The difficult problem of Han Dynasty: economic freedom and enriching the country and strengthening the army

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Public goods of war and people’s enthusiasm for production

At first, the main public goods in human society were not courts, lighthouses or other public facilities, but war. “Zuo Zhuan” said, “the major event of the country is to worship and fight.”. “Sacrifice” is a public goods for the inside, while “Rong” is a public goods for the outside. Even the Zhou nationality, which is considered to have bred Chinese culture, was initially just an armed group, according to Mr. Qian Mu. General public goods can be better or worse, and can have a variety of results; War, as a kind of public goods, generally has only two results, victory or defeat. Victory expands territory, plunders treasures and enslaves other peoples; Defeat means loss of life or freedom, looting of treasures and occupation of land.

Therefore, the coercion of the government itself, first of all, is due to the coercion of the war. If you don’t want to be forced by the enemy, you have to force yourself. This may be the earliest reason for the emergence of mandatory organizations such as the government. The organization of resources for war can only take compulsory means, such as stipulating that the people have the obligation to perform military service and collecting taxes. The early tax was mainly used for war, which can be seen from the structure of the word “tax”. The word “Wu” on the right has explained its purpose, and the word “Bei” on the left refers to currency. “Han Dynasty ยท Xing Fazhi” said: “tax to eat enough, give enough soldiers.”

For ordinary people, the meaning of military service and tax payment is to use part of their own resources for war. If this part is too small and the resources invested in the war are not enough to defeat the enemy, it will suffer heavy losses due to the defeat; If there is too much, people need to spend more of their resources on war. However, when this proportion is too large, the economic freedom of the people will be violated, and they will not have the enthusiasm to carry out production activities, their income will be reduced, and the resources required for war as a part of the people’s income will also be reduced. This may also eventually lead to the failure of the war.

Therefore, in theory, there is an optimal ratio of resources to war. If they are converted into money, it can be called the optimal tax rate. However, in the early stage of the development of human society, it is quite difficult to find the best tax rate, which requires a long time to explore. Tax rates often hover between “too little” and “too much”. When there is no strong enemy outside and the threat is still far away, a society may adopt a lower tax rate; However, when the enemy is present and the threat is imminent, a higher tax rate may be adopted.

Moreover, the government that organizes resources into war is not only providing public services, it has its own interests. If the tax collected from the people is higher than the cost of war, there will be a surplus, which will go to the political group that forms the government. Therefore, borrowing the public’s fear of the enemy is more likely to obtain more taxes and earn more surpluses, which may be a short-term trend of many political groups that form governments. When the leaders of this political group have a long-term vision, they will curb the tendency to levy heavy taxes.

In a society, some groups have more advantages to provide resources for war, so they prefer war and collect more wealth from the people for the reasons of war. Even within the government, these groups are different from the government as a whole. They do not consider whether raising tax rates has suppressed the people’s enthusiasm for production, hindered social prosperity, and shaken the political foundation of political groups in the long run. They just get more private interests from the government and society in the name of war. Therefore, there is a kind of interest rigidity in the high tax rates promoted by these groups, which is not easy to change.

On salt and iron: an example of the Han Dynasty

In the early years of the Western Han Dynasty, the strength of the Han Dynasty was weak. If the tax rate was raised to resist the Xiongnu, the society would not prosper rapidly because of the suppression of the people’s enthusiasm for production, and there would be no strength foundation to resist the Xiongnu. Therefore, the political leaders at that time, from empress Lu to Emperor Wen and Emperor Jing, wisely made the Xiongnu weak to the Xiongnu, or made the Xiongnu reduce the invasion of the mainland by means of amity, and implemented a lower tax rate at the same time. At that time, the land tax was reduced to the level of 30 taxes and 1 tax. Under the policy of “resting with the people” with low tax rates as the core, the Western Han society quickly recovered from the war at the end of Qin Dynasty and accumulated a lot of wealth. This laid a material foundation for the later war of Emperor Wu of the Han Dynasty against the Huns.

In the period of Emperor Wu, although the society had been very prosperous, the tax rate was still formulated during the cultural period, which still could not support the resources needed to attack the Huns actively. At this time, a sang Hongyang came up with the proposal of salt and iron official camp and other wealth gathering, which solved the temporary need for Emperor Wu of the Han Dynasty’s northern expedition on the Huns. However, on the one hand, the official business of salt and iron was suspected of “competing for profits with the people”, and created a bureaucratic monopoly group that made profits from the official business of salt and iron. Once this group appeared, it had its own interests different from those of the Han Dynasty. This group is also more “belligerent”. With their support, the later war of Emperor Wu of Han Dynasty was no longer to resist the Huns, but to show off force, and even to plunder (such as sweat BMW).

