우물 안 개구리

11/22/2005

Market economy and exchange in ancient Korea

Filed under: — noja @ 10:52 pm Print

Dear all, one topic that might be interesting to discuss is the degree of the development of market relations, exchange economy and internal trade in early traditional Korea. I myself fell in love with this sort of things while reading the materials on the discussion on the so-called “Asiatic mode of production” in (still Marxist-Leninist) Soviet historiography of the 1960-70s. My older colleague, Prof. S.V.Volkov, was, in fact, a champion of this theory, which was also carefully backed by my dissertational adviser, M. N. Pak – also the latter chose not to irritate the mighty orthodox opponents of the “Asiatic mode” thesis and speak very carefully about “early feudalism”, with an “extremely low degree of the development of market relations”. Of course, now I understand more or less that the over-generalisations about “Asian” history as a whole smack too heavily of Orientalism to be taken seriously; China and India after 15-16th C. had the degree of the “proto-capitalist” development Europe could be envious of at that point, and some archaic “European” societies (Spartan, for example), also seemed to have highly centralized exploitation/redistribution systems. So, if we want to continue developing this thesis, we probably should speak of early statehood in a more general context, taking references to “Asian” out; we may also speak, I guess, about agrarian bureaucracies, which manage to preserve and develop to a fantastic degree of complexity the centralized redistribution mechanisms rooted in the “state exploitation” technologies of the early antiquity. But, with all these reservations and precautions duly taken, I still suppose that the earlier Marxist insights about centralized redistribution and its historical trajectory in the agrarian monarchies continue to be valid – and wonder what the others think about it.

For one thing in Korea particularly, a fact Korean historical textbooks seem to studiously avoid mentioning is that Korea began minting metallic coins only in the late 10th C. (and on very small scale) – compared with Japan’s 7-8th C. coins production and China, which had coins already for almost a millenium to that point. In fact, various Chinese coins seem to have been used by the proto-Korean state already in the ancient Chosŏn time – but mostly for external exchange and/or prestige purposes. The media of the internal exchange in Unified Silla seems to have been either rice or textiles: the markets in the capital were managed by the state (kwansi) and most of the high-level artisanship in the capital was concentrated in state workshops. State was the biggest actor in these commercial transactions, which still took place – buying, for example, lots of paper for the sutra-copying at the state-run temples (we have mokkan materials on these transactions). Private external trade started to flourish when central controls weakened in the late 8th – early 9th C. – but powerful merchants like Chang Pogo were more interested in acquiring state power than in the development of the purely commercial side of their enterprises. So, shouldn’t we conclude that “early feudal” (to use M. N. Pak’s term) Korea really largely lagged behind in the terms of market economy development, compared to its neighbours – the state both controlling the existing (internal) market operations and largely substituting the market with its own production/distribution network?

9 Responses to “Market economy and exchange in ancient Korea”

  1. John Sanders says:

    Dr. Kaplan has a decent webpage with his lectures on Chinese Economic History (I beleive that Dr. Kaplan has just passed away). He has indicated that China developed a market economy during the Spring Autumn period. There is no indication that Korea developed a market economy, but that it retained the political dsitribution system. Even during the colonial period there is no real support for a market economy, that only occurred in the South after the civil war. An interesting question is why? Especially since both China and Japan carried on very active market economies.

  2. K. M. Lawson says:

    John, are you talking about Ed Kaplan at WWU: http://www.ac.wwu.edu/~kaplan/ ? He was one of my undergraduate professors and I took several of my first courses on East Asia with him. I hope it isn’t the same Kaplan, but he is also a scholar of Chinese economic history (especially coins) and a hard anti-Marxist historian.

