Fan Li, a renowned strategist and economist in the Spring and Autumn Period of ancient China, spent 22 years planning against the State of Wu and accumulated vast wealth three times within 19 years. As Sima Qian stated, 'Fan Li thrice changed his residence and achieved fame throughout the land.' In the field of economics, Fan Li is hailed as the God of Business Management. The study of Fan Li should focus more on his economic thoughts.
In recent years, the "travel fever" has sparked a "historical celebrity fever", and Fan Li has become a figure of contention: Nanyang claims that Fan Li's tomb is in Zhe County; Dingtao emphasizes that Zhu Gong (Fan Li's alias) "settled in Tao" - buried in Taoshan, Feicheng; Guoyang, Anhui has a joint tomb of Fan Li and Xi Shi; Zhuji, Zhejiang successfully applied for domestic cultural heritage based on Zhang Jue's "Zhuluo Records" from the Ming Dynasty.各地 have spared no effort in exploring historical culture. It is suggested that our city use Fan Li's economic thoughts as an entry point to study their influence on the formation of Wuxi's business culture.
Fan Li's Position in Economic History
Fan Li, who became known as Zhugong when he settled in Tao, is revered as the patriarch of business and the God of Wealth in Chinese folklore. He is the first merchant to be recorded in history. Many scholars in East Asia study Fan Li's business philosophy. Dr. Sakai Shoho, a Japanese business management scholar, regards Fan Li as the world's first business management expert. Some universities even offer courses on 'Fan Li's Business Management'
Fan Li is a symbol of business wisdom. Although his original works have been lost, his ideas can be found scattered in historical records such as "Records of the Grand Historian", "Guoyu", "Yuejue Shu", and "Wu Yue Chunqiu". Many works attributed to Tao Zhugong (Fan Li's pseudonym) have appeared over time. In the Han Dynasty, there was "The Art of Fish Farming", and in the late Ming and early Qing dynasties, there was "The Complete Book of Wealth Accumulation" (also known as "Six Books on Agriculture and Gardening"). The most famous are "Tao Zhugong's Eighteen Business Methods" and "Tao Zhugong's Business Principles" (Twelve Guidelines and Twelve Precepts for Wealth Management). "The Eighteen Methods" is written in a semi-classical style and includes modern terms such as "capital" and "work", indicating it was likely written in the late Qing or early Republic period. The attribution to Tao Zhugong mainly borrowed from Fan Li's influence in business thinking, as well as factors such as the despise of commerce in Chinese feudal society and the literary inquisitions of the Qing Dynasty.
Fan Li was an important figure in the Spring and Autumn Period. Some people in Henan and Shandong regard him as a Confucian businessman, but this is incorrect.Zi Gongwas actually China's earliest Confucian businessman. However, Zi Gong's business achievements were far inferior to Fan Li's. Later generations referred to business as "Taozhu's undertakings,端木's career." During the Spring and Autumn Period, various schools of thought competed, and Confucianism was not highly valued by different states at the time. Fan Li had studied under Wenzi (also known as Jiran or Jini). Wenzi's teacher was Laozi, so Fan Li belonged to the Taoist lineage. The "Taiping Guangji•Immortals Biography" states that Laozi "was Fan Li in Yue, Chi Yi Zi in Qi, and Tao Zhu Gong in Wu." In December 1973, the "Four Classics of Huang Di" were unearthed in Mawangdui, Changsha, which quoted many of Fan Li's remarks from "Discourses of the States•Yue II." Some research suggests that Fan Li was the founder of the Taoist "Huang-Lao School." The concept of "Dao" in ancient times had multiple interpretations, referring to the way of governing, morality, orthodoxy, and objective laws, not just Taoism. Fan Li and Wenzi mainly studied objective laws, including political struggle laws, agricultural timing laws, and business laws.
Fan Li's Economic Thoughts are one of the origins of industrial and commercial culture.
