An Inquiry into 優合 Capital
（exploratory draft）
Foreword
We have been in the Chinese-medicine world for more than ten years now, and have come to feel deeply the depth and richness of Chinese medicine — like a cry of "open sesame!" unlocking a treasure vault of every color, every surface covered with rare and strange jewels. Whether in treating illness or in keeping a person well, Chinese medicine plays a remarkable, singular role. But what has given us the most, more than anything else, is the way of thinking that runs through Chinese medicine from earliest times to the present day.
This way of thinking derives from the best of our traditional culture. It infuses every step of diagnosis, treatment, and daily care. It is the fundamental guarantee that Chinese medicine works — that ordinary people accept and welcome it — and it is the only standard by which we can tell good Chinese medicine from bad, real from counterfeit.
We say "Chinese medicine," and the phrase is normally understood as *zhongyi* — the medicine of China. But it should really be understood as the *medicine of the middle*: a medicine seeking *zhong* (中). The core of Chinese-medical thinking is that one character, *zhong*; and the movement toward *zhong* — that is, the achievement of balance and harmony — is captured in another, *he* (和, harmony). "Philosophy" is a term of Western origin; if we define philosophy as the way of thinking that governs all disciplines, then the soul of Chinese-medical philosophy is *he*: harmony between human and nature, harmony between human and society, harmony of the body within itself. The whole of human history is a process of seeking harmony; humanity has progressed and developed through that seeking.
"When the way is open, be a good minister; when it is closed, be a good doctor." This old saying already sensed the universal applicability of Chinese-medical thinking. It can treat illness; it can also govern nations. It has something to say to politics, economics, the military, culture, science and technology. Once we have climbed out of the swamp of "struggle philosophy" — that muddy pit of "struggle forward, stop struggling and fall back" and "what joy is it to struggle with heaven, with earth, with one's fellow humans," right down to "rebellion is justified" — once we review the past, squandered years and all, we may blame the world, blame society. But the one who most needs dissection is the self — and the habit of adversarial thinking carried inside.
For the last ten years or so, we at Pingxintang have been practicing, testing, and refining this way of thinking in our small corner of the world. On the whole, it has worked. Chinese medicine has helped people's health, and it has also reshaped and enriched our own minds. People often ask what the Pingxintang growth story is, and what follows is our summary. Call it not experience but understanding.
1. Begin with strong points
Seeking harmony is a process of seeking strong points. Any normal person must have some: a person without strong points does not exist. Regardless of age, sex, status, or wealth — regardless of whether one fishes, woodcuts, farms, or herds, or where one lives — every person has strong points, advantages, distinctions, specialties, whether physical or mental. For years we have been in the habit of hunting for our own shortcomings and others' flaws, treating criticism and self-criticism as our magic weapon, and forgetting that what we really should catch — in ourselves and in others, any time, anywhere — are the strong points.
A person survives and develops in society by drawing on strong points; an organization, a country, a people survives and develops on earth by drawing on strong points; we work with others because we have noticed a strong point in them; an organizer, a manager uses people precisely by drawing out and putting those strong points to work. Society from ancient times to today has universally despised self-abandonment and been repelled by an obsession with flaws — precisely for this reason.
Once you see your own strong points, your advantages, your distinctions, you know how to play to your strength and work around your weakness. "Playing to strength and avoiding weakness" is not the same as "using the long to make up for the short" — short cannot easily be lengthened. Mao Zedong's strengths were politics, strategy, military, history, literature; had you forced him to make up math, physics, chemistry too, could he still have been Mao? Chen Jingrun's strength was mathematics; if you had pressed him into social-relations work, could he still have cracked Goldbach's Conjecture?
"Knowing oneself is clarity." Only by knowing your own gifts can you be confident; only by following nature can you move from the necessary to the free. Zhuangzi says: "Though a bird's neck is short, to stretch it out is sorrow; though a crane's neck is long, to cut it shorter is grief." The sky is high for the bird to fly; the sea is wide for the fish to leap. Give the bird gills, give the fish wings — the bird still cannot enter the sea, and the fish still cannot rise to the sky. If Zhuge Liang had charged into battle with a blade, if Zhang Fei had sat waving a feather fan, if Song Jiang had gone thieving for gold armor, if Shi Qian had become an imperial guards instructor — could any of them still have been the figures we remember? By contrast, a person who knows themselves, is confident, and plays to strength can fill their life with sunlight, and tune their note to the progress of society.
"Humility advances the person" — when humility means seeing others' long points, living in harmony with them, and filling in one's own gaps, it really does advance the person. But we should also see that "pride advances the person." We take pride in our strong points, in our progress, in our successes, in the flourishing of our country. None of the great-deed-doers of old ever lacked pride. Of course pride is not the same as hubris, not the same as looking down on everything. But it is pride that gives confidence; otherwise, one walks hesitantly, speaks falteringly, and runs dry before anything is done — how then to advance, how then to succeed?
No one is without shortcomings, but Lenin said: "A person's shortcomings are often the continuation of their strong points. Strong points displayed at the wrong time, in the wrong place, beyond the limits they should keep, become shortcomings." The unity of strength and weakness tells us exactly that every long has a short, and every short has a long. Eliminate someone's shortcomings entirely, and their strong points will vanish too.
By Lenin's reading, then: shortcomings are strong points used at the wrong time, the wrong place, the wrong conditions. When you truly cannot find a person's strong point, think about what you most dislike in them — the strong point is often hiding just behind that.
Take "selfishness." It sounds bad; anyone labeled selfish finds it hard to hold their head up. But in truth selfishness is a fine quality: only with selfishness is there competition; only with competition does society progress. At the root — at least at this stage — selfishness is the source-engine driving social advance.
