- An examination of the status of merchants in Imperial
China will reflect the influence of centralized government
on social structure and economic developments in China.
DenisTwitchett examines the revolutionary change that took
place in Chinese political institutions, economic organization,
and social structure during the years 750-1000 CE. There
was immense growth in commerce, the general money system,
and urbanization, as well as changes in government bureaucracy.
Until that time, the scholars were tied to the government,
by their common ideology and because they served as their
scribes. The status of anyone who displayed any rivalry
toward them immediately suffered. The military elite was
treated contemptuously, and the scribes who recorded the
history of the time regarded the merchant community even
more negatively. There were four classes mentioned in recorded
history: the scholars and bureaucracy, the farmers, artisans,
and merchants. The government favored the farmers, since
they paid taxes and served in the army at a time of war.
The merchants were considered a threat to the established
order. They were disparaged because in their pursuit of
wealth and material gain, they violated Confucian principles
that emphasized service of the civil and military state.
Though there was consensus that the merchant filled an essential
role in bridging distances between sellers and buyers, he
was nevertheless considered as lowly as the artisan, in
addition to being viewed as uncreative and a divisive force.
The government struggled to find a way to monitor their
activities. Some people were of the opinion that they should
be isolated in order to avoid rousing the farmers' jealousy.
The merchant class was already accepted by the time of the
Chin and Han dynasties as a necessary evil, and merchants
enjoyed a free status according to law. During the T'ang
dynasty, two policies pertaining to them were established:
- 1. A prohibition against turning them into an elite class
based on their wealth, a class that would rival the governing
and intellectual elite. The intention was only to prevent
the merchants from parading their wealth, not to prevent
them from amassing wealth. 2. Financial activities and expenditures,
including style of dress, type of vehicle, residence, furnishings,
ornaments and their involvement in social events were to
be regulated. All these regulations and the taxes they were
subjected to would highlight how lowly their status was
compared to the bureaucrats and scholars. The merchants
were even the first class enlisted in a time of war. Each
merchant was obligated to register and pay for a place in
the market. He, his sons, and his grandsons, were disqualified
from government positions. Despite all the limitations,
the merchant remained a free man and he was exempt from
all civil obligations. A special government agency established
work conventions and hours, monitored the quality of the
merchandise, issued licenses of sale for livestock, slaves,
and land, and ensured fair honest business practices. Independent
markets that operated in the capital city catered to the
needs of the ruling elite, the clergy, and the emperor's
court. Foreign trade was conducted, all the way until the
Middle East, Manchuria, and Tibet. There were various checkpoints
along the way in which written licenses were checked, and
tolls and even bribes were paid. The government itself competed
with the merchants, buying up large quantities in times
of bounty and selling them at discounted prices in times
of scarcity. The government's intention was to help the
needy, but this policy significantly lowered the merchants'
profits. During the T'ang dynasty, the government issued
coins whose value was lower than the price of their copper,
as well as stockpiled in its warehouses silk cloth that
they sold at prices that prevented the merchants from making
excessive-profits. Inspectors from the merchant class itself
worked in cooperation with the merchant unions that registered
merchants and set official prices. The government employed
other merchants to collect taxes. It would entrust money
usually in the hands of certain wealthy merchants, who would
pay a set interest rate and could then use the money as
they chose, loaning it to who they saw fit, and keeping
the difference in interest. The local, not central government,
was responsible for all this. All this changed in the year
755, with the revolution of An-Lu-Shan. - At the end of
a multi-year process, the only areas that remained under
direct imperial control were the areas around the capital
and the southern regions, while all the other regions maintained
only a tenuous connection with the emperor. Some of the
southern districts were destroyed and became desolate. During
the revolt and the battles that took place, the government
gained control of approximately a fifth of the merchants'
assets. The manufacture and marketing of salt remained primarily
under the emperor's control, and a monopoly was created
that paid the emperor taxes, an arrangement that continued
for the duration of the dynasty. Salt merchants attained
an elite status among the general population of merchants.
After the year 760, every semi-independent region paid an
annual tax to the emperor, and the regional government imposed
taxes as it saw fit - but taxes were paid using currency,
and not merchandise, as had been formerly the norm - causing
a serious shortage of copper currency. Hebei and North Henan
were now independent and thus paid no taxes. They were the
primary source of silk, so money replaced silk as valuable
change, weakening the power of the imperial government.
