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Sorting out and Distinguishing the Trends of Thought in Ancient Monetary History Research ·
Differences and Reflections on the Study of Fiscal Monetization in the Song Dynasty
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(China Numismatic Museum, Beijing, 100031)
In Chinese history, the history of the Song Dynasty has remarkable uniqueness, and the theory of change in the Tang and Song dynasties and the theory of modern life in the Song Dynasty are all summaries of the uniqueness of the history of the Song Dynasty by Chinese and foreign academic circles. Wan Zhiying has pointed out that "China's economy underwent drastic changes during the Tang and Song dynasties, and this reflected a fundamental change in the basic system" (translated by Cui Chuangang, Cambridge Chinese Economic History, Chinese University Press, 2018, p. 183). The Song Dynasty continued the changes in private ownership of land, conscription, and fiscal and taxation systems that began in the late Tang Dynasty, and the commodity-money economy flourished unprecedentedly. The role of money in the country's finances and social economy was unprecedented, and the Song Dynasty also produced the world's first national credit banknotes. This phenomenon has attracted the attention of Chinese and foreign academic circles and has become an important topic in the study of Song history.
1. The monetization of the Song Dynasty's finances
Fiscal monetization refers to the fact that the proportion of the monetary part of the country's fiscal revenue and expenditure far exceeds the physical part. From the perspective of tax sources, these monetary revenues mainly come from industrial and commercial taxes other than traditional agricultural taxes, such as commercial taxes and government monopoly revenues from consumer goods such as salt, tea, and wine. Because these tax items are not directly levied from producers or consumers, but from the taxation of commodity circulation, which is an indirect tax, it is said that the monetization and taxation of the Song Dynasty mainly came from the indirect tax of industry and commerce, which are two sides of the same coin.
In the 40s of the 20th century, Quan Hansheng's "The Relationship between Government Revenue and Monetary Economy in the Tang and Song Dynasties" (Collected Journals of the Institute of Historical Languages, Volume 20, 1948) compared the tax revenue of the Tang and Song dynasties, and pointed out that the government tax revenue in the Northern Song Dynasty was not only much higher than that of the Tang Dynasty, but also the proportion of currency was much higher than that of the Tang Dynasty, and the proportion of the monetary part in the total tax revenue during the Tianbao period of the Tang Dynasty was 3.9%; In the second year of the Northern Song Dynasty, the proportion of monetary revenue in government revenue reached more than half. After that, Jia Daquan's "A Preliminary Study on the Tax Structure of the Song Dynasty" (Social Science Research, No. 3, 1981) made statistics on the tax revenue of the Northern Song Dynasty, and converted the physical part according to the price, arguing that the state taxes in the previous dynasties before the Song Dynasty were mainly taken from agriculture and agricultural laborers; However, in the Song Dynasty, the composition of tax sources changed, with the field tax gradually relegated to a secondary position, and the commercial tax, monopoly tax, and mining tax gradually rose to the main position. More than two-thirds of the state finance comes from tax revenues other than the second tax on agriculture. Subsequent studies of the financial history of the Song Dynasty have come to much the same conclusion.
During the Southern Song Dynasty, there was no national fiscal and tax data, but most of the new taxes in the Southern Song Dynasty were monetary revenues, and the data of local fiscal revenues also reflected the further increase in the proportion of monetary parts of the Southern Song Dynasty's fiscal revenues. Due to the increase in additional taxes such as silk money, wine money and seven-cent tax increase in the general system of money, the monetary part of the fiscal revenue has been further increased (Gao Congming, "Research on Currency and Money Circulation in the Song Dynasty", Hebei University Press, 2000). During the Northern Song Dynasty, the monetization of tax revenue and the marketization of military procurement were further strengthened in the Southern Song Dynasty. According to the financial data of the Huaidong Consulate General, during the Southern Song Dynasty, the transformation of taxes from goods to money became more dramatic, with cash income accounting for 75%-87% of the Consulate General's income in the second half of the 12th century, while grain income from the two taxes fell sharply (Wan Zhiying, Cambridge Chinese Economic History).
What is even more striking is that the degree of fiscal monetization in the Song Dynasty was not only much higher than that of the previous dynasties, but also higher than that of the later Ming and Qing dynasties. The Ming and Qing dynasties surpassed the Song Dynasty in terms of population and territory, and from the late Ming Dynasty to the early Qing Dynasty, industry and commerce developed greatly, and the market size was not inferior to that of the Song Dynasty, but the degree of industrial and commercial taxation or fiscal monetization was far less than that of the Song Dynasty (Li Huarui, "Financial Policy and Social Economy in the Song Dynasty", Chinese Social Sciences, No. 7, 2022). Liu Guanglin et al. pointed out that the proportion of indirect taxes in fiscal revenue in the Song Dynasty exceeded that of England during the Tudor period and the Netherlands between 1650 and 1790 (Liu Guanglin and Guan Yiyun, "Tang and Song Dynasty Reforms and the Song Dynasty Fiscal State", Journal of Chinese Economic History, No. 2, 2021).
