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Adam Smith stated that a free market would be able to run freely even if there is no government intervention, because the market will regulate itself. This will happen because of competition among many markets and the mentality of people in general. Adam Smith stated that this principle was called The Invisible Hand. A major problem with the economic development of China was the consistent interference of the Chinese government. The reasons behind why the government kept continuously involving itself was because of the cultural, and religious preconditions of the country.
The mindset and behavior of the Chinese population contributed heavily to the poor economic outcome of the nation. Chinas culture prevented the nation from following Adam Smiths principal, which in turn caused the Great Divergence from Europe. The Chinese government ruled the country through the Mandate of Heaven. The Mandate of Heaven was a guideline through which the citizens viewed the government rulers. This mandate was based on four principles which stated, that the right to rule was granted by heaven, that there was only one ruler, the right that the ruler had to reign was based on his personal virtue, and that the right to rule was not limited to only one particular dynasty. This Mandate of Heaven gave the ruler a high ranking statues and also religious significance.
The ruler had supreme power, but more importantly, the ruler gained power quickly because every person believed that he had the authority granted from heaven. This reason alone allowed the people to blindly follow his command without question because of their faith in the system. Their behavior was portrayed the cultural aspect of China, which contributed to the downfall in their economic situation. Ancient Chinese, as represented by their monarch claimed to hold a Mandate of Heaven according to which they had a valid claim to preside over everyone else by virtue of their unequivocal political, cultural, and moral authority. That principal remained intact even under an alien ruler; it was moral integrity and benevolent leadership rather than ethnic origins that were important. (Waley-Cohen, 13 - 14) The government had supreme control over the regulations of the country, and was also supported by the people. A major economic problem with this was that it was highly possible for the government to favor certain enterprises over others.
Owners would be inevitably be involved in government affairs, and the government would begin to favor one specific company. If corruption existed within the system, it would upset the economy because of such favoritism. Monopolies would develop, and only a small portion of the society would benefit. Therefore government involvement of the economy can never be good for economic stability. Another cultural principle form, which many Chinese people followed, their lifestyle was the ideas established by Confucius. His ideas of societal relationships were something that many Chinese people followed.
It stated that one should recognize the existence of superiority, and he described those relationships. He listed them as ruler and subject, father and son, husband and wife, elder brother and younger brother, and friend and friend. His teachings implied that a person should know their social position when in the presence of another individual he characterized. These teachings that he displayed kind of motivated people to not work as hard as they would have done in a Capitalistic society. Unlike a Capitalistic society where the main idea was the harder you work, the better the outcome, the Chinese working classmen were kind of stuck in the social structure that they were born into. Thus, they knew not of achievement and advancement in life.
This mentality hurt the possibility of economic advancement. Since people did not work hard, the government probably felt as if it is compelled to intervene to improve the condition of the economy. In the long run though, this will not help improve the instability. One of the main factors that helped improve the economy of Europe was that it involved itself with free trade. The Europeans were opened to new and exciting things.
They were eager to expand their intellectual horizons by divulging themselves in foreign goods. Also, because they lived in a Capitalistic society, they had more of an eagerness to gain wealth, which can only theoretically result from hard work. China, on the other hand, turned itself away from foreign relations, or in the rare occasion allowed them to enter the country, but only under extreme circumstances. The trade networking for China usually consisted of mainly other Asian countries nearby such as Japan and Korea.
The culture of the Chinese was also that of favoritism towards the conventional, antiquity of the Chinese civilization. They honored and respected the past and thrived to prevent change from occurring in the country. This therefore prevented any development from occurring. With no new products being imported into the country, the chance of marketing newer material goods were decreased. The dominating religion in China at the time was Buddhism, which originated in India. Buddhism actually in part promoted the economy of China somewhat.
In order for the monks to build and construct temples and in order to have the required scents and materials for sacred rituals, they invested in trade with foreigners. Buddhist monasteries also began to play an important economic role. For example, they held religious festivals for which Buddhist paraphernalia were in demand. Many such commodities could be obtained only abroad, so that fragrant plants for incense, jewels, and precious metals came to form an important sector of long distance trade. (Waley-Cohen, 20) Also, individuals used Buddhism for personal gain through monetary means. Monarchs struck deals whereby in return for their investment in religious institutions and for letting the Buddhist establishments operate more or less without restriction, they arranged for prominent clergymen to declare them incarnations of the Buddha. (Waley-Cohen, 21) Such acts were not necessarily sanctified, nonetheless through religion, the economy of China was heading towards the right direction of financial investment. The economic contribution made by Buddhism was very small compared to that made by Catholicism in the European society.
In Europe the religion was utilized basically to make money. The social status of a person was determined not only by his work ethics, but also the degree of dedication to the church. A person was supposed to make donations to the church. Also, the common belief in Catholicism was that a person was not able to have a direct relationship with God, but only through a person of a supposedly divine status, such as a friar or a priest. At that time forgiveness, blessings and testimonies were given in exchange for money. All these aspects in Europe helped contribute significantly to the economic development.
China in itself is very large geographically and demographically compared to Europe. The population of China was increasing faster than that of Europe. This also affected the economy because it was difficult to support the amount of people that was in China, while the amount of people in Europe were comparably smaller. There were instances when there was overpopulation relative to land supply and the production of food. This would cause famine, and in turn population decline. Therefore China and Europe both went through difficult economic troubles.
The main factor necessary for economic development is competition. Without competition in the market, there is no circulation of currency and profit. The current form of government in China is Communism, in which the economy is planned and controlled by the state, and the people equally share all the goods produced. If everyone receives the same amount despite the amount of effort put into producing that amount, the idea of personal gain and progression is completely eliminated. It is highly possible that these principles originated from the idea of Confucianism and his teachings. Because Europe did not base its economy and social practices on their culture and religion as heavily as China did, they ended up being at a superior economic situation than China.
Therefore, it is presumed that the Great Divergence of Europe and China began in the 16 th Century when the mindset of the Chinese people began to revolve around their culture, and their sense of superiority to the other countries.
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Research essay sample on Mandate Of Heaven Amount Of People
