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| Government Involvement in Social Welfare, Part 2
Anti-monopolists
Another good example of how we misinterpret Chinese history when we apply a Western framework concerns the Qing attempts to prevent the emergence of monopolies in essential goods. The Qing tried very hard to make sure that no one grain dealer obtained complete dominance over the local grain market because they know that what that could mean for consumers. As a result they devised a licensing system, which was designed to make sure that there were always multiple licensees in any given place. If you look at that in isolation, you can find a document that says so and so had his grain license taken away. And if you're caught in the old stereotype that the Chinese government hated commerce, you look at that and that appears to be evidence of an anti-commercial attitude. But if you look at it in the broader context, you say, "Oh no, they were not anti-commerce. They were anti-monopoly."
One important exception to this is the government monopoly on salt. Various Chinese regimes going back centuries found salt taxes an irresistible revenue source—it was an essential nutrient that you can only produce in selected areas, and so it was relatively easy to control it and raise the price. In fact, many premodern regimes find this a crucial source of funds and monopolize it.
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| The Government Promotes Cotton |
However, on the whole the Qing government encouraged competition and made sure there were multiple grain dealers so that nobody could do the sorts of things that monopolists do. There were a whole series of regulatory efforts as well as educational efforts to teach people how to weave, spin, and grow cotton, and how to market their products. The government also built emergency granaries and maintained public order to ensure that grain moved back and forth.
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| Illustrations of Cotton Cultivation and Manufacture Presented to the Qianlong Emperor and Used by Government Officials to Instruct Farmers. |
All these are ways in which the Qing were very good at exploiting the possibilities that they could see within a premodern economy. They never envisaged getting out of that premodern economy and suddenly getting into a world in which you used vastly increased quantities of energy, invented loads of new products and production processes, and did the things that we did in the nineteenth and twentieth centuries. But we shouldn't be shocked that they didn't envision that: nobody else did either. It came upon people as a surprise when it happened. It's only in looking back from today that nineteenth-century technology-driven growth appeared to follow from the very different kind of premodern growth, largely driven by increased trade, labor, power, et cetera, within an environment of very limited technological change.
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Emperors and Reign Periods (PDF)