It is only when selfishness is used in the wrong place that trouble begins. Someone calculates every petty gain, thinking that by loafing a little and doing a little less, he has come out ahead — only to have his own earnings shrink and his capital depreciate. Or someone runs a red light, thinks he got away, and is the first into an accident. A self-serving person who also has social conscience, who grasps that "one for all, all for one," is a clever, or "high-grade," self-seeker. The stupid, low-grade self-seeker is the one who robs banks for gain, kills for power, embezzles for wealth, runs red lights — in the end, harming others to help oneself always comes back to harm oneself, and society or history will punish it.
Seeing others' strong points is equally essential. Some people have a habit of criticism, believing criticism to be the best educational tool, and can always justify it: "He did wrong — shouldn't he be criticized?" But for strong points used in the wrong place, there is no need to swing a cudgel; correct guidance can accomplish the same goal. We have long had our fill of the embarrassment and humiliation of face-to-face criticism, and tasted enough of the suspicion and bitterness of back-to-back criticism. Unrealistic demands for perfection tend to produce the opposite of what they aim at.
Criticism is a solvent that eats away at solidarity. Even well-meant criticism begins from a focus on error, on problems, on shortcomings — and the world has yet to produce a miracle of "solidarity" built around error, problems, and shortcomings. Behind the dignified tone of much criticism there is usually nothing dignified: fixing on another's shortcomings makes it easier to excuse and cover up one's own; seizing on another's weakness makes it easier to shrug off one's own responsibility. Worse still, envy is given a stage — not to push you forward together, but to drag you backward together. Once you make a habit of staring at others' faults, you have, without realizing it, turned your own surroundings into poison weeds and thorns.
Is management not the discovery of problems, the correction of errors, the plugging of leaks? Yes — but we must never forget that management's purpose is to spread strong points and advantages, to mobilize enthusiasm, to cultivate a sense of ownership, to improve the coordination of work, to deepen the solidarity of the whole. Management that sees only "error" and "problem" is stupid, low-grade, inefficient management — and is itself "wrong management."
A flaw does not cancel the jade. Not because "the white jade has no flaw," but because of where your gaze falls. Turn the eye from the flaws and problems to the strong points, and you will see a different world. Temporary bias, petty disputes, sinking complacency — all melt away, replaced by close cooperation, unspoken backing-up, a rising spirit.
Learning from others' strong points, rejoicing in others' progress and successes — that is the deepest respect one can offer another. Respect another, and respect for yourself returns naturally. Mutual learning and mutual respect will ripen into mutual understanding, mutual cooperation, mutual momentum. Each of us lives among everyone else's strong points; each of us enjoys another's respect. It will carry us all into a field of blossoming flowers; the combined force, lift, cohesion that grows from this will push us into a new territory of prosperity, flourishing, breadth, and freedom.
2. Strong points are latent capital
What is capital? The dictionary keeps revising its definition: once it was "funds the capitalist uses to extract surplus value"; now it is "means of production and currency used for production or operation in pursuit of profit."
Is the definition right? If we accept it, how are we to explain today's popular talk of "knowledge-capital" (with knowledge as capital), or phrases like "health is the greatest capital" and "integrity is the greatest capital"? Must capital be a purely material concept? Must it be only a word with a pejorative tint?
The distance between this definition and real society is too great; the gap between it and ordinary understanding is too wide. And the class coloring imposed on it is too thick — enough to frighten anyone away. Who would want to be sorted into the "capitalist class" just for having some capital?
So we have drafted a new definition:
Capital is a spiritual or material factor, or form of strength, that can embody value and produce returns.
Concretely, what is capital?
For an individual: money, a home, property, land, securities are capital; knowledge, skill, ability, technical proficiency are capital; experience, connections, courage, wisdom, social ability are capital; diligence, perseverance, integrity, loyalty, will are capital; and even physical constitution, energy, appearance, family background, interests, personality — all can become capital. Material or spiritual — in sum, a person's strong points, the things that distinguish or exceed others, are their capital.
Similarly, for an enterprise or group: its people-combination, funds, stock, land, equipment; management, efficiency, quality, culture; brand, reputation, environment, market; the grasp of timing, the grasp of policy, the leverage of relationships — all of these are capital.
Capital, then, looks like this:
Material capital has been in plain sight for years; there is no real dispute. That knowledge is capital — we now have the word "knowledge-capital" (知本) and broad social acceptance.
Treating morals and character as capital — examples are everywhere. Li Ka-shing, when his firm was close to bankruptcy, was rescued by integrity and reputation: people helped him and trusted him, and he was able to come back. To sum up his own success, he changed his given name to "Ka-shing" (嘉誠) — "*cheng*" meaning sincerity. Sincerity was his greatest capital.
Intelligence is capital. Read ten lines at a glance, cite the ancients and the present — we admire it; remember every page, recite any text backward — we marvel at it; and even learning without a teacher, skill without training, "no schooling but plenty of method" is often the capital a self-made person is proudest of.
Background is capital, and there is no need to argue whether you are "a tiger cub from a general's house" or "a rat's child digging a hole." Even the phrase "a hundred-legged insect does not wobble even after death" captures it — background provides advantages that others do not have. That, too, is no small capital.
Looks are capital, and capital given at birth. When an actress wins over her audience by her beauty, she demonstrates the value of beauty. Maradona loved football from childhood and became the world's "football man"; Gao Qiu in *Outlaws of the Marsh* kicked so well he kicked his way to "Minister of Defense" and "Prime Minister"; Xiangxiu in *Grand Mansion Gate* went from dog-carrying servant to the head of the household — by her luck with dogs. Are these not, by any standard, capital?
Capital is thus everywhere, and in every color. There is no need to envy another's capital; every one of us has capital worth envying. Some of it is so hidden we do not even see it ourselves; some has been covered with dust by a frantic society; some simply lacks a chance to show itself.
