The “I Ching” is probably the oldest guide on how to deal with uncertainty … and shapes the culture of Chinese business

April 24, 2019

The I Ching is probably the oldest surviving text on how to deal with uncertainty. The classic Chinese text is also known as The Book of Changes.

Swiss psychologist Carl Jung  wrote a foreword to the English translation of I Ching. he was one of the first Western scientists to recognise that if man is affected by nature and the unpredictable behaviour of other men or women, then “every process is partially or totally interfered with by chance, so much so that under natural circumstances a course of events absolutely conforming to specific laws is almost an exception”. In other words, Chinese thinking starts from a different premise than the Western science of causality, which are statistical patterns that must allow for random events.

The dating of the earliest version of the I Ching goes back to probably 4,500 years ago, when the first eight trigrams were formulated as an early attempt to classify different ways of responding to random events. If correct, the I Ching predates the Axial Age, a period of flowering of civilisation in the eighth to third centuries BC in Greece, Babylon, India and China. The I Ching is considered the source of Chinese culture, including mathematics, astronomy, historiography, music, architecture, medicine, philosophy, martial arts, art and religion.

There are three fundamental principles of change embodied in the I Ching. The first constant is that everything changes (变易). The second principle is change through simplification (简易). The third principle is that even though things change, things may not change (不易).

  • The first concept of constant change was recognised by the Greek philosopher Heraclitus of Ephesus, about 2,500 years ago, who argued that change was the fundamental essence of the universe, encapsulated in his saying “no man ever steps in the same river twice”.
  • The second principle of “simplification” is that the universe can be reduced to simple principles, which are easy to understand. That is very much the reductionism of physics that tries to find the theory of everything in simple mathematical form.
  • The third principle of “no change” can be interpreted as “the more things change, the more things stay the same”. Everything is formed by opposite poles, such as order and chaos. Without order, there will be chaos; and without chaos, there cannot be order.

Most people think that the I Ching is a book of oracles or mystic mumbo jumbo, since one can interpret the 64 different hexagrams in very different ways. Those of us who use the I Ching ask: if life is affected in random and unpredictable ways, how should we think about handling such challenges?

The I Ching is useful, at least to those of us who consult it, not for predictions but for analysis. Firstly, every piece of information, however random or unrelated, may be relevant, because life or nature is interconnected in ways that are not always obvious. For example, when Donald Trump won the US presidential election, every world leader was scrambling to find the right connections to get through to him. Some of them found it through his son-in-law.

Secondly, the I Ching prompts you to ask questions you do not normally ask. For example, have you considered factors that are outside your normal frame of analysis? It is fashionable these days to talk about the elephants in the room and the “black swan” events. The I Ching questions everything, because there are no certainties.

Third, the I Ching encourages one to think about the system as an interacting whole, not in compartments that do not add up. You cannot fix a system by surgically removing one part of it. The human body, for example, is an interconnected whole in which pain in the toe could be a symptom of an organ dysfunction.

What is means for business

One of the most distinctive features of Chinese businesses is that they take a long-term view. This is reinforced by the Daoist principle, according to which the only unchanging law of the universe is constant change. For the Chinese, things will always change and what is bad today could turn out to be good, just as much as a loss could turn out to be a gain in the future.

The long-term approach plays out in the global success of many Chinese companies that are able to integrate in a pragmatic way their short-term objectives into a long-term strategy. But maybe the best example of Chinese long-term orientation is the Belt and Road Initiative, China’s vision for a new Silk Road that, if successful, is set to reshape global trade in the coming decades. An economic and geostrategic project of such historical proportions could not have been devised by a Western government used to focusing more on the next elections than on the next generations.

A second aspect of China’s culture that differentiates it radically from the West is the way the Western mind focuses on things while the Chinese mind focuses on relations between things. In the Western tradition, we are used to thinking analytically: in order to make sense of the whole, we need first to analyse the parts separately. The Chinese way is completely different. The Chinese think holistically, meaning they don’t separate the parts from the whole, because the whole is not made of the combination of the parts but of the relations between them.

This difference in thinking patterns is reflected very clearly in the difference between Western and Chinese medicine. The latter treats a disease by regulating the whole body and not just a single part of it, because any problem in a specific part of the body is considered to be a local reflection of imbalance of the whole body.

Another central characteristic of Chinese culture is the synthetic integration of opposites and contradictions. In China, as the saying goes, if a statement is true, its opposite can also be true. This makes no sense to the binary logic of Western thought, based on the principle of non-contradiction, according to which if A is true and B is the opposite of A, then B must inevitably be false. It does not work this way for the Chinese, who are influenced by the Daoist principle of “yin and yang” that says that all things are inseparable from their opposites; both A and B, despite being opposites, can be true.

While Westerners typically see two (apparently) opposite concepts as irreconcilable, the Chinese see them both as part of something bigger and therefore can synthesise them into a new concept. The best example of this mental pattern comes from the Chinese language itself, where the word for “crisis” is the combination of the words “danger” and “opportunity”. By being comfortable with ambiguity, the Chinese can therefore merge two opposite perspectives and create a new one.

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