The monetization of the Song Dynasty's finances has become the consensus of Song historians. However, there are different understandings of the relationship between fiscal monetization and the commodity economy.
2. The relationship between fiscal monetization and commodity economy in the Song Dynasty
The relationship between fiscal monetization and the commodity economy involves two issues, the first question is whether the monetization of the Song Dynasty finance was the result of the development of the commodity economy, or the result of government coercion beyond the level of the development of the commodity economy. The second question is whether fiscal monetization promotes or inhibits the development of the commodity economy.
On the first question, the views of the Japan scholar Tomoyuki Miyazawa are representative. He argues that between the government and the market, the government plays a decisive role, and that the shift from a tax in kind to a monetary tax in the Song Dynasty was caused by fiscal needs. The monetization of finance is not a reflection of the development of a market economy, but a reflection of the increasing dominance of the financial circulation system over production and commerce. He even argues that cash as fiscal revenue should not be understood as money in the general sense, but as a kind of physical object with a specific purpose in government military expenditure. Although 30,000,000 copper coins were minted during the Northern Song Dynasty, only about 30,000,000 copper coins were circulating in the market in the late 11th century. This fundamentally negates the existence of a market-oriented commodity economy in the Song Dynasty, in which money was only a financial tool of the government (Tomoyuki Miyazawa, "Song Dynasty China の国と经济: Finance· Market · Money", Sobunsha, 1998).
Domestic scholars have a similar view. Bao Weimin basically agrees with Miyazawa Tomoyuki, "We cannot directly deduce the scale of spontaneous commodity circulation in society at that time from the commercial tax data of the Song Dynasty. On this issue, Miyazawa's research is of fundamental significance to our argument." He believes that the level of spontaneous commodity circulation reflected in the commercial tax of the Song Dynasty should not be overestimated. The high amount of revenue collected in the Song Dynasty was not the result of commercial development, but essentially an indirect tax levied by the autocratic government using administrative power to collect from the society, which was essentially the same as the land tax, but the collection method was different. This also negates the significance of the monetization of fiscal taxation in the Song Dynasty (Research on Local Fiscal History in the Song Dynasty, Chinese Renmin University Press, 2011, pp. 215-216).
In contrast to Miyazawa's view, Gao Congming analyzed the relationship between state finance and the market in the Song Dynasty from the perspective of money circulation channels. Vertical circulation is the release and withdrawal of currency with the content of state finance, and horizontal circulation is the circulation of currency in the market. Currency delivery is the source of money in horizontal circulation, and only after horizontal circulation can money be converted into government revenue, so as to carry out the next circulation, and so on. In this process, horizontal circulation is the foundation, and vertical circulation is built on this foundation. Therefore, the monetization of finance depends on the development of the commodity economy. The degree of fiscal monetization ultimately depends on the degree of development of the commodity economy. At the same time, vertical circulation also has a great impact on horizontal circulation. According to the estimation of the total commodity circulation in the Song Dynasty, the total commodity circulation in the country during the Xining period was 150 million guan, and the government monetary revenue in the same period was 60 million guan. The government's monetary revenue and expenditure accounts for one-third of the total commodity circulation, indicating that fiscal monetization has the basis of commodity economy, and the government's monetary expenditure has created a huge consumer market, which is an important factor to stimulate the development of commodity economy (Research on Currency and Money Circulation in the Song Dynasty).
On the second question, one view is that the fiscal and taxation policies of the Song Dynasty mainly inhibited the development of the commodity economy. Jia Daquan believes that this policy is a further development of the policy of "emphasizing agriculture and suppressing business" after the Tang Dynasty, which seriously hindered the development of the commodity economy, suffocated the embryonic factors of capitalism that had just begun to emerge, and played a role in hindering the development of society (A Preliminary Study on the Tax Structure of the Song Dynasty). This kind of understanding has a certain relationship with the fact that in the early days of reform and opening up, the academic circles did not emancipate their minds enough, and there were only one theoretical tool for analyzing history.
Most researchers believe that fiscal monetization in the Song Dynasty played a role in promoting the development of the commodity economy. Shigeru Kato, Ichisadari Miyazaki, Robert Hortwell, and Mark Elvin believe in the classic theory of Tang and Song Dynasty reforms, which argues that the monetary and fiscal reforms of the Song Dynasty promoted the productivity of agriculture and handicrafts and created a vibrant market economy (Wan Zhiying and Zhou Xinghui, "The Innovation of Song Dynasty Monetary History Research: A Review of Miyazawa Tomoyuki's Song Dynasty China の国と経済" and Gao Congming's "Song Dynasty Currency and Money Circulation Research", Song History Research Series) 13th Edition, Hebei University Press, 2012).
