Moral Scalability: Why Cultivating Oneself and Regulating One's Family Doesn't Equate to Ordering the State and Bringing Peace to the World

For this discussion, we’re tackling a big topic. Let me start by telling you three anecdotes—

First. Old Wang partnered with someone to open a company that was doing well. His wife wanted him to arrange a management position for her younger brother. Old Wang said no, even close siblings must keep clear accounts. His wife said, “Exactly, close siblings keep clear accounts! You’re just arranging a position for him, not asking him to spend your money!”

Second. At the annual meeting, the boss spoke with great feeling, saying, “The company is my home, and everyone here is my family.” Some in the audience were moved, while others were unimpressed.

Third. Chinese mathematicians Wang Hong and Deng Yu won the Fields Medal. In the news comment section, some demanded they return to China, saying that even being a middle school teacher in China, cultivating a group of young people, would be better than making significant contributions abroad!

Don’t pick sides yet; what I want to say is that there are no bad people here. No one believes that people should be selfish or that “I just want to do evil, what can you do about it?” On the contrary, everyone righteously and sincerely believes they are expressing their views out of morality and justice.

Their real disagreement isn’t about their moral standards, but about their moral scale.

Morality has a scope of application; it cannot be arbitrarily expanded. Virtues that apply to small communities might become corruption when applied to a large system.

The intellectual tool for this discussion is “moral scalability.” Once this principle is revealed, you’ll find it everywhere—it can both unravel a major historical conundrum in China and tell you why you can’t run your family like a company.

The Limitations of Morality: Who Pays for Your Virtues? #

We’ve discussed “scalability” many times. It means that no matter how much you enlarge the scale, its effectiveness persists. Morality, however, is not scalable.

The most fundamental reason is: you cannot love everyone. The stable social relationships you can maintain are limited to Dunbar’s number, which is about 150 people.

Family members eat without limits, tuition fees for children aren’t accounted for, and there’s no spending cap on medical expenses for elders. You can talk about kinship or genes all having their reasons, but the more fundamental reason is that there are only a few people in the family.

Expand to the extended family, and sisters-in-law will emphasize reciprocity; expand further to fellow villagers, and social favors need to be recorded—whoever helped with an event at whose house, people remember clearly how much you gave. Beyond that, in a society of strangers, even favors aren’t enough; one must rely on contracts, invoices, and laws.

As the scale changes, several key variables change with it. In a village, you see everyone regularly, interacting repeatedly throughout life, so no one dares to easily cheat another, and your reputation is known to all. In a big city, you might only interact with most people once in your life, so reputation has to be maintained by artificial constructs like credit reports and platform ratings.

But the most crucial variable is: who pays.

If you treat your brother to a meal and pay with your own money, that’s loyalty; if you expense it as company entertainment, that’s embezzlement. If you arrange a company position for your brother, that’s nepotism; if you approve a national project for a fellow villager, that’s corruption.

Your feelings for your brother haven’t changed, and no matter how high your position, you’ve always valued loyalty—what changes is whose bill it is. As the scale enlarges, your loyalty generates increasingly significant “negative externalities,” and others pay the bill: the rejected applicants, the company’s shareholders, the entire body of taxpayers.

Why don’t you show loyalty to those people? They haven’t done anything to offend you. They just don’t know you, aren’t present, and have no say.

Many corrupt officials are recognized as good people within their own circles—good sons, good brothers, affectionate elder brothers. They aren’t lacking in morality; they are too moral, but they adhere to the morality of their village.

Your love for your siblings exceeds your love for strangers, and if you happen to hold power, this becomes particularly unfair to strangers. So next time, don’t ask whether you should take care of your own; you should ask who pays.

Corruption is not the absence of morality; it is morality’s overreach in payment.

The Five-Tiered Ladder of Morality: Currencies for Different Scales #

In 1992, American anthropologist Alan P. Fiske proposed a “relational models theory” [1]. He summarized human relationships into four basic modes: communal sharing, authority ranking, equality matching, and market pricing. In 2011, Fiske and psychologist Tage Shakti Rai extended this theory to the moral domain, suggesting that the same behavior, placed in different relationships, can go from appropriate to overstepping boundaries [2]. When the relationship changes, the standards for judging what is fair, what constitutes dereliction of duty, or what is an overreach also change.

