Discourses on Salt and Iron
Encyclopedia
The Discourses on Salt and Iron was a debate on state policy during the Han Dynasty
in China. The previous emperor, Emperor Wu
, had reversed the laissez-faire policies of his predecessors imposed a wide variety of state interventions, such as monopolies on salt and iron, price stabilization schemes, and taxes on capital, which had sparked fierce debate. After his death, during the reign of Emperor Zhao of Han
, the regent Huo Guang
called on all the scholars of the empire to come to the capital, Chang'an
, to debate the government's economic policies.
The debate was characterized by two opposing factions, the reformists and the modernists. The reformists were largely Confucian scholars who were opposed to the policies of Emperor Wu
, and who demanded abolition of the monopolies on salt and iron, an end to the state price stabilization schemes, and huge cuts in government expenditures to reduce the burden of the citizenry. The Modernists supported the continuation of Emperor Wu's policies in order to appropriate the profits of private merchants into state coffers to fund the government's military and colonization campaigns in the north and west.
The results of these debates were mixed. Although the Modernist were largely successful and their policies were followed through most of the Western Han after Emperor Wu, the Reformists repealed these policies in Eastern Han, save for the government monopoly on minting coins.
tribes which posed a threat to the empire. Although Wu was successful in his campaigns, his policies bankrupted many merchants and industrialists and led to widespread dissatisfaction and even revolts; after his death, the regent, Huo Guang, called a court conference to discuss whether to continue Wu's policies.
principle of Wu wei
(無為), literally meaning "do nothing". As part of their laissez-faire policy, agricultural taxes were reduced from 1/15 of agricultural output to 1/30 and for a brief period, abolished entirely. In addition, the labor corvée
required of peasants was reduced from one month every year to one month every three years. The minting of coins was privatized, while Qin taxes on salt and other commodities were removed.
Both the private and public sectors flourished during this period. Under Emperor Jing,
Merchants and industrialists particularly prospered in this period. In the early Western Han, the wealthiest men in the empire were merchants who produced and distributed salt and iron and gained wealth that rivalled the annual tax revenues collected by the imperial court. These merchants invested in land, becoming great landowners and employing large numbers of peasants. A salt or iron industrialist could employ over one thousand peasants to extract either liquid brine, sea salt, rock salt, or iron ore.
(r. 141–87 BCE) viewed such large-scale private industries as a threat to the state, as they drew the peasants' loyalties away from farming and towards the industrialists. Nationalizing
the salt and iron trades eliminated this threat and produced large profits for the state. This policy was successful in financing Emperor Wu's campaigns of challenging the nomadic Xiongnu Confederation while colonizing the Hexi Corridor
and what is now Xinjiang of Central Asia, Northern Vietnam, Yunnan, and North Korea. Other policies included a price stabilization scheme, and a tax of 10 percent on the capital of merchants and industrialists who had not yet been expropriated. However, these policies imposed great hardships on the people; banditry and even revolts were occurring by Emperor Wu's death.
, which was the de facto ruler of China after Emperor Wu of Han
, called a court conference to debate whether the policies of Emperor Wu should be continued. The resulting debate was divided into two groups, the reformists and the modernists. The reformists, largely provincial confucian scholars, backed privatization and a return to the laissez-faire policies of old. The modernists, on the other hand, largerly represented the interests of the central government and were more in tune with legalist philosophy, as well as being admirers of the previous Qin Dynasty
whose harsh and numerous laws had been based on legalist principles.
, which they believed had weakened instead of strengthening China, and whose costs did not justify the benefits involved.
, an ex-merchant who had been selected by Emperor Wu to administer to his new interventionist policies. They justified the imposition of controls on the grounds that they would thus wrest profits from wealthy private merchants that could pose a threat to the state and bring them into state coffers; particularly, modernists claimed that industrialists in salt and iron were "brutal and tyrannical", and who employed thousands of workers that could potentially become rebels. The modernists took the view that with its iron monopoly the state could effectively distribute tools of good quality for the use of the peasant, as well as stabilizing the price of many essential goods. They also claimed that private workshops were too small, unspecialized and poorly equipped. Modernists claimed the government workshops offered better working conditions and materials than private workshops. In addition, the modernists claimed that the expansionist campaigns were necessary to defend China from barbarian incursions, and that by nationalizing the salt and iron industries the state could obtain the funds needed without imposing additional burdens on the peasantry.