Wan Zhiying and Liu Guanglin both believed that the fiscal and taxation system of the Song Dynasty was the government's use of the market and the combination of the government and the market, which not only did not have a destructive impact on the development of the commodity economy, but on the contrary promoted the development of the market and the commodity money economy. Wan Zhiying argues that "the tax system of the Song Dynasty relied heavily on indirect taxation, and its fiscal policies were mostly aimed at exploiting the market rather than suppressing it" (Cambridge Chinese Economic History, p. 213), and that the policy of taxation did not stifle the spirit of commercial enterprise, and that the expansion of the market promoted the commercialization of agriculture and the specialization of production, freed the vast majority of the population from the shackles of servitude, and promoted a more rational distribution of economic resources. Liu Guanglin believes that the Song Dynasty government's economic policies to stimulate market expansion and urban consumption were successful in order to draw financial resources from market expansion and make economic development an urgent priority. The Song Dynasty's sales system constructed an imperfectly competitive market of government-business cooperation, and the tax policy dominated by indirect taxes did not deal a blow to the trade activities at that time (Liu Guanglin and Guan Yiyun, "Tang and Song Dynasty Reforms and the Song Dynasty Fiscal State").
3. Song Dynasty national credit banknotes
The Song Dynasty produced the world's earliest paper money, 600 years earlier than Western European paper money. The paper money system that began in the Song Dynasty was inherited and developed by the Jin and Yuan dynasties, but completely disappeared in the middle of the Ming Dynasty, while the paper money in Europe continued to develop after its inception and was in line with the modern national credit currency.
The production of national credit banknotes in the Song Dynasty was closely related to the fiscal monetization of the Song Dynasty. Sichuan Jiaozi was created by the private sector, but the development of the paper money system was the result of the paper money government and the government using it as a financial tool. Wan Zhiying, The Origin of Chinese Paper Money (eds. by Gozman and Rowenhorst, translated by Wang Yu and Wang Wenyu, The Origin of Value, Wanjuan Publishing Company, 2010, p. 93), points out: "The Song government invented and developed a series of complex fiscal policies and monetary systems, including paper money, which enabled the government to mobilize economic resources on an unprecedented scale. For a long time, Song Dynasty paper money has been used as a means for the people to pay taxes to the government and as a medium for private transactions of goods, which is indeed an outstanding contribution. ”
How to look at the national banknotes of the Song Dynasty, there are two different views in the academic circles.
Consistent with the denial that the fiscal monetization of the Song Dynasty was the result of the development of the commodity-money economy, Bao Weimin, based on Marx's exposition on paper money and the experience of the production of European paper money, proposed that the paper money of the Song Dynasty was issued by the government, although it had the nature of modern command paper money to a certain extent, but because it was not mainly based on the development of credit, fundamentally speaking, it was only an alternative currency that appeared due to the shortage of metal coins at that time, and there was still a gap between it and the paper money produced due to the development of credit relations in the real sense. Only in this way can we explain the tortuous historical process of paper money from its creation to its disappearance, as well as the various defects of the calendar currency system ("On the Nature and Historical Status of Song Dynasty Paper Money", Journal of Chinese Economic History, No. 3, 1995).
Gao Congming believes that from the perspective of the essence of money and the history of world currency, currency has undergone an evolution from metal coinage to exchange paper money, and then to national credit banknotes. The state credit note was established on the condition that the state accepted payment to the state in such banknotes, and "once the relationship between money creation and taxation (and the potential structure and stability of the two and the government) is fully understood, the transition from metal coinage to fiat money or paper money becomes much more straightforward" (Goodhart's Monetary Economics Papers, China Financial Publishing House, 2010). The monetization of the Song Dynasty finance provided the necessary conditions for the production of national credit banknotes, and the evolution of paper money from coinage to paper money in the Song Dynasty from exchange paper money to national credit currency was completely in line with the law of monetary evolution. The national credit banknotes pioneered in the Song Dynasty were inherited by the Jin and Yuan dynasties. The Yuan Dynasty went one step further and implemented a complete paper money system. The paper money system was also implemented in the early Ming Dynasty, but due to the high degree of materialization and forced labor of the Ming Dynasty's fiscal and taxation system, paper money also lost its raison d'être (Gao Congming, "The "Monetary Revolution" Thousand Years Ago: On the Emergence and Historical Significance of National Paper Money in the Song Dynasty", Guangming Daily, January 22, 2024).