Strictly speaking, what we have described above is *latent* capital. It only becomes capital when it enters a combination that lets it express value or produce returns. What others could not do, or could not do well, our latent-capital-holder has done — not merely done but done with visible value. The latent becomes the actual. Whether others envy or resent is their concern; our own success is the real thing. Small latent capital should not be dismissed. Once conditions are right, a tender shoot can grow into a towering tree. Once latent capital starts working in a compatible combination, the arithmetic is not 1 + 1 = 2, nor only the stock market's daily leaps. Some of it can turn into overnight fame or sudden wealth, and some into lasting greatness in the record of history.
3. The necessary conditions for latent capital to become capital
Latent capital, in order to embody value, yield benefit, and become real capital, must enter combinations. This is a necessary condition.
However capable a person is, he cannot possibly live outside various combinations; however much latent capital he holds, without joining a combination its value cannot appear, and its benefit is zero. Even Robinson Crusoe needed Friday; even the strongest of heroes, "strength enough to shoulder a mountain," needed his eight thousand followers. Some say, "I can do it all myself on the internet." Is that really so? Without demand and market, without materials and products, where do value and benefit come from?
What is true of a person is equally true of a group, of an enterprise, of a nation, of a people: one must be inside one or several overlapping combinations — large or small, good or poor, tight or loose. Without combination, no value and no benefit; there is, strictly, no capital.
But joining a combination and thereby becoming capital is only the preliminary condition for value and return. Whether the capital actually appreciates depends on the nature of the combination. We can divide combinations broadly into *benign* and *non-benign*.
What is a benign capital combination? A benign combination is a combination of strong points, a harmonious combination, a fair combination.
*In composition* — it is built from each member's strengths, not their weaknesses. Inside it, each member's capital gets the chance to embody its value, and appreciates together with the combined capital. The result is a benign pattern of mutual reinforcement and shared growth. Under such conditions, value and benefit can be magnified tenfold, a hundredfold, a thousandfold.
*In organizational form* — a benign combination is also a harmonious combination: individual freedom within a unified will; mutual respect within shared discipline; room for each member to play to strength, and a shared platform that makes that possible. A harmonious combination yields economic benefit and also advances a harmonious social civility.
*In distribution* — a benign combination is a fair combination. Its principle is distribution according to *capital*: each member joined by putting in their own capital, so the fairest distribution is in proportion to each member's capital share. The more capital one invests, and the more scarce it is, the greater the value expressed and the returns earned, the larger the share deserved. By this light, everyone is a "capitalist." This fairness is also a fairness of social-capital value, no longer measured by a single ruler — "labor-time" — but by a multidimensional standard: a standard of the whole rather than the part, connected rather than isolated, real — that is, broadly recognized by society — and current — that is, fit to today's actual conditions.
A benign capital combination that has all three of the above features we call, for short, 優合 capital. People join 優合 capital hoping their own capital will appreciate. Why do people look for respectable companies, for successful enterprises? Precisely to see their own capital lifted. Leap once through the dragon's gate, and your standing doubles. Choose poorly, and if you land in a combination in decline, bankruptcy, liquidation, or closure, your capital crashes with it.
優合 capital wants its members' capital to grow, and will therefore keep providing opportunities to study, train, and practice. If a member cannot grow and cannot match the combination, sooner or later a parting is necessary. Similarly, if a combination cannot let every member's capital grow and yield due returns, the member will inevitably look elsewhere for a combination where the capital can fully express itself — what we usually call "switching jobs." When the non-benign character of a combination reaches an extreme, and such combinations are the norm, and switching offers no remedy — the only path left is to break the non-benign combination and build a benign one. That is when revolution happens.
This mechanism of mutual constraint is the inner engine by which each member's capital and the combined capital keep growing. The shared growth that comes from mutual adaptation has driven the flourishing of society and the progress of history.
4. The philosophy of *he* (和)
優合 capital is precisely an expression of the *he* (harmony) form of thinking in Chinese medicine — the application of a universal law under the guidance of the philosophy of *he*. In Chinese medicine, the best state of life is *zhong* (中), balance between yin and yang; the mechanism by which *zhong* is achieved is *he*, harmony; *he* is the universal, fundamental law.
"Contradiction is the fundamental cause of development," we have been told. But even the concept of "contradiction" here is unclear: it lumps together difference, problem, and opposition. If it refers to the reconciling of differences or the handling of problems, there is some truth in it. But if it is swapped for "opposition," it is completely wrong — because at its root, harmony is the fundamental cause of development. Why does anyone put "solidarity" first, or make "stability" the foundation? Precisely because only harmony and reconciliation bring social progress and successful enterprise. A life of endless squabbling, palace-intrigue, even the deliberate provocation of war and disorder — what "progress" and "development" can there be in that? To call war a driver of co-prosperity, to call chaos the bringer of progress — is that not the logic of the bandit and the fool?
"Isn't it exactly because contradictions exist that we must speak of solidarity, of harmony? Contradictions are universal, absolute; the reconciliation of contradictions is relative; it is the unity of opposites that is the law" — is that correct?
Let us look at what "contradiction theory" and "優合 theory" differ on.
The first difference is the starting point. Contradiction theory starts from contradiction, from opposition; 優合 theory starts from seeking strength, seeking harmony, seeking fairness. Contradiction theory looks first for contradiction, problem, shortcoming; 優合 theory looks first for the strong points and the points of harmony.
The second is the path and means of reaching the goal, the unity. Contradiction theory holds that solidarity is reached through struggle; 優合 theory holds that solidarity is reached through the seeking of strength and harmony. Contradiction theory holds that opposites' unity is each opposite existing on the other's condition, each turning into its opposite. 優合 theory holds that opposites are in themselves the same: they exist relative to *zhong*, which is the best state of their being, and *he* is the path by which they reach that best state — the necessary, ultimate route of their transformation.