  3. Remco Breuker says:

    Due to the fact that most of the pre-modern sources we still have have been compiled by the state or by people closely associated with the central bureaucracy, it is tempting to base our explanations of society solely on those sources. But at least for the Koryŏ period, the occurrence of private trade and barter, outside of the government controlled institutes, is well-attested. The frontier markets in the North for example played a large role in early to middle Koryŏ. Traders from this period, also, seem to have been perhaps not completely free in what they did or did not do, but there was much international traffic and trade conducted from Koryŏ’s capital of Kaegyŏng, activities which were only nominally under control of the state. The same goes for the large Buddhist monastic complexes and the large landed estates of the elite. These also functioned as alternative places of economic activity, only barely touched by state regulations. As for the absence of a market economy in Korea before the Korean war: the example of Kaesŏng under the Chosŏn dynasty proves otherwise. Kaesŏng (or Kaegyŏng) was virtually excluded from the Chosŏn state in terms of its inhabitants reaching positions of authority and influence, since it had been the capital of Koryŏ for 500 years. As a result, Kaesŏng literati were forced to either concentrate on innovative ways of interpreting Neo-Confucian doctrine (e.g. Ch’oe Han’gi) or contribute to the economic development of the city by closely working with the commoners. This approach resulted in the emergence of Kaesŏng as a place of economic importance and most surely a place where something closely resembling a market economy was to be found. Apart from this, what to think of complaints recorded in pre-modern sources of prices of commodities having risen if there was no market economy at all? I guess I would suggest that a market economy can be present in all kinds of degrees. I do not think that either Choson or Koryo can or should be characterized as societies with an extensive market economy, but I do think that some caution is needed when talking about modes of production, because it is easy to gloss over alternative forms of production that may have existed alongside the dominant mode of production. Apart from this, it is easy to overestimate the authority of the capital in Chosŏn and in particular in Koryŏ. The main sources have literally been written from the capital and as such reflect a view of Koryŏ and Chosŏn that privileges the ideas, activities and desires of the capital elite. In this respect, they should not be taken at face value and nor should the popular idea that Confucian scholars necessarily scorned trade. To some extent this was true, but there is little enough of it found in Koryŏ and in Chosŏn it was balanced by the presence of Neo-Confucian scholars who argued that increased consumption by the people would contribute to the health and wealth of the state!
    Summing up, my take on it is that we should be careful not to undervalue economic diversity even in Koryŏ and Chosŏn and that the power of the capital often was significantly less than its sources reflect.
    On a related note, I think that the idea of a market economy as being something modern and new is completely wrong. The work of James Lewis (Oxford) on Chosŏn economy is fascinating in this respect, showing the complexities of pre-modern economy and also demonstrating that Chosŏn was in many ways economically speaking a country much closer to the ideal of Adam Smith than its contemporaries in Europe. Perhaps research such as this may give us reason to rethink that ugly pre-modern/modern dichotomy…
    If anything, modern South Korea for instance has known only a very limited market economy for a long time, because state interference was absolutely decisive. Policy took precedence over the market economy and the organization of the South Korean economy rivaled the planned economy of the Soviet Union.

  4. John Sanders says:

    KM Larson: Unfortuately, it is the same Dr. Kaplan. I never met Dr. Kaplan, to my regret. After I read his lecture notes, I wrote him, etc. His wife replied by email and told me that he was gravely ill. That was perhaps six months ago. The fact that he identified with the Austrian Economic School is a great credit to him, in my book. It shows that he had a very rational mind, etc. etc.

    R. Bruekder: Those points I fully agree with you, but there existence does not make pre-modern Korean economicy society a market society. The State, either directly or indirectly, controlled the significant part of the economy.

    You wrote “…what to think of complaints recorded in pre-modern sources of prices of commodities having risen if there was no market economy at all?” I am not quite certain why one would think that economic relationships will not exist in a state economy and only in a market economy. As an example, after the Chinese communists acquired control of the country, they began certain economic programs to reign in the serious problem of inflation, after that they started their economic program of consolidating wealth within the state. The result was a massive economic contraction. But there was no large unemployment lines, but the economic contraction was real and was manifest throught the population by large numbers of malnourished individuals and mass starvation. “Economic laws” are valid, whether the system is a market economy or a state economy.

    I would totally agree with you about the idea that a market economy is not the product of “modern society”. Late Spring-Autumn China, and definitely the “Warring States” period indicate a significant and vibrant market economy. The state quickly muscled in on this activity, taxing it, putting social controls, etc. The first proto-industrial society was Song China,followed by a couple or three centuries later by Belgium and the Netherlands, followed by three or four centuries later by the first industrialized society, the English. There is nothing “Western” nor “Modern” about a market economy.

  5. noja says:

    Yes, I fully agree with the thesis that the long-distance trade always meant more to the Korean society than the (state/
    literati-compiled) sources may suggest – after all, it very much predates the very ancient statehood on the Korean
    Peninsula, as Chinese traders were already active in contacts with Chinhan or Mahan communities around 1-2nd C. A.D.
    But it looks as if the long-distance trade was placed under the state control in Silla when the statehood matured,
    and then the state was rivalled at some points only by private quasi-states (like that of Chang Pogo) in its capasity
    of the foreign trade-controlling entity. Smuggling and the private trade by state officials (yOkkwan interpreters) not being counted, the controls seemingly remained in place until the inclusion of Korea into the modern world-system, I
    guess. Then, the trade in luxury goods under Silla and KoryO must have been affected by the sumptuary laws, which are
    described in details in Samguk sagi, for example – your status limited your level of conspicuous consumption, at least in
    theory. And the trade in daily necessities was seemingly limited by the levels of taxation, which severely curtailed the tradeble surpluses. So, Yi YOnghun thinks, for example, that the monetarized internal exchange became an important
    feature of the Korean society only by 17th C. – and I wonder whether we shouldn’t concede that this interpretation
    has some good grounds?