Leveraging Fiske’s insight, let’s reconstruct a five-tiered moral map—

Starting from yourself and moving outward, there are roughly five steps: family, kinship/local community, organization, nation, and world. With each step up, the “circulating currency” of morality must be exchanged.

The currency of family is “love.” Distribution is according to need, no accounting, no question of worth. Its enforcement mechanism is emotion and guilt—if a family member needs something and you can’t help, no external intervention is needed; you can’t justify it to yourself.

The currency of kinship/local community is “reciprocity.” Give a peach, get a plum; reciprocity; favors must be returned. Its enforcement mechanism is face and gossip: a society of acquaintances doesn’t need lawsuits; “this person is not decent” is the verdict.

The currency of organization is “responsibility.” Every bit of power you wield in a company is not yours; it is temporarily entrusted to you by shareholders, colleagues, and clients. This is called fiduciary duty. Its enforcement mechanism is procedure: signatures, audits, recusal, bidding.

The currency of the nation is “law.” In a society of hundreds of millions, where no one knows everyone else, the only valid currency is impersonal rules: before the law, it doesn’t matter who you are, only what you did. Its enforcement mechanism is procedural justice and state coercive power.

The currency of the world is “verifiability.” Although there are international courts, there is currently no truly effective way to enforce their judgments. However, relations between nations are not entirely jungle law; here, one thing can circulate: verifiable commitments—contracts can be checked, data can be verified, spoken words can be reconciled. This is why, although major global powers sometimes seem to do as they please and are occasionally truly unreliable, they are generally fundamentally reliable in their dealings. It’s also why some underdeveloped countries, despite excellent natural conditions, attract no investment.

Do you see the trend? The further out you go, the less morality recognizes people, and the more it relies on evidence.

Small communities ask “Who are you?”, large systems ask “What did you do?”, and super-large systems can only ask “Are there verifiable traces left?"—the larger the scale, the less observable and less important the motives become. Therefore, we always have good motives for our family, actively loving and caring for them; this is called “positive obligations.” For strangers, we have more “negative obligations”: not to deceive, not to harm, and simply to abide by contracts.

The point is: the intensity of moral concern is inversely proportional to its scope.

Adam Smith performed a famous thought experiment in The Theory of Moral Sentiments: a European hearing that a distant China was swallowed by an earthquake, with millions dead, would certainly lament, but would still go about his life as usual; but if he were to lose one of his little fingers tomorrow, he wouldn’t sleep that night [3].

Smith would never believe that someone would choose to sacrifice millions of lives to save a little finger—we uphold justice, but our love is indeed diluted by its scope.

The reason for changing currency is that “love” cannot be relied upon at a large scale. To strangers, you owe not love, but rules; to foreigners, you owe not affection, but credibility.

The Wisdom of the I Ching: The Scale of Grouping and the Radius of ‘Fellowship’ #

Let’s look at a particular moral relationship: grouping together.

Ordinary people believe that grouping together is always good; we must unite to stand against outsiders. But Chinese sages knew as early as three thousand years ago that grouping together isn’t always good; it depends on the scale.

This wisdom comes from the 13th Hexagram of the I Ching, the “Tóng Rén” (Fellowship) Hexagram. The I Ching is a book of divination, but it also summarizes many natural laws. The Tóng Rén hexagram tells a story about scale.

“Tóng Rén” means to form an alliance or association with others. This hexagram divides people from near to far into four circles: gate, clan, suburbs, and wilderness—just one “organization” step short of our five-tiered ladder—it examines how far out you extend your “fellowship.”

Let’s look at the line statements—

Line 1 (Chujiǔ): “Fellowship at the gate. No blame.” It’s fine for a family to close its doors and stick together [4].

Line 2 (Liù’èr): “Fellowship with the clan. Regret.” When the fellowship extends to the clan or faction, the evaluation actually worsens.

Unity within the family gate is blameless, but unity of the clan is “regrettable.” Why?

It still comes down to who pays. When a family groups together, they spend their own money, so of course there’s no blame; you can even say, “harmony in the family brings prosperity to all endeavors.” But when people of a clan group together to form a faction, it’s different, because they will inevitably reach into the public sphere: clan members banding together to compete for village water, or fellow villagers banding together to seize official positions—you might be united, but what about everyone else?