The third is the outcome. "When yin and yang are sundered, the vital essence is gone." Struggle between contradictions cannot produce solidarity; in fact, it more often produces division — solidarity on the face, division underneath; a "you die or I die" gain-for-loss between the two sides of the contradiction, which sows the seed of still deeper contradiction. The outcome of 優合, by contrast, is real solidarity: inner fusion, shared progress and development, the "everyone lives better" outcome.
If contradiction is absolute, how can the absoluteness of problems and flaws bring about absolute progress? Conversely, if social progress is accepted as absolute, there must be absolute, ever-present strong points and points of harmony inside things driving that progress. It is precisely the absolute, universally-present latent tendencies toward strength, harmony, and balance — present in all things — that are the fundamental engine of history.
Contradiction is not equivalent to opposition. "Use your spear to break through your shield" seems to be an unsolvable puzzle, but in practice it is a false premise. The warrior holds spear in one hand and shield in the other; the tank combines attack and defense; flowers and weeds both live in society; a country carries on both defense and construction. Spear and shield are not opposed; they are coordinated — not in struggle but in harmony. Between the two terms of a binary there is always a "three"; between advanced and backward there is always *zhong*; and *zhong* is precisely the overwhelming majority, the absolute, ever-present mainstream. We often understand the motion of two terms as "three." This slightly differs from our usual understanding of "three" but in substance is the same. The traditional Taiji diagram looks as if it divides into two halves, black and white, yin and yang — but not by a straight line. The halves move, exist, merge, and wax and wane relative to the central S-curve. The S-curve is *zhong*; the Taiji is *he* moving toward it.
The contradiction-opposition view that splits the world in two is in essence splitting it into "I" and "not-I." It grew from the Western hegemonic culture of "self-as-root." "Self-as-root" differs from selfishness. Selfishness is weighted toward the self — self first, self satisfied — but does not necessarily set up opposition with others. "Self-as-root," on the other hand, eventually lays down the posture of "what is mine is mine, what is yours is mine, the whole world is mine" and "I obey myself; you shall obey me; the whole world and nature too shall obey me." Needless to say, a culture shaped by that philosophy may win for a moment, but has no lasting life.
Our conclusion, therefore, is: precisely because points of harmony exist, solidarity, harmony, reconciliation become possible. Sometimes the harmony points are latent, but beyond question strong points and harmony points are universally present in every thing and every process of its development. Nothing without strong points and harmony points exists. Therefore 優合 is absolute; the struggle of contradictions is only the temporary, relative phenomena that arise within the 優合 process.
**The philosophy of *he* is the core idea of 優合 capital. *He* is the indispensable tool, the one we cannot put down for a moment.**
5. The culture of *he*
優合 capital is also an expression of the *culture* of *he*.
What is culture? The culture we are speaking of here is not literacy or bookkeeping or being well-read, but culture in the broad sense. One dictionary defines it as:
"The sum of all material and spiritual wealth that humanity has created in the historical process of social development."
That is too broad, too vague, and not in keeping with our ordinary sense of the word. We find another definition more apt:
"A spirit, character, style, and tradition that a group forms through shared, long-sustained effort."
First, culture must belong to a group — a single individual cannot form one. The group can be an association, enterprise, or industry; a region, country, people; even the world. Second, culture forms through deliberate human effort; it does not fall from the sky or arise by accident. Third, culture is not made in a day; it requires a long accumulation, sedimentation, and transmission. Fourth, culture belongs to the spiritual realm: though "when food and clothing are sufficient, people know honor and shame" — so material wealth is not wholly irrelevant — by no means does more money mean more culture. Culture is a spirit, a style, sustained over long time until it becomes a tradition.
Culture cannot be seen or touched; it cannot easily be measured or evaluated. Yet it can be felt; it is an invisible force, sometimes stronger than anyone imagines.
When a country takes pride in diligence, courage, tolerance, integrity, and harmony, its self-reinforcing combined force lifts it to prosperity. When a country instead makes arrogance, selfishness, deceit, laziness, and narrowness into fashion, its decline is foretold.
A unit of the army may fight to the last man on the battlefield, yet so long as its tough, unyielding spirit survives, it will reform as a morale-filled, indomitable team. That spirit, that style, that bearing — that is the culture of that unit.
China is an agricultural country. Our soldiers and workers mostly came from peasants. They have been called selfish, narrow-minded, ignorant, and yet through their loyalty, toughness, and diligence they have become fine soldiers and outstanding workers. Our intellectuals have been called dogmatic, old-fashioned, proud, and cowardly; through their intelligence, rigor, and perseverance, they have shown their worth. From a cultural standpoint, these traits have all been shaped by the best of traditional Chinese culture.
*He* is the mainstream of that traditional culture. Several millennia of civilization have had their unharmonious currents — official-rank-worship, patriarchal-family system, and the like rotten "rule-by-man" cultures — but alongside abetting autocracy they have also strengthened moral transmission, social cooperation, and national unity. Similarly, the selfish culture of "man does not act for himself — heaven and earth will destroy him" has long been submerged by cultures of "the rise and fall of the state is the concern of every common person" and "the world is for everyone" — cultures that take the world as one's own charge. That we are a country this vast, this populous, this stable, we owe to the culture of *he*: Laozi's "Dao patterns itself on nature" and its message of heaven-human unity; Confucius's "middle way of *he*" soaked into our middle-path temperament; the repeated great fusions of peoples inside our borders; and great outward exchanges like Zheng He's voyages across the seas.
