Economic policy disrupts the regulation of the moral economy through ritual—harming social harmony.

The last point we can glean from Xunzi’s (19.1a) statement about desires leading to chaos and thus rituals is that in order to overcome the state of poverty, what is urgently needed is not economic policy per se but the establishment of good government that relies on ritual and yi. (In the writings of Mencius, yi could be translated as “relational appropriateness,” but Xunzi gives it a different meaning.) What ritual and yi refer to in Xunzi’s ethical and political thought has been one of the most debated topics in contemporary Chinese philosophy, and I will return to this question shortly. What is important in the present context is that Xunzi approaches a productive economy and a more systematic satisfaction of desires from a broader perspective of good government. As we have seen, for Xunzi, the state of nature is the state of distributive injustice where people’s competing desires for material goods cannot be evenly (or equitably) satisfied due to a serious coordination problem, resulting in endless struggle and eventually poverty. He describes injustice in the state of nature as more than a mere condition of material poverty. It is also a state of domination and subjugation, the remedy for which must be found in a new form of politics and political economy. If [people] live apart and do not help each other, then they will be impoverished. If they live together but have no social divisions, then they will struggle with each other. Poverty is a catastrophe, and struggle is a disaster. If you wish to save them from catastrophe and eliminate disaster, then nothing is better than to make clear social divisions and so employ the masses. If the strong threaten the weak, if the wise terrorize the stupid, if the people below disregard their superiors, if the young bully their elders, if you do not govern by virtue—if it is like this, then the old and the weak will face the worry of losing their means of nurture, and those in their prime will face the disaster of divisive struggle. Work and labor are what people dislike, and merit and profit are what they are fond of. But if there is no division of occupations, then people will face the catastrophe of trying to complete their work by themselves and the calamity of struggling over merit. (Xunzi 10.1) Here we gain new information about the Xunzian state of nature. As Xunzi repeatedly claims, mutual struggle in the state of nature causes impoverishment. Though originating from competing desires for material goods, struggle among the people has a social cause as well, directly relevant to the coordination problem. According to Xunzi, it is the absence of “social divisions (fen 分)” that drives people to struggle because only by means of social divisions are they enabled to helpeach other and live together harmoniously. If there are no social divisions, not only does struggle become permanent but it also gives rise to what can be called the circumstances of injustice where “the strong threaten the weak, the wise terrorize the stupid, the young bully their elders, and the people below disregard their superiors.” Moreover, in the absence of social divisions great inconvenience is born as everyone will be forced to lead an autarkic life, which ineluctably brings the quality of life near or below the threshold of sufficiency. In any event, in the Xunzian state of nature, distributive injustice is entangled with social exploitations and unjust hierarchies. Of all members of society, the old and the weak are most severely affected by the circumstances of injustice both socially and economically. What does Xunzi mean by social divisions, which he presents as the Confucian method to solve the coordination problem? How can social divisions redress the circumstances of injustice where social domination and economic injustice are entangled, and bring about social order and productive economy? In an orderly society, according to Xunzi, everyone is situated above the threshold of sufficiency, social and economic inequalities beyond the threshold are merit-based but not excessive and thus not to the detriment of social harmony, and the well-being of the worst-off is given priority. Let us begin with the following statement, where Xunzi (9.16a) explains the uniqueness of humans in terms of their ability to form a community. Water and fire have qi [vital energy] but are without life. Grasses and trees have life but are without awareness. Birds and beasts have awareness but are without yi. Humans have qi and life and awareness, and moreover they have yi. And so they are the most precious things under Heaven. They are not as strong as oxen or as fast as horses, but oxen and horses are used by them. How is this so? I say it is because humans are able to form communities (jun 群) while the animals cannot. Why are humans able to form communities? I say it is because of social divisions (fen). How can social divisions (fen) be put into practice? I say it is because of yi. And so if they use yi in order to make social divisions, then they will be harmonized. If they are harmonized, then they will be unified. If they are unified, then they will have more force. If they have more force, then they will be strong. If they are strong, then they will be able to overcome the animals. … Thus the reason why humans can order themselves with the four seasons, control the myriad things, and bring benefit to all underHeaven is none other than they are able to get these social divisions (fen) and yi. And so human life cannot be without community. Recall Xunzi’s earlier statement that people should live together