- 1 In 2001, Beijing University Professor Justin Yifu Lin (later he served as the World Bank Chief Econ (...)
1At the beginning of the first decade of the twenty-first century, Chinese economic circles looked back on a hundred years of penetration of Western economics in China.1 The publication of the first Chinese translation of Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations became the starting point of this historical endeavour. For professional economists, this symbolic date provided an opportunity to remind people that economics in China began about half a century before the PRC was established in 1949. The first step in the development of Chinese economic science as an independent branch of knowledge was made through contact with Smith’s doctrine, which is based on liberal market principles.
2 Discussion about the sources of modern Chinese economic science has drawn attention to the translator of The Wealth of Nations, the well-known thinker and public figure Yan Fu (1854-1921), who exerted a great influence on the reformatory movement. In 1866, Yan Fu began to attend the Fuzhou Shipyard School where he studied English, natural sciences and mathematics. In 1877, the Qing authorities sent him to Europe for training with the first group of Chinese students. From 1877 to 1879, Yan Fu studied in Great Britain at the Royal Naval College in Greenwich. He came home with the dream of making China stronger by making his compatriots acquainted with the achievements of Western science. After China’s defeat in the War against Japan (1895), Yan Fu became a social activist. He wanted to strengthen state institutions through liberal transformation and conceived reforms based on Western ideas, especially Darwin's evolutionism.
3Yan Fu started translating The Wealth of Nations in 1896 and completed the work within five years. Besides economics, he paid special attention to the introduction of Western logic and the doctrine of natural selection. His translation of Thomas Huxley’s Evolution and Ethics, published in 1898 under the title Theory of natural development (Tianyan lun), gained great popularity in China. Yan Fu also translated Charles de Montesquieu’s De L'Esprit des lois (The Spirit of the Laws) (1909), John Stuart Mill’s On Liberty (1903) and (partially) A System of Logic (1905), Herbert Spencer’s The Study of Sociology (1903), and William Stanley Jevons’ Primer of Logic (1909).
4The aim of this paper is to analyse the first Chinese translation of Adam Smith’s The Wealth of Nations by Yan Fu in order to understand the characteristics of the Chinese text with regard to the terminology and interpretation of economic ideas. Section 1 explores the reasons why Yan Fu chose to translate this Western classic into Chinese and analyses his arguments regarding the importance of Smith’s book. Section 2 focuses on the translator’s stylistic approach and his choice to favour the elegance of classical Chinese language. Another important feature was the selectiveness of the translation; Yan Fu inserted his economic views and comments into the Chinese text in the footnotes as well as the rendering of the original. The further purpose of this article is to explore the intellectual paths of the Chinese adaptation of Smith’s key concepts. Section 3 deals with the notion of profit and the problems involved in reconciling this with the moralist approach of the classical Confucian tradition. In section 4, I discuss the problem of the cross-cultural reception of the Western notion of the relationship between individual interests and the state. I also argue that the absence of the well-known metaphor of the “invisible hand” in the Chinese translation was determined by differences between Chinese and Western cultural traditions. Section 5 concentrates on the Chinese translator’s critical attitude with respect to the labour theory of value and his explanation of the relationship between supply and demand. Section 6 examines Yan’s understanding of Smith’s concept of natural price and market price and I attempt to review both the Chinese and Western sources regarding his views. In section 7, I examine Yan’s determination to find a proper definition of economics, which was a new branch of knowledge in China in the early years of the 20th century. In section 8, I conclude by attempting to outline the impact of Yan Fu’s translation on the development of economics in China.
5In 1895, in the essay On Strength, Yan Fu explained his wish to translate Adam Smith by the necessity to reveal the secrets of Western might and prosperity to his compatriots:
When hearing about the huge riches the Western countries possess today, the people of the East doubted and did not trust what they heard, and after having seen it with their own eyes, they believed it but were unable to understand the source of these riches. Only after having seen with their own eyes the variety of methods of entrepreneurship and manufacturing in the West did they begin to understand that this important development is the fruit of the book by Adam Smith; it is conventional wisdom among the educated people of the West. (Yan Fu,  1969b, 57-58)
- 2 Thereafter, The Wealth of Nations refers to Adam Smith’s original text and The Origins of Wealth to (...)
6Contemporary scholars underscore the words of Yan Fu ( 1981b, 13), which are that “economic science matters for the poverty and prosperity of China, and more generally – for the flourishing and decline of the yellow race” (Wang Zhenzhong, 2005, 2). For his translation of The Wealth of Nations, Yan Fu found an elegant and broad Chinese title: Yuan fu (The Origins of Wealth2). This title is perfect for a classical text. The well-known treatise by philosopher Han Yu (768-824), for example, was entitled Yuan Dao (Tracing Dao to Its Source, also translated as On the Origins of the Way). The first character “yuan” means “source” or “origin”, it also refers to the action of searching for the source, investigating the causes, and studying the essential beginnings. This title reflected Yan Fu’s desire to encourage the Chinese to search for the roots of Western wealth and prosperity in Adam Smith’s book.
7 The Chinese translation was carried out at the turn of the twentieth century. By that time, more than a century had passed since the publication of The Wealth of Nations and Western economic science had already progressed to a new level of development. American sinologist Benjamin Schwartz (1964, 115) has noted that Yan Fu regarded Adam Smith as a source of economic wisdom, yet throughout his commentaries, the Chinese thinker points to the vast economic changes which occurred since Smith, some of which rendered obsolete some of the master’s views.
- 3 The publisher of The Origins of Wealth added a footnote with reference to Francis Amasa Walker (184 (...)
8 Yan Fu ( 1981b, 9) considered that the “economic science of modern times was exact and clear” and therefore differs from the economic science of the eighteenth century. In the preface to The Origins of Wealth Yan Fu noted: “Economics has made great advances in the last two hundred years. If one wishes to have a total picture of economic science in addition to Smith’s ‘Wealth of Nations’, one would have to translate Mill, Walker 3 and Marshall …” (ibidem).
9 Following the spirit of Chinese respect for the classical tradition, Yan Fu ( 1981b, 9) called for “gaining new knowledge by reviewing the old” (wen gu zhi xin). He saw a resemblance between British mercantilist policies, which were criticized by Smith, and the economic policy of the Qing government. Yan Fu believed that Smith’s economic liberalism fitted China’s needs and could be used to criticize state intervention in the development of the national economy. He thought it was wrong for the Qing authorities to want to promote the development of selected branches of the economy while simultaneously restricting the development of others. Such measures limit freedom in human activity, have a negative impact on the creation of wealth and subsequently lead to a reduction in the income of the state. Yan Fu followed Smith’s ideas and supported freedom of foreign trade; he believed that since the beginning of modern times, the Chinese had made similar mistakes to those of the Western Mercantilists (Zhao Jing, 2004, 344-346).
10Yan Fu ( 1981b, 7) explained that he chose Adam Smith’s book because it “investigates the nature and manifestations of wealth and profit, the causes and effects of poverty and riches, the origins of state wealth—and only that!” He demonstrated his knowledge about the achievements of Western economic science and logic by noting that economic science is an “inductive science” that carries out empirical observations of change and proceeds from understanding them to formulating general laws: “Works of Smith, Ricardo and the Mills (father and son) all belong to this sort [of approach]. But recently, the books of Jevons and Marshall have used deduction” (Yan Fu,  1981b, 8-9). Yan Fu observed that in his time, economics used formal deduction methods to go from the general to the particular by putting forward “curves of differentials and integrals” with “exact and clear principles” (Yan Fu,  1981b, 9).