In this context, there appeared the great debate recorded in the “salt and iron theory”. “Virtuous” and “Literature” criticized a series of policies based on salt and iron official camp, which infringed on the interests of the people, while “censor” and “doctor” argued against the Huns. Virtuous writers pointed out that the quality of official salt iron products is low, the variety is few and the price is high; The bureaucratic monopoly group headed by sang Hongyang borrowed salt and iron to seek private interests. As for the so-called reason of “resisting the Huns” put forward by the doctors, the virtuous literature refuted that if the court could show benevolence and righteousness, the world would be happy for those who are near and happy for those who are far away.

From the perspective of the decision-making mechanism of the Han Dynasty, it cannot be said that the debate on the salt and iron official camp will directly affect policies and systems. However, this debate reflects the problems brought by the salt and iron official camp, that is, the excessive proportion of resources used for war and the problem of interest groups that obtain monopoly profits by virtue of the salt and iron official camp. If the salt and iron official camp is only a short-term policy, the people can understand and tolerate it in order to meet the temporary needs of attacking the Huns. The problem is that when the fight against the Huns has achieved a decisive victory and the threat has been reduced, it is not necessary to continue a large-scale war; If it is not for defense, but for expansion and plunder, war has only negative significance. In order to maintain the salt and iron official camp for such a war, and let the society and the people continue to pay a high price, we cannot continue to be understood and tolerated.

In fact, Emperor Wu of the Han Dynasty had repented of his militarism in the late period, and issued the “Luntai sinful imperial edict” to stop large-scale war. After that, although the Han court continued to attack the Xiongnu strategy, it no longer carried out wars unrelated to the security of the Central Plains. Resources for defense will also be reduced. At this time, it is more unnecessary to continue to implement salt and iron official camp. On the contrary, the flow of salt and iron official interests is more concerned. Sang Hongyang is not only the person who proposed the official policy of salt and iron, but also the person who implemented it. As the “son of Luoyang Jia people”, he was well versed in business and the benefits of monopoly, and once “despite the salt and iron in the world” (Sima Qian). The function of salt and iron official camp to raise military expenditure for the Han Dynasty is weakened, and the fact that it brings rolling profits to interest groups such as sang Hongyang is even more prominent. Therefore, it has become one of the main reasons for the virtuous literature to strike salt and iron official camp. Later, sang Hongyang participated in the court coup in order to pass on his monopoly benefits to future generations. After being exposed, he was killed, which shows that the political structure of the Han Dynasty ensured that its political leaders did not want to bury their country for an interest group. The life of the Han Dynasty was thus extended.

Xu Fuguan’s thought of salt and iron

From today’s perspective, although the imperial historians have an obvious tendency to belittle Confucianism, as Mr. Xu Fuguan pointed out, they cite Confucian resources, especially Confucius’ words, as well as virtuous literature, to defend their propositions. On the contrary, in the debate, even those who follow the Confucian ideas are not so pure. This makes it difficult for ordinary readers to distinguish what the two sides advocate.

From the classic point of view, Confucianism has always advocated economic liberalism. Confucius said, “what’s the word of heaven? What’s the word of heaven? What’s the word of heaven?” It is a very famous philosophical expression. Because obeying nature is considered to have good results, pushing this understanding to the extreme, there is a branch of Confucianism, that is, the eastern Zhejiang School represented by Chen Liang and Ye Shi, who believes that “success is virtue”. The mainstream economic thought of Confucianism should be represented by Zhu Xi. There is only a small but very important difference between him and Chen Liang, that is, he does not think that benevolence and righteousness will bring merit at all times: “it is solid to get moral and utilitarian, but there are those who get moral and utilitarian”. (quoted from Shu Jingnan: biography of Zhu Zi, commercial press, 2003 edition, pp. 595-625) this seems to be right today, because we already know that the market also fails.

Therefore, according to the mainstream of Confucianism, “righteousness” does not always correspond to “benefit”, so we must surpass benefit; Especially those political elites and cultural elites. Because from the perspective of the whole society, there is no need for everyone to talk about “righteousness”, as long as some people talk about it. Because in most cases, the market operates effectively, and most people follow the guidance of invisible hands to pursue their own interests, which will bring social prosperity. Market failure is rare. Besides, not everyone has the ability to surpass utilitarianism. Therefore, for ordinary people, Confucianism recognizes and protects their right to pursue interests, while for political ruling groups and cultural elites, there are requirements beyond utilitarianism.

