The Transformation of Commerce from Ming dynasty to Modern China

The Transformation of Commerce from Ming dynasty to Modern China

For centuries, China has been a feudal society with the majority of its output being based on agriculture. In this paper, a feudal society refers to a society that its economy is based on land and relied on agriculture and handicraft industry that all product activities are restrained within a family. In light of Economism, along with the development of the commodity economy and the rise of merchants, China went through a commercial revolution during sixteen to nineteen centuries, resulting in the shift of business ideas and the social status of the merchants. As Yeh states in Shanghai Splendor, Economism “distances the mind from the reverence of immanence and turns it towards the secular reasoning of calculation and transaction.”[1] Although the revolution to capitalism itself ended unsuccessfully, it indeed provided a powerful base for the formation of the commerce-based modern China. The enlightenment in commerce in Ming and Qing dynasty, which leads to the widespread idea of mercantilism, plays a crucial role in the breakdown of the feudal autocracy and the transformation of China from an agricultural society to an industrial society. Thus, this paper aims to identify the transformation of Commerce in China from Ming and Qing dynasty to 20th century. This paper will begin by examining the historical and social background of the time to find elements that lead to the change in the field of commerce ideology and the gradual establishment of modern China’s industrial and commercial system. Then this paper will provide specific comparisons regarding the differences between the commerce in Ming dynasty and 20th century. 

The Shift of Economic ideas

 The Feudal society of China has gradually collapsed since the Ming dynasty. In the process of the decay, changes in many traditional ideas took place. One of the most significant changes is the shift of people’s attitudes toward business. Before the Ming dynasty, it is commonly accepted that agriculture is the essential base for a nation’s economic development. Li Kui, an ancient Chinese government minister, believes that a nation’s wealth is derived solely from agriculture, and advocates for the restriction of commerce because of its detrimental effects on agriculture.[2]

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However, as the population grow and the labor market expanded, both the production of the agriculture and handicrafts increased. In the Confusions of Pleasure, Brook marked that the demand from the imperial households and elites also stimulated industries.[3] The remarkable progress made in agricultural production and handicrafts planted the seeds of commoditization. Toward the end of the dynasty, along with the development of commodity economy, the rise of the social status of the merchants, the thought of economic gradually changed. For instance, Jun Qiu, a famous economist in the Ming dynasty, realized not only that the exchange of commodity is essential to people’s life, but also the importance of market, as the bridge between production and consumption. In Jun Qiu’s opinion, the dynamic of the market reflects the wellness of the economy of a nation: “民用足则国有余矣”.[4] In addition, Jun Xun believes that markets are the affair of the merchants.[5]He supports the merchants’ freedom to run their business for the reason that the market will regulate itself and opposes any commercial activities made by government. Although the idea of mercantilism is different from Laissez-fiare, it is interesting to see how Jun Qiu’s idea correlates to Adam Smith’s. Both of them advocates for minimizing the role of government intervention and taxation in the market, and are against for the intention of government to achieve monopoly in the market through political power. Despite the similarities of their concepts, the thinkers of the late Ming dynasty are in the late stage of a feudal society. Thus, their theory of the free economy served the civic class. Jun Qiu, for instance, is considered a Confucian statecraft scholars that works for the ruling class. They aim to prevent the federal regime from oppressing and interfering the market, and thus contributes to the further development and growth of the commodity economy. At this stage, the concept of “shi nong gong shang” has faded. People relied on liberal economic thoughts and formed the development of market economic systems.

During the same period, monetization of silver became an obvious phenomenon. Using silver as currency broke the monopoly of autocratic government. It changed the relationship between the state and the market by weakening the economic control of the state. The emperor responded to the situation by trying to replace silver by paper currency that was issued by the government. For instance, the Hongwu emperor attempted to withdraw silver from circulation.[6] Brook in his book comments his action as the “least successful intervention to manage the commercial economy.”[7] The paper currency never gained any confidence by people, to a degree that the government had to protect the physical bills by “legally analogizing them to stamped government documents, destruction of which was illegal.”[8] Despite the efforts the Hongwu emperor made, people still preferred silver over paper money that are privileged by laws.[9] If we look in retrospect, the replacement of metals by paper currency is inevitable during the development of commercial economy. The Hongwu emperor failed because the paper currency issued by the state in Ming dynasty was an absolute product of the political power for the interests of the ruling class. The printing of the paper currency and the size of the unit are completely determined by the state power. The paper currency itself does not closely related to the value of commodities in social circulation and are not the product of the development of relations between commodity and currency. The Ming dynasty failed to use paper currency to replace silver because of its mismanagement.

Overall, although China was still a feudal society under a power-centralized system, the rise of the mercantilists’ economic ideas and the failure of paper currency changed people’s attitudes toward commerce. However, the seed of capitalism stayed in the bud for no capitalist movement and the overthrow of the feudal ruling class. Instead, the society continued to carry out economic activities under feudal rule.

After the ruling of the Kangxi Emperor, the Yongzheng Emperor, and the Qianlong Emperor, the Qing Empire established under a stable foundation for governmence. The national strength was strong and the commodity economy developed more than the previous generation. As we can see from Table 1, from 1550 to 1880s, the number of the population almost tripled – grow from approximately 150 to 400 million.[10] According to the chart, the government revenue increased from 74 million taels in 1750 to 250 million taels to 1880s.[11]

Despite the solid foundation and the prosperity from the Ming dynasty, many social problems arose at the beginning of the Qing dynasty: the contradictions between the vapid increase of population and the lack of production supply, the deterioration of privatization caused by land mergers, the decline of silver evasion and the purchasing power of money, and the distorted market resulted from the intensified class conflicts. The Qing dynasty proposed some approaches to solve the issues, such as the Imperil Maritime Customes and lijin duties on commerce. Another approach is solving the surplus human resources by lock them on the existing land system or use them to exploit new land. What I found most interesting is how the Qing used human resources and commerce for innovative solutions to military provisioning challenges that allowed Manchu the expanded.[12] The Qing state mobilized merchant capital through selling official degrees and transferring revenue from wealthy coastal provinces.[13] Moreover, “To promote commerce…the Qing state allowed merchants to migrate to newly conquered areas, where the Qing sought to develop the commercial economy by issuing bronze currency…One might think of this approach as employing ‘commerce as a weapon of war’.”[14] For instance, the Qing initially directed merchant activity in cities in ways that would support the military and at the same time not harm local society.[15] But those cities in Xinjiang developed where the Daoguang court had to prioritize merchants needs for Chinese merchants wielded so much power.[16] Merchants and practices of commerce became crucial to the Qing state’s conquests.

After the Opium War, China shifted between a feudal and a colonial society. The ideas of Chinese feudal society conflicted with ideas from Western capitalism. The ruling class of the Qing dynasty chose to stay conservative to remain its political power. Therefore, China missed the opportunity to become industrialized. In the late Qing dynasty, the internal feudal system of China was steadily decaying after the long-term impact of the Western capitalism. At this time, the contradiction in society is mainly the one between the Chinese and foreign force, and is also interspersed with the contradiction between feudalism and the people. The capital powers used the Qing government as a tool to manage, but it could no longer reach the requirements of the rapid development of the economic base.

At this point, the landlord class conservatives the reformists are identical to some extent. Their struggle is nothing more than economic and ideological debates among different factions within the feudal ruling class. The ultimate goal is to maintain the increasingly declining feudal ruling order. Their difference is only in the different ways they are taken. For instance, Lin Zexu, one of the most famous Politician and thinker in modern China, advocated for making policies that would promoted commercial prosperity. He believed that there is a connection between agriculture, industry and commerce, and only when they work together would the economy of a society prosper. [17] It was essentially a struggle between backward feudal production methods and advanced capitalist production methods, which determines that the new economic thought will inevitably gain a dominant position in the battle with the old economic thought. The Westernization Group(洋务派) also first established the military industry in order to maintain the rule of the Qing Dynasty. At this time, there was an “enterprise” movement jointly organized by the government and the business, trying to exploit the characteristics of capitalist commerce under the feudal system. Naturally, the Qing government plundered most of the surplus, and these “enterprises” did not continue. Later, after the emergence of the reformists, a capitalist system was proposed to overthrow the feudal system. What can be seen is that the promotion of the capitalist system has been a trend of the society at that time.

However, during this period of time, the Qing government and Western capitalism jointly suppressed the movement after the Reform Movement of 1898, until the Revolution of 1911 broke out. The expansion of imperialism’s investment in China, although its subjectively is to strengthen the exploitation and control of China, objectively stimulated the development of Chinese capitalism.

Social Change: The Rise of Merchants

Tam points out a very interesting point in his paper that the order of four classes was intended to reflect the relative value of the four classes of worker to the state.[18] According to him, “as far as many Chinese elites were concerned, a career as scholar-official was the most prestigious of occupations and a merchant’s work was the least prestigious.”[19] This idea can be trace back to Qin dynasty: Both Confucius and Mencius, who are most well-known and respected teacher and philosopher of Chinese history, contributed to the intellectual foundations for viewing merchants as a “parasitic element” for a long period of the history.[20] The students of Consucius, followed his ideas, considered merchants as “mean peoples”; Mencius brought it to another level by calling merchants “unscrupulous men” who “competed for profits with people.”[21]

Bibliography

Brook, Timothy. The Confusions of Pleasure: Commerce and Culture in Ming China. Berkeley:University of California Press, c1998., 1998.

Feuerwerker, Albert. “The State and the Economy in Late Imperial China.” Theory and Society13, no. 3, May 1984.

Giersch, C. Patterson. “Commerce and Empire in the Borderlands: How Do Merchants and Trade Fit into Qing Frontier History?” Frontiers of History in China 9, no. 3 (September 2014):361.https://login.avoserv2.library.fordham.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=edb&AN=101008342&site=eds-live.

Li, Kui, The Book of Law.

Lin, ZeXu. 《畿辅水利议总叙》

Qiu, Xun. 《大学衍义补》, 卷 25.

TAM, KAT TAI. “The Social Status and Thought of Merchants in Ming China, 1368-1644: A Foray in Clarifying the Social Effects of the Commercialization of Ming China,” 2009. https://login.avoserv2.library.fordham.edu/login?url=http://search.ebscohost.com/login.apx?direct=true&db=edsndl&AN=edsndl.oai.union.ndltd.org.LACETR.oai.collectionscaada.gc.ca.OKQ.1974.5149&site=eds-live.

Yeh, Wen-Hsin. Shanghai Splendor: Economic Sentiments and the Making of Modern China, 1843-1949. Berkeley and Los Angeles, California: Universty of California Press, 2007.