And think of "Unity, intensity, seriousness, vivacity" — the culture that moved from the Yan'an-era resistance academy to the whole country; "Study hard and make progress every day" — the culture of childhood in the new China; "When oil workers let out a shout, even the earth will shake three times" — the culture of Daqing; "Dare to fight, dare to die" — the culture of the Hard-Bone Sixth Company; "Self-reliance and leaping splendor" — the culture of China's space industry…
These cultures were once the spirit of a single group, a single region, a single period; but over time they have joined the culture of our people. Invisible as they may be, their force is not to be underestimated. They have become a powerful motive force of national revival and Chinese rise.
In some Western cultures, the "self-as-root" culture of opposition — which uses "self" and "not-self" as the sorting standard and encourages plunder — also encourages irrational behavior that violates the laws of nature and overstates the self. Such a culture has the useful sides of strengthening individual consciousness, advancing social division and exchange, and resisting dictatorship; but lacking *he*, it will in the end be absorbed into the *he*-culture.
All cultures have advantages and particularities, each painting the world in its own colors — and humanity has stumbled forward under the soaking, the pressure, of these many cultures. But a good culture must be a gathering, merger, inheritance, and amplification of each member's specialties and strengths. We call such a culture the culture of 優合 — the culture of *he*. We can foresee: the day 優合 becomes culture, when "harmony-yet-diversity" is accepted by people everywhere as a voluntary act, a habit, a tradition — that is the day Fei Xiaotong spoke of: "Each beautiful in its own way, beauty in the beauty of others, beauty shared among all, and the whole world at one."
The culture 優合 capital needs is exactly this kind of culture, and this culture will in turn feed 優合 capital's appreciation. 優合 capital, in turn, gives that culture a broad and solid platform on which to grow.
6. Misunderstandings of fairness
The third feature of 優合 capital is the fairness of distribution. What is fairness? The dictionary says: "To handle affairs with reason and sentiment, favoring no side." What we want to say is: "To distribute with reason and sentiment, favoring no side."
In pursuit of fairness, people have sought for thousands of years, and have at last made "labor" the sole yardstick of fair distribution. So we made "distribution by labor" today's fairness, and set "distribution by need" as tomorrow's ideal.
"Distribution by labor," "payment by labor" — these have been shouted for more years than we can count. But when have we actually seen it? Where have we seen it? We have seen manual labor that faced the yellow earth, the back to heaven, a sweat-drop splitting into eight — and could not at year's end guarantee one's own ration. We have seen mental labor so intense that food was forgotten, the lamp lit through the night — only to find that "the atom-bomb maker earns less than the tea-egg seller." Neither could compete with merchant profit, to say nothing of the windfalls in real estate and stocks. Against this reality, "payment by labor" is a castle in the air; it might as well be a madman's dream.
Why does distribution by labor not produce fairness? Labor cannot be measured scientifically: neither "necessary time" nor "required schooling years" can capture labor's value, let alone link it to its benefit. And the concept of labor is too narrow. The sharp divide between "working people" and "non-working people" was absurd: intellectuals were long shut out of the working-people category, until Deng Xiaoping's formulation — "science is the primary productive force" — finally let them back in. Today, "non-working people" covers more and more ground, and using labor as the yardstick of distribution grows more and more detached from reality, more and more unfair.
Even worse, "distribution by labor" badly devalues the person. It recognizes only "labor," not the value of the labor-doer; it does not acknowledge the capital a laborer possesses (as described above), nor the value that capital embodies or its potential for appreciation. It further refuses to recognize other kinds of capital inputs — either writing them off as "exploitation" or ignoring them entirely. This both hurts the enthusiasm of social élites and artificially manufactures social conflict — exactly the opposite of the harmonious, stable society we hope for.
Genuine fair distribution is distribution by capital — call it "distribution-by-capital." As we said: in 優合 capital, each member joins by contributing their own capital, embodies value through the capital combination, and earns returns according to the share of their capital inside the combination.
One will object: in a combination built from diverse material and spiritual capitals, each of varying size and form, how is each capital's share to be valued, and who should do the valuing? This looks like an unsolvable puzzle; there is no calculation formula to hand. But if we change thinking — applying *zhong* — we find the answer simple to use, and already broadly practiced. It is the socially-average-value standard: a multidimensional standard that is whole rather than partial, connected rather than isolated, real — that is, broadly recognized by society — and current — that is, fit to today's actual conditions. This standard varies reasonably by industry, yield, region, and period, within limits constrained by the combination's normal operation. Overvaluation or undervaluation is punished by law and reproached by society. Some will of course persist against reason and regardless of rebuke; they will either fail to fit any combination, or suffer the punishments of law, and in the end accomplish nothing.
Only distribution-by-capital inside 優合 capital can ignite every capital's potential for growth. Each capital's growth lifts the combined capital's growth; the combined capital's growth in turn lifts each. This is the seeking-strength, seeking-harmony, seeking-fairness of 優合 capital — an engine hard to restrain, bringing benefits hard to estimate.
Given how familiar everyone is with share-holding, we can look at a capital combination as a "share-holding" where each member puts in his own capital as shares — with differences: conventional share-holding recognizes only material capital and a few special intangibles, while the capital combination recognizes the full capital investment of every member. Conventional share-holding is relatively rigid; a capital combination keeps optimizing. Conventional share-holding has relatively fixed inputs; the capital combination's inputs change as needed. As technology advances, people enter the combination with management as shares, with technology as shares, with science as shares, with market share as shares, with every kind of advantage and specialty. No one can do without the others; their blending becomes inseparable. Material capital takes an ever-smaller proportion; research, technology, management, and market take ever-larger proportions. Member capitals converge toward balance.
