What if the concept of the free market, spontaneous order, and the minimal state wasn’t devised by Mises, Hayek, or Rothbard, but by guys in robes sipping tea in the mountains of China 2,500 years ago? Does such a claim surprise you? Then today we will talk about Wu Wei—the ancient philosophy of “non-action,” which, of course, does not mean lying on the couch with a beer, but refers to how the Universe (and the economy) works.
What is Wu Wei and what does it have to do with the free market? “Wu Wei” literally translates as “non-action,” but this is a terrible translation that makes Daoists look like slackers. It would be much more accurate to translate it as “action without violence” or “non-interference.” Imagine a surfer. He doesn’t try to beat the ocean with his fists to force the wave to go where he wants (which is how any government behaves). The surfer catches the wave and uses its natural power. He acts, but does not contradict the nature of things. In libertarianism, we call this “spontaneous order.” People, interacting voluntarily, create highly complex systems themselves: languages, money, markets. And a bureaucrat’s attempt to step in with his wrench and standards only breaks the mechanism. The Daoists understood this even before paper was invented.
Let’s transport ourselves to Ancient China (the Warring States period). Complete chaos, kings slaughtering each other over territories. Against this backdrop, the Confucians appear—ancient etatists of a sort. They walk around with tablets saying: “We need more laws! More officials! More subordination and taxes!”. And then Lao Tzu comes along and drops the “base,” which exactly mirrors modern libertarians: “The more prohibitions and restrictions there are in the world, the poorer the people become. The more laws and decrees are issued, the more thieves and robbers appear.”
Lao Tzu argued that the best ruler is one who rules so unobtrusively that the people forget he even exists. The ideal policy according to Wu Wei is to lower taxes, remove prohibitions, and leave people alone. Let them plant rice, trade, and make agreements on their own.
Some might say: “Sounds great in theory, but did it work in practice?” It worked, and brilliantly! Let’s recall recent history: Mao Zedong, wanting to take everything under his control, ordered the destruction of sparrows. A typical example of anti-Wu Wei (“I am smarter than a complex system”). The result: locusts devoured the harvest, and tens of millions of people died of hunger.
Now let’s rewind 2,000 years. The Han Empire (2nd century BC). After the brutal tyranny of the previous Qin dynasty (which tried to control every sneeze and predictably collapsed), Emperors Wen and Jing came to power. They were convinced fans of Daoism. And what did they do?
– Reduced agricultural taxes first to 3%, and then abolished them entirely for 12 years!
– Deregulated the economy, allowing peasants to freely mint coins, extract salt, and smelt iron.
– Abolished repressions for criticizing the authorities and abolished corporal punishment.
– Stopped waging senseless wars and reached agreements with neighbors.
The state simply stepped aside. What did this lead to? The economy exploded with growth. The standard of living soared, granaries were overflowing with grain, and the population grew rapidly wealthy. This period is still considered the Golden Age of China. No state plans—just give people freedom, and they will build everything themselves.
By relying on Wu Wei, we can learn two things:
1) Macro-level: Do not believe in saviors. Any political program that promises to “make everything good for everyone” through new prohibitions and regulations is doomed to fail. The system is too complex. The market will always find a way, just as water finds a crack in the asphalt.
2) Micro-level: Agorism and the black market. Do not waste energy on head-on collisions with the leviathan. Water does not fight the stone; it flows around it. Use crypto. Build parallel institutions. Find loopholes. Mind your own business without attracting the attention of the “sovereign’s eye.” Be like water.
The state is heavy, rigid, and fragile. While freedom is fluid, flexible, and unstoppable. And in the long run, water always wears away the stone!