11 Chinese scholar Li Jingneng notes that Yan Fu chose the Smith’s classical work because of his “deep understanding” that the basic idea of The Wealth of Nations is freedom and non-interference (ziyou fangren), that is laissez-faire, laissez-passer. In his comments on the translation, Yan Fu advocated the idea of granting freedom to the people (ren min zi you) and identified concrete ways of increasing state wealth following this idea, so that “the national bourgeoisie and its intellectuals widely welcomed [the book]” (Li Jingneng, 1979, 72).
12 Yan Fu suggested that China should look at the example of England, in which at the end of the eighteenth century, had accumulated substantial debt but managed to acquire wealth and power by granting freedom to the people:
The English have not been free of national debt for a day. Although their financial burdens are heavy, their treasures are abundant. Instead of getting poor and weak they have become wealthy and powerful due to the fact that they have broken the locks, opened the doors wide, and allowed the people to exercise their freedoms. (Yan Fu,  1981a, 5; English translation quoted after Schwartz, 1964, 119-120)
13The key translations by Yan Fu (except Montesquieu) which exercised a huge influence on the development of Chinese thought at the turn of the century were those of English works by Spencer, Huxley, Mill and Smith. Yan Fu studied in Great Britain and achieved a high level of proficiency in the English language which enabled him to understand difficult texts and juxtapose their ideas with the problems of development in China. Schwartz (1964, 113) pointed out that Yan Fu had chosen to translate The Wealth of Nations because England was economically strong and Smith’s theory of economic liberalism occupied an important place in Spencer’s philosophical system. Spencer’s ideas exercised a strong influence on Yan Fu’s way of thinking; he concluded that the Western doctrine of evolution was capable of contributing to the development of China in the highest degree. At the same time, the connection between Yan Fu’s interest in Spencer and his choice of translating Smith’s book was not rigid. His interests in political economy, logic and sociology were rather separate from each other and it is not possible to deduce two of the components mechanically from the third.
14 Chinese researcher Pi Houfeng believes that Yan Fu has exaggerated the significance of Adam Smith’s book for European wealth and power of Europe in modern times. Nevertheless, Yan’s assessment comprised a “rational element” because the doctrine of economic liberalism from The Wealth of Nations has been accepted by many advanced capitalist countries in the West and has promoted the development of the world capitalist economy. In the time of Yan Fu, the doctrine of free circulation of goods had already become part of the heritage of classical political economy in the West, but was new for China. In the middle of the nineteenth century, the school of national economy emerged in Germany and Friedrich List's National System of Political Economy could possibly have made a greater contribution to the development of Chinese thought (Pi Houfeng, 2000, 310-311). Lai Jiancheng (2009, 2-3), a well-known Taiwanese researcher of Yan Fu’s translation of The Origins of Wealth, shares this idea:
If Yan Fu aspired to wealth and power for China as the starting point and asked Smith— the doctor—for the prescription, then I think that economic liberalism as expounded in The Wealth of Nations was not appropriate for China’s condition. What was necessary was to ask the “German historical school” for the appropriate recipe for salvation, firstly about how to protect the young industry by means of taxation, and how to embrace the policy of gradual self-protection and self-strengthening.
15However, Yan Fu ignored this economic school not because of lack of knowledge or poor mastery of the German language. His rather complete worldview had already been permeated by the British tradition of liberalism, so that once he believed in the doctrine of Adam Smith, he did not think about translating List’s book, whose content contradicted Smith’s ideas.
16 Pi Houfeng notes that through The Wealth of Nations, Yan Fu had been exposed to the indirect influence of the French physiocrats. He had become especially interested in the passages where Smith provides physiocratic arguments in favour of free-trade policy. Yan Fu regarded economic liberalism as an important tool in the struggle against the decline of China which was a backward agrarian country. With the help of Smith, Yan Fu tried to express his views on the development of the nation and, in the spirit of his time, he hoped “to put foreign [ideas] in the service of China” (Pi Houfeng, 2000, 310-311).
17 Yan Fu was aware of the new trends and works which had arisen or been published in Western economic science after The Wealth of Nations, and frequently used their arguments to challenge Adam Smith’s views. For example, he did not recognize the labour theory of value and promoted instead the theory of supply and demand. He disagreed with Smith’s treatment of profit and claimed that interest is only a part of profit, the other components being payment for managers and insurance (Yan Fu,  1981c, 84). The Chinese thinker also disagreed with Smith’s definition of economic science which he found too broad.
18 Similarly, Yan Fu understood that the material side of Western economy has also changed. He added a commentary to Book I, Chapter I “Of the Division of Labour”: “Smith finished this book in the fortieth year of reign of Emperor Qianlong (1776); more than a hundred years have passed since then and therefore much of what was said is different from the situation in Western nations of today” (Yan Fu,  1981c, 5).
19In The Origins of Wealth, Yan Fu’s contribution is not only that of a translator but also that of a thinker. He gave his own interpretation of the material, expressed his support or disagreement with the ideas in the original text, and established links between these ideas and the realities of China. This unique experience of creative re-thinking of the Western classical work suggests that it is reasonable to start the history of the development of Chinese economic science with Yan Fu’s translation.
20 The stylistic appeal of Smith’s book could be regarded as an extra reason for choosing to translate it into Chinese. The Wealth of Nations provides many vivid examples from everyday life and concrete explanations. In this aspect, it resembled the traditional Chinese style of narration and this cross-cultural resemblance has facilitated the understanding of The Origins of Wealth by the educated audience that was accustomed to this style.
- 4 The first version of this translation was completed by Wang Yanan and Guo Dali in 1931 under the na (...)
21Yan Fu translated The Wealth of Nations from the second Oxford edition of 1880 edited by James E. Thorold Rogers (Smith,  1880) with considerable cuts and alterations of the author's text. Chinese researchers have counted from the 1981 edition that among 520,000 characters of the full text of The Origins of Wealth, 80,000 characters are from Yan Fu’s commentaries (Pi Houfeng, 2000, 323). According to other calculations, Yan Fu added 310 commentaries of more than 60,000 characters (Lai Jiancheng, 2009, 2) or 289 commentaries of more than 66,000 characters (Hu Peizhao, 2002, 64). Without these comments and other supplements (the translator’s introduction, a chronological table that correlated the Western calendar with the succession of reigns of Chinese emperors, a biography of Adam Smith), the translated text of Smith’s work consists of approximately 400,000 characters. The contemporary Chinese translation of The Wealth of Nations (Guo Dali and Wang Yanan, 1981) has approximately 600,000 characters4 (Pi Houfeng, 2000, 323). Yan Fu translated the text into classical Chinese which allows shorter forms of expression compared to contemporary “vernacular” Chinese (baihua), so that we cannot conclude directly that the difference of 200,000 characters between the old and new translations means that Yan Fu left out one third of the original content. Nevertheless, according to the most conservative estimate, Yan Fu omitted about a quarter of the primary source in his translation.