  6. owen says:

    By coincidence, I’m preparing a post for the site on the theory of combined and uneven development and its possible to application to Korean history, which I think could overlap significantly with Noja’s thought-provoking post. I’ll save most of that for later though.

    I would like to pick up a couple of things here. First, I get a bit worried when people use terms like ‘market society’ and ‘mode of production’ in what seems to be a highly descriptive and non-analytical way. As Eric Wolf pointed out, there have been almost no states in human history in which market exchange has not existed and merchants have not played an intermediary role in the distribution of surpluses. So what do we mean by ‘market society’? It reminds me of the common usage by Korean historians of the term ‘commodity-currency economy’ (상품화폐경제): does this mean an economy with some commodities and some usage of currency, or does it mean something closer to our modern society in which (at least in most parts of the world) these things dominate our economic life. I’m also suspicious of associating markets too closely with modern society or capitalism – to me, as a Marxist, capitalism has very little to do with markets, it is the capital-labour relationship which is central. (This is why, for example, I think that those Marxists like Paul Sweezy or the world system theorists who trace capitalism in Europe back to 15th and 16th century mercantilism, are on the wrong track. On this basis you might just as well say that Song China was a capitalist society).

    I’m also worried by the Soviet M-L idea of ‘early feudalism’ and the somewhat teleological implications that this seems to have, as though the politically decentralised feudalism of medieval Europe was more advanced than the centralised bureaucratic states of Chosŏn or Qing. To my mind you could just as well argue that the centralised bureaucracies were more advanced within the pre-capitalist logic of political accumulation. Of course, the insight that these bureaucratic states have less space for markets still stands.

    To add to what Remco said, I think you could say similar things about Seoul as well as Kaesŏng, at least from the 18th century onwards. Not only did the official market system within Seoul (the sijŏn) expand massively during this period, there was also the appearance of very significant markets outside the city’s jurisdiction which could circumvent the licensing system within the city. Until fairly recently, Korean historians tended to see this as evidence of development toward capitalism, but really it seems that Chosŏn was just beginning to catch up with the level of market development in contemporary China and Japan. My hypothesis would be that centralised bureaucratic states have a sort of ‘lifespan’ (organic metaphors are not always good I know) in that they start out with strong regulation of economic activities, strong centralisation of surplus and a relatively uncorrupt bureaucracy (ie minimal ‘skimming’ of surplus by officials). But they tend to deteriorate over time in all these areas and allow more space for independent economic actors and hence also markets. In Korean history this never seems to have led to economic actors who were able to gain independent political power. Rather, as Noja points out, people like Chang Pogo sought to consolidate their power within a centralised framework or, as in the 19th century the relationship was reversed and merchants had to rely heavily on powerful people in the bureaucracy.

    I’ll stop there. Apologies for the overlong comment, but this is an area I think about quite a bit.

  7. yuna says:

    Korea’s Monetary economy was very late. It is ture. In 壬辰倭亂, Lee Dukhyung insisted on using coin(1). It showed Chosun’s economy status. He was diplomat of Choson, contact with China(Ming) army for supply of goods, operations. So he would know china’s coin use and it’s value. But using Chosontongbo was failure, because of war(丙子胡亂).
    It is wonder that Korean monetary economy is very late, in spite of their economy scale, population. During Koryo and Chosun, discussion about using coin was allways refered to lack of silver, copper, iron(2). And using coin was always promote by nation, and it became dead when nation lost interest in that. It means, using coin was artificial decision, not natural growth. In the other hand, in spite of many inconveniences, barter system was valuable in ancient Korea.

    (1) 漢陰先生文稿卷之九 獻議 用錢事議, It must be recording in 實錄.
    (2) 練藜室記述 別集 11券 政敎典故 錢貨綿布

  8. [...] Foreign Dispatch has written a posting on The Korean Economy Under Japanese Rule, challenging some of the more dismal characterizations in the historiography of the colonial period. The post prompted extensive debate in the comments. Mike at Histor¥, who is an expert on financial reforms in Meiji Japan has expressed some doubts about the entire approach of the article. Other recent postings on Korean economics include one by Owen at Frog in a Well – Korea about the theory of uneven and combined development and Pak Noja’s discussion of the late development of market exchange and use of coinage in ancient Korea. [...]

  9. I was looking for notes on ancient Korean economy and trade for a school project, and this site popped up. I was disappointed because the title lead me to think that many notes could be found here, but I only got one.

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