Various copper mines and their copper fell into the hands
of private individuals, lowering the value of the copper
currency that the imperial government issued. As a result
of this situation, private banking began to develop in the
year 760. While all these changes were occurring - also
manufacturing began to expand, early agricultural machinery
and irrigation tools were developed, and a population shift
took place - all of which led to a growth in commerce. The
cities that were home to the governments of the semi-independent
regions grew and prospered, particularly in the regions
of River Hiang-Che and Henanonaan. The growth of commerce
affected the process of urbanization. Markets became particularly
active in the cities of the region. The government no longer
interfered in the markets in rural regions, where commerce
was originally seasonal, but ultimately became almost daily.
In the 9th-10th centuries, these rural markets became commercial
cities, and the regional government's administration was
established in them. Trade initially took place through
a system of bartering, but eventually currency was used
instead. The old system of government-controlled markets
gradually disappeared, and centers of trade even began to
operate outside the markets, in separate quarters that each
specialized in a particular line of merchandise. The special
status previously enjoyed by foreign merchants, relative
to local ones, declined. Commercial taxes were no longer
imposed on a regular basis, but rather only in times of
emergency. During the years 844-878, during the reign of
Chao-Tsan, direct taxes were levied on buildings, and certain
merchandise (like tea, wood, and polish), a government monopoly
existed on liquor, and a 20% sales tax collected by the
merchants' union. All the taxes were repealed, however,
in the year 785. In the year 793, a tax was reimposed on
tea, a product that enjoyed a wide market and which enriched
anyone who traded in it. Both the imperial government and
regional governments occasionally imposed taxes on the merchants.
The prevailing attitude was no longer that commerce was
a necessary, but inherent evil, and close supervision and
regulation of it was abandoned, now that it provided a source
of income for the government. Nevertheless, 'lip service'
was paid to the agricultural heads, since agriculture was
viewed as the backbone of the economy. This completed the
changes that resulted from government uprisings combined
with changes in economic needs. The height of this process
took place in the 12th-13th centuries, but subsequently,
in the later imperial period, there was a return to the
conservative attitude that opposed commerce and consequently
impeded the development of science and industry. Conclusion
- For hundreds of years, the Chinese progressed and even
overtook the Europeans in the field of technological inventions,
such as the paper and printing industry, gun powder, large
battleships, manufacture of silk, astronomic studies, and
the manufacture of iron. During the period of the final
two dynasties, primarily beginning with the 15th century,
however, all progress halted. Astronomy, from the beginning,
had only served the interests of the royalty in China, providing
the emperor with background for astrological predictions
regarding his empire. The building of cannons did not progress
past cannons that fired arrows (probably because the imperial
government had no imperial aspirations, and needed only
to protect itself against invaders). As is evident from
examination of the development of industry at the end of
the T'ang dynasty, in the year 755 C.E., Chinese commerce
and economy expanded as a result of the partial collapse
of the imperial government. Similar economic development,
including industrial and commercial growth, urbanization,
changes in the social structure, system of taxation, and
ownership of agricultural land, as well as changes in the
status of the farmers, occurred over 1,000 years earlier,
as examined by Hsu Cho-Yun. All this demonstrates the critical
role - that the system of government, its structure, power,
and interests - play in halting, or encouraging and facilitating
economic and social changes, and the effect they in turn
have on the government. In examining the reasons for the
lack of an industrial revolution in China, taking into consideration
the centrality of the government in all that goes on in
the State, it is important to take into account the unity
of the Chinese government and the trend to one unified government
in all of China, as depicted by Yuri Pines. This was a trend
that prevailed in China throughout the relevant periods,
and it played a significant role in the endurance of the
imperial form of government whose authority and jurisdiction
extended to all of China. The question is, why specifically
China? Why not Europe? Why not India? Why not Africa and
America? Why not the Arab world? Why didn't the Roman Empire
survive as long as Chinese imperialism? Imperial government
could not be sustained indefinitely simply by military legions,
as is evidenced by the reign of Alexander the Great and
the Roman Empire. What failed, though, in Greece and Rome,
succeeded in China, namely the attempt to imprint in the
hearts and minds of the Chinese citizens the perception
that the emperor was a father to all his subjects, and that
all his subjects were a single nation, bound by one faith,
one worldview, one tradition, and even one (written) language.
The Chinese considered themselves one family, and this perception,
whether historically accurate or not, caused the Chinese
to view themselves as one unity, rooted in hundreds and
thousands of years of common history. The Chinese, very
successfully achieved that which so many -the French, English,
German, and Italians - sought largely unsuccessfully to
accomplish. Only they were able to create the perception
that their nation was one great unity. As a result, even
when a foreign power ruled China (the Yuan dynasty that
ruled China for approximately one hundred years, and the
Manchj'urian Qing dynasty that ruled for close to amore
than 250 hundred years), the government lasted for many
years. The key to such successful government lay not within
successful rulers, but within successful subjects - the
Chinese.
