When stock markets made back some of their losses at the end of 2008, I was hopeful that the economic decline in the US might be easing.  But no.  The past few weeks have brought markets down once again.  Credit has thawed (see, for example, the TED spread) but equities are down again and unemployment is up.  Things will be bad for some time.

So, what would Confucius do?  Or Chuang Tzu? I have written a bit about how Confucians and Taoists might respond to certain aspects of the economic decline but I want to try to pull the ideas together in a more focused manner.   Here goes.

Even though modern globalized markets are not at all a part of the direct experience of the ancient writers, we can derive certain basic ideas from the old books that are applicable to our complex and difficult times.  To get right to it, I think a Confucian-Mencian outlook would stress caring for one another, and a Taoist view would focus on acceptance.  Let me draw both of these ideas out further.

Confucius himself is not afraid of material deprivation.  A person should always, from a Confucian view, place the fulfillment his or her duties to family and close social relations first, before work that might allow for a more comfortable lifestyle.   Remember Analects 7.16 :

The Master said: "Poor food and
water for dinner, a bent arm for a pillow – that is where joy resides. 
For me, wealth and renown without honor are nothing but drifting
clouds.

Now this might suggest a certain basic standard of living that a person must provide for his or her own family.  If a head of household loses a job, and there is no money for food and rent, then what?  Not a matter of conspicuous consumption, but a need for the basic elements of life?  It is then that, I believe, a Confucian would urge us to care for one another.  The first line of defense should come from family and neighbors and friends. 

Concretely, a Confucian would stress every individual's affirmative obligation to relieve the distress of those closest to them.  If a relative is in dire straits, family members should offer help.  If a neighbor is having trouble, those nearby should offer assistance.  Those who have more than they need to provide the basics for their own family, should give to organizations like local food banks, which respond to the needs of the immediate community.  Other kinds of charitable giving would be good, but a Confucian would want to emphasize closer personal connection.  Actually going down to a place like the Berkshire Food Project, helping to cook the food and distribute it, those sorts of conscious and active involvements would come closer to the Confucian ideal of performing one's duty.  Physically going through the well intentioned enactments (which is what Ritual is all about) is better than writing a check.  The actual doing of the act makes us better people.

What of government policy?  Confucians would focus less on "stimulus" and more on "assistance."  What do people need to get through difficult economic times?  A Confucian president (and I do not think that Obama is a Confucian president, he merely has certain Mencian aspects) would want to make sure places like the Berkshire Food Project could keep up its good work.  I think this passage from Mencius (which I know I quote a lot) says as much:

"If you want to put my words into
practice, why not return to fundamentals?  When every five-acre farm
has mulberry trees around the farmhouse, people wear silk at fifty. 
And when the proper seasons of chickens and pigs and dogs are not
neglected, people eat meat at seventy.  When hundred-acre farms never
violate their proper seasons, even large families don't go hungry.  Pay
close attention to the teaching in village schools, and extend it to
the child's family responsibilities – then, when their silver hair
glistens, people won't be out on roads and paths hauling heavy loads. 
Our black-haired people free of hunger and cold, wearing silk and
eating meat in old age – there have never been such times without a
true emperor." (1.7)

This is not to say that the government should directly provide food (chickens and pigs) and clothing (silk) to people, but it does suggest that the government should concern itself with facilitating the acquisition of these sorts of essentials.  Thus, a regulatory regime that did not obstruct people from getting what they need ("proper seasons") would be a Confucian goal.  Also, something like occasional direct payments to people (a la the "stimulus checks that were issued last year) would be supported, for the purpose of sustenance and only secondarily for "stimulus."

And notice, too, that maintaining education in hard times would also be a Confucian priority.

All in all, there is an old fashioned liberal quality to the Confucian response, a focus on serving the people, providing for their needs, before any concerns about bailing out banks or finding new investment opportunities.

Taoists would, predictably, be less interventionist.  "Acceptance" is, to my mind, a central theme of Chuang Tzu, and that sensibility would have implications for the current crisis.  I think a Chuang Tzu Taoist would counsel acceptance at both the individual and government levels.  Those beset by economic hardship should not read into their situation any sort of moral lesson. They are not bad for having run into difficulty.  They are simply caught up in the turbulent transformation of that part of Way termed "economy."  How else can we understand this passage (which is another of my oft-quoted):

Birth and death, living and dead,
failure and success, poverty and wealth, honor and dishonor, slander
and praise, hunger and thirst, hot and cold – such are the
transformations of this world, the movements of its inevitable nature. 
They keep vanishing into one another before our very eyes, day in and
day out, but we'll never calibrate what drives them.  So how can they
steal our serenity, how can they plunder the spirit's treasure-house? 
If you let them move together, at ease and serene, you'll never lose
your joy.  And if you do this without pause, day in and day out, you'll
invest all things with spring.  (75)

Just let economic circumstances wash over you.  Find what is possible, let go of what is untenable.  Certainly don't live in the past.  Eventually, things will turn around and you will ride Way up just as you had rode Way down.

A critique here might be: but that doesn't help me pay the rent.  And that is true. Taoism is the least instrumental of all of the schools of pre-Qin Chinese thought.  So, if you really need to pay the rent, you should probably look elsewhere for workable ideas.  What Taoism can do, however, is to show you how to not let the rent get to you…

At the level of government, Taoism would not offer a fifteen point plan for active reform of the economy.  There is something of a laissez-faire attitude in Taoism generally, which would suggest something closer to libertarian non-intervention (though not, perhaps, of the Cato Institute variety).  I do not interpret wu-wei ("nothing doing") as literally no action at all.  Rather, I would read it as not too much action, and only that which accords with the unfolding of events.  To extrapolate this to the current moment, any Taoist policy (and the very terms seems an oxymoron) would aim not at "stimulus" or investment, but, rather, at mild redistribution.  Take passage 53 of the Tao Te Ching:

Understanding sparse and sparser still
I travel the great Way,
nothing to fear unless I stray.

It's vainglorious thievery –
not the Way, not the Way at all.

There's an anger there.  A disgust at those who profit off of others: it's "not the Way at all."  It would seem then, if undue economic inequality is unnatural "vainglorious thievery," that taking from those with much and giving to those with little might be countenanced by a Taoist Secretary of Treasury.  Not too much, but some redistribution. 

So maybe, pace the Western Confucian, Grover Cleveland is not the paradigmatic Taoist President. But neither would be FDR or LBJ or other establishment liberal icons: they are simply too interventionist.  It would be someone who does not fit neatly into our categories of liberal or conservative, someone who would be generally non-interventionist but open to some redistribution…

What would unite Confucians and Taoists, however, might be the thng that is hardest for Americans to take: accepting a more modest standard of living, simpler food, plainer clothes, basic housing, a "bent arm for a pillow."  But that is what we seem destined for….