Therefore, we can understand the deeper connotation of Confucian discourse. Since the object of persuasion of the Confucian elite is mainly the political ruling group, there is a specific perspective when talking to them about this proposition, such as “benefiting from the interests of the people” and “not competing for interests with the people”, which are words for the government. On the one hand, this is to protect people’s economic freedom and rights; On the other hand, it is to restrict the political ruling group from pursuing general commercial interests. Therefore, Confucianism also emphasizes that “the country is not for the benefit of interests, but for the benefit of righteousness”, and emphasizes “emphasizing the origin and suppressing the end”. Among them, “righteousness” includes providing public goods and obtaining tax returns, so it is “righteousness for benefit”; The so-called “this” is the responsibility of the government, and the “end” is the improper behavior of the government. In short, Confucianism stresses “benefit” for the people and “righteousness” for the country.

Based on a deep understanding of Confucian Economic Thought, Mr. Xu Fuguan combed the two schools of thought in salt and iron in his article “political, social and cultural issues in salt and iron”. He clearly pointed out that although the imperial historians cited a large number of Confucian classics, they did not follow the true spirit of Confucianism. The literary sages’ reference to Confucian classics is “principled”, which basically represents the mainstream of Confucianism. This judgment is correct.

The core issue of the debate between the virtuous literature and the imperial doctors is whether to implement the government monopoly on the production and sales of salt, iron, wine and other products, as well as the government monopoly on the transactions caused by the equal loss, in order to resist or even attack the Xiongnu. In the debate, virtuous literature put forward the idea of “respecting the origin and restraining the end”. It is easy to misunderstand that Confucianism is generally opposed to industry and commerce. Mr. XuFuguan analyzed this. He pointed out that “Confucianism recognizes the normal function of industry and Commerce (” dredging depression “,” preparing equipment “)”. However, because industry and commerce are easier to obtain and gather wealth, it is only in political and social order that agriculture is emphasized and commerce is suppressed, but it is not a denial of industry and commerce. On the other hand, “what virtuous literature really opposes here is not folk industry and commerce, but the industry and Commerce directly operated by the imperial court, and the industry and Commerce linked with the government under the direct operation of the imperial court, using major measures such as the transportation of salt and iron.” (XuFuguan: “political, social and cultural issues in salt and iron”, in the history of thought in the Han Dynasty, Taiwan student publishing company, 1992 edition, P. 140) Mr. XuFuguan’s sorting out of the virtuous literature in salt and iron, more clearly expresses a key point of Confucian economic thinking, that is, Confucianism opposes the direct involvement of the government in the general business field and the monopoly of industry and commerce, Especially the monopoly of government officials with the help of power.

The reasons why virtuous writers deny the official operation of salt and iron include that government monopoly will bring high-quality products, especially the agricultural tools necessary for agricultural production, which directly infringe on the interests of farmers; As the government and its officials enter the general business field, they will compete for profits with the people, “the benefits of commercial and industrial markets are not attributed to the people”, but “the benefits belong to the power family”, and even directly invade people’s land and other properties, resulting in bankruptcy and becoming refugees; Government officials used the power of managing salt and iron official business to enrich their own pockets, formed an interest group integrating government and business, and had an important impact on government policies; In order to maintain such a situation in which the government monopolized industry and commerce, the bureaucratic monopoly class that benefited from it strongly supported a militaristic foreign policy, which led to “domestic waste and halving of household registration”. Generally speaking, this is the result of the combination of political power and market rules, that is, the so-called “national interests for interests”.

However, Mr. Xu Fuguan did not fully affirm all the propositions of the virtuous literature. For example, when they refuted the reasons of the imperial doctors that the salt and iron official camp was used to resist the Xiongnu, they only emphasized that “the husband’s literature was declining but the military was victorious, and the virtue was prosperous but the preparation was few”, and “since the cultivation of literature and virtue”, which was criticized by Mr. Xu Fuguan as “an empty theory regardless of reality” (ibid., P. 170). And the argument of the censor doctors that “the border people fight a hundred battles, while the Chinese recliners take the border county as a shield” must be “a solid argument in reality.” (ibid., P. 167) this grasp is very good.

How to coordinate economic freedom with enriching the country and strengthening the army

However, Mr. Xu Fuguan’s comments on “salt and iron” are still a little regretful. Since it is necessary to maintain military readiness in Bian County, it is reasonable for the censor doctors to adhere to the monopoly of salt and iron to raise military expenditure; Since the Huairou policy can’t affect the four barbarians, doesn’t it become “unrealistic” for virtuous writers to strike the demand of salt and iron monopoly? If we not only support the policy of economic freedom, but also emphasize that military equipment should not be abandoned, we should put forward a theory that takes into account economic freedom and enriching the country and strengthening the army, as well as implementable institutional policies, in order to achieve both goals at the same time. Otherwise, any kind of criticism is not complete.