The balancing of capital brings equality and harmony for each combination member — the true "from each according to ability" (another phrasing of "each playing to their strengths") fair distribution (not "to each according to need" but "to each his proper place"). Capital balancing will further promote a trend toward distributional equality. This does not mean "to each according to need" becomes reality overnight, but with the maturing of capital combinations, we will gradually approach it. This is a natural process; no one can stop it, and no one can force it ahead of its time; every violation of its law produces the opposite of the intended effect.
7. Misunderstandings of capital
Our definition of capital is "a support or reliance that can embody value or produce returns." To further correct the misimpressions of capital that people carry, we now dissect the main errors.
Misunderstanding 1. Capital is filthy.
Mention capital and one cannot help but recall the "blood and filth dripping from every pore of capital," the "slaves frozen and starving," the crises, recessions, and waste it has caused… all these evils have been attributed to capital's profit-seeking nature. Hence "proletarians of the world, unite," seize power, seize the means of production — that is, seize capital. We changed capital's ownership through revolution, but we must see clearly that we did not change its profit-seeking.
Any capital will find a way to embody value or produce returns; any capital will flow in the direction where value is most fully embodied or returns are largest. This is the profit-seeking of capital. Any capital — whoever owns it — is profit-seeking. That seeking is not filthy; it expresses the principle of competition; it is a positive upward force. Today's reforms, the building of market mechanisms — all of this opens broad space for capital's profit-seeking. A real reform, a good reform, must obey this law; otherwise one risks falling into false-reform, false-market swamp. The slogan "I'd rather socialist weeds than capitalist sprouts" is reactionary, reactionary precisely because it violates this law.
Capital does not willingly waste itself. Even what cannot yield today is storing, watching. It cannot "give" without seeking return, either: even a sacrifice of small, temporary, near, partial interest is for the larger, longer, overall interest (and we cannot exclude disguises worn to extract real return).
If you have capital, seek return. If you have knowledge, ability, strength, wisdom, embody value and produce returns. Sitting unused on your own capital, waiting for pies to fall from the sky, violates the law of capital: it deserves no sympathy and should not be accommodated or indulged by society. Such self-degradation is usually the fruit of bad policy, of excessive welfare. Rewarding laziness and punishing diligence only pushes society backward. Social welfare for the elderly, young, sick, and disabled is reasonable and beyond question. But if such provision extends to idlers and speculators, it betrays the original intent of "human rights" and "humanity," and is in essence a disregard of capital, a violation of others' rights, and an inhumanity to others.
Misunderstanding 2. Capital is unchanging.
Once one was labeled of "capitalist" status, it stuck for life and was visited on the offspring — generations bearing that label. This bred the impression that capital does not change.
In fact capital has a mobility. Capital is always either appreciating or depreciating; no capital is unchanging.
Tangible capital — material capital — changes constantly. It gains and loses in the capital combination's operations, it expresses value or loses it in the combination's use; and even stored fixed assets like land, funds, and stocks fluctuate constantly.
Intangible capital — spiritual capital — moves even more. It may leap forward as in the progress of knowledge and technology; it may decline year by year. Experience accumulates; knowledge grows; technique sharpens; ability increases; connections open; character matures — all of these appreciate capital. The opposite depreciates it.
Using capital is a necessary condition for appreciation. Correct use will necessarily make capital grow. Even inside a combination, leaving your own capital idle means depreciation. In capital's movement there is no "lifetime repose," no fixed wealth or return. "Stop advancing and you retreat" — that is the best gloss on capital's mobility.
Capital in use is constantly being transferred: for example, the market changes a salesperson tracks, the network expansions and contractions a service worker sees, an enterprise's market share, a country's shifting allies. All of it changes at every moment.
The most critical factor in capital's movement is the combination. Inside a benign capital combination — that is, inside 優合 capital — every capital appreciates with it. If you want your own capital to appreciate, first maintain the combination's appreciation. If a member capital cannot push the combination toward the benign, either look elsewhere for a benign combination, or break the present one and build anew. Following the law of profit-seeking, achieving capital appreciation — this is a change in a benign direction. All of society should encourage this kind of change, and provide the necessary conditions for it.
Misunderstanding 3. Capital is private.
Strictly, latent capital is private: your intelligence and learning, gold and jewels, house deeds and securities all belong to you. But as we have said, latent capital becomes capital only by joining a combination. Once it has joined, yours is no longer yours alone: your funds, property, equipment, cleverness, talent, character, courage, experience, connections, appearance, and physical health are shared by the capital combination. Each capital is shared by the combination; the combined capital is shared by each. From this angle capital is not private; at the very least it is shared.
We used "shared" rather than "collectively owned" because once capital leaves the combination it reverts to privacy; but the moment it leaves, it also becomes "latent capital" again — that is, no longer real capital. So "shared" capital is for practical purposes equivalent to "collective." "Private capital" is, in effect, a false proposition. What has real, practical meaning is capital's "collectivity" or "sharing."
The "private property" we speak of is only property, not capital. The reason people often conflate property with capital is that the social status, relationships, and reputation property brings often enter the capital combination silently as intangible capital. Only when property and capital are fully separate are we looking at true private property. Protection of private property is therefore not the same as protection of capital. Our legislation needs one more big step forward.
Misunderstanding 4. Capital deceives.
People say "no business without deceit," as if anything adjacent to money must be full of deception — since it seeks to embody value and earn returns, it may use any means. Add to this the pervasive deceit of recent years: cheating as an effective way to make money, corrupt officials arbitrarily widening rent-seeking space, and above all the U.S. subprime crisis, in which financial trickery plundered the world's wealth — nearly to the point of madness, utterly destroying the credibility of finance. As the ancient saying runs: when the city gate catches fire, the fish in the moat suffer. No one now is willing to trust the integrity of capital.
