While people may have the best of intentions by offering goods and services below market prices, they risk “messing up the market” by making it harder for others to make a living. Such actions could provoke backlash, whether in village clashes, or at large, in protests and anti-dumping measures between countries. China, long the factory of the world, has borne the brunt of such a decline. Industries in other countries are affected, as capital moves freely between borders while labor generally stays put. Those who feel like the losers can hold a grudge and end up dealing a huge blow to society.
Recently, I came across a report in Dushi Kuaibao from Hangzhou about 81-year-old Jin Shuhua doing 2 yuan ($ 0.31) haircuts at an elderly activity center on the street. Beishan in the New Railway Village every Tuesday, Thursday and Saturday for 30 years. . Granny Jin has been hailed as a “good, honest and trustworthy person” and has received good reviews for her low cost service. In addition, she never took the extra bills pressed by satisfied customers. At the end of the article, the reporter said that they sincerely hoped that Granny Jin’s hair salon prospered and wished there were more.
Mamie Jin’s story is truly touching. Although there are many hair salons in the city, few specialize in serving the elderly. It must not have been easy for Granny Jin to persevere in her job for 30 years, and she certainly deserves to be called a “good person”. But when I read the story, I remembered what happened to my dad when he did something right almost 20 years ago, and I can’t help but sigh.
About 20 years ago, my father returned to his hometown in the countryside after retiring from a public company. At the time, the village still had dirt roads because the paved road connecting the village to the city was still under construction. This made commuting difficult, especially for the elderly when traveling to town for groceries. Like someone who couldn’t sit still, my dad bought a tricycle to solve the problem. He charged extremely low fees which were just enough to cover fuel and maintenance. Having finally found a job after lazing for a year in retirement, he felt extremely energized. At that time, I was still studying for my masters and I didn’t read too much because my dad looked very happy every time I spoke to him and the whole family was supportive of me.
Reprisals for having “spoiled the market”
Sadly, less than two months later, I got a call from my mom, who asked me to go home because my dad was in the hospital. The story went like this: because he charged a low fee, business quickly got very good. Residents of neighboring villages even used his services, drawing the ire of peers in the town. That fateful afternoon, my father was ambushed and found himself unconscious by the side of the road. He was then taken to hospital by passers-by. Fortunately, he was not seriously injured and only had a slight concussion, but this incident took a heavy toll on my father’s mental health. For at least two years after that, he whispered to himself that “it doesn’t pay to be nice.”
My mother harassed him: “You haven’t read the situation! Who in this city doesn’t want to charge higher fees to earn a living and feed their family? But you charged such low fees and robbed their business, so sure they’re going to hate you for it? “
My dad was a sweet person who never quarreled with anyone. But he wasn’t convinced when he heard this and blurted out, “Their fees are way too high! Many older people cannot afford such high fees and it is difficult for them to travel. Wasn’t I doing a good deed? Why are you criticizing me?
Although we made a police report, the police said there was nothing they could do because we had no evidence. We could only tell the father to have a good rest at home and to stop working.
This incident reminded me of the anti-dumping investigations that Western countries often carried out against China at the time. As high-quality and low-cost Chinese products are sold all over the world, related industries in several countries have been affected. A Spanish shoe-making town even burned leather shoes made in Wenzhou at one point in protest at the cheap versions that undermine theirs. In fact, many other products made in China – not just leather shoes – have been affected by anti-dumping complaints initiated by Western countries. I am not an expert in anti-dumping cases and cannot comment on the subject. But based on familiar economic principles, we can always ask ourselves: When shoes made in Wenzhou, Zhejiang province are sold in another Chinese province, they are also cheaper than those made locally – why is that not – it not considered dumping? Why is it only considered dumping when exported to another country?
In fact, when affordable Wenzhou leather shoes are exported to Spain, it is the Spanish consumer who really benefits. Leather shoes are cheaper and the money saved can be spent elsewhere, improving people’s well-being. In this sense, weren’t the shoe dealers in Wenzhou doing a good deed just like my father? But my father ended up in the hospital, and Wenzhou’s shoes were burnt in Spain. Either way, it seems kindness doesn’t breed kindness.
