[Reading the World Through Han Feizi] What Makes a State Truly Capable?

Govern a Country as You Would Grill a Small Fish

There is a misunderstanding about Legalism. Because it emphasizes law and the rule of law, many assume it must favor big government. When people think of Legalism, they often imagine trying to control every aspect of people’s lives through law, with excessive regulation and interference. But if you read Legalist texts carefully, that is not the case. In fact, the opposite is true. You can see that it aims for small government and seeks to minimize interference and regulation.

There is a famous remark by Han Feizi quoting Laozi: “Governing a large state is like cooking a small fish (治大國者若烹小鮮).” He said that governing a country should be like grilling a small fish. Imagine grilling a small fish on a wire rack. If the heat is too high, or if you keep flipping it over with chopsticks, the fish will fall apart and become inedible. It is best to cook it over low heat and avoid touching it as much as possible until it is fully done. That was Han Feizi’s ideal of government. Govern as you would grill a small fish. He presented this as a grand principle of rule.

But how can state intervention be minimized? Han Feizi said laws and ordinances should not be changed frequently. If the state constantly steps in and keeps changing laws and regulations, interests are disrupted, people’s affairs become burdensome, and the people suffer. So he argued that laws and institutions should not be altered lightly. And from the outset, Han Feizi said, laws and institutions should be made simple so that everyone can understand them easily, and once enacted, they should be thoroughly announced and promulgated so that everyone knows them. Laws must be easy. They must be transparent. Only then is there less room for officials and bureaucrats to deceive the people or exercise arbitrary discretion. Han Feizi truly did not like the state stepping in and constantly moving things around. Shang Yang went even further, arguing that legal judgment should be something the people themselves can make.

“There are several conditions in the governance of a state: when right and wrong are judged in the people’s own households, the state becomes king under Heaven; when right and wrong are judged by officials, the state becomes strong; when right and wrong are judged by the ruler, the state becomes weak.”

He argued that judgment and choice do not necessarily have to be made by the state. He thought it was better for such judgments to be made in the private sphere rather than by officials and bureaucrats in the public sector. In other words, the more individuals can decide matters for themselves in the private realm, the better. Shang Yang went even further and believed that the more such decisions were left to private individuals, the more productivity would rise and the more the economy would grow. This applied not only to punishments and rewards, but also to whether to undertake a certain business, whether to sell a certain product, and commercial judgment generally. He held that the people themselves should make such decisions thoroughly on their own and that the state should not interfere in each and every case. The more the state interfered, the weaker he believed the country would become.

Both Shang Yang and Han Feizi, the major Legalist thinkers, were products of the Warring States period. It was an age in which markets emerged, and merchants and artisans, unlike in the Spring and Autumn period, escaped aristocratic domination and managed their own affairs, producing goods, selling them, and earning enormous profits through exchange. The Warring States period was also an age in which every state struggled to convert the strength of these merchants and producers into national power. But if merchants and artisans had to be screened and licensed by the state every time they made goods or tools or opened a shop, if they were subject to regulation and interference in every trivial matter, how could economic power possibly expand? Legalism is often summarized as “wealth and military strength,” but military strength presupposes national wealth. And national wealth presupposes the freedom and vitality of the private economy. That is why Legalism opposed excessive interference and intervention.

Legalism and the Case for Protecting Public Interest Whistleblowers

Looking at Legalist thought—which advocated small government and the elimination of pointless regulation and interference—it seems they understood something important. Government is not competent simply because it tries to oversee everything well. True state competence, in their view, meant handing over to the private sector what the private sector can do, and properly distinguishing between what government should do and what private actors should do. Legalist thinkers represented by Han Feizi and Shang Yang seem to have thought in precisely these terms. What, after all, is state competence? What kind of state is truly capable? Is it not one that clearly distinguishes between what it should do and what the private sector should do, and then, having made that distinction, definitively hands over what ought to be handed over? That was the Legalist view, and there is a good example of it: the whistleblower protection system discussed by Shang Yang and Han Feizi.