And yet what capital needs most is integrity. Integrity is the greatest capital; without it, every other capital is zero. The harmonious, fair combination of 優合 capital cannot do without integrity; its reputation and market even more so. Each small act, each day of patient diligence, each careful management — all just for a brand, a name, an image of integrity. In a frivolous society, integrity grows ever more precious — the scarcer, the more valuable. Integrity will lift capital's value, and in turn 優合 capital will push society as a whole toward integrity.
Only integrity can sustain development. "Deceit has its art, its effectiveness, and its limits," but no one can deceive all people forever; the end is always more severe punishment, more devastating cost. Integrity accumulated drop by drop can be destroyed by one small thing, one morning. Society leaves us little margin. What finally survives is only integrity. This is no scholar's fancy but the necessity of history.
8. A few things worth rethinking
Democracy and the "citizen-guest"
In a benign capital combination, every member is a member of that combination, every member an owner — not "acting as" owner, but truly an owner. Whatever the quantity or form of each member's invested capital, it does not change their ownership. An owner is simply an owner, not "acting as." The true meaning of "democracy" ought to be this.
"Democracy" is not a tool, not a goal, not something fought for, nor something handed down. What democracy asks for is the *consciousness* of ownership, the *attitude* of ownership. The moment you join a capital combination, you gain the status of owner in that combination — in an enterprise, a country, even the world.
We used to believe that winning the right to speak, to be informed, to vote, to supervise, to recall — and so forth — was democracy, and that one could use these rights as tools to defend one's interests. The premise of this thinking was to place oneself *outside* the combination: to enjoy rights as a guest, not as an owner.
We used to believe that giving these rights to the people *was* democracy. In truth, these rights belong to the owner from the start. One does not need to pour tea and water for the owner, as one does for a guest. Democracy that is *given* is not democracy but **"citizen-guest" (民客, *minke*)**. The "citizen-guest" knows no owner-to-owner harmony; only outside-the-combination finger-pointing. It knows no self-correction or self-appreciation; only outside-the-combination grievance.
And those who think only they themselves are owners, excluding everyone else from ownership, are themselves no real owners. They demand that others obey them, and will sooner or later be discarded by those others. In 優合 capital, the owner's contribution and the owner's return should match. Democracy is not adversarial; democracy is harmonious; democracy is brought in by harmony and further advances harmony.
On this point, the peoples of many so-called democratic countries do better than we do. They have a strong owner-consciousness: they voluntarily look after their home, voluntarily defend their own combination, voluntarily raise the combination through individual strength and growth. The phrase we often use — "same breath, shared fate" — is here genuinely practiced. In our own country, too, from ancient to modern, there has been no shortage of real democracy: "The rise and fall of the state is the concern of every common person" is real democracy; "First to worry about the world's worries, last to enjoy the world's joys" is real democracy. An owner must have an owner's consciousness; an owner must carry himself like an owner; if you are an owner, begin with strengthening your own owner-consciousness.
Those who manufacture social conflicts, stoke opposition, use "rights-defense" as bait, use "grants of democracy" as banner, open the way with mass criticism, calculate against their own people with power-plays, and use "one-raid-and-it-works" class-struggle to discipline their own — they are not advocating democracy but playing on democratic consciousness to strengthen "citizen-guest" behavior, and beyond that, to turn "citizen-guest" into "citizen-slave" (民奴).
A house may have cockroaches or rats, but a real owner does not sit by making sarcastic remarks. He does not burn down the cupboard to kill the cockroach, much less tear down the house to catch the rat. "Cultural-Revolution"-style "great democracy" that set China back by decades, or U.S. auto-union-style endless-benefit "democracy" that devalues the capital combination to the point of bankruptcy and mass unemployment — that kind of democracy, we can do without.
What is society divided by?
In primitive society, under matrilineal clans, we divided society by tribe; everyone was hungry, and there was no rich-poor divide. In the age of sharp class opposition, we divided society by "strata" — slave and slave-owner, peasant and landlord, worker and capitalist. After Liberation we still kept the habit of dividing by strata, adding "x-element," "rightist," "black-gang," "capitalist-roader." Today we all know these labels don't fit, but old "leftist" habits die hard; so we have drawn new lines — "rich" and "poor," "boss" and "employee."
In a benign capital combination, every person is embodying value and earning returns by contributing their own capital. Although each person's quantity of capital differs, and so do earnings, division of labor and authority, treatment and rights — *as members of the combination, as owners, as users of shared capital, we are completely the same.* Our interests are tied together; we share the combination's fate.
From this angle, society is divided into *groupings* (tuán), into groups, into clusters — that is, into combinations. Everyone is a member of some combination; the only difference is the quantity and form of the capital invested. Some members put in funds, equipment, and factories; others put in knowledge, ability, and wisdom; others put in physical strength, technology, and time. Each investment is a strong point, a specialty, a piece of capital — without essential difference.
Dividing by strata looks fair and has played a positive role at certain stages, but today it artificially manufactures opposites and precisely destroys the combination's harmony and fairness. Because the adversarial mode of thinking will not change overnight, and the 優合 way of thinking cannot be accepted overnight, various people have various motives; but we believe that through our own practice, everyone will increasingly come to see that dividing society by combination is the most realistic way.
As society develops, what we have seen is: the more stable various capital combinations become, the more value they embody, the greater their returns, the faster each capital inside appreciates, the narrower the gap in living standards, the greater the equality in social status. In some combinations, owners and managers, engineers and skilled workers, have seen their incomes invert. Facing these realities, who can still tell who belongs to which class? Who decides? By what criteria? What good does all this dividing do for society or for humanity?