Social implications beyond simple market forces
The problem lies in the social implications of the market. My father was doing a good deed, but it was not without gain. Not only did he enrich his boring retirement life, but he also earned praise from locals in his hometown. These are his earnings. And because he had a retirement income – my brother and I were also financially independent at the time – it was okay for him to choose to do good without having to make money.
But what about the townspeople who did this for a living? Unlike my father, they needed money because they had mouths to feed. As my father’s business improved, some of them lost the game. Not being able to earn enough money, they may return home with an angry woman or worry about family expenses. In this case, it was difficult to judge who was more noble – my father for his good deeds or the other drivers for their sweat and tears which earned them money to support their families.
Likewise, Spanish leather shoe manufacturers have mouths to feed. They were working under different restrictions and with different labor costs for merchants in Wenzhou, but the market is oblivious to these grievances – it only cares about the price. When it comes to similar products and services, the cheapest wins in a free market. However, when Wenzhou leather shoes drove Spanish leather shoes out of the market, Spanish leather shoe makers and their families found themselves in dire straits in the short term. I could understand their plight, in the same way that I recognized the situation of the drivers in the village who carried passengers for a living. Later, I shared this with my father, who fell silent upon hearing it.
There is no sense in stealing Peter to pay Paul
While the market is good on its own, it is constantly disrupting the default structure of society and causing painful short-term adjustments. In this process, if we were to expect those who are in pain to voluntarily accept this “good” thing, we would steal Peter to pay Paul.
Within a country, leather shoes from Wenzhou can certainly be sold to other provinces, and the manufacturers of leather shoes from those other provinces can choose to change careers and transfer their resources to places that can generate income. higher value if they cannot outperform Wenzhou’s bids. It’s a logical economic argument. But the premise of the story is that the factors of production can flow freely. Between countries, however, while labor may not be able to move freely, capital can. This means that the beneficiaries of globalization and commodification are two different groups of factors. Another thing is that we have neglected the feelings of those who are the losers in this competition. If these groups of people do not receive timely help from society, they could get angry with the market and globalization, and ultimately deal a huge blow to society.
The “Chawei” chapter of Master Lü’s Spring and Autumn “Xianshi” exam (吕氏 春秋 · 先 识 览 · 察 微 篇) recorded the story of Zigong, one of Confucius’s disciples , redeeming a person. It looks something like this: There is a law in Lu state stating that anyone who succeeds in redeeming a Lu citizen who became a slave in a foreign state would be entitled to compensation from the public treasury. Confucius’ disciple Zigong once redeemed a Lu citizen from a foreign state, but rejected compensation from the Treasury. After hearing this, Confucius said that Zigong was wrong to do so because with this precedent, no one from Lu State would ever redeem their comrades enslaved in a foreign state again. While accepting compensation does not harm your reputation, rejecting compensation would impact the system. On the other hand, Confucius’ disciple Zilu once saved a drowning person who later gave him a cow as a thank you. Zilu accepted the cow, which led Confucius to say that the people of Lu would now be urged to save the drowning. What an observer of Confucius!
People like Granny Jin are important additions to the market machinery because there are many issues in society that the market cannot solve. The moral mechanism – the role played by conscience – can also play an important role in social governance. You can’t say that the market inherently drives out morality or makes people feel that it doesn’t pay to be nice. However, the role of the right person should not be overstated either. If we force everyone to learn from people like Granny Jin and distribute products at low prices – allowing good people to replace the market – maybe no one will choose to be a hairdresser anymore. For this reason, I can say with certainty that Confucius’ observations are indeed impressive and that he lives up to his name as a sage.
More than 40 years have passed since China began to develop its market economy model. But the market economy is a systematic project – its construction and improvement must be complemented by other mechanisms and culture. Only then can an effective mechanism of wealth creation be formed, in which the well-being of people can be genuinely improved.
Translated by Grace Chong of ThinkChina.
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