salt, the state, and the private sector -- 3/25/15

Today's selection -- from Salt by Mark Kurlansky. Until very recently, salt was one of civilization's rarest and most precious commodities. Wars were fought to gain access to salt mines, it was sometimes used as money, and states often formed salt monopolies as the underpinning of their economies. This first occurred with the Emperor Qin of China in the third century BC, and with it began the perennial debate regarding the role of the state versus the private sector:

"[In the third century BC, China's emperor Qin was advised by his ministers to] fix the price of salt at a higher level than the purchase price so that the state could import the salt and sell it at a profit. 'We can thus take revenues from what other states produce.' The adviser goes on to point out that in some non-salt-producing areas people are ill from the lack of it and in their desperation would be willing to pay still higher prices. The conclusion of the [ancient Chinese philosophical text the] Guanzi is that 'salt has the singularly important power to maintain the basic economy of our state.'

"By 221 B.C., Qin defeated its last rivals, and its ruler became the first emperor of united China. ...

"The Han dynasty that replaced it in 207 B.C., ended the unpopular monopolies to demonstrate better, wiser government. But in 120 B.C., expeditions were still being mounted to drive back the Huns, and the treasury was drained to pay for the wars with 'barbarians' in the north. The Han emperor hired a salt maker and ironmaster to research the possibility of resurrecting the salt and iron monopolies. Four years later, he put both monopolies back into place.

Salt Manufacturing -- This picture clearly shows how Han dynasty Chinese dug wells in order
to obtain underground salt and how they used bamboo tubes to transport the salt water to
large cauldrons where it was boiled to obtain salt.

"China at the time was probably the most advanced civilization on earth at what was a high point of territorial expansion, economic. prosperity, and trade. The Chinese world had expanded much farther than that of the Romans. ...

"In China the salt and iron monopolies, whose revenue financed many of these adventures, remained controversial. In 87 B.C., Emperor Wudi, considered the greatest emperor of the four-century Han dynasty, died and was replaced by the eight-year-old Zhaodi. In 81 B.C., six years later, the now-teenage emperor decided, in the manner of the emperors, to invite a debate among wise men on the salt and iron monopolies. He convened sixty notables of varying points of view from around China to debate state administrative policies in front of him.

"The central subject was to be the state monopolies on iron and salt. But what emerged was a contest between Confucianism and legalism over the responsibilities of good government -- an expansive debate on the duties of government, state profit versus private initiative, the logic and limits of military spending, the rights and limits of government to interfere in the economy.

"Though the identities of most of the sixty participants are not known, their arguments have been preserved from the Confucian point of view in written form, the Yan tie lun, Discourse on Salt and Iron.

"On the one side were Confucians, inspired by Mencius, who, when asked how a state should raise profits, replied, 'Why must Your Majesty use the word profit? All I am concerned with are the good and the right. If Your Majesty says, "How can I profit my state?" your officials will say, "How can I profit my family?" and officers and common people will say, "How can I profit myself?" Once superiors and inferiors are competing for profit, the state will be in danger.'

"On the other side were government ministers and thinkers influenced by the legalist Han Feizi, who had died in 233 B.C. Han Feizi, who had been a student of one of the most famous Confucian teachers, had not believed that it was practical to base government on morality. He believed it should be based on the exercise of power and a legal code that meted out harsh punishment to transgressors. Both rewards and punishments should be automatic and without arbitrary interpretation. He believed laws should be decreed in the interest of the state, that people should be controlled by fear of punishment. If his way was followed, 'the State will get rich and the army will be strong,' he claimed. 'Then it will be possible to succeed in establishing hegemony over other states.'

"In the salt and iron debate, legalists argued: 'It is difficult to see, in these conditions, how we could prevent the soldiers who defend the Great Wall from dying of cold and hunger. Suppress the state monopolies and you deliver a fatal blow to the nation.'

"But to this came the Confucian response, 'The true conqueror does not have to make war; the great general does not need to put troops in the field nor have a clever battle plan. The sovereign who reigns by bounty does not have an enemy under heaven. Why do we need military spending?'

"To which came the response, 'The perverse and impudent Hun has been allowed to cross our border and carry war into the heart of the country, massacring our population and our officers, not respecting any authority. For a long time he has deserved an exemplary punishment.'

"It was argued that the borders had become permanent military camps that caused suffering to the people on the interior. 'Even if the monopolies on salt and iron represented, at the outset, a useful measure, in the long term they can't help but be damaging.'

"Even the need for state revenues was debated. One participant quoted Laozi, a contemporary of Confucius and founder of Daoism, 'A country is never as poor as when it seems filled with riches.'

"The debate was considered a draw."


Mark Kurlansky


Salt: A World History


Penguin Books


Copyright Mark Kurlansky 2002


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