Governmental Controls and Liberal Economic Policy in Qing China

Michael Das, May 1st 2016

I. Introduction

The “received wisdom” of 18th century scholars suggests that the divergence of Europe

from China occurred due to the West’s liberal economic tendencies. This statement infers that the

Qing dynasty had some degree of control over the economic output of their nation. This assumption

inevitably leads to the question: what type of powers did the Qing dynasty have over the economy?

This is first addressed using the theories of Albert Feuerwerker with regards to his analysis of direct

and indirect governmental influence on the Chinese economy. Finally, the question of “Did the

Qing dynasty follow liberal economic policies?” is answered by first describing the received

wisdom of 18th scholars in the form of Oriental Despotism. This wisdom is later refuted by further

analysis from Feuerwerker and by consulting two case studies; Peter Perdue’s survey of land rights

in Imperial China and Susan Mann’s study of liturgical governance. Due to the low taxation,

individual land rights, loose commerce regulations, and free markets China under the Qing followed

policies that were clearly liberal in their economic tilt.

II. Oriental Despotism

Scholars of the eighteenth century contributed to a vision of China being under the yoke of a

singular absolute monarch. These ideas were instilled into the theory of Oriental Despotism,

popularized by the works of Karl Wittfogel. In it the emperor had absolute power with no legal or

customary limitations. The theory points to the fact that there was weak hereditary nobility and no

clergy to challenge or erode the power of the emperor. Wittfogel suggests that, “the unlimited

power of the emperor stifled development… [and] failed to produce capitalism and Western science
because there were no constraints on state bureaucracy.” 1 This quote highlights how the theory was

used as a tool to show that the East was doomed to stagnate while the representative reformation

West allowed them to escape a similar fate. Evidence to this absolute power is shown in Qing

China’s ability to levy a continuous land tax on its provinces. Contrastingly, in Medieval Europe

direct taxes could not be imposed without first garnering the consent of local nobles.

III. Feuerwerker’s Refutation of Oriental Despotism

Albert Feuerwerker presents evidence, grounded in economic policy of the Qing, which

undermines some of the fundamental assumptions of Oriental Despotism. First, Feuerwerker

demonstrates the role of bureaucratic and local elites in the central government's decision making

process. During the Qing period, the central government was staffed by the imperial bureaucracy, a

group made up of elite that held office. Local governments were made up of the gentry, also known

as the local elite. Feuerwerker shows that the elites that composed the central bureaucracy came

from the same clans and kin groups as the local gentry. Thus these two groups had intersecting

policy goals which often tended to prefer lower taxes and less regulation on the local landowning

gentry.

Another illustrative distinction made by Feuerwerker is the division between indirect and

direct governmental controls over the economy. Direct influence would include actions such as

taxation and direct expenditure. He shows that that this sort of heavy handed influence was

relatively weak in Qing China. Direct influence was limited not due to a lack of desire, but rather a

low availability of infrastructure with which to implement such policies.

The Qing exercised most of their economic policy through the lighter touch of indirect

government influence. This sort of influence can be characterized as charges levied by the
government to influence the economy outside of tax. For example, such charges could take the form

of tolls, excises, customary duties and corveé services.2 To illustrate this sort of influence in action,

Feuerwerker describes policy taken to encourage farmers to expand their plot size by clearing land.

Under the Kangxi emperor, local elite would misrepresent their holdings to show that they had less

land than they really did, in order to pay a lower land tax; the state consciously turned a blind eye to

these misrepresented holdings, a policy that encouraged the clearance of land in order to inflate

revenue while paying the same amount of land tax. This sort of action illustrates how the Qing were

adept users of indirect economic influence.

Finally, Feuerwerker describes the mindset of the Qing rulers and the Confucian ideology

that they followed. He describes how the Qing ruling class did not desire to influence the economy

in a modern fashion because the very concept of sustained economic growth was alien to them at

that time. Confucian tradition hold stability and and strength as paramount in civil service. Thus,

instead of growth, the ruling class was more concerned with how to most efficiently distribute the

relatively constant product of land and grain to its ever growing population.

V. Case Study: Susan Mann’s Liturgical Governance

Susan Mann describes the light touch with which the Qing regulated their merchant class

and the marketplace. The Qing found that there were limits to bureaucratic governance, especially

when implementing policies on a local or county level. In response to this, the concept of liturgical

governance was implemented. In this type of governance local elites, such as merchants, were

called upon to provide public goods and services on the state’s behalf. Mann explains how low

revenues and a thinly spread army forced the Qing to rely heavily on liturgical governance towards

the late imperial times.6

 Through liturgical governance, local gentry such as merchants were tasked with collecting

taxes for the state. It was believed that allowing the gentry to execute this function would drastically

cut down on “profligate bureaucracy”. Thus merchants were given powers to collect tax on their

own local marketplaces. The Qing viewed the taxes collected by these gentry-merchants as

miscellaneous, a curious oversight explained later.