's (r. 9–23 CE) regime, which imposed ultra-modernist policies. After his overthrow, the government of Later Han resumed earlier laissez faire policies and relinquished control of these industries to private businessmen.
Han Dynasty
The Han Dynasty was the second imperial dynasty of China, preceded by the Qin Dynasty and succeeded by the Three Kingdoms . It was founded by the rebel leader Liu Bang, known posthumously as Emperor Gaozu of Han. It was briefly interrupted by the Xin Dynasty of the former regent Wang Mang...
in China. The previous emperor, Emperor Wu
Emperor Wu of Han
Emperor Wu of Han , , personal name Liu Che , was the seventh emperor of the Han Dynasty of China, ruling from 141 BC to 87 BC. Emperor Wu is best remembered for the vast territorial expansion that occurred under his reign, as well as the strong and centralized Confucian state he organized...
, had reversed the laissez-faire policies of his predecessors imposed a wide variety of state interventions, such as monopolies on salt and iron, price stabilization schemes, and taxes on capital, which had sparked fierce debate. After his death, during the reign of Emperor Zhao of Han
Emperor Zhao of Han
Emperor Zhao of Han was an emperor of the Chinese Han Dynasty from 87 BC to 74 BC.Emperor Zhao was the youngest son of Emperor Wu of Han. By the time Zhao was born, Emperor Wu was already 62. Zhao ascended the throne after the death of Emperor Wu in 87 BC. He was only 8 years old...
, the regent Huo Guang
Huo Guang
Huo Guang , courtesy name Zimeng was a Western Han statesman who was a rare example in Chinese history of a powerful official who deposed an emperor for the good of the state rather than to usurp the throne...
called on all the scholars of the empire to come to the capital, Chang'an
Chang'an
Chang'an is an ancient capital of more than ten dynasties in Chinese history, today known as Xi'an. Chang'an literally means "Perpetual Peace" in Classical Chinese. During the short-lived Xin Dynasty, the city was renamed "Constant Peace" ; yet after its fall in AD 23, the old name was restored...
, to debate the government's economic policies.
The debate was characterized by two opposing factions, the reformists and the modernists. The reformists were largely Confucian scholars who were opposed to the policies of Emperor Wu
Emperor Wu
Emperor Wu may refer to a number of Chinese emperors:*Emperor Wu of Han , emperor of the Han dynasty*Emperor Wu of Wei , a posthumous name of Cao Cao*Emperor Wu of Jin *Emperor Wu of Liu Song...
, and who demanded abolition of the monopolies on salt and iron, an end to the state price stabilization schemes, and huge cuts in government expenditures to reduce the burden of the citizenry. The Modernists supported the continuation of Emperor Wu's policies in order to appropriate the profits of private merchants into state coffers to fund the government's military and colonization campaigns in the north and west.
The results of these debates were mixed. Although the Modernist were largely successful and their policies were followed through most of the Western Han after Emperor Wu, the Reformists repealed these policies in Eastern Han, save for the government monopoly on minting coins.
Background
The discourses on salt and iron took place behind a tumultuous background. The previous ruler, Emperor Wu of Han, had undertaken a drastic change in policy compared to his predecessors. Reversing their laissez-faire policy at home and policy of appeasement of the Xiongnu abroad, he nationalized the coinage, salt, and iron in order to pay for his massive campaigns against the northern XiongnuXiongnu
The Xiongnu were ancient nomadic-based people that formed a state or confederation north of the agriculture-based empire of the Han Dynasty. Most of the information on the Xiongnu comes from Chinese sources...
tribes which posed a threat to the empire. Although Wu was successful in his campaigns, his policies bankrupted many merchants and industrialists and led to widespread dissatisfaction and even revolts; after his death, the regent, Huo Guang, called a court conference to discuss whether to continue Wu's policies.
Policies in the early Han
Policies in the early Han were marked by laissez-faire, due to the adoption by the early emperors of the TaoistTaoism
Taoism refers to a philosophical or religious tradition in which the basic concept is to establish harmony with the Tao , which is the mechanism of everything that exists...
principle of Wu wei
Wu wei
Wu wei is an important concept of Taoism , that involves knowing when to act and when not to act. Another perspective to this is that "Wu Wei" means...
