Axioms on the production of wealth 163
2.1 Self-nature embodies all 163
2.2 Minds and thoughts are the determinants 166
2.3 Giving is receiving 175
2.4 Accumulation of virtue changes destiny 177
2.5 The Heaven rewards the diligent 179
2.6 Harmony breeds wealth 181
3. Axioms on the phenomena of wealth 185
3.1 Different types of wealth 185
3.2 Wealth is not determined by the type of profession 187
3.3 Wealth collected in unrighteous ways will be lost in
similar ways 188
3.4 Wealth in the past, present, and future lives 190
3.5 The ancestors’ good virtue benefits descendants 193
4. Axioms on the use of wealth 194
4.1 Luxurious enjoyment and waste reduce lifespan 194
4.2 Hoarding wealth keeps one away from Dao 195
4.3 Giving is receiving 196
Chapter IV. Theoretical Framework and Research Paradigm of
Chinese Classic Economics 199
1. Logic premise and the starting point of analysis:
Motivation, action and realization of altruism 200
1.1 Self and others as one: Self-interest, altruism and win-win
200
1.2 Private property, motivation of altruism and social equity
208
1.3 The nature of market price: A point achieved by both
altruism and self-interest 213
2. The basic nature of economic resources: The consequences of
virtuous deeds 216
2.1 “Nature and man are in one” and the law of cause and effect
216
2.2 The right man at the right time for the right technologies
and resources 218
3. Government and market: The two intertwined natural orders
220
3.1 The nature of government and market 220
3.2 The driving force of market: Self-improvement rather than
competition 224
3.3 The boundary of government behaviors: “Not to disturb”
226
3.4 “The invisible hands”: Morality rather than the market
236
3.5 Root causes of the market risk: “Lack of virtue in the past
lives” and “losing virtue in the present life” 238
4. Virtue capital: The third form of capital 239
4.1 Physical capital: The tangible asset of virtue capital
240
4.2 Human capital: The transformed asset of virtue capital
241
4.3 Virtue capital: Accumulation of good deeds as capital
242
5. Methodology of unifying inner verification and outer
practice: Interactive changes of Yin and Yang, movements of the
Five Elements, and deductions based on the Eight Trigrams 244
5.1 The economic implications of The Yellow Emperor’s Inner
Canon 244
5.2 Mathematical economics in the Book of Changes 254
5.3 The economic forecasts based on the Book of Supreme World
Ordering Principles 258
5.4 Research approaches and methods: Inner verification,
comprehensive perception and in-accord-with-known action 265
Chapter V. Interpretation of the Economic Phenomena Based on
Chinese Classic Economics 267
1. Consciousness, behaviors and economic phenomena 267
1.1 Ethics, psychology and physiology 268
1.2 The Dao following nature, spontaneous order and the
economic institutions 275
1.3 The hierarchy structure of Chinese classic economics
279
2. Eight aspects of economic phenomena 281
2.1 Essence, phenomena, and functions 282
2.2 Causes, consequences and conditions 284
2.3 Facts and principles 285
3. Ethics and morality determines the transaction cost of the
economic institutions 286
3.1 Four standards: In accordance with Dao, virtue, principle
and law 286
3.2 Contracts are substitute for ethics 289
4. The economic system and employment system of ancient China
291
4.1 Contracts of ethics: Follow the etiquette and act according
to the position 292
4.2 Contracts of patents: Skills inheriting from family
tradition 296
4.3 The employment contract: Names are carved to be truthful
297
Chapter VI. Historical Evidence of Chinese Classic Economics
(I): Good Fortune Stems from Good Virtue 299
1. The “Grand Times” in Chinese history 300
1.1 The legendary saints: Governance by good virtue 302
1.2 Rule of Wen and Jing: Simple and modest, benefit all
generations 307
1.3 Golden Years of Zhenguan Administration: Restrain oneself
and follow the advices, practice good administration diligently
313
1.4 Prosperity of Kangxi and Qianlong: One employment supported
ten persons 327
2. The “Resurgence Periods” in Chinese history 329
2.1 Yi Yin and Tai Jia: Introspection of emperor and trustiness
of minister 329
2.2 Gou Jian restored his country: Enduring hardship with
vigorous efforts 332
2.3 Resurgence by Guangwu: Cease military activities and
promote culture and education, brighten the good virtues of
ancestors 335
3. Ethical evaluation of reforms in Chinese history 337
3.1 Reform of Shang Yang: Strengthen the national power but
hurt the human relationships 338
3.2 Reform of Wang Anshi: Win good time but lose harmony
between people 341
4. Economists justified by Chinese classic economics and their
theories 345
4.1 Guan Zhong: Establishment of the principles that match with
the facts 347
4.2 Fan Li: A sage of business who retreated modestly to
himself 362
4.3 Bai Gui:“Father of Business” who possessed wisdom,
benevolence, bravery and strength 370
4.4 Yan Ying: Help people without singing his own praise,