Shang Yang in particular institutionalized the protection of whistleblowers, requiring people to report corruption, misconduct, and lawbreaking whenever they saw it around them. If they failed to do so, they were punished. If they reported it, by contrast, they were generously rewarded. He strongly pushed this kind of whistleblower system. Yet there have been many misunderstandings about it. Many criticized it as being similar to guilt by association or as a harsh system of collective responsibility. But in most such criticisms, people either ignored or deliberately overlooked the part where informants were rewarded for reporting criminals and corrupt actors. They focused only on the negative side of the system, but in reality this was a whistleblower protection system—what we today would call a public interest whistleblower protection system. It was a system that accepted reports of corruption and misconduct at any time for the sake of the public interest, rewarded them generously, and protected the informants. Its truly shining feature, above all, was that it sought to draw on the strength of the private sector.

One could say that, in monitoring corruption and misconduct, it went beyond merely relying on private-sector help and effectively outsourced part of the task to private citizens. Can the state really monitor and manage all corruption and misconduct on its own? It cannot. At the time, for various reasons, oversight, inspection, and investigation must have been even more difficult than they are today. So what should be done? Some part of the task had no choice but to be handed over to the private sector. Since the state could neither do it properly on its own nor accomplish it all, it handed over what could be handed over and borrowed private-sector strength. And corruption and misconduct are matters that insiders and those in close proximity are naturally better positioned to know about. That is why Legalists presented insiders with incentives in the form of rewards and punishments, encouraging reports and disclosures. That was precisely the thinking of Han Feizi and Shang Yang. Even Legalist public interest whistleblower protection shows their belief that what the private sector can do should be left to the private sector. Their thinking—that what can be delegated should be delegated, and that the exercise of discretion should be minimized—can be found throughout Legalist texts.

Legalism’s Negative Regulation

As noted, Legalism opposed excessive intervention. It aimed for small government, and it left to the private sector what could be entrusted to it. At this point, I would like to reframe the discussion slightly in terms of negative regulation and positive regulation. Through this lens, we can better understand the Legalist view of government regulation and interference. Put simply, Legalism favors negative regulation. Confucianism, by contrast, favors positive regulation. And if Legalism is close to ex post regulation, Confucianism is closer to ex ante regulation. That Confucianism is positive regulation is evident even from the arrangement of ritual food tables on holidays. No lengthy explanation is needed. It prescribes even which foods should be placed where. It minutely subdivides behavior and prescribes norms of conduct and deportment. Legalism does not regulate so many things. It compels people to observe only a few rules. If those specific rules are violated, it punishes severely. But apart from what is explicitly regulated, everything else is free. Individuals should decide for themselves. Confucianism, however, regulates far too much. At the same time, violations do not necessarily bring severe punishment. Although one may not receive heavy penalties, under a Confucian regulatory order freedom of action is greatly constrained. This helps explain, at least roughly, why Korea remains a society of positive regulation and heavy ex ante regulation. The traditions and inertia of Confucianism are still strong. But many businesspeople now say things must change. They argue that we need to move from positive regulation to negative regulation, and from ex ante regulation to ex post regulation. Only then, they say, can innovation occur, creative destruction take place, rent-seeking domains be broken up, and new businesses and opportunities emerge. Should we not now truly move in that direction?

Legalist thought offers many implications and directions for present-day South Korea. Among them, abolishing excessive state intervention in the economy, breaking free from the inertia of a government-led economy, and shifting toward negative regulation and ex post regulation alone are enough to make Legalism deeply suggestive and full of alternatives for us. As Han Feizi said, I hope we will govern the country and intervene in the economy as one grills a small fish. And I hope we will keep asking the question: “What is true state competence?” Should the state and the public sector really act as a parent to the people, looking after everything and interfering in every domain? Or should they sometimes be capable of being cool-headed bystanders? I hope a leader will emerge who believes the state should do only the minimum, that the private sector’s affairs belong to the private sector, and that prosperity is created in the private realm. I long for the emergence of a politician who governs the country as one grills a small fish.

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Original title: [한비자로 세상읽기]국가의 진정한 유능함이란 무엇인가?

Author: Geon-sun Im

Date: 2020-02-04

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=10&idx=22347