Duke Huan asked Guanzi，“Would you please tell me something about the guidelines on the economic policy of a state?”Guanzi replied．“Regarding the guidelines on the economic policy of a state，the most important thing is to establish suitable polices according to the actual situation．’’ Duke Huan asked．“What does‘establish suitable polices according to the actual situation’ mean?” Guanzi replied，“At the time when the Yellow King was in power，he used to disarm all other military forces of the kingdom．When Yu Shun was in power，he used to drain off all the lakes and cut down all the trees on the mountains．When Xia Hon was in power，he used to set fire to the grasses of wastelands，burn weeds in the swampy areas and forbid the common people to take advantage of them．During the time when Yin Ren was in power，sovereigns of all feudatories were prohibited from raising livestock，making weapons or utensils of their own free will．During the time when Zhou Ren was in power，he used to appoint positions to people with all kinds of talents，skills and prepare all kinds of items to meet the needs of the state．Even though the means of governing taken by these five sovereigns were different from one another，these various means were taken however to serve the same purpose．”

    Duke Huan asked，“Then，regarding measures taken by these five sovereigns，which one among them do you think is the best and therefore can be taken by us?”Guanzi replied，“Mountain forests，grasses growing in the wastelands and in swampy areas were burnt because they were haunted by a lot of dangerous wild animals．Trees on mountains were cut down and the water of all the ponds and lakes was drained off because the sovereign was not wise enough．Grasses on wastelands and in swampy areas were burnt to prevent the common people from taking advantage of it，people were forbidden to make weapons or utensils and the wise and talented ones were not employed，because the sovereign was aiming at consolidating his authority．Sovereigns of all feudatories were not allowed to raise livestock such as cows or horses or make their own utensils，because the hearts of the common people can be well directed if all these extravagant utensils were under firm control．By appointing officials to administer the common people，forbidding people to make weapons privately，popularizing  benevolence and righteousness，and taking opportunities provided by Heaven to consolidate the throne，these five sovereigns had all focused on the same purpose even though they had taken various respective measures．”

    Duke Huan asked，“Whose policy among them do you think contemporary sovereigns should take?”Guanzi replied，“Please adopt all the strong points of the policies taken by these five sovereigns but do not copy any one among them automatically in disregard of the specific conditions．”Duke Huan asked，“What did you mean?”Guanzi replied．“Hold ceremonies in worship of mountains and lakes．Make weapons and utensils and then use them to take advantage of tens of thousands of raw materials．Provide benefits to people all over the world by taking the right measures to manipulate the price of items．Cut down all the trees on the mountains and drain off ponds and lakes to control the distribution of profits and movement of trade．Exploit metal mines of some mountains to mint money，and keep the grasslands to raise livestock to enrich the common people．Those low-lying wastelands full of weeds are not suitable for growing crops but can be used as meadows to raise elk，cows and horses．During spring and autumn，supply the common people with newly born livestock and kill the old ones，grant money to the people to control the grain produced in that year，then useless land can be made good use of，and the grain surplus of the common people can be collected by the state．So，adopt all the strong points of the policies taken by these five sovereigns，but do not copy any one among them automatically in disregard of the specific conditions．”

    Duke Huan said，“The five sovereigns have all taken the necessary worldly measures．Would you please tell me something about future sovereigns who will unify the world?” Guanzi replied，“They will make investigations into situations to avoid troubles．Adhere to fixed principles but also reform things becoming unsuitable due to the situation at that time．They will take action at the right time，but will not take action when the right time passes by．Nevertheless，policies of sovereigns who will unify the world in the future cannot be made in advance．These are the guidelines of the five above-mentioned sovereigns．”