22 Yan Fu’s efforts to introduce China to the achievements of Western social sciences were not limited by the literal translation of foreign works. He interpreted the text and commented on it, he excluded from the translation foreign realities that were too outlandish for the Chinese mentality and emphasized the ideas that were similar to his personal views. Foreign researchers on Yan Fu focused their attention on his translations of Thomas Huxley’s Evolution and Ethics and John Stuart Mill’s A System of Logic (Schwartz, 1964; Krushinskij, 1989). Because the research on the Chinese version of The Origins of Wealth had not been extensive, the unsubstantiated impression emerged that Yan Fu had translated Smith without departing too far from the original text.
23 This impression was supported by the Yan Fu’s own words: in the foreword to The Origins of Wealth, he wrote that he had followed Smith’s original text more closely than for his translation of Huxley’s Evolution and Ethics (Yan Fu,  1981b, 13). At the same time, Yan Fu mentioned some of his alterations to the text. For example, he explained that he shortened Book I, Chapter XI “Of the Rent of Land” because he considered the issues of variations of the value of silver and the information about prices of wheat to be difficult and irrelevant for the purposes of his translation. Instead, in a commentary on that particular chapter, Yan Fu added the translation of the section “On rent” from Chapter II of Elements of Political Economy by James Mill (Yan Fu,  1981c, 224-228). He also admitted that he skipped the section devoted to the Bank of Amsterdam in Book IV, Chapter III because the situation had changed and the banking system of his day was different.
24 In the original English book of The Wealth of Nations used by Yan Fu for translation (kept in the library of the East China Normal University, Shanghai), one can see that Yan Fu has made notes in English such as “omit” or “to be rearranged before translation” (Pi Houfeng, 2000, 313). He gave an abridged account of large passages of the original text and inserted his own views into the translation. Yan Fu expanded some of Smith’s ideas and added words or phrases that were not in the primary source in order to bring the themes of the original closer to Chinese issues.
25 For example, in Book I, Chapter III “That the Division of Labour is Limited by the Extent of the Market” Adam Smith wrote: “It is remarkable that neither the ancient Egyptians, nor the Indians, nor the Chinese, encouraged foreign commerce, but seem all to have derived their great opulence from this inland navigation” (Smith,  1904, WN, I.iii.7). Yan Fu embedded his own thoughts into the translation of this passage:
In three ancient states—Egypt, India and China—there was a ban on maritime trade (haijin); because the home market was wide enough, they did not want to establish external relations which would have allowed spying (kuisi) on them. Therefore these three states prospered in the past but are today in decline. (Yan Fu,  1981c, 16)
26An obvious addition to the original text was the idea that isolation from the external world led Egypt, India and China to decline.
27 Yan Fu recognized that his intention was not to produce a word-for-word translation:
The basic statements [in the translation] reflect the original, but most of the illustrations and examples [of the author] have been replaced by my own. After all my purpose in writing this book was to explain the reasons to others and not to be faithful to the original. (Yan Fu,  1969a, 218)
28This remark by Yan Fu refers to his translation of the Primer of Logic by William Stanley Jevons. He consciously went beyond the limits of the original text while “reserving himself considerable freedom with regard to the selection and explanation of the material” (Krushinskij, 1989, 39-40).
29 Yan Fu translated Smith's thoughts into classical Chinese which was not easily comprehensible for an average Chinese person of his time, so that all the nuances of The Origins of Wealth could only be adequately understood by Chinese intellectuals with good training in the humanities. The Russian scholar Andrej Krushinskij has noted that Yan Fu “was successfully able to play the role of mediator between two civilizations in his time because in the process of assimilation of the development of Western ideas (the results of this process were materialized in his translations), he succeeded in acting as a representative of Chinese culture as a whole”. Yan Fu attempted to translate the basic terminology of Western social sciences into wenyan, the traditional literary language. His translations are “in fact, a dialogue between two different philosophical traditions, i.e. two different theories, and not the mere interaction between two spoken languages for everyday communication” (Krushinskij, 1989, 16).
30 The problem of style and quality of translation has a special significance for the history of Chinese social thought of modern times. The first translations of Western economic works appeared in China in the middle of the nineteenth century due to efforts of Protestant missionaries, almost half a century earlier than The Origins of Wealth. However, contemporary economists do not regard missionary texts as the cradle of Chinese economic science. Among the reasons for this neglect, one might mention the inertia stemming from nationalistic disapproval of the activities of Western missions in China as well as the poor quality of their translations. Foreign missionaries orally retold texts to Chinese assistants who tried to write them down in a coherent form. Such a “division of labour” between two linguistic intermediaries led to numerous distortions of meaning. The economic works of missionaries did not reach the educated audience and have not had a significant impact on the development of Chinese thought in the second half of the nineteenth century. While missionaries attempted to translate elementary textbooks on political economy, Yan Fu chose Smith’s fundamental work. It is not by chance that Yan Fu’s translation was called in China “the famous translation of the famous book” (ming yi ming zhu) (Xia Yande, 1948, 166).
- 5 More than two thousand years passed since the reign of the Qin dynasty (221 BC - 202 BC), but thank (...)
- 6 Han dynasty ruled in China from the third century BC till the third century AD.
31 Yan Fu’s contemporaries criticized his translation for its unnecessary complexity and excessive stylization patterned after classical Chinese works. This style was aimed at the educated elite. It demanded enormous efforts from the translator in order to present the material in the traditional form of another civilization as well as highlight the relevance of the work of a foreign author for the needs of China. Yan Fu described the three criteria of a good translation as being faithful to the original text (xin), comprehensible (da) and literarily elegant (ya). The Chinese thinker and educator Liang Qichao complained that despite Yan Fu’s absolute superiority as an interpreter of Western ideas in China, in style, he has been overly concerned with depth and elegance: “He is firmly bent on copying the style of the pre-Ch’in [pre-Qin] period, and those who have not read many ancient books found his translations most difficult to comprehend” (quoted after Schwartz, 1964, 93).5 However Yan Fu himself supposed that if the target language of translation was not refined, the text would not have as much influence, so “in using the style and syntax of the pre-Han period6 one actually facilitates the comprehension of subtle principles and abstruse phrases [of the translated text]” (Yan Fu,  1959b, 101-102; English translation quoted after Schwartz, 1964, 94). Yan Fu rejected appeals to popularize Western knowledge among the people using “vernacular” Chinese:
The books with which I concern myself are profound and abstruse. They are not designed to nourish schoolboys and I have no hope of deriving profit from them. I have translated precisely for those Chinese who do read many ancient books. (Yan Fu,  1969c, 259)
32After returning from abroad, Yan Fu took lessons of classical Chinese language (Xiong Yuezhi, 2010, 569).
33 Yan Fu added the biography of Adam Smith to the translation, imitating the classical style of Historical Records (Shiji) of the ancient Chinese historian Sima Qian. The account opens with dry information about the birthplace of the historical personality and ends with a subjective emotional assessment from the author: “I, the translator-historian (yi shi shi), will say this…”. Yan Fu also wrote a biography of Montesquieu in the same style. The Chinese thinker He Lin praised Yan Fu for the beauty of style of both biographies which were chosen by his contemporaries for the collections of great literary essays; “regrettably, there are not too many texts of this kind by Mr. Yan” (He Lin, 1925, 85).
