The Chinese Mentality and Economical Results
The Chinese Mentality and Economical Results
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. China’s culture prevented the nation from following Adam Smith’s 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...