remedy the misbehaviors of three emperors without taking rewards
373
4.5 Xiao He and Cao Shen: Cao followed Xiao’s rules as they
were both well aware of the principles of management 374
5. Be benevolent to achieve longevity: Virtues for century-old
shop 378
Chapter VII. Historical evidences of Chinese Classic Economics
(II): Losing Virtue Induces Bad Consequences 382
1. Bad virtue and bad deeds of the last emperors and the fall
of the dynasties 383
1.1 Main aspects of bad virtue and bad deeds of the last
emperors 383
1.2 Typical examples of the last emperors 387
1.3 Examples of emperors causing the state going from
prosperity to decline 395
2. Bad virtue and bad deeds of ministers and the social unrest
400
2.1 Zhao Gao and the downfall of the Qin Dynasty 400
2.2 Yang Guozhong, Li Linfu and Rebellion of An and Shi
402
3. Bad virtue and bad deeds of people and the decline of their
families or enterprises 403
3.1 Unrighteous behaviors induce the loss of wealth and the
fall of family 403
3.2 Bad virtue is the root cause of the fall for century-old
shop 407
Chapter VIII. The Crisis of Western Economics and the Rescue:
From the Perspective of Chinese Classic Economics 412
1. Why western economics comes to an end 413
1.1 Groundless assumptions 413
1.2 Paradoxical logical systems 415
1.3 Self-righteous model designs 418
1.4 Half known explanations for the phenomena 419
1.5 Split of Macro and Micro 421
1.6 Theoretical defense lacks sincerity 422
2. Inner causes for the crisis of western economics: Away from
ethics and reality 426
2.1 Marshall: Worry about the split of economics and ethics in
the speak in Royal Economic Society 427
2.2 Hayek: The ultimate ends of the activities of reasonable
beings are never economic 429
2.3 Coase and Steven Cheung:“Economics” has nothing to do with
the real-world 430
2.4 Armartya Sen: Calling for bringing economics closer to
ethics 433
2.5 Akerlof and Shiller: A “new findings” of animal spirits
433
2.6 Soros: Proposing “Theory of Reflexivity”, conclusively
demonstrating the inadequacy of the Efficient Market Hypothesis
436
2.7 He Xin: Anti-mainstream economics 440
3. The original principles of western economics: Ethics and
economics 442
3.1 Virtue and wealth in western history of thought 442
3.2 The original intention of Adam Smith and his limitations
444
3.3 Adam Smith founded the western economics with two books
447
4. The integration and development of Chinese classic economics
and western economics 449
4.1 Renaissance of Chinese economics and rescue of western
economics 449
4.2 Fundamental methodology to be learnt by western economics:
The complete, perceptive and practical researches in China 453
4.3 From Confucius to Hayek: “Following the desire of his heart
without breaking the laws” V.S. “Achieving freedom by
self-discipline” 460
4.4 From Laozi to Adam Smith: “Act naturally as if taking
no-action” in China V.S. “Night watchman” in the west 462
4.5 From Guanzi to Armartya Sen: “When the barn is full, man
appreciate rites and etiquette” V.S. “A serious distancing between
economics and ethics” 465
Chapter IX.A Balanced Economy: The Road to Harmony 467
1. The essential nature of a balanced economy: The ethics of
Middle-way 469
1.1 The great law of nature: Act naturally as if taking
no-action 469
1.2 The Middle-way economy: All are shaped by ethics 473
2. Four basic elements of a balanced economy 476
2.1 Ethical self-discipline 476
2.2 Freedom of contract 480
2.3 Self-conscious government 482
2.4 Leave wealth with the people 486
3. The “socialist market economy” is actually a balanced
economy: A re-interpretation of China’s 30 years reform and
opening-up from the perspective of Chinese classic economics
491
3.1 From planned to market: Free the mind and release the
vitality 495
3.2 Watch out for an uncontrolled market: Risks and problems
496
3.3 A harmonious Middle-way economy: Past and future 498
Chapter X. Conclusions: New Economics, New School and New
Education of Economics 502
1. Spring has returned: The rebirth of Chinese Classic
Economics 502
1.1 A brief review of the main contents 504
1.2 What’s left 506
2. Awaken and act: The rising of School of Chinese Classic
Economics 507
2.1 The establishment of School of Chinese Classic Economics
508
2.2 The tasks of School of Chinese Classic Economics 509
3. Behave in accord with what you have known and comprehended:
Reforms in the education of economics following Chinese Classic
Economics 512
3.1 Existing problems in current education of economics
512
3.2 Guidance for education in universities of finance and
economics: Behave in accordance with what you have learnt 515
3.3 Policy suggestions 518
Postscript: More Is Left: A New Start Rather Than an End
521
About the Author
Yongsheng Zhong graduated from Dongbei University
of Finance and Economics in China. He dedicates his research to the
influence of Chinese culture on China’s economy and finance.
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