34 Yan Fu’s striving for elegance in the translation could be explained by his personal preferences in terms of literary style as well as his aspiration to influence his well-educated contemporaries who greatly valued the formal perfection of a text. The Chinese philosopher and historian of philosophy Feng Youlan (Fung Yu-lan, 1966, 326) noted:
[I]n Yen Fu’s translations, the modern English of Spencer, Mill, and others was converted into Chinese of the most classical style. In reading these authors in his translation, one has the same impression as that of reading such ancient Chinese works as the Mo-tzu or Hsun-tzu. Because of their respect for literary accomplishment, the Chinese of Yen Fu’s time still had the superstition that any thought that can be expressed in the classical style is ipso facto as valuable as are the Chinese classical works themselves.
35Many educated Chinese wanted to read Yan Fu’s translation of Evolution and Ethics because of the beauty of its style. Contrary to his expectations, schoolchildren also became interested in the book. Schwartz concluded: “Nevertheless the basic question remains. Can the authentic thought of eighteenth- and nineteenth-century Europe be transported into classical Chinese—a linguistic medium soaked in categories of a totally alien culture?” (Schwartz, 1964, 94).
36 Yan Fu worked on the assumption that Chinese and Western cultures were compatible and that it was possible to express European thought in literary Chinese language. His goal to put foreign ideas into classical form did not correspond to the mainstream tendency of development of Chinese culture in the twentieth century which decisively distanced itself from classical canonical forms. However, at the end of the nineteenth century, Yan Fu’s desire to carrying forward the Chinese cultural tradition which had been stable throughout two millennia seemed clearer and more explicable. Retelling the original instead of providing a literal translation, excluding unclear details, making comparisons with Chinese traditional thought and providing abundant comments helped Yan Fu to bring foreign ideas to the Chinese audience.
37A stumbling block on the path of spreading Western economic ideas in China was the Confucian orthodoxy that neglected profit and exalted moral ideals of humanness and righteousness. Smith’s concept built on the hypothesis of free activity of individuals moved by self-interest was in conflict with the Chinese notion of social relations, the latter demanding submission of the individual to the complex hierarchy of ethical obligations that stood above material interests. The first reader of Yan Fu’s translation was the high-ranking Qing official Wu Rulun. In the preface to The Origins of Wealth, he noted: “If profit is taboo there can be no science of management of wealth (li cai zhi xue)”, that is economics (Wu Rulun,  1981, 2). The author of the preface underscored that Smith’s book “addresses the issue of profit” (ibidem).
38 Understanding the weakness and backwardness of China with respect to the West generated a common goal to achieve wealth and power among the reformers of the end of the nineteenth century. However, most of them wanted to enrich the state but not individuals. The concept of self-interest still faced resistance and the Chinese educated elite was unwilling to give merchants a higher social status than that defined by tradition. In his translation, Yan Fu conveyed the idea of self-interest as put forward by Adam Smith by the Chinese notion of si – “private, selfish” which had a negative connotation in Confucian tradition.
39 Yan Fu attempted to bring the economic idea of self-interest into the Chinese cultural context:
There may be those who maintain that Smith's book is concerned purely with utility (kung-li) [gongli]. They say that according to the economists human morality is a matter of calculating gains and losses and that if morality is to be nothing more than a matter of self-interest and the pursuit of profit, the principles of Heaven will be lost. Such is their harsh judgment! What they do not understand is that science concerns itself with questions of truth and falsehood and not with whether its findings coincide with benevolence and righteousness. What the economists discuss is economics. They decidedly do not discuss that which lies outside the realm of economics. But they do not assert that human morality is nothing but a matter of economics. If one were to condemn them, how would this be different from reading books on military strategy and censuring them for dealing with matters of violence (lit. ‘subjecting other countries’) or from reading treatises on acupuncture and moxibustion and blaming them for advocating the infliction of pain? (Yan Fu,  1981b, 12; English translation quoted after Schwartz 1964, 124)
40Yan Fu tried to convince his audience that economics could be put on an equal footing with studies in military strategy and medicine, as an independent discipline that does not directly submit to the universal ethical hierarchy of Confucianism. In order to resolve the conflict between Smith’s doctrine and Chinese tradition, he referred to evolutionary theory to demonstrate that people in the West in the past had also neglected profit and had not recognized the positive role of self-interest. The fact that this recognition had emerged in the West during the process of social development meant that China was not unique and also had to go through this stage of general evolution of mankind.
41 In his commentary on The Origins of Wealth, Yan Fu cited from the ancient Confucian thinker Mencius: “Benevolence and righteousness, and let these be your only themes. Why must you use that word—‘profit’” (Mencius: Liang Hui Wang I) and words of the system-builder of Confucian orthodoxy Dong Zhongshu: “Be true to moral principles and do not scheme for profit; illuminate [exemplify] the Way and do not calculate the advantages [for oneself]” (Yan Fu,  1981c, 77; quoted after De Bary, 1999, 743). Yan Fu explained that in all “old religions” including Western religions, there was a division between righteousness and profit. However today, as a result of evolution, the conflict between them had disappeared. He paraphrased the words of Dong Zhongshu to adapt to the new situation: “Without righteousness there will be no profit, without the Way-dao there will be no advantages gained”. According to Yan Fu, this statement is “clear as a burning flame” and was predicted by economic science.
42 Confucian ethics of self-cultivation, humaneness and ritual propriety divides humans into “virtuous men” (junzi) who follow righteousness and “inferior men” (xiaoren) who seek profit. Yan Fu stressed that there are narrow-minded and ignorant people, but no “inferior men”. If an “inferior man” perceives his true long-term interest, then he is no different from “virtuous men”. Although this reasoning follows Confucian terminology, it is based not on Chinese tradition but on Smith’s doctrine.
43 A telling example of cultural adaptation can be found in Yan Fu's interpretation of the idea of man’s ability to exchange things, which makes him different from other living creatures:
Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. Nobody ever saw one animal by its gestures and natural cries signify to another, this is mine, that yours; I am willing to give this for that. (Smith,  1904, WN, I.ii.2)
44In his translation, Yan Fu has replaced dogs with pairs of birds and monkeys, which are more appropriate to the Chinese literary style. This substitution made it possible to correlate Smith’s idea with the traditional Chinese notion of division between the world of humans and the realm of “birds and beasts” (qinshou), which marks the boundary between civilization and barbarity.
45 Here is a creative translation of this passage by Yan Fu:
Birds do not exchange insects with each other, monkeys do not exchange fruit with each other, because those who exchange should first be aware of a division between what is mine and yours, but birds and beasts do not make this distinction. Therefore mutual exchange is possible only among humans. When birds and beasts want to get food, they struggle with other representatives of their species and the strongest gets it without asking to whom it belongs. (Yan Fu,  1981c, 11)
46Yan Fu added the theme of the struggle for life which was not in the original. It seems that he decided that his favourite Western theory, natural selection, could serve as a good explanation for Smith’s thinking.
47 In The Wealth of Nations Smith noted:
[M]an has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them … It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. (Smith,  1904, WN, I.ii.2)
48Here is the same passage in Yan Fu’s translation:
We often appeal with requests to society but there is not enough generosity from other people to allow us to lean on their support. What should we rely upon to give ourselves the necessary means of livelihood? I say: on what in the Heavenly Empire everyone values as their own—and that is enough. The human being is like an insect that independently maintains its livelihood. He strives to get something for himself from other insects and it is impossible to get it without relying upon what they value as their own. The butcher at the market, the wine seller, the grain supplier help us to obtain our meals not because of their humanness but because all three care about what is their own. (Yan Fu,  1981c, 11)
49Besides the presence in the Chinese text of the unusual image of an insect to express the general notion of living creatures, it is necessary to note that Yan Fu used pejorative words to refer to the seller’s self-interest. The word “tugu” (butcher and wine seller) means a despicable person with an unrespectable occupation. It reveals Yan Fu’s scornful attitude to self-interest and his perception of trade as a contemptible occupation, which was not expressed to the same degree by Smith.