Fan Li's economic thoughts emphasize economic governance at the macro level and study price formation at the micro level. His ideas also cover many aspects of economic ethics, making his economic theories very comprehensive. The main points include:
Enrich the people and strengthen the military. Fan Li believed that "one should prepare for war when understanding the nature of conflict." War is not merely a contest of military power, but also a competition of national strength. After "ten years of population growth and accumulation," Fan Li advised King Gou Jian, advocating "not disrupting the people's work, not defying natural timing, allowing grains to ripen in harmony, so that the people can thrive," and "eliminating harm to the people to avoid heavenly disasters. When fields are cultivated and granaries are full, the people will prosper" (from "Discourses of the States - Yue"). The Records of the Grand Historian states: "After ten years of reforms, the country became rich, and soldiers were generously rewarded. They charged into battle as if thirsty people finding water, and finally defeated the powerful Wu state." Yue defeated Wu on the foundation of a prosperous people and a strong nation.
"Both agriculture and commerce thrive."
In feudal society, scholars, farmers, artisans, and merchants were ranked in that order, with merchants at the bottom. Fan Li emphasized the equal importance of agriculture and commerce. He believed in "balancing activities with nature" and "not letting the people idle." He argued that "cheap grain harms farmers, while expensive grain harms merchants. When merchants suffer, wealth doesn't circulate; when farmers suffer, land remains uncultivated. Therefore, benefiting both agriculture and commerce, stabilizing grain prices, ensuring supply at markets, and maintaining customs duties - these are the principles of governing a nation." He created the "Equal Grain Price Law" - setting national maximum and minimum grain prices. His pro-commerce policies promoted business development. "Prepare furs in summer, cotton in winter, boats in drought, and carts in flood." Yue State prospered through commerce.
"Adapting to Timing and Transforming Goods" - Emphasizing Market Forecasting.
Fan Li "understood goods according to the times" and acted accordingly. The Records of the Grand Historian described him as "following the times without blaming others." He studied the relationship between climate, supply and demand, and commodity price fluctuations, for example, predicting therules of six abundant harvests, six lean years, and a major disaster every twelve years. Based on such predictions, the State of Yue bought grain from Wu at high prices during a severe drought, causing internal turmoil in Wu. "...Without engaging in battle, our army stayed for three years, and the Wu army collapsed by itself," thus winning a brilliant "transfinite war."
When doing business, Fan Li and others mastered the principle that "when prices reach an extreme high, they will inevitably fall; when prices reach an extreme low, they will inevitably rise." They advocated "buying when prices are low and selling when prices are high," "buying like precious jewels and selling like dirt," making small profits but selling in large quantities to "seek one-tenth profit," and accelerating turnover to "avoid idle capital." Fan Li also predicted fortune and misfortune, knowing when to withdraw after achieving success.
"The wealthy should practice virtue."
According to the Records of the Grand Historian, after Fan Li had accumulated a fortune of ten thousand gold pieces three times, he distributed it among his poor friends and distant relatives. He set an example for later generations of merchants to balance profit with righteousness and practice virtue while being wealthy.
Due to Fan Li's expertise in managing wealth and production, his descendants accumulated vast fortunes, which the Records of the Grand Historian explained as "hundred million". Fan Li's successful business strategies and wealth creation methods made him highly revered by modern Wuxi industrialists and merchants. In Mr. Rong Desheng's "Autobiography of a Happy Farmer", he wrote: "Regarding Tao Zhu Gong's business philosophy, buy like a grasshopper and sell like dung - I live by diligence and frugality, with a balanced heart, following ancient wisdom. Thus, my business ventures have more benefits than harms, and I can manage them with ease." "This principle can be applied from society to province, province to nation, and nation to international - always closely observing the fluctuations of supply and demand, keeping them in mind, and understanding market trends." "Everything I manage follows this principle." "I often think that Tao Zhu Gong's insights were always accurate, not by chance." The name "Li Garden" was suggested by Mr. Rong; Meiyuan has the "Yi Li" Pavilion; and Yuantouzhu's "Tao Zhu Pavilion" was built in 1925 by the Wuxi Chamber of Commerce to honor "Tao Zhu Gong".