Note that “regret” (吝) is not “misfortune” (凶). It’s not an immediate disaster, but it’s a path that narrows over time. Nepotism won’t immediately crash a system, but if you only recognize your own people and not outsiders, you lose the possibility of further growth and expansion.

Lines 3, 4, and 5 can be fast-forwarded: from “Hiding soldiers in the thickets” (covert factionalism), to “Ascending their wall, but unable to attack” (conflicts thwarted), and then to “First weeping and then laughing” (reunion after conflict), all describing the suspicion, conflict, and reconciliation necessary when moving from clan associations to larger unions.

Line 6 (Shàngjiǔ): “Fellowship in the suburbs. No regret.” The ‘Image Commentary’ (Xiàngzhuàn) adds: “The aspiration has not yet been realized.” Beyond the city, in the suburbs, detached from clan ties, but not yet reaching the wilderness—no regret, but the aspiration is incomplete.

This imagery roughly corresponds to having entered a weak-tie zone beyond clan: fellow villagers, friends of friends, alumni, people in your industry circle. There’s a certain inexplicable sense of familiarity and trust. Perhaps they can give you an internal referral for a job, but it’s far from forming factions for selfish gain. So this isn’t bad; you feel comfortable, but this scope isn’t high enough.

The true high realm is the Hexagram Statement: “Fellowship in the wilderness. Success. It is favorable to cross the great stream.” The wilderness is the open country, beyond the city, beyond the suburbs, a place without acquaintances. To form a group with strangers in the wilderness—this is true success! One can cross great rivers and undertake great endeavors.

You see, a family grouping together is beyond reproach, but a clan grouping together is not good. Only by uniting with strangers can great things be accomplished—your “fellowship radius” determines the scope of your enterprise.

Let’s look at an example: the Shanxi Piaohao (draft banks).

During the Qing Dynasty, Shanxi Piaohao had a famous rule: “avoid relatives, use fellow villagers, and no ’three masters’"—meaning young masters, sons-in-law, and maternal uncles were not to be employed; the proprietors were only responsible for capital investment and selecting the head manager, not interfering with operations [5]. Viewed through the spirit of fellowship, “no ’three masters’” transcends “fellowship at the gate”; “avoid relatives, use fellow villagers” further transcends “fellowship with the clan”—isn’t that brilliant? This was a remarkable institutional innovation at the time.

The Shanxi Piaohao consequently prospered for nearly a century, with Rishengchang’s drafts even famed as “connecting the world.”

However, the Piaohao only pushed its fellowship radius to fellow villagers from Shanxi: this was already “fellowship in the suburbs”—freed from blood ties, but still reliant on geographic ties and personal trust. Both the achievements and the ceiling of the Piaohao lay here.

It never reached “fellowship in the wilderness,” never established an open system that allowed any stranger to enter by rules and cooperate through institutions.

As a result, in the 20th century, when the Piaohao encountered modern banks—organizations that could absorb capital from any stranger, operating by charters and audits rather than regional kinship ties—they had almost no power to resist.

The Confucian Dilemma in Governance: A Major Case of Moral Scalability #

With moral scalability as our framework, a major historical conundrum in Chinese thought becomes clear: why Confucianism couldn’t govern the state.

Confucius was so brilliant, and Mencius so eloquent, even traveling among the states to promote their ideas, yet why did no one in the realm truly adopt them?

The Confucian governance plan imagined the world as an enlarged family, ruling with “benevolent governance,” which is essentially ruling with love. Mencius said: “Treat our elders as elders should be treated, and extend this to the elders of others; treat our young as young should be treated, and extend this to the young of others.” By extending the love felt within the family outward, circle by circle, to the four seas, the world would be at peace.

But love is diluted by the radius of the circle. As described by Fei Xiaotong in his From the Soil: The Foundations of Chinese Society, the structure of traditional Chinese society is a “differential mode of association” (差序格局): everyone is at the center, and relationships radiate outwards like ripples from a stone dropped into water, extending further and further, but also becoming thinner and thinner [6]. Confucians were very clear that “love has gradations,” but they stubbornly believed that diluted love still holds governing power.

Mencius even thought that diluted love would be enough to make people from all over the world voluntarily submit. He once used the story of King Tang of Shang to persuade King Xuan of Qi: “When you march to the east, the western barbarians complain; when you march to the south, the northern barbarians complain”—meaning, if you merely practice benevolent governance, when you campaign east, people in the west will complain why you didn’t come to their aid first; when you campaign south, people in the north will be impatient.

