The oldest essay on markets in Chinese

Around 90 BCE the historian Sima Qian included, in his Records of the Grand Historian (Shiji), a chapter on people who grew rich through trade and production: the “Biographies of the Money-Makers” (货殖列传) (司马迁 1959). It is one of the earliest sustained discussions of markets in any language, and it is remarkable for treating the pursuit of gain as a natural force to be understood rather than condemned.

Read today, “profit” could almost be replaced by “attention”. The chapter’s merchants succeeded by understanding where others’ interest was moving and placing themselves accordingly.

Going with the grain

Sima Qian wrote this of government’s relation to the people’s pursuit of livelihood. As advice about attention, it is surprisingly modern: the best strategy follows what people already want (因), the next makes it worth their while (利道), then educates, then imposes rules, and the worst fights the current. In the terms of Chapter 1, a source that offers people what they already value enters their allocation at a lower cost than one that must first change what they value.

Bai Gui: take what others discard

Bai Gui bought grain when the harvest was plentiful and others were selling, and sold when it was scarce and others were buying. Sima Qian adds that he lived frugally, shared hardship with his servants, and moved on an opportunity “like a beast of prey or a bird of prey striking” (趋时若猛兽挚鸟之发). The same chapter records the advice attributed to Ji Ran: “when the price of a thing has risen to its extreme, it turns back to cheap; when it has fallen to its extreme, it turns back to dear” (贵上极则反贱，贱下极则反贵), and his maxim “in drought, invest in boats; in flood, invest in carts” (旱则资舟，水则资车).

# "What others discard, I take": a newcomer's expected share of a niche's daily attention, if
# the niche's
# attention D (hours per day) is split evenly among its n creators plus the newcomer. Invented
# numbers.
niches = {"crowded: beauty hauls": (50000, 4000), "middle: home cooking": (12000, 600),
          "neglected: repair tutorials": (3000, 40)}
print("niche                          attention/day   creators   newcomer's share (hours/day)")
for name, (D, n) in niches.items():
    print(f"{name:30s} {D:13,d} {n:10,d} {D / (n + 1):18.1f}")
# niche                          attention/day   creators   newcomer's share (hours/day)
# crowded: beauty hauls                 50,000      4,000               12.5
# middle: home cooking                  12,000        600               20.0
# neglected: repair tutorials            3,000         40               73.2

The even split is too kind to crowded niches. Chapter 2 showed that under preferential attachment a newcomer receives much less than an even share, because incumbents gather a disproportionate part. The calculation therefore understates the advantage of a neglected niche. But it also hides a risk Bai Gui understood: a niche can be neglected because there is little demand in it, and the advantage lasts only until others notice. “Take what others discard” is a strategy about timing, not a permanent position.

Fan Li: scattering the fortune

The chapter tells how Fan Li, after helping King Goujian of Yue defeat Wu, left politics, changed his name and became a merchant at Tao, where he became known as Lord Zhu of Tao (陶朱公).

The popular phrase says Fan Li “scattered his wealth three times”; the text says he made a fortune three times and gave it away twice. For the economics of attention, the point is the relation between accumulation and trust. Reputation, in Chapter 6’s terms, is an asset whose value lies in how cheaply others can verify it; generosity that others can see and confirm is one of the oldest ways of building it.