In response to the abuses of the previous tax system of the Ming, early Qing rulers

deregulated their inherited tax system. These early rulers, “pledged to restore the vigor of markets

by... lifting old restrictions.” 7 They did this by removing taxes on local trade while reaffirming the

agrarian tilt of their society by declaring that the land tax was the primary source of state revenue.

This relegated all county level taxes as miscellaneous, thus the level of power granted to merchants

by the Qing in this liturgical-style of governance becomes clear. Merchants assumed the role of tax

collector for only this “miscellaneous” section of taxes, however many of the so called

miscellaneous taxes provided sources of revenue to be grafted by the merchants. This meant that

the Qing’s liturgical strategies allowed merchants and their organizations to regulate their own

markets without intervention from the government. As Mann puts it, “the state adopted a relatively

laissez-faire policy in local markets where government actions tended to affect commerce only

directly.” 8 These actions can be directly linked to the Qing belief that China was a primarily

agrarian focused society, which meant commerce and trade were miscellaneous and thus could be

handled by liturgical governance. Ultimately Mann shows how the Qing allowed commerce to be

self regulated and lightly taxed by the merchant class.

IV. Case Study: Property Rights Described by Peter Perdue

 Perdue wrote extensively on the theory of the “Limited State” in China, wherein he argues

that “the imperial state seldom interfered with commercial or agricultural growth during [early

Qing] period.” 3 An important part of his argument against the ideals of Oriental Despotism is that

the Qing government recognized and facilitated the individual's right to own and trade property. The

earliest land contracts uncovered in China date back to the Han dynasty in 140 BCE.4 It is thought

that written contracts validated the ownership and transfer of land in China well before that date.

During and after the Song dynasty, officials would apply red seals on government approved land

transfers. These seals required incurred a tax, and thus alternative, privately drawn up “white

contracts” were also used to evidence land sale.

Though the Qing respected and facilitated individual land ownership and sale, which is a

central tenet of economic liberalism, the concept of absolute rights to a piece of land never

developed in imperial China. First, relatives and neighbors often have preemptive first-buyer rights

to any sale of land. Additionally, the seller rarely ever permanently surrendered all the rights to the

land. For example, most sellers reserved the right to rebuy the land in a given time frame. This also

meant that sellers could reclaim any increase in value of the land by demanding payments from the

buyer up to three times.

With regards to property markets, customary rather than state law dictated the sale of land in

China, allowing for less regulation when drawing up land contracts. For example, state law during

the 18th century prohibited the distinction of subsoil and surface rights to a piece of land. It also

banned the conditional sale of land, with the ability of the seller to repurchase at a later date. In

practice, both these state laws were completely ignored, and the customary rules of the market were

followed. Perdue states, “[the Qing] did not try to despotically replace custom with imperial law.”
Thus from this quote it is clear that though state law introduced restrictions into the land market, in

practice these restrictions were ignored and a freer market prevailed.

Finally, Perdue makes the case that it was in the Qing government’s best interest to only

lightly intervene in China’s property markets. Local officials did not want to control every land

transaction or collect the small tax income from red seal contracts. Instead, Perdue claims that these

officials would not strictly enforce state law in order to “save themselves the trouble of hearing

lawsuits.” 5 Instead of tightly enforcing state law the Qing would only step in when sellers

attempted to manipulate the terms of contracts, in order to clarify these types of ambiguous

contracts.

VI. Conclusion

Liberal economic policy tends towards free markets, low taxation, reduced regulation,

dispersed economic power, and strong property rights. The received wisdom of 18th century

scholars suggests Imperial China stagnated under the illiberal yoke of despotic dynasties. Disputing

these claims, Feuerwerker describes how bureaucratic and local elite shared policy goals of

lowering taxes and reducing regulations on the agrarian society it oversaw. He also shows that the

Qing government primarily used indirection means to lightly influence the economy. The Susan

Mann case study demonstrates the Qing’s willingness to cede regulatory power to merchants

through liturgical governance. Finally, the Peter Perdue case study shows that the Qing government

respected individual land ownership and facilitated property markets with contract enforcement.

Taken as a whole, these arguments evidence the claim that China under the Qing followed policies

fairly liberal domestic economic policies as defined above.

VII. Sources

1. Perdue, Peter. Exhausting the Earth: State and Peasant in Hunan, 1500-1850. Harvard Univ.

Pr., 1987. Page 3.

2. Feuerwerker, Albert. “The State and the Economy in Late Imperial China,” Theory and

Society, Vol. 13, No. 3, Special Issue on China. (May, 1984), pages 297-326.

3. Perdue, Page 4.

4. Perdue, Page 137.

5. Perdue, Page 146.

6. Mann, Susan. Local Merchants and the Chinese Bureaucracy, 1750 - 1950. Stanford, Calif.

Stanford Univ. Pr., 1987. Pages 12-13

7. Mann, Page 40.

8. Mann, Page 20.