4. Reflections on the issue of fiscal monetization in the Song Dynasty
Finance, as the way in which the state draws social resources, is the economic basis for the existence of the state. Schumpeter believed that finance is an important pillar of national governance, and an in-depth look at the fiscal system corresponding to fiscal revenue is the key to understanding the social and political changes in a country. The transformation of the way fiscal revenue is drawn will also bring about the transformation of the national governance model. Schumpeter's theory of the tax state aims to explain the transition from a "territorial state" to a "tax state" in Europe from the late Middle Ages to the late 18th century, accompanied by the expansion of the public's voice in national public affairs, and led to the establishment of a modern state governance system. Of course, this theory is not entirely applicable to explain the evolution of the fiscal system in Chinese history, but it shows that the fiscal monetization of the Song Dynasty is still relevant. Japan scholar Miyazaki Ichidai was the first to use the term "fiscal state" to describe the fiscal system of the Song Dynasty, but he did not elaborate in detail. Liu Guanglin is one of the earliest scholars to give an in-depth explanation of the formation and characteristics of the tax (fiscal) state in the Song Dynasty based on Schumpeter's theory of the tax state and the theory of the fiscal state in Western academic circles, and he believes that the rise of the tax state in the Song Dynasty is closely related to the market, and the high monetization of taxes, the dependence on city-based consumption taxes, and the growth of negotiable debt bills all highlight the high degree of involvement of the Song government in the private economy. The centralization and specialization of fiscal institutions also reflects the efficiency and skill of state organizations in collecting, transferring and distributing tax resources. The Song Dynasty was already a mature tax state, and as the fiscal system evolved from a tax-based to debt-based in the 12th century, the Song Dynasty gradually moved from a tax state to a fiscal state. （Willian Guanglin Liu, “The Making of a Fiscal State in Song China，960-1279”, Economic History Review, vol.68, Issue 1,Feb.2015; "Tang and Song Dynasty Reform and Song Dynasty Fiscal State"). Wan Zhiying also uses the term "fiscal state" to describe the fiscal and taxation system in Chinese history, arguing that the basic concept of the fiscal state was already present in China as early as the Warring States period, when "the rulers of the peripheral states of Qin, Chu, Qi, and Yan established a bureaucratic system that controlled economic resources, and the latter was the hallmark of the fiscal state" (Cambridge Chinese Economic History, p. 67). However, Wan Zhiying's "fiscal state" refers to the establishment of the state tax system and the corresponding bureaucratic administrative institutions during the Warring States period, rather than the financial drawing resources from the market.
As for the changes in fiscal monetization and tax sources in the Song Dynasty, although its significance did not lead to a fundamental transformation of the state governance model and lead to the modern state governance model like Schumpeter's tax state theory, it still shows the change in the state governance model of the Song Dynasty. Fiscal monetization is more flexible, economical and efficient than physical monetization, from collection, transportation to use. In terms of the object of taxation, it is also fairer to shift from a poll tax to a property tax, and from a direct tax on producers to an indirect tax on the circulation of goods. At any time in history, taxation as a system for the state to obtain social resources must have a certain degree of compulsion, and the Song Dynasty obtained financial revenue through commercial taxation and monopoly on specific commodities, which was a process of game between the government and merchants, and its compulsion was the least compulsory than direct taxation of producers.
It is impossible to draw resources from society in the form of money without the basis of the development of a commodity economy. The monetization of finance in the Song Dynasty was inevitably premised on the development of the commodity economy, and it is not objective to overemphasize the coercive role of the government and deny that commercial development is the basis of fiscal monetization. At the same time, the monetization of the Song Dynasty's finances actually created a huge consumer market, which played a role in promoting the expansion of the market scale and the development of the commodity economy, and also promoted the social division of labor and social progress. The economic prosperity, contractualization of social relations, and the unprecedented openness of the social atmosphere in the Song Dynasty were not the result of the development of the commodity-money economy.
In the same way, the Song Dynasty national credit banknotes are based on the premise of fiscal monetization, although the generation and development of Song Dynasty banknotes and the production of Western European banknotes are different in time and path, but it still conforms to the general law of monetary development and evolution, and its rationality cannot be denied on the grounds that it is different from the path of Western banknotes and does not conform to the theory based on Western experience. As Braudel put it, "The money economy is the raison d'être of money, and this economy can only be established where people need it and can afford to pay for it." Its flexibility and complexity depend on the flexibility and complexity of the economy that drives it. Therefore, there are as many currencies and currency systems as there are economic rhythms, systems and situations. (Gu Liang and Shi Kangqiang, trans., Material Civilization, Economy and Capitalism from the 15th to the 18th Centuries, Joint Publishing Co., Ltd., 2002, p. 519)
This article was originally published in the 4th issue of Chinese History Research Trends in 2024 and is reprinted with the author's permission. If you need to quote, please ask for the original text.