50Under the influence of Chinese tradition, Yan Fu puts the interests of the state above the interests of individuals. He cares more about the wealth of the state than about the prosperity of individuals. This emphasis can also be found in Smith’s work which Joseph Schumpeter ( 1994, 181) characterized as “a collection of recipes for the ‘statesman’.” At the same time, Yan Fu interpreted Smith’s words about “general interest” or “public happiness” in a Chinese way and transformed them by reasoning in terms of the state (guo) instead of the original notions of “society” and the “nation”.
51Schwartz (1964, 117) noted:
If to Smith the “wealth of nations” refers in the first instance to the wealth of the sum total of individuals who compose the nation-society, to Yen Fu the wealth of the kuo [guo] refers in the first instance to the wealth and hence to the power of the nation-state as a collective entity struggling for existence in a world of similar collective entities.
52Yan Fu’s arguments fall outside the limits of Smith’s views of individual wealth because the Chinese thinker justified economic freedom primarily on the grounds that it reinforces the power of the state. According to Schwartz (1964, 122) the translator shifted the emphasis from a concern with “public happiness” in terms of economic welfare of the sum total of individuals to the more essential concern with goals of state power. The aspiration to put the universal above the particular, which is inherent to Chinese culture, has generated a problem of coordination between private self-interest and the interests of the state, which gained importance in the process of assimilation of Western liberal thought, including economic ideas.
53 The priority of state enrichment complicated the Chinese intellectuals’ understanding of the well-known principle of the “invisible hand” in the market. One of the key ideas of Smith’s economic theory claims that the individual desire to pursue self-interest leads to social progress even when the person does not have this goal in mind. At the same time, the selective approach to the translation of The Wealth of Nations led to the omission of the famous passage about the “invisible hand” guiding the market economy in The Origins of Wealth. The Chinese researcher Hu Peizhao (2002, 64) wrote that in Yan Fu’s translation, the “invisible hand” of the market economy “is really not visible.”
54 This “disappearance” results first of all from the difficulty in explaining the Western metaphor of the “invisible hand” to the Chinese audience due to differences in cultural setting. “If one could speak about the substantiation of the ‘invisible hand’ in the market economy, then it was rather in theological terms. The idea of the ‘invisible hand’ was an organic part of Smith’s religious outlook” (Avtonomov et al., 2001, 48). However in China, there was no notion of a monotheistic God the Creator and therefore for the Chinese, the process of cognition of the world was not linked with the comprehension of Divine wisdom. Yan Fu has rendered this passage using Chinese notions about the impersonal natural order of the universe as expressed in Taoist concepts of “naturalness” (ziran) and “non-action” (wuwei).
55 Smith wrote that an individual and his pursuit of self-interest is being “led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it” (Smith,  1904, WN, IV.ii.9). Yan Fu translated this passage adding Chinese terminological and cultural flavour:
It is necessary to say that if somebody considers the common interest to be his goal, if he knows that his [actions] will be useful to the state and he acts accordingly, this will be unnatural. He who rejects what is distant and aspires to seize what is near, he who strives for his personal wealth will not miss. Those who strive for prosperity instead of a modest life will ensure that their profit increases every day. Each individual cares about his private [interests] so that the state does not intervene but successfully moves ahead to reap the great profit. Will the interest of the state suffer because everyone cares about their private [interests]? Only when the people care about their private [interests] is this favorable for the state. They bring more real profit to the state than those who publicly proclaim that they bring benefits to the state. I have seen people who publicly declare that they bring benefits to the state, I have heard their speeches. As a result, the state has no means of making a profit and besides, those who do not care about private [interests] are a source of constant worry for the state. (Yan Fu,  1981c, 371-372)
- 7 It seems that this phrase by Yan Fu was inspired by the ancient Taoist thought. An evident parallel (...)
56With the same Taoist idea of natural order, Yan Fu connected Smith’s notion of equilibrium between supply and demand. In his comments to Book I, Chapter VII “Of the Natural and Market Price of Commodities”, the Chinese thinker wrote that the equilibrium between supply and demand occurs naturally as a result of competition. If one tries to “establish posts of governing officials”, to “violate the nature of things by imposing one’s will”, to “use what’s uneven to produce what is even”7, then one steps on a road that leads to “great disorder” (Yan Fu,  1981c, 50-51).
57 Smith wrote that “the quantity of every commodity brought to market naturally suits itself to the effectual demand” (Smith,  1904, WN, I.vii.12). Yan Fu commented that “saying that supply and demand are dosing each other means asserting that when the things are left to themselves, both [supply and demand] tend to balance each other” (Yan Fu,  1981c, 50). The Chinese thinker believed that supply and demand balance each other in a natural way, while interfering with the free market could create chaos.
58The most considerable divergence between the translator’s economic views and Smith’s original text is to be found in Yan Fu’s disagreement with the labour theory of value. The Chinese thinker failed to integrate this theory into the concept of natural order. Book I, Chapter V “Of the Real and Nominal Price of Commodities, or of their Price in Labour, and their Price in Money” in Yan Fu’s translation was entitled “Of the distinction between the real value of a thing and [its] market price”.
59 The translator added a commentary expressing his disagreement with the labour theory of value. The original thesis, “labour, therefore, is the real measure of the exchangeable value of all commodities” (Smith,  1904, WN, I.v.1), has been re-formulated by Yan Fu as: “labour is the real value, [based on which] things are exchanged. The values of all products can be ranked from high to low according to the [quantity] of labour” (Yan Fu,  1981c, 23).
60 Yan Fu added his own explanation:
Smith considers the labour spent on manufacturing something is the real value of this thing. Value is considered to depend on whether much or little labour was necessary and whether this labour is difficult or easy. Although he argues exhaustively to show this, the wise man will necessarily be mistaken in one case out of a thousand. A thing has no ascertained value, thus one has to look only at the mutual dosing between supply and demand. If there is little supply and great demand, [the thing] is difficult to obtain, therefore it is expensive; if there is a large supply and little demand, [the thing] is easy to obtain and is therefore cheap. When [the thing] is difficult to obtain, it is not necessarily true that a lot of labour [was spent] on it, and when [the thing] is easy to obtain, it is not necessarily true that a small [amount] of labour [was spent] on it. If one mu [traditional Chinese measure of area, about 0.07 hectares] of land is in a remote area, it costs a small [amount] of gold but it is [difficult] to sell; if this piece of land were located in a big city, all are in eager rivalry to buy it even for ten thousand pieces of gold, yet is there any difference in labour? If the fruits of tree are turned to the sun, they are sweet, big and get a good value; if the fruit are not turned toward the sun, they are small and sour, and people reject them; where is the difference in labour here? (Yan Fu,  1981c, 24-25)
61It is possible to assume that Yan Fu followed Mill’s treatment of value and had accepted his notions that “the value, or exchange value of a thing” is “its general power of purchasing” (Mill,  1909, III.i.5). Yan Fu regarded value as commensurable by the mutual comparison of things. He wrote: “Value is real (zhi zhe zhi ye), [it is a] numerical parity that connects two corresponding terms” (Yan Fu,  1981c, 25). Here apparently, Yan Fu tried to explain a difficult statement by Mill using classical Chinese language which blurs the category of numbers and the distinction between the individual and the general: “Value is a relative term. The value of a thing means the quantity of some other thing, or of things in general, which it exchanges for” (Mill,  1909, III.vi.2).
