The Eternal Comedy of Oversight: Why Power and Business are Forbidden Lovers
History is littered with the corpses of good intentions, and nowhere is this more evident than in the forbidden romance between power and business. From the early Han Dynasty, the rules were crystal clear: merchants could not be officials, and officials could not be merchants. It was a crude, binary attempt to keep the sword from getting its hands sticky in the ledger.
The Confucian scholars of the time, functioning as the conscience (and the ultimate obstructionists) of the state, looked at Sang Hongyang’s state-run enterprises and saw disaster. Their argument was as cynical as it was accurate: power cannot be supervised. When the government becomes the baker, the butcher, and the candlestick maker, they lose the only accountability that matters: the threat of going broke. State-run tools were shoddy, the service was insulting, and they ignored the actual needs of the farmer because they didn't have to sell a product—they just had to fulfill a quota.
Sang Hongyang, caught in the inevitable trap of the visionary, had a classic reply: "The rules are perfect; it’s just the implementation that is flawed."
It is the oldest excuse in the book of governance. Every tyrant, every idealistic bureaucrat, and every failed project manager has used this line to shield themselves from the rot of reality. The arrogance of the state enterprise lies in the belief that they can override human nature with a rulebook. They assume that if they write a document long enough and precise enough, the local official—who is struggling to meet a quota while feeding his own family—will magically transform into a disinterested, efficient servant of the public good.
But humans aren't cogs in a machine; they are opportunistic creatures who react to incentives. When you remove the pressure of the market, you don't get "socially responsible" production; you get a bloated mess where the rules are just suggestions and the "flawed implementation" is actually the only way the system can survive. We are still playing this game today, pretending that we can fix state monopolies with "better oversight," while the reality remains what it has always been: when you give power the ability to trade, it won’t just manage the market—it will consume it.