The essence of the thirty years' work of Reform and Opening is precisely a gradual move toward benign capital combinations — not only one enterprise at a time, but the country itself as a capital combination has undergone a fundamental change. Rural contracting overturned the "communal wind," "big iron rice bowl," and "one-big-two-public" forms. Private-economy growth overturned the single "all-the-people's" form. The return of the market economy overturned the planned-economy form. Prioritizing economic construction, productive forces, and science and technology overturned the class-opposition and "class-struggle-as-key-link" form.
In the early stage of capital combination, the member we called "capitalist" believed the means of production were all his own, ignored the workers' capital, and squeezed beyond reason — turning the workers' capital to depreciation, turning the combination into a non-benign one without fairness or harmony — and in the end brought about his own combination's depreciation and failure. Similarly, the member we called "working class" believed he himself had nothing, and tried through "expropriating the expropriators" to seize capital — also wrecking the combination. Of course, breaking non-benign combinations that cannot be reformed is the prerequisite for building benign ones. History proves such breaking to be positive and reasonable — a driver of social progress.
Calling for a *Capital Protection Law*
Among the three layers of sentiment, reason, and law, people generally believe reason is greater than sentiment and law is greater than reason. In practice, however, sentiment dominates — and in a culture like China's, where *he* is central, sentiment plays an even larger role than reason and law in maintaining social order and stability. There is plenty of favoritism, back-door dealing, and all the corruption that follows, but the overwhelming share of daily order is still a harmony under reason-and-sentiment.
To strengthen a social direction, to accelerate the 優合 process of capital in society, to dissipate the resistance and undercurrents, we still think it necessary to enact a *Capital Protection Law*.
Such a law should have the following contents:
Protect latent capital, encourage and guide latent capital to join combinations, express capital's value, and earn lawful returns; block to the fullest degree the wasting of latent capital. Latent capital includes both tangible and intangible. The "private property" we now protect covers only tangible latent capital; we have overlooked intangible forms like knowledge, ability, and experience. Protecting the rights of people to learn, apply knowledge, seek truth, and create is protecting their own capital. When each person's own capital is protected, society's shared pool has inexhaustible shared capital.
Protect capital combinations, support and guide them toward benignity, restrain and curb non-benign, non-harmonious, non-fair tendencies; make clear the principle that combination property is inviolable. In this way, from a fundamental level, people's democratic consciousness will be strengthened, a culture of 優合 will form, society's overall harmony will move forward, and on the basis of capital's tendency-toward-balance, we will pave the road to society's complete and lasting justice.
Protect the lawful earnings one gains by virtue of capital, uphold the fairness of earn-by-capital, encourage wealth-creation, curb wealth-envy, and define and punish exploitation. Looking at today's society, there are really only two kinds of exploitation: first, embezzlement and bribery by power through rent-seeking space; second, leaving one's own capital idle and waiting for welfare. (Robbery, theft, and the like fall under the reach of criminal law.)
The *Capital Protection Law* should fall under public law and civil law; its principles should be written into the Constitution.
Afterword
Culture and capital may appear profound, but from beginning to end this essay has spoken only of the simplest common sense. I call it common sense because almost everyone has heard it, seen it — it comes from the most ordinary practice.
People are always drawn to the "profound," the illusion of stepping into a mysterious hall. In fact truth sits beside us — it may be the spark of a thought that flies up while shooting the breeze.
People are always bound by already-formed ways of thinking. Even when a theory or thought has been bleached by the rain of time and scarred by the sand of years, there are still many who cling to it, patch upon patch, refusing to change clothes. But the times have changed; society has moved forward; our steps are in the twenty-first century — what happens if the head still lives in the past?
Open a window and fresh air comes in. "Feeling the stones across the river" may be confusing, but it also gives us a rare chance to free our thinking, to let a hundred schools contend, to prepare our system of ideas for a rise from low to high. We will find necessary and inevitable laws in uncertain exploration. The exploring is only the process; in the end a bridge must be built, a road laid, and we must walk out onto the bright avenue.
In truth we have written too simply, too naïvely. Our life is far richer, our society far more complex than this. But precisely because we write simply, we can cut to the point and find the patterns within the rough detail; precisely because we write naïvely, there is no guile, and the plain colors of truth can show through.
Open your eyes and look at the world. Believe not the book, not the higher-ups, not authority — only reality. Easy to say, hard to do: "as hard as climbing to the sky." Believing only what you see may lead to narrowness, but to disbelieve even what you have seen and heard with your own eyes and ears, to refuse to face, refuse to think — to tailor your theoretical research to someone's taste — is too sad. The Cultural Revolution has been thirty-plus years gone; the shackling of thought should be loosened now. Opening our thinking should begin with opening our eyes, and believing ourselves. We uphold a spirit of responsibility to truth alone, not to gain; we praise those who are willing to answer to history and refuse to bend to falsehood.
Of course, any "heterodoxy" that runs against the mainstream current will not be grasped by people all at once — let alone accepted. Nor can it be perfected to airtight form all at once. There will remain many holes, many unresolved knots. It requires a process of perfection — a long, perhaps painful process by which it seeps into every cell, into every corner, completed by all of us together.
From Marxism-Leninism to Mao Zedong Thought to Deng Xiaoping's "cat theory" — new China has walked sixty years; Reform and Opening more than thirty — close to four Wars of Resistance. When economic development has come so far, yet cultural and moral scaffolding is missing, and when Hu Jintao raises the banner of "harmony" while the content of harmony has not yet been filled in — if this essay can lay a small stone into that harmony-edifice, then my wish is fulfilled. Harmony is, after all, the most beautiful hope of humankind.
I am a person who loves to read but does not pursue the recondite; who loves to think but is easily moved by feeling; who has ideas but is often extreme. This essay grew from exchanges with many friends; it was written at their urging, and revised again and again after their comments. I sincerely thank all my teachers and friends. Responsibility for what is written remains mine; I look forward to more friends, with more comments to offer.