Many excellent qualities possessed by modern industrialists and businessmen in our city can be traced back to Fan Li's philosophy. For example, they took the rise and fall of the nation as their responsibility, promoted industrial salvation, and emphasized good management. In particular, they practiced righteousness while being wealthy, establishing charitable foundations and schools, building bridges and roads, and constructing public parks. During the Republic of China period, promoting education while being prosperous became a distinctive feature of Wuxi, with more than 20 schools established by industrialists and businessmen. Qian Mu said, "Wuxi people value reputation more than profit. Whenever a Wuxi person establishes a factory in Shanghai and makes profits, they will definitely set up a private school in their hometown to support local education development." (From "Recollections of Parents and Friends at Eighty")
In-depth Study of Fan Li's Business Maxims
In ancient China, becoming wealthy through business was known as "The Legacy of Tao Zhu," and business theories and management skills were called "The Art of Tao Zhu." "The Eighteen Methods of Tao Zhu's Business" and "Tao Zhu's Business Precepts" are summaries of business rules and strategies by merchants throughout history, serving as early "business guides." These can be seen as transitional "intermediaries" between Fan Li's economic thoughts and business culture. "The Eighteen Methods" and "Business Precepts" are both business culture and popular culture, requiring historical verification without being limited to existing texts. The origin of these business maxims in terms of time and place is worthy of scholarly research. Based on existing materials, it can be concluded that they emerged in periods and regions with relatively developed commodity economies. The use of the ancient character "餂" in "Business Precepts" suggests it might be from an earlier period.
《陶朱公经商十八法》：
生意要勤快，切勿懒惰，懒惰则百事废。
接纳要谦和，切勿暴躁，暴躁则交易少。
价格要订明，切勿含糊，含糊则争执多。
账目要稽查，切勿懈怠，懈怠则资本滞。
货物要整理，切勿散漫，散漫则查点难。
出纳要谨慎，切勿大意，大意则错漏多。
期限要约定，切勿延迟，延迟则信用失。
临事要尽责，切勿放任，放任则受害大。
用度要节俭，切勿奢侈，奢侈则钱财竭。
买卖要随时，切勿拖延，拖延则机会失。
赊欠要识人，切勿滥出，滥出则血本亏。
优劣要分清，切勿混淆，混淆则耗用大。
用人要方正，切勿歪斜，歪斜则托付难。
货物要面验，切勿滥入，滥入则质价低。
钱账要清楚，切勿糊涂，糊涂则弊窦生。
主心要镇定，切勿妄作，妄作则误事多。
工作要细心，切勿粗糙，粗糙则出劣品。
说话要规矩，切勿浮躁，浮躁则失事多。
《陶朱公商训》：
理财致富十二则
一是能识人。知人善恶，账目不负
二是能接纳。礼文相待，交往者众
三是能安业。厌故喜新，商贾大病
四是能整顿。货物整齐，夺人心目
五是能敏捷。犹豫不决，终归无成
六是能讨帐。勤谨不怠，取行自多
七是能用人。因才是用，任事有赖
八是能辩论。生财有道，阐发愚蒙
九是能办货。置货不苛，餂（通舔）本便经
十是能知机。售贮随时，可称名哲
十一是能倡率。躬行以律，亲感自生
十二是能运数。多寡宽紧，酌中而行
理财致富十二戒
一勿鄙陋，应纳无文，交关不至。
二勿优柔，胸无果敢，经营不振。
三勿虚华，用度无节，破坏之端。
四勿强辩，暴以待人，祸患难免。
五无懒惰，取讨不利，账目无有。
六勿轻出，货物轻出，血本必亏。
七勿急趋，货重争趋，需防跌价。
八勿昧时，依时贮发，各有各道。
九勿固执，拘执不通，便成枯木。
十勿贪赊，贪赊多沽，承卖莫结。
十一勿薄蓄，货贱贮积，回复必速。
十二勿痴赁，优劣不分，贻害非浅。
