Changing Tradition and Historical Transcendence: Dialectical Equilibrium and the “Ever-normal Law”

The principle of economic stability underlying the Ever-normal Granary—its countercyclical purchase and sale of grain, and intertemporal allocation of resources—is followed from ancient to modern times, and in both China and the West, manifesting the vitality of this economic tradition in ancient China. The theoretical essence of this economic model is the identification of dominant economic resources or factors of production, including labor, as the economic base. By establishing a buffering purchase and sale mechanism, the economic base stays in a state of “full employment”, effectively guiding the full utilization of other resources and production factors and thus exerting a stabilizing force on the economic society. The Ever-normal Granary has its “application”. When we trace the mode of thinking behind this application, we find its “principle” and “essence”. As Guanzi states, “Now all things are born of the two, Yin and Yang, so that a third comes into being.” This philosophical essence, along with the economic principle of “qing and zhong give birth to balance” and the four modes of specific application—primary-secondary coordination (“A but B”), excess being just as bad as deficiency (“A (B) but not A+ (B+)”), impartiality (“neither A nor B”), and flexible adaptation (“both A and B”)—lay the foundation for the dialectical nature of Chinese economic thinking. Its essence is to seek dynamic equilibrium or ever-normal development in the economic society. The essence, principle, and application of economic thoughts in Guanzi shaped the economic worldview of the Chinese—maintaining balance through the mean. Like an “invisible hand”, it has profoundly influenced economic cognition and practice in later generations. To this day, from economic systems and basic economic institutions to major economic policies, all are concrete examples of the modern transformation of such economic tradition. The A-B model, based on dialectical thinking, forms a rigorously logical and mutually supportive framework in accordance with the “doctrine of the mean”. We have reason to call this “ever-normal principle” in Chinese economic thought. In the new environment, the Chinese people unify theoretical logic and historical logic together in the practice, and, with a more inclusive and open holistic view, endow the “ever-normal principle” with fresh meaning. The modern transformation of this economic tradition represents a significant historical transcendence.