井底之蛙

4/28/2008

Qing China’s modern economy

Filed under: — Alan Baumler @ 10:28 am

Shanghaist among others reports on Asia’s growing rice crisis. Well, actually it’s only a crisis if you are trying to live on less than a dollar a day. Much of the world is trying to do this of course, which has led to rice riots. For historians rice riots call up lots of associations. Although the modern neo-liberal state does not much concern itself with guaranteeing the food security of its people lots of pre-modern states did, and the Chinese Late Imperial state in particular was obsessed with stabilizing the price of grain, hence the ever-normal granaries. A lot of Asian states are currently trying to find ways to up grain production for next year, banning exports of grain, fixing prices and scrounging around for extra supplies. There has been a fair amount of popular violence, in the long tradition of food riots, which are usually focused on forcing sales at a “fair” price or preventing exports of local supplies. In America Sam’s Club is limiting rice purchases. No doubt this will make the W.T.O. grumpy, since we should be entering the glorious era of the universal free market.

Free markets vs. paternalism/meddling is often presented as one of the big traditional/modern dichotomies. Actually, even in China officials have a long history of relying on market mechanisms to deal with food problems. Although Confucian officials have long had a reputation in the West for being anti-commercial this not very accurate. According to Rowe1

Qing provisioning policy might be divided into the following five strategies (listed
in roughly ascending order of controversiality): (1) attacking extravagance and encouraging frugality, on the part of both government and society; (2) encouraging increased food production; (3) promoting maximum commercial circulation of grain;(4) attempting to meet sporadic and localized food crises through administrative means; and (5) maintaining large permanent stocks of grain in government hands as leverage to control local availability of grain on a routine basis. …

Chen Hongmu did not see encouraging commerce as betraying the classical tradition as he showed in his letter to Fang Bao

“The pervasive dilemma today is that the price of rice is high and the people are too
poor to afford it. But if those who seek to deal with this lack an overall conception of
the problem, they will never be able to come up with a comprehensive policy approach
to resolve it. This overall concept is none other than the Way of Producing Wealth
[shengcai], identified in the Great Learning and repeated by Mencius: “Open the well-
spring and restrict its flow [kaiyuan jieliu}” [i.e., produce more and consume less].”

Chen Hongmu was Qing China’s chief provincial-level troubleshooter felt that the most important method of dealing with famine was “relief through commercial circulation”. One of his main concerns was avoiding any state or private action that would cut off the flow of grain. Rowe emphasizes his reliance on market forces. For instance in 1743 when dearth occurred in Jiangxi he dealt with the situation by loaning a large sum of state money to pawnshops, in other words pumping more liquidity into the commercial economy, much as the American Federal Reserve would do today. As Rowe points out “however ‘liberal’ such promarket policies might appear, there were by no means laissez-faire. The objective was less one of letting the market accomplish its task than of making it do so” (p.162) He was certainly a moralizer and willing to nag (or force) people to stop wasting land on tobacco or grain on alcohol. He was also very big on encouraging increased production and such. Chen did not share the modern world’s market idolatry, nor was he willing to question the Confucian imperative to care for the poor.

So how would Asia’s current responses to the rice crisis rate with Chen Hongmu? Any comments from readers would be welcome as I am not following this as closely as some, but it seems that China is taking a pretty free-market approach, not doing anything radical2 and assuming that they have enough cash on hand to maintain a low price on rice. China, at least, seems to have moved a bit beyond the historical phase where states worried about grain supplies.

UPDATE

Here is an angle I had not thought of. Sexy Beijing has been interviewing Chinese consumers about increasing prices. They also talk to some shopkeepers who are finding business off. One woman then interviewed at the end of the clip below said that if the dofu-selling business keeps getting worse she may go back home and return to farming. Chen Hongmu was alway worried about famine causing peasants to flee the land, but this price increase may have the opposite effect.

  1. Rowe, William. Saving the World: Chen Hongmou and Elite Consciousness in Eighteenth-Century China. Stanford University Press, 2001. []
  2. China has not restricted rice exports, but they were not a top exporter anyway []

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