(無為), literally meaning "do nothing". As part of their laissez-faire policy, agricultural taxes were reduced from 1/15 of agricultural output to 1/30 and for a brief period, abolished entirely. In addition, the labor corvée
Corvée
Corvée is unfree labour, often unpaid, that is required of people of lower social standing and imposed on them by the state or a superior . The corvée was the earliest and most widespread form of taxation, which can be traced back to the beginning of civilization...
required of peasants was reduced from one month every year to one month every three years. The minting of coins was privatized, while Qin taxes on salt and other commodities were removed.
Both the private and public sectors flourished during this period. Under Emperor Jing,
... the ropes used to hang the bags of coins were breaking apart due to the weight, and bags of grain which had been stored for several years were rotting because they had been neglected and not eaten.Severe criminal punishments, such as cutting off the nose of an offender, were abolished.
Merchants and industrialists particularly prospered in this period. In the early Western Han, the wealthiest men in the empire were merchants who produced and distributed salt and iron and gained wealth that rivalled the annual tax revenues collected by the imperial court. These merchants invested in land, becoming great landowners and employing large numbers of peasants. A salt or iron industrialist could employ over one thousand peasants to extract either liquid brine, sea salt, rock salt, or iron ore.
Emperor Wu's policies
Emperor Wu of HanEmperor Wu of Han
Emperor Wu of Han , , personal name Liu Che , was the seventh emperor of the Han Dynasty of China, ruling from 141 BC to 87 BC. Emperor Wu is best remembered for the vast territorial expansion that occurred under his reign, as well as the strong and centralized Confucian state he organized...
(r. 141–87 BCE) viewed such large-scale private industries as a threat to the state, as they drew the peasants' loyalties away from farming and towards the industrialists. Nationalizing
Nationalization
Nationalisation, also spelled nationalization, is the process of taking an industry or assets into government ownership by a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being...
the salt and iron trades eliminated this threat and produced large profits for the state. This policy was successful in financing Emperor Wu's campaigns of challenging the nomadic Xiongnu Confederation while colonizing the Hexi Corridor
Hexi Corridor
Hexi Corridor or Gansu Corridor refers to the historical route in Gansu province of China. As part of the Northern Silk Road running northwest from the bank of the Yellow River, it was the most important route from North China to the Tarim Basin and Central Asia for traders and the military. The...
and what is now Xinjiang of Central Asia, Northern Vietnam, Yunnan, and North Korea. Other policies included a price stabilization scheme, and a tax of 10 percent on the capital of merchants and industrialists who had not yet been expropriated. However, these policies imposed great hardships on the people; banditry and even revolts were occurring by Emperor Wu's death.
Debate
As complaints surfaced more and more about the government's policies, the regent Huo GuangHuo Guang
Huo Guang , courtesy name Zimeng was a Western Han statesman who was a rare example in Chinese history of a powerful official who deposed an emperor for the good of the state rather than to usurp the throne...
, which was the de facto ruler of China after Emperor Wu of Han
Emperor Wu of Han
Emperor Wu of Han , , personal name Liu Che , was the seventh emperor of the Han Dynasty of China, ruling from 141 BC to 87 BC. Emperor Wu is best remembered for the vast territorial expansion that occurred under his reign, as well as the strong and centralized Confucian state he organized...
, called a court conference to debate whether the policies of Emperor Wu should be continued. The resulting debate was divided into two groups, the reformists and the modernists. The reformists, largely provincial confucian scholars, backed privatization and a return to the laissez-faire policies of old. The modernists, on the other hand, largerly represented the interests of the central government and were more in tune with legalist philosophy, as well as being admirers of the previous Qin Dynasty
Qin Dynasty
The Qin Dynasty was the first imperial dynasty of China, lasting from 221 to 207 BC. The Qin state derived its name from its heartland of Qin, in modern-day Shaanxi. The strength of the Qin state was greatly increased by the legalist reforms of Shang Yang in the 4th century BC, during the Warring...
whose harsh and numerous laws had been based on legalist principles.