In fact, the economic liberalism system and policy are not as unable to support enriching the country and strengthening the army as it seems. First of all, the economic liberalism policy will increase the economic aggregate rapidly due to its low tax rate, which will enable the government to obtain more resources for the provision of public goods for national defense, and it will be more sustainable. The financial history of the Song Dynasty tells us that Wang Anshi also increased the measures of collecting wealth outside the tax in order to strengthen the border equipment. As a result, “except for the increase of income directly related to the new law, there has been no significant natural growth in other aspects of taxation.” (Wang Shengduo: financial history of the Song Dynasty, Zhonghua Book Company, 1995 edition, P. 66) for example, in the ten years of Xining after the reform, the income of land tax decreased slightly compared with that before the reform (P. 52); Business tax and wine revenue are “not very good” (page 67). This “is naturally related to the increased burden on the people after the implementation of the new law, which is detrimental to the development of production.” (page 67) more importantly, this financial policy is unsustainable. The increase of people’s effective tax rate will lead to the decline of social economy.

On the other hand, low taxes have political implications. As Mencius said, “a hundred Li place can be a king. A king is like a benevolent government to the people, provincial punishment, thin tax collection, deep cultivation and easy cultivation. A strong person spends his spare time, cultivating his filial piety and loyalty, serving his father and brother in order to enter, and serving his long-term interests.” In other words, benevolent policies, including low tax rates, can make people more identify with the legitimacy of political ruling groups, and are more willing to spend their own resources, including property and time, to support the government in providing public goods for national defense. In this way, “it can make stiles to attack the strong armor and sharp soldiers of Qin and Chu”, that is, it can fight against a powerful enemy. If these enemies do not practice benevolent government, they are not opponents of countries that practice benevolent government. “Who is the enemy of the king when the king marches? Therefore, it is said that benevolent people are invincible.”

Furthermore, if benevolent government is extended to the world, rather than plundering and enslaving other countries and peoples by force, a more peaceful world order will be formed. There will be fewer disputes between countries, less need to use force to solve, less competition in force, which will also improve a country’s security level and reduce its defense spending.

Of course, as mentioned earlier, Confucianism recognizes the need to maintain the necessary armaments. Its level is to be able to defend itself, not to conquer others, so there is no need for excessive armament. This does not need to consume too much social resources. On the other hand, the production enthusiasm stimulated by light corvee and light taxes will increase the total output of society, which can provide resources to reach this appropriate level of armament. Thus, economic freedom can go hand in hand with enriching the country and strengthening the army.

There have been a lot of precedents in historical reality. For example, due to some accidental factors, a society maintains a certain military advantage while maintaining a low tax rate. For example, Britain and the United States since modern times; Although we do not rule out that these two countries also partly relied on predatory factors when they rose, such as Britain’s plundering of Spanish and French merchant ships and the opium trade with China; Early slavery and deprivation of Indians in the United States.

Britain is an island country on the edge of the European continent. This makes her not need to build a strong army to prevent the invasion of neighboring countries, but only need to concentrate resources on building a navy. Her competitors, whether Spain, the Netherlands, or France, have to build two armies at the same time, the army and the Navy. This enables Britain to maintain a low tax rate while gaining maritime advantage. The United States, on the other hand, was founded on the North American continent and separated from the great powers by the sea, enabling it to implement an isolationist policy for quite a long time at the beginning of its founding, and devote less resources to military affairs, so that it can pursue economic liberalism for a long time. This policy eventually made her a world power.

Throughout history, perhaps China is the only country that has maintained a strong society while consciously implementing economic liberalism policies. The Han, Tang, Ming and Qing Dynasties are more prominent. They all levy lower taxes, and there are only a few soldiers. The military strength of these traditional Chinese societies does not match their identity as “Empires”, so that some people call them “countries without soldiers.” (Lei Haizong: Chinese culture and Chinese soldiers, 1940 edition of the Commercial Press) even in the Tang Dynasty, which seemed to have strong military power, the ruling group mainly borrowed the military power of northern minorities to defend the border. Even outward expansion. As the Tang poem said, “the Big Dipper is seven stars high, and brother Shu wears a knife at night.” The tax rate of the Tang Dynasty, including the rent adjustment, was about 14%. This is a far cry from the military spending of the world’s super strong United States, which is equivalent to the sum of 190 countries. “A country without soldiers” is a criticism of China’s lack of armaments by Chinese intellectuals in modern times. On the contrary, think about why “a country without soldiers” can achieve such a powerful country and China’s successive powerful dynasties? There should be a factor of “benevolence is invincible”.

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