In the Confucian imagination, “cultivating oneself, regulating one’s family, ordering the state, and bringing peace to the world” is a continuous chain of expansion: an individual first makes himself good, then extends the same goodness to his family, then to his state, and finally to the world.

However, Mencius’s unified plan was entirely unfeasible. No small state would voluntarily submit just because they heard you practiced benevolent governance; instead, all states sought to enrich themselves, strengthen their armies, and fight aggressively.

History has repeatedly proven that if you truly try to govern a state with this method, all you will get is hypocrisy.

For example, the Han Dynasty implemented the “recommendation of the filial and incorrupt” (舉孝廉), using “filial piety”—originally a family virtue—as a criterion for selecting officials. The result was “recommending talented individuals who are illiterate; observing filial and incorrupt officials whose fathers live separately” (舉秀才，不知書；察孝廉，父別居)—the morally-based recommendation system quickly became corrupt, far less fair than the later imperial examination system, which didn’t rely on “morality” in the same way [7].

On a larger scale, whether it was the enfeoffment system of the Zhou Dynasty or the early Han Dynasty’s enfeoffment of kings of the same surname—dividing the realm among uncles and brothers, hoping that kinship would protect the empire—didn’t blood ties become diluted after a few generations, leading to utter chaos? Love is not only unscalable but also has a very short half-life.

Mohism saw this problem, but their solution was not to let love dilute, advocating “universal love” (兼愛): “Treat other people’s states as one treats one’s own state; treat other people’s families as one treats one’s own family”—love without gradations. This is almost a religious spirit. Under the command of the Mohist leader, disciples truly would brave fire and flood.

But as you might imagine, this was also unsustainable because it does not conform to human nature. Mencius criticized Mozi for being “fatherless,” using the same charge that Zeng Guofan leveled against the Taiping Heavenly Kingdom more than two thousand years later: “All fathers of the people are brothers; all mothers of the people are sisters” [8].

Among the pre-Qin thinkers, the one who truly grasped scalability was Legalism. Although Legalists treated common people as tools, they had clear rewards and punishments, recognizing no kinship but only merit and demerit; the same set of laws could be replicated from one county to a hundred, allowing its enterprise to expand infinitely. This is why Legalism ultimately unified the realm.

However, Legalism applied performance management to everything, which also did not suit China’s national conditions. For example, Shang Yang’s reforms stipulated that adult brothers who did not separate their households would have their taxes doubled, forcibly breaking up large families into smaller units; he also implemented the “group responsibility system” (什伍連坐), encouraging neighbors and relatives to report on each other. The family was no longer a place for love but became a public order unit, which the common people could not tolerate.

The ultimate solution found by pre-modern China was a combination of Confucianism and Legalism, adopting different governance logics at different scales, known as “outwardly Confucian, inwardly Legalist” (外儒内法)…

Different Scales, Different Morals: Applications and Warnings in the Modern World #

Whether the Confucian-Legalist system is still suitable for modern society is another story. But the wisdom is: we should practice different moralities at different scales.

British author John Lanchester said that if all macroeconomics were to disappear, and only one sentence could be left for future generations, that sentence would perhaps be: “Governments are not households” [9]. Frugality is a family virtue; a government calculates the entire system’s balance, and sometimes it should actually spend more.

Nassim Nicholas Taleb also discussed this issue specifically in his 2018 book Skin in the Game [10]. His judgment can be summarized as “Ethics don’t scale”: ethics are fundamentally local and one set of rules cannot apply to all scales. He calls the practice of applying one political stance from the family all the way to the state “scale-free political universalism,” saying it is absurd. The book also quotes Geoff and Vince Graham: “At the federal level, I am a libertarian; at the state level, I am a Republican; at the local level, I am a Democrat; and among family and friends, I am a socialist.”

F. A. Hayek said that we simultaneously live in two worlds: small circles emphasize solidarity and altruism, while large societies adhere to abstract rules. He also said: if we apply the rules of the larger society to intimate relationships, we will crush them [11].

You see, these people aren’t saying that doing this is moral and doing that is immoral—they’re saying you first need to consider the scale of the matter.

For example, you cannot run a company like a family, but you also cannot run a family like a company.

