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There is no such thing as an autonomous civilization. In The Rise of the West: A History of the Human Community, historian W.H. McNeill wrote, “The principal factor promoting historically significant social change is contact with strangers possessing new and unfamiliar skills.” When we think only about the history of nations, we cut ourselves off from the history of ideas that transcend boundaries and borders.
Liberalism may have initially manifested in the West due to unique circumstances, but the inspiration for liberalism and its core principles is not the monopoly of one nation or even any single collection of nations. One seemingly forgotten legacy is that of China, specifically how China helped give intellectual legitimacy to early European liberals in the 18th century who argued for free market reforms.
The French economist François Quesnay developed the “Tableau économique” (Economic Table) in 1758, providing the foundations for the ideas of the Physiocrats, an early school of liberal economists. Physiocracy, meaning the rule of nature, was coined in 1767 by Pierre Samuel du Pont de Nemours. Physiocrats believed that economic phenomena operate on a set of natural laws, working independently of the intentions of states and legislators. The Physiocrats believed the economic world was governed by immutable laws, just like the natural world.
The loosely organized individuals who composed the Physiocrats shared the common aim of freeing agriculture, manufacturing, and commerce from mercantilist regulations. The physiocrat motto became “Laissez faire, laissez passer,” “let it be and let it pass,” a term popularized by physiocrat Jacques Claude Marie Vincent de Gournay after he had read Quesnay’s works.
Quesnay’s ideal of agriculture and commerce free from mercantilist regulations was a bold vision that needed to be anchored to representative real-world examples. France’s domestic grain trade and the need for substantial reform became the focus of the emerging physiocrats of the 18th century. In the 1750s, Quesnay was introduced to texts about the history and philosophy of China, which opened a substantial new vista of argument for economic reform.
By the beginning of the seventeenth century, Jesuit missionaries had provided detailed reports of China, enrapturing European audiences. Philosophers Pierre Bayle, Voltaire, and Denis Diderot praised China as an enlightened nation. Unlike Europe, China’s bureaucratic system, the mandarinate, selected members based on merit, not heritage. European kings almost always recruited their administrators exclusively from the ranks of nobles and the clergy, while the Chinese held universal examinations open to anyone, regardless of rank or blood.
Though today we are accustomed to hearing of China “catching up” with the West, in the 17th and 18th centuries, the wealth and efficiency of Chinese society stunned European observers and intellectuals. China was an example of a non-Christian yet flourishing and moral society that challenged notions of European supremacy and universality.
Accounts of physiocracy often omit how China gave intellectual legitimacy to free market ideals. In 1767, Quesnay wrote his book Le Despotisme de la Chine, articulating his positive views of Chinese society. He described the Chinese government as “a government, which is the oldest, the most humane, the largest and most prosperous that has ever existed in the universe.” For his admiration of Chinese morals, Quesnay’s followers dubbed him the “Confucius of Europe.”
Quesnay believed that, unlike European regimes, “the governing institutions of China were built on the basis of natural laws.” Unlike philosophers such as John Locke, who believed in a moral natural law, Quesnay referred to natural laws as economic laws that govern society regardless of our intentions. Quesnay even states that Europe could not rival China in commerce, where “the whole [Chinese] empire is like a huge market.” From Jesuit sources, Quesnay and his followers identified three Chinese policies that France could emulate: increased agricultural productivity, a simplified system of taxation, and an educated administration.
Quesnay’s admiration of China was not delusional but based on the available evidence. Thanks to Dutch trading routes, Chinese goods and art were disseminated throughout Europe. Porcelain pottery from China was adorned with images of harmonious agricultural life that portrayed a faraway country that was prosperous and stable. China was not a pie-in-the-sky theoretical utopia but a real-life representative and complex model for society that the physiocrats used to legitimize their cause. For Quesnay and his fellow physiocrats, a well-run government is based on the principle of “letting the branches grow.”
But beyond institutions, Quesnay, like other European intellectuals, was intrigued by Chinese ideals of leadership. The Confucian focus on leadership through moral example gave European admirers the impression that China was ruled through Sagehood. This indirectly brought Quesnay and the physiocrats in contact with Taoist ideals of leadership.
Taoism is a spiritual and philosophical tradition from ancient China that emphasizes living in harmony with the Tao or the way through simplicity, balance, and spontaneity. Taoism’s foundational work is Lao Tzu’s Tao Te Ching, written in the 4th century BC. A foundational idea in Taoism is that of Wu Wei, which translates roughly to action through non-action.
Lao Tzu applies this philosophy of Wu Wei to government, writing, “The best of all rulers is but a shadowy presence to his subjects. When his task is accomplished and his work done, the people all say, it happened to us naturally.” The naturally emerging order is superior to anything any political leader or party can design. Taoist Chuang Tzu, in a chapter entitled “Let It Be, Leave It Alone,” writes, “I have heard of letting the world be, of leaving it alone; I have never heard of governing the world.” Part of Wu Wei’s ideal in politics is that no personal prejudices interfere with the leader’s abilities. The best leaders reign instead of rule by providing a moral example.
During the Han period, Wu Wei was adapted as a political doctrine of peace and filtered into broader Chinese culture and political thought. Though not directly based upon Wu Wei, the Physiocrats’ admiration and emulation of China resulted in the creation of laissez-faire economics.
By Quesnay’s death in 1774, the ethos of Wu Wei from China was adopted into laissez-faire in France, which quickly spread across Europe. Taoism and laissez-faire economics both acknowledge that to understand the world, we must understand an extended order beyond the human mind’s capacity. This is what libertarians call spontaneous order. As F.A. Hayek wrote in The Fatal Conceit, “To understand our civilisation, one must appreciate that the extended order resulted not from human design or intention but spontaneously.”
Neither Lao Tzu nor Quesnay would be surprised by the failure of centrally planned economies in the 20th century. In that context, even Karl Marx, in Das Kapital, pointed out that “the Physiocratic system provides the first systematic understanding of capitalist production.” The idea that liberalism, laissez-faire, or capitalism are purely indigenous developments originating in Europe is deeply mistaken.
The last two centuries of astounding progress and economic growth are thanks to the popularization and spread of liberalism and laissez-faire attitudes toward the economy. The physiocrat’s predictions about the transformative power of trade have been validated. However, without the example of China, which was influenced by Taoist principles of leadership, the vision physiocrats dreamt of and the reality we live in today would not exist. Those in the West ought to acknowledge our intellectual debts.