and help one another. Now it is clear what he means by it: people are capable of forming “communities” (jun). Xunzi presents this capacity of community-building as the most salient trait that distinguishes humans from other living things. However, the community here cannot refer to just any community. Xunzi (19.9b) seems aware of the fact that some animals are capable of forming a community. When he says that it is only humans that are capable of forming communities, therefore, he must have a special kind of community in mind, one that enables people to live together and help one another.12 More specifically, Xunzi’s community is one that is marked by social divisions. How then do social divisions give communities social and political characteristics that make them distinctively human? According to Xunzi, it is yi that puts social divisions into existence and practice. Notice that Xunzi’s understanding of yi here is somewhat different from our earlier usage as “relational appropriateness” in reference to Mencius. As Hutton (2016: 71) notes, since Xunzi does not believe in yi as a moral virtue innate in human nature, it cannot be a natural moral sentiment of appropriateness or righteousness. Rather, it is close to a “(social) norm” which designates proper roles to community members. Rituals” are the institutional practices that embody yi as social norms. Here arise two important questions. First, who created the structure of social norms and social divisions that allot proper roles to the people? Second, what do social divisions based on yi look like? Xunzi (4.12) points to the former sage-kings as the founders of ritual and yi who established social divisions in order to properly nourish human desires and distribute material goods: To be as noble as the Son of Heaven and to be so rich as to possess the whole world—these are what the natural dispositions of people are all alike in desiring. However, if you followed along with people’s desires, then their power could not be accommodated, and goods could not be made sufficient. Accordingly, for their sake the former kings established ritual and yi in order to divide the people up and cause there to be the rankings of noble and base, the distinction between old and young, andthe divisions between wise and stupid and capable and incapable. All these cause each person to carry out his proper task and each to attain his proper place. After that, they cause the amount and abundance of their salaries to reach the proper balance. This is the way to achieve community life and harmonious unity. So, when a person of ren is in power, the farmers devote all their strength to their fields, the merchants devote all their cleverness to their earnings, and the hundred craftsmen devote all their skillfulness to their products. From the officers and high ministers up to the dukes and marquises, no one fails to devote all his ren, generosity, intelligence, and capabilities to fulfilling his official position. This is called the utmost balance. Finally, we have arrived at the crux of Xunzi’s political economy. Notwithstanding some critical disagreement with Mencius regarding human nature and the method of moral self-cultivation, Xunzi fully agrees with him (and Confucius) that Confucian moral economy is part of good government and thus approaches it from the perspective of social harmony. For Xunzi, a productive and just economy is an integral part of good political order that prioritizes social harmony. Creating a political order ensures social harmony that unites people and enables them to develop more force and become prosperous. Xunzi is convinced that a political order of this effect can be best achieved by social divisions that not only distinguish the noble from the base, the old from the young, and the wise from the stupid, but also distribute specific economic and sociopolitical positions and roles to the people that correspond to their talents and merits. In addressing the coordination problem and creating a moral economy, the ruler (or the state) plays a pivotal role. After all, communities are not formed naturally. Though Xunzi presents the former sage-kings as the founders of ritual and yi, he emphasizes the critical importance of the political leader as the agent who carries out the task of social divisions and coordination. Most tellingly, Xunzi (9.16a) says: The true lord is one who is good at forming community. When the way of forming community is properly practiced, then the myriad things will each obtain what is appropriate for them, the six domestic animals will each obtain their proper growth, and all the various living things will obtain their proper life spans. Here Xunzi does not present Confucian statecraft in terms of “effortless action” (wuwei 無爲) as if the ruler’s excellent moral character will automatically bring about good public results.13 The kernel of Confucian statecraft (and moral economy) lies in “the way of forming community,” which is none other than the method of social divisions. Xunzi (12.6) makes this point clear: What is the Way? I say: It is the way of the true lord. Who is a true lord? I say: It is one who is able to create community. Who is able to create community? I say: It is one who is good at keeping people alive and nurturing them, good at organizing and ordering people, good at elevating and employing people, and good at beautifying and ornamenting people. In short, for Xunzi, the way of a true lord is statecraft based on youwei 有爲 (purposeful action). Xunzi presents social divisions as the method of youwei statecraft by which to build a harmonious political community and address the coordination problem (El Amine 2015: 68–73).