Reformist position
The reformist view was based on the Confucian ideal which sought to bring about the betterment of man by conformity with fundamental moral principles. To achieve this, they wished to reduce controls, demands for service, and taxation to a minimum. The reformists' criticism of the monopolies largely centered on the idea that the state "should not compete with the people for profit", as it would tend to oppress the citizenry while doing so; mercantile activity were not "proper activities for the state". They pointed out that the monopolies had placed an immense burden on the citizenry. In addition, the reformists complained that the state monopolies oppressed the people by producing low-quality and impractical iron tools that were useless and made only to meet quotas, but which the peasants had to pay for regardless of their quality. The reformers believed former private smelting by small-scale family enterprises made better implements "because of pride of workmanship and because they were closer to the users", in contrast to the state monopoly. In addition, the reformists complained that the state monopolies could not coordinate their production in accordance with the needs of all the provinces of the empire, with some areas overproducing and actually forcing the peasants to buy the surplus. The reformists also criticized the aggressive foreign policy of Emperor WuEmperor Wu of Han
Emperor Wu of Han , , personal name Liu Che , was the seventh emperor of the Han Dynasty of China, ruling from 141 BC to 87 BC. Emperor Wu is best remembered for the vast territorial expansion that occurred under his reign, as well as the strong and centralized Confucian state he organized...
, which they believed had weakened instead of strengthening China, and whose costs did not justify the benefits involved.
Modernist position
The modernists were headed by Sang HongyangSang Hongyang
Sang Hongyang was a prominent official of the Former Han Dynasty, who served Emperor Wu of Han and his successor Emperor Zhao. He is most famed for his economic policies during the reign of Emperor Wu, the best known of which include the state monopolies over iron and salt - systems which would...
, an ex-merchant who had been selected by Emperor Wu to administer to his new interventionist policies. They justified the imposition of controls on the grounds that they would thus wrest profits from wealthy private merchants that could pose a threat to the state and bring them into state coffers; particularly, modernists claimed that industrialists in salt and iron were "brutal and tyrannical", and who employed thousands of workers that could potentially become rebels. The modernists took the view that with its iron monopoly the state could effectively distribute tools of good quality for the use of the peasant, as well as stabilizing the price of many essential goods. They also claimed that private workshops were too small, unspecialized and poorly equipped. Modernists claimed the government workshops offered better working conditions and materials than private workshops. In addition, the modernists claimed that the expansionist campaigns were necessary to defend China from barbarian incursions, and that by nationalizing the salt and iron industries the state could obtain the funds needed without imposing additional burdens on the peasantry.
Legacy
The modernists survived this debate with most of their policies intact, with only the monopoly on liquor abolished, although Sang was later executed in 80 BCE for treason. Reformists gradually gained more power through the rest of Former Han, due to the growing unsustainability of the Modernists' policies. They briefly succeeded in getting the central government monopolies on salt and iron abolished from 44 to 41 BCE, though this was unsuccessful and the monopolies resumed until the end of Wang MangWang Mang
Wang Mang , courtesy name Jujun , was a Han Dynasty official who seized the throne from the Liu family and founded the Xin Dynasty , ruling AD 9–23. The Han dynasty was restored after his overthrow and his rule marks the separation between the Western Han Dynasty and Eastern Han Dynasty...
's (r. 9–23 CE) regime, which imposed ultra-modernist policies. After his overthrow, the government of Later Han resumed earlier laissez faire policies and relinquished control of these industries to private businessmen.
Sources
- Bielenstein, Hans (1987), "Wang Mang, the Restoration of the Han Dynasty, and Later Han", in Twitchett, Denis and Fairbank, John K. (eds.), The Ch'in and Han Empires, 221 B.C. – A.D. 220, The Cambridge History of China, 1, Cambridge: Cambridge University Press, pp. 223–290, ISBN 0521243270
- Li, Bo; Zheng, Yin (2001) (in Chinese), 5000 years of Chinese history, Inner Mongolian People's publishing corp, ISBN 7-204-04420-7
- Loewe, Michael. (1986). "The Former Han Dynasty," in The Cambridge History of China: Volume I: the Ch'in and Han Empires, 221 B.C. – A.D. 220, 103–222. Edited by Denis Twitchett and Michael Loewe. Cambridge: Cambridge University Press. ISBN 0521243270.
- Nishijima, Sadao (1986), "The Economic and Social History of Former Han", in Twitchett, Denis and Fairbank, John K. (eds.), The Ch'in and Han Empires, 221 B.C. – A.D. 220, Cambridge History of China, 1, Cambridge: Cambridge University Press, pp. 545–607, ISBN 0521243270
- Wagner, Donald B. (2001). The State and the Iron Industry in Han China. Copenhagen: Nordic Institute of Asian Studies Publishing. ISBN 8787062836.