Some people now truly run their marriages like companies: household chores are contractually assigned, expenses are split and accounted for, arguments involve burden of proof, and year-end performance reviews are conducted. I understand they want to protect their relationship with rules, but this commits the same error as corrupt officials: moral mismatch. And parents who implement a piece-rate wage system for children’s chores and homework are even more profoundly mistaken. People need kinship, they need a space where calculations are unnecessary… As ordinary people say, “the family is not a place for reasoning,” and this is correct.

A Guide to Moral Scales in Life: Moral Principles for Different Relationships #

You can perfectly practice “communism” with your parents, spouse, and minor children, distributing according to need;

For adult children, practice “socialism,” allowing for “soft budget constraints,” but not so soft that they preemptively factor your safety net into their own budgets;

For neighbors, practice “mutualism”: if someone’s pipe bursts or an elder falls, everyone lends a hand, but no one needs to hand over their salary card to the homeowner’s association;

For strangers in the market, practice “capitalism”: money and goods settled, contract is binding. Don’t forget to check the return policy just because a livestreamer calls you “family”;

At the national level, demand procedure and the rule of law. You don’t need officials to love you like parents, but you have the right to demand that power operates according to rules.

Final Chapter: The Multi-Scale Moral View of the Modern Individual #

Some say: “I am a global citizen; I love no country, only humanity.” I find this statement untenable. You cannot love all of humanity the way you love your family, nor do you live at the scale of “humanity”—your joys and sorrows, your city, your pension, all are concrete.

But I also oppose using the banner of patriotism to demand that scientists must return to their home country. Science is humanity’s largest-scale “fellowship in the wilderness”: countries fund research individually, theories ignore nationality, peer review only verifies evidence, and research results are shared globally. This is not a nation-state project; you should ideally be where efficiency is highest.

Morality at any single scale, no matter how small or large, cannot apply universally to all scales.

A truly modernized individual is not one who has no “own people,” but one who knows where their “own people” don’t count. Love those whom you love; for everyone else, be true to your word.

【A Short Poem for the End】

Inside the gate, a lamp always burns later for one person. Outside the gate, the station clock never slows for any surname. The train crosses the wilderness, full of strangers, each arriving at their own destination.

Notes

[1] Fiske, Alan Page. “The Four Elementary Forms of Sociality: Framework for a Unified Theory of Social Relations.” Psychological Review 99, no. 4 (1992): 689–723.

[2] Rai, Tage Shakti, and Alan Page Fiske. “Moral Psychology Is Relationship Regulation: Moral Motives for Unity, Hierarchy, Equality, and Proportionality.” Psychological Review 118, no. 1 (2011): 57–75.

[3] Smith, Adam. The Theory of Moral Sentiments. 6th ed., 1790. In the Glasgow Edition, edited by D. D. Raphael and A. L. Macfie. Indianapolis: Liberty Fund, 1982, III.3.4, 136–38.

[4] (清末)马其昶：《重定周易费氏学》，同人卦初九注：“爻言同人于门，谓初同二于门内，盖家人也。”“同人于门”历来有两读：《象传》作“出门同人”，王弼、程颐等主流注家皆从“出门与人和同”解；本文从马其昶“门内家人”之异读，取其与六二“同人于宗”构成半径递进、且更贴初九居门内之爻位。

[5] 《日升昌：银行“祖父”的盛衰史》，凤凰网财经，2008 年 9 月。https://finance.ifeng.com/topic/zgsd/200809/0923_4704_799616.shtml

[6] 费孝通：《乡土中国》，上海：观察社，1948 年。

[7] 葛洪：《抱朴子外篇·审举》。

[8] 曾国藩：《讨粤匪檄》，1854 年。https://zh.wikisource.org/zh-hans/%E8%A8%8E%E7%B2%B5%E5%8C%AA%E6%AA%84

[9] John Lanchester, “Let’s Call It Failure,” London Review of Books 35, no. 1 (January 3, 2013).

[10] Taleb, Nassim Nicholas. Skin in the Game: Hidden Asymmetries in Daily Life. New York: Random House, 2018；中译本：《非对称风险》，周洛华译，北京：中信出版社，2019 年。

[11] Hayek, F. A. The Fatal Conceit: The Errors of Socialism. Chicago: University of Chicago Press, 1988.