62 Concerning Smith’s labour theory of value, Yan Fu explained: “If one speaks in terms of labour, it is present in each separate thing, and [the value of labour] cannot increase or go down with time. Therefore subsequently, the economists did not follow Smith’s doctrine according to which a thing has a real value” (Yan Fu,  1981c, 25). Yan Fu was confident that labour could not serve as a measure of exchangeable value, he believed that in this case— “one out of thousand” —Smith the wise man was mistaken.
63Yan Fu was the first Chinese scholar who tried to understand what value is and what is the distinction between value and price. This fact was noted by the well-known historian of Chinese economic thought Hu Jichuang. In the works written after 1949 when Marxism became the leading ideology in China, Hu Jichuang (1984, 218-219) criticized Yan Fu for not understanding that the labour theory of value was the strongpoint of Smith’s book. Hu judged that Yan Fu’s concept of value based on the interaction of supply and demand was erroneous. At the same time, Hu Jichuang gave Yan Fu credit for being the first thinker in several millennia of Chinese history to have addressed the theory of value.
64 Yan Fu persistently advocated the idea of balancing supply and demand and accused Smith of lacking consistency: “Concerning the notion of mutual dosing of supply and demand, Smith often trusts it without sincerity and does not adhere to it firmly. Therefore, later wise men criticized his doctrine…” (Yan Fu, , 1981c, 162). In the note to Book I, Chapter XI “Of the Rent of Land” the translator disagrees with the statement that “the scarcity of wood […] raises its price [and] […] affords a good rent” (Smith,  1904, WN, I.xi.68). According to Yan Fu, such a conclusion cannot be drawn without the involving factor of demand: “If there is no demand, should even all forests in the Heavenly Empire have withered and should there be only one tree left, would it become expensive?” (Yan Fu,  1981c, 162).
65 Yan Fu also disagreed with Smith’s division between productive and unproductive labour. The Chinese thinker wrote that these views were later debated by wise men. Smith considered “profit that has a form and did not consider profit that has no form, he knew that people’s labour creates wealth, and had not observed that people’s virtue and reason were particularly significant for the creation of wealth” (Yan Fu,  1981c, 272).
66In the commentary to Book I, Chapter VII “Of the Natural and Market Price of Commodities”, Yan Fu once again addressed the principle of mutual dosing of supply and demand. He had encountered a problem with the translation of “natural price” and “market price”. Yan Fu chose the Chinese term jing that has a broad range of meanings including “permanent” and “normal” to express the notion of “naturalness” in relation to price. Yan Fu consciously avoided the term tian (nature, Heaven) that he had used earlier to translate the English term “Nature” in Spencer’s The Study of Sociology. Similarly, he translated the title of Huxley’s Evolution and Ethics into Chinese as Tianyan lun (Theory of natural development). Yan Fu did not use the notion of “Heavenly naturalness” (tian) for the purpose of introducing Western economic thought, possibly because it was detached from the realm of human activity and burdened with connotations from Chinese traditional cosmology.
67 In translating the notion of “market price”, Yan Fu refrained from using a literal approach and used the term shi jia (temporary price). It seems that Yan Fu’s translation of both terms was influenced by Mill who treated as synonyms the “permanent” and “natural”, and the “temporary” and “market” value of a thing (Mill,  1909, III.vi.3; III.vi.4). It is also possible to suppose that another source of influence was Alfred Marshall who introduced the element of time as a factor in the analysis of the equilibrium between supply and demand and put forward the concept of the normal price. It is worth mentioning that in a commentary on The Origins of Wealth, Yan Fu wrote that “among the contemporary British economists, no one stands on par with Marshall” (Yan Fu,  1981c, 433). In this case, Yan Fu relied for his translation on economic concepts developed in the West after Smith.
68 For Yan Fu, it was no less important to make the subject more accessible to a domestic audience. The translator explained that jing jia is also called ping jia (balanced or equalized price) (Yan Fu,  1981c, 272). Yan Fu elaborated this explanation by referring to the traditional Chinese concepts of ping zhun (balanced standard) and jun shu (equalization of transportations) ( 1981c, 48). Yan Fu ( 1981c, 50) commented that the ancient Chinese thinkers Guan-zi and Sang Hongyang had already discussed the problem of balance between supply and demand. Hu Jichuang (1984, 223) dismissed these cross-cultural comparisons as totally irrelevant to Smith’s original concept of “natural price” because the Chinese notion of equalization of prices implied state interventionism: selling stocked goods when prices are high and buying them when prices are low. Other scholars argued that this approach was justified by the necessity to add clarity for Chinese readers: “From this example, one can see the problems and conundrum Yan Fu had to face” (Lai Jiancheng, 2009, 81).
- 8 In his translations of The Wealth of Nations Yan Fu added many natural science metaphors. For examp (...)
69 Smith noticed that monopolists sell their goods at prices that are much higher than the natural price and that this increase in the market price can last as long as the police regulations that dictates them (Smith,  1904, WN, I.vii.29). Yan Fu explained that Smith had made a very thorough investigation of the “principle of mutual dosing of supply and demand” and had used in his economic arguments the achievements of scholars of that time in studies on the laws of hydraulics8.
Smith has applied their knowledge to the management of wealth; he has learnt that the prices tend to level just as water is levelled; [to follow] the Way-Dao is to leave them to themselves. If the things are allowed to compete, it will be similar to allowing many people to come to a large market; the [prices] will start levelling until they are levelled. And the monopoly (guque) is similar to a dam that makes a barrier for water in the mountains; the [water] stops for a while, then it is levelled at a higher level. (Yan Fu,  1981c, 54-55)
70To translate the term “monopoly”, Yan Fu used the ancient Chinese notion of guque which was used to designate state monopolies. The figurative perception of monopoly as a barrier on the path of streaming water is based on the original meanings of these two characters, also underlined by Yan Fu:
Gu is a dam, que is a beam [manufactured] from a tree. Therefore, when someone solely draws benefits from a dam, it is called monopoly-guque; Meng-zi named it monopoly-longduan, all the means to constrain and not allow passage. (Yan Fu,  1981c, 55)
- 9 The ancient Confucian classic begins the relevant passage on monopoly with the quotation of Jisun ( (...)
71The term of monopoly longduan is used in contemporary Chinese. Its original meaning is not connected with water but with the image of a man standing at the top of a hill9.
72 Yan Fu ( 1981c, 55) explained that when investigating monopoly, Smith had observed that a person that demands certain goods pays the highest price that can be received by the seller, but that under conditions of free competition, the price was the lowest. In the same commentary, Yan Fu took the example of the Western price monopoly for a spice obtained by The Dutch East India Company. Another example provided by Yan Fu was the salt monopoly in China. He concluded that due to the monopoly, the price of salt was several times higher.
