INTRODUCTION

Confucius, as we know, stressed rule by moral example and opposed heavyhanded governmental control. Mencius extended this bias against state intervention to the economic realm. He suggested that anything beyond a taxation level of “one in ten” is “morally wrong” (III.B.8, Lau).1 Minimal taxation would also have desirable economic consequences: “Tend the fields of grain and flax well, tax their yield lightly, and the people will be prosperous” (7A.3, Dobson). The government, he added, should refrain from fixing the prices of goods under exchange. Since people understand that different things have different value, the prices of goods should be primarily determined by means of people's judgment of the worth of goods: