Salt, salt production, and salt taxes played key roles in Chinese history, economic development, and relations between state and society.
Debate over government salt policies brought forth conflicting attitudes toward the nature of government, private wealth, the relation between the rich and the poor, while the administration of these salt policies was a practical test of a government's competence.
Next, you'll go to 3 historical periods to learn about them.
State of Qi (1046-221 BC, 齐国) was rich in salt.
Once, the politician Guan Zhong (Guanzi) and Duke Huan were discussing economic policies.
“I wish to place a special tax on towers and pavilions. What about it?”
“This will harm construction,” replied Guanzi.
...
“I wish to place a special tax on men. What about that?”
“That will lead to their concealing their true numbers.”
“How am I to run the country?”
If you were Guanzi, you would:
What is the difference between them?
The monopoly on salt is an indirect tax.
Guan Zhong argued that direct taxes created resentment among the people, but extolled indirect taxes, such as those on salt and iron.
Even in China today, most taxes are taken as hidden taxes.
You can hardly see the tax rate on a receipt.
What is the tax form in your place?
Emperor Wu of Han (156-87 BC, 汉武帝) was considering whether to carry out economic reforms, including restoring a monopoly on salt. But it would increase the burden of the people.
If you were Emperor Wu, you would:
In reaction to Emperor Wu' expansionary wars, his agricultural minister Sang Hongyang created national monopolies for salt and iron.
However, monopoly is not the whole of economic policy, which has a range of measures, such as price adjustment policy(Pingzhun, 平准):
The national treasury would purchase consumer goods when the prices were low and sell them when the prices were high at profit. Thus making sure the price fluctuation would not be too great.
Have you seen similar economic policies?
Interesting hypothesis:
You "killed"/"saved" Rome!
There is a hypothesis that the Xiongnu were defeated by the Han Dynasty and migrated to Europe, i.e. the Huns, which eventually caused the fall of Rome.
Northern Song dynasty and Western Xia dynasty had military conflicts. (10th to 12th century)
The Xia had famed ‘dark and white salt’, both of high quality and at low prices.
If you were the Emperor of Song, you would:
The Xia made a lot of profit from the salt trade.
Once the trade was banned, it was difficult for the Xia to consume so much salt because of its own small population.
Apparently, the Song used salt as an economic weapon.
Do you know other economic wars? What are weapons there?
We examined salt in ancient economy...
- as an indirect tax.
- as a tool of fiscal policy.
- as a trade war weapon.
They have deeply influenced modern Chinese economic policies.
Do you know other legacies of ancient economic policies?
What has as much impact as salt today?