73 Yan Fu’s liberal arguments in favour of free competition rely both on Smith and on the traditional Chinese idea of naturalness. The prices which are the result of a monopoly (monopoly prices) are in practice much higher than natural prices. It is reminiscent of the water level in a dam—it is flat but it is abnormally high above the natural level. Ancient Chinese thinker Meng-zi has a similar metaphor:
Now by striking water and causing it to leap up, you may make it go over your forehead; and, by damming and leading it you may make it go up a hill; but are such movements [according to the nature] of water? It is the force applied which causes them. (Mencius: Gaozi I; translation by James Legge, 1875, 307)
74It is remarkable that Yan Fu used the image of “water flowing toward the sea” not only in his notes but also in the text of the chapter (Yan Fu,  1981c, 55) to convey Smith’s idea that the market price of every particular commodity continually gravitates towards the natural price (Smith,  1904, WN, I.vii.20). By comparing prices to flowing water, Yan Fu encouraged following the naturalness that would lead to the leveling of prices at a lower level without governmental intervention. Traditional Chinese images became an appropriate form of transmission of Smith’s views on the reduction of prices under conditions of free competition.
75In The Origins of Wealth, Yan Fu expressed his own views on the subject of economic science.
76 In the Introduction to Book IV “Of Systems of Political Œconomy” Smith put forward his definition of economic science:
Political œconomy … proposes two distinct objects: first, to provide a plentiful revenue or subsistence for the people… ; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services. It proposes to enrich both the people and the sovereign. (Smith,  1904, WN, IV. Introduction. IV.i.1)
77In the Chinese translation of this passage, Yan Fu specified that economic science (jixue, “science of calculation”) is one of the branches of knowledge about government. “It focuses on two [purposes]: the first is that the people have enough to eat, the second is that the state has wealth to be used. Economic science aspires to achieving a state where the people and the ruler always have sufficient [resources]” (Yan Fu,  1981c, 347).
78 Yan Fu added a critical commentary to underscore the deficiencies in Smith’s definition. He observed that economists after Smith considered it “unclear” and “simplified” and that they did not use it often. Yan Fu referred to a more recent definition of economic science as the knowledge of “principles of production, distribution, and consumption of wealth”. He maintained that this definition is closer to the subject of economic science. However, logicians saw a deficiency in its use of the categories of production, distribution and consumption which have many interpretations. They also suggested that economic science speaks about principles of motivation for labour, the mastery of things and the stimulation of the strength of the exchange value. In this case, Yan Fu tried once again to rely on the reasoning of Mill who was engaged in studies of logic and wrote about exchange value as the power of purchasing. However, this definition was too difficult and Yan Fu admitted that only certain well-educated scholars could understand it.
79 Yan Fu assumed that the “unclear” and “simplified” nature of Smith’s definition was due to the mixing of economic science with all sciences about the economy (yu jingji quan xue xiang hun). If one wants to use Smith’s approach and see the task of economic science as being to achieve “satisfaction of the people” (zu min), then it is necessary to speak about many other things such as virtuous behaviour, customs and habits, mental abilities, institutions and religion. However economists believe that their science focuses on the problems of increase and decrease of wealth, which is why Smith’s definition was considered “unclear”.
- 10 Expression “to live in common and to obtain sustenance in common” (xiang sheng xiang yang) was used (...)
80 The translator observed that those who are engaged in “satisfying the people and enriching the state” (zu min fu guo) consider that the purpose of this science is the deep understanding of the principles of wealth in connection with knowledge about common living and obtaining subsistence (xiang sheng xiang yang10). However in his definition, Smith only wrote about what economic science aspires to instead of indicating what it investigates. For this reason his definition was considered “simplified” (Yan Fu,  1981c, 348).
81 Together with a discussion on the definition of economic science, Yan Fu provided arguments for his choice of the Chinese terminological equivalent of this concept. He declared that it is necessary to distinguish science (xue) from art (shu). “Science investigates natural principles and formulates laws. Art is based on already known principles; it aspires to achieve success in skills (gong). In science, the main thing is knowledge, in art the main thing is action” (Yan Fu,  1981c, 348). Economic science should be named jixue (science about calculation) instead of licai (management of wealth) because the latter belongs to the category of practical techniques or art. Secondly, according to Yan Fu, economic science investigates production (sheng), distribution (fen), management (li) and accumulation (ji) of wealth, and this variety of problems cannot be reduced solely to management. Thirdly, the notion of “management of wealth” has already been included in the Chinese language, indicating in most cases the needs of the state, not of the people. Yan Fu also reminded one of the traditional use of the character ji (calculation) in the words jixiang (the state treasurer) and shangji (to present the accounting report for the authorities to review at the time of the Han dynasty). “If it is so, then the reduction and increase in social wealth, its completeness and emptiness are the affairs of calculation (jishi), [and we] proceed from there to establish the term jixue” (Yan Fu,  1981c, 348).
82 In the middle of the twentieth century, the Chinese researcher Xia Yande noted that scholars after Smith, such as John Elliott Cairnes and Nassau William Senior in England, Karl Heinrich Rau in Germany and others made a distinction between “science” and “art”, thus drawing a line of divide between economic science of pure principles and applied science to avoid their mutual penetration. According to Xia Yande (1948, 166), under their influence, Yan Fu insisted that economic science should be the science of pure principles and disagreed with Smith’s opinion on economic institutions and policy. In his description of this stage of development of Western economic science, Joseph Schumpeter ( 1994, 515) observed that “most of the writers of standing who paid serious attention to the fundamental questions of methodology clearly saw, and strongly emphasized, the distinction between arguments about what is and arguments about what ought to be: the distinction between the ‘science’ of economics and the ‘art’ of policy.” In the spirit of scientific attitudes at the end of the nineteenth century, Yan Fu strived to emphasize the independence of economic science and put forward his arguments about this issue. In the notes to The Origins of Wealth, Yan Fu challenged Smith’s definition and attempted to narrow the subject-field of economic science.
83 Yan Fu’s well-known interest in the methodological work of John Stuart Mill suggests that the Chinese thinker was possibly aware of his essay “On the Definition of Political Economy; and on the Method of Investigation Proper to It” (Mill,  2000) and referred to it when challenging Smith’s definition of economic science. In this article, Mill wrote about the “current loose notion of Political Economy” and made the distinction between the concepts of science and art: “The one deals in facts, the other in precepts. Science is a collection of truths; art a body of rules, or directions for conduct” (Mill,  2000, 88-89).
84 Mill ( 2000, 89) emphasized that “science takes cognizance of a phenomenon, and endeavours to discover its law; art proposes to itself an end, and looks out for sneaks to effect it.” He also mentioned the definition of Political Economy that was most popular in scholarly circles, which was that science “informs us of the laws which regulate the production, distribution, and consumption of wealth” (ibidem). Yan Fu used a very similar definition of economic science that could serve as an additional proof of his knowledge of Mill’s work. Another source of influence was “A System of Logic, Ratiocinative and Inductive”, which was translated by Yan Fu. In this book, Mill explained the relationship between science and art (Mill,  1974, VI.xii).
85 According to Mill ( 2000, 94), “Political Economy does not treat of the production and distribution of wealth in all states of mankind, but only in what is termed the social state.” He considered the most complete definition of political economy to be “[t]he science which traces the laws of such of the phenomena of society as arise from the combined operations of mankind for the production of wealth …” (Mill,  2000, 99). Yan Fu therefore used the expression “to live in common and to obtain sustenance in common” (xiang sheng xiang yang) to translate Mill’s notion of social production of wealth.
- 11 The contemporary word “economy” is derived from Ancient Greek “oikonomia”. Its first root “oikos” m (...)
- 12 According to evaluations of modern Chinese authors, only about 12 percent of versions of translatio (...)
86 Yan Fu struggled to reconcile the Chinese equivalent of the concept of “economic science” with the original meaning of the Western term. In the preface to the translation of Smith’s work, he remarked that the origin of the Western term of economic science is the Greek “yekenuomi” (Chinese phonetic transcription of oikonomia). “Yeke” means house or family and “nuomi” means to operate or to calculate, so that its original meaning was knowledge on the management of the family economy11 (zhi jia). Later, the sphere of this knowledge was extended to the scale of the state and the whole world. In Yan Fu’s time, this term was translated in Japan as jingji, meaning “governing society and helping the people”, while in China, it was translated as licai. “However jingji appears to be too broad and licai too narrow” (Yan Fu,  1981b, 7). Proceeding from the traditional use of these terms, Yan Fu concluded that they are unsuitable to designate economic science and suggested using the term jixue (science of calculation). However, the term jingji has prevailed in modern Chinese due to the numerous translations of Japanese economic works at the beginning of the twentieth century.12 The name that was suggested by Yan Fu did not gain popularity. Words with the character ji (calculation) are present in Chinese economic terminology in narrow spheres of accounting and statistics.
87 It is remarkable that Yan Fu did not try to translate into Chinese the term “political economy” which was present in Smith’s book and was widely used in the eighteenth century. Yan Fu realized that in Western thought, it had already been supplanted by “economics”. He put forward this argument when discussing his translation with Liang Qichao. Yan Fu wrote that in recent works in this discipline, the term “Political” is omitted and the science is named “economics”. The term jixue corresponds to “economics” (Yan Fu,  1969c, 261).
88 Yan Fu noted that economic science became a specialized discipline (zhuanke zhi xue) about 200 years ago. “Though its principles (li) were [known] in China for a long time, as a science (xue) it essentially did not exist in China” (Yan Fu,  1969c, 261). Even if the combination of the two characters ji xue can be found in ancient manuscripts written thousands of years ago, it did not signify “economic science”. Yan Fu concluded that economic science is a new body of knowledge for China.
- 13 The “Three ancient periods” include the early period before the Zhou dynasty, i.e. until the eleven (...)
89Having listed Chinese classical works since the “three ancient periods”13, Yan Fu admitted that they carried rudiments of knowledge about “wealth management” (licai). Among such works, he mentioned the Confucian canonical text of Daxue, texts of Zhou guan (Officials of Zhou), Guan-zi, Meng-zi, two chapters—Pingzhun shu (Treatise on the Balanced Standard) and Huo zhi lie zhuan (Description of Those Who Multiply Wealth)—from the Historical Records of Sima Qian, section Shihuozhi (Treatise on Food and Commodities) from Han shu (Books about Han [dynasty]) of Ban Gu, Yan tie lun (Debate on Salt and Iron) of Huan Kuan, and also the works of Du You of the Tang dynasty and of Wang Anshi of the Song dynasty (Yan Fu,  1981b, 7-8). However Yan Fu maintained that the specialized “science of calculation” (jixue) or economics was not presented in these texts.
90The Chinese educated elite welcomed the publication of the translation of The Wealth of Nations. In 1901, after the publication of two parts of the book, the well-known thinker Liang Qichao presented the translation in the first issue of the Xinmin congbao (New Citizen Journal). Many friends asked Yan Fu to give them copies of the translation.
91 In December 1902, other parts were published and in January 1903 the complete text of The Origins of Wealth appeared in book form. After 1903, the publishing rights were transferred to the Commercial Press publishing company (Shangwu yinshuguan), which still exists today. The translation was reprinted many times, in 1929, 1931 and 1961, then in 1977 (in Taiwan), and the sixth edition was published in the PRC in 1981. The 1931 and 1961 editions are especially significant because The Origins of Wealth was published twice as part of the Collection of translations of famous works by Yan Fu (Yan yi ming zhu congkan).
92 The initial reaction to the book was very enthusiastic. After the first edition, the second followed, with two thousand copies sold in two days. New translation by Yan Fu attracted educated officials, intellectuals and students. Some educational institutions used The Origins of Wealth as a manual. Mao Zedong read The Origins of Wealth in 1912 (Fan Zhongcheng, 1993, 295).
93 In 2001 a would-be leader of China, Xi Jinping, who was at the time governor of the Fujian Province, wrote a foreword to the collection of articles about Yan Fu. He mentioned that Yan Fu “had translated and commented over ten well-known Western scholarly works, the contents of which touched upon biology, sociology, ethics, economic science, law, philosophy, politology and other sciences, and that he had strived to study foreigners in order to restrict them, to alleviate poverty and to eradicate weakness” (Xi Jinping, 2001, I).
94 Several years before The Origins of Wealth, Yan Fu published his translation of Thomas Huxley’s Evolution and Ethics which gained wide popularity. In a fairly concise Chinese edition of Huxley’s work (about 60,000 characters, it is approximately one ninth of The Origins of Wealth), readers found a striking and impressive slogan: “The rivalry of things is the natural law, the fittest will survive” (wu jing tian ze, shi zhe sheng cun). The idea of struggle for survival in natural selection was easily accepted in the historical context of China’s struggle for survival under the increasing pressure from imperialistic powers.
95 It was much more difficult to understand The Origins of Wealth. The lengthy book covered many difficult economic problems; although the idea of free competition looked like the development and the continuation of the idea of natural selection, it caused no similar sympathetic response from Chinese patriotic intellectuals. The Chinese elite wanted to gain economic strength but not through the means of economic liberalism and individualism.
96 Researchers admit that Yan Fu’s liberal ideas had no great influence on his contemporaries, and Chinese studies in Western economic thought throughout the twentieth century did not go beyond description and retelling (Zhong Xiangcai, 2006, 127). However, in the years of reform in China, there emerged the desire to expand the intellectual horizon of economics beyond 1949 by connecting modern searches with academic heritage of the first half of the twentieth century. The historical reference point has already been established. It is 1902, the year of publication of The Origins of Wealth:
It was the first book where the Chinese systematically advertized Western classical political economy. It promoted the development of progressive social trends at the end of the Qing dynasty and the establishment of economic science as an independent branch of knowledge in China. (Wang Zhenzhong, 2005, 2)
97The value of Yan Fu’s heritage is not limited to the history of economic thought. His translations, including The Origins of Wealth, constitute an important part of the process of interaction between Chinese and Western culture. An analysis of the first translation of Smith’s book reveals the patterns which influenced the whole process of Chinese intellectual borrowing from the West since the end of the nineteenth century—this includes pragmatism, selectivity, orientation toward national interests and aspiration to harmonize foreign ideas with China’s cultural tradition.
Earlier versions of this article were presented at the ESHET meeting at St. Petersburg University, 17-19 May 2012, and the EACS conference at Paris VII University, 5-8 September 2012. I would like to thank two anonymous referees for their helpful comments.