History of Money, Banking, and Trade
A historical look at the development and evolution of money, banking, and trade. From the ancient civilizations to the present.
History of Money, Banking, and Trade
Episode 41. Money and Power in Ancient China
The financial brilliance of ancient China offers profound lessons for our modern economy. From the revolutionary policies of Li Kui who abolished hereditary slavery and granted private land ownership, to Emperor Wu's creation of what economists might recognize as the world's first mercantile state—China's economic evolution reveals striking parallels to contemporary challenges.
What makes China's development particularly fascinating is how it occurred largely in isolation. Separated from other ancient civilizations by vast deserts and mountain ranges, China cultivated unique innovations in bronze casting, silk production, and governance without direct external influence. By the time of the Shang and Zhou dynasties, China had not only caught up with but in many ways surpassed its ancient counterparts.
The pendulum between state control and private enterprise swung dramatically throughout Chinese history. Emperor Wu's controversial state monopolies on salt and iron production secured the legendary Silk Road trade routes that would eventually connect China with Rome, reshaping global commerce for centuries. Yet these policies also accelerated wealth inequality—a tension that remains at the heart of economic policy debates today.
Chinese technological innovations were nothing short of revolutionary. Their metallurgists created steel 1,700 years before Europe, while engineers discovered deep borehole drilling during the Han Dynasty, reaching depths of 600 meters and becoming the first society to develop a fossil fuel market. Meanwhile, mathematicians embraced negative numbers and correctly approximated pi as 3.14 at a time when Greco-Roman mathematicians dismissed such concepts entirely.
Despite Emperor Wu's aggressive reforms to curb land concentration, powerful elites consistently circumvented these measures, creating extreme wealth gaps between average families and the ruling class. This cautionary tale of economic concentration undermining central authority offers valuable perspective as we navigate our own challenges of balancing prosperity with equity.
Join us on this journey through China's remarkable financial history and discover how ancient economic wisdom continues to illuminate our path forward. Support our podcast at patreon.com/historyofmoneybankandtrade or visit moneybankandtrade.com to learn more.
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I am Mike D. This is the History of Money, banking and Trade podcast. My goal is to expand your knowledge of the history and evolution of trade, along with money, banking and credits, from ancient civilizations to present-day market innovations. I am not a historian, but I have an MBA and more than 20 years working in various financial roles. I find that if I study the history of financial innovations along with trade, complex modern international economic activities are much easier to understand.
Speaker 1:China had transformed from its warring states period into the foundation of one of history's greatest civilizations. With regards to the role of state intervention, the pendulum would swing back and forth over government intervention, wealth inequality, along with striking the proper balance between private enterprise and state control. Chinese rulers and philosophers had to navigate these policies 2,500 years ago. However, these debates are still going on today in our modern economies. Much of the policy changes had been attributed to Li Kui, who was a commoner that rose to become the prime minister, and he revolutionized the economy by abolishing hereditary slavery and established merit-based governance. He also implemented fair taxation and granted private land ownership. His radical ideas that farmers should own their own land rather than work for nobles triggered massive productivity increases, which proved to be an early lesson in how economic incentive would drive human behavior. China's first currencies were developed around 600 BCE, possibly right after the Lydians in Anatolia had developed their first coins. The constant warfare in China possibly spurred technological evolutions, as well as iron replaced bronze for both weapons and tools, agricultural productivity soared. The standardization of weights, measurements and languages, and even carriage axle widths under the Qin dynasty created efficiencies that modern economies still strive for today. Dynasty created efficiencies that modern economies still strive for today. Everything changed with Emperor Wu's controversial state monopolies on salt and iron production, which transformed China into what economists might recognize as the world's first mercantile estate. His conquests secured the legendary Silk Road trade routes that would connect China with Persia and eventually, down the road, it would be connected to Rome, creating a global network that reshaped global commerce for centuries. Yet his policies also accelerated wealth inequality, something that nearly every advanced economy will grapple with going forward. Mainly, what is the proper role with government in economic affairs? Ultimately, ancient China provides modern individuals with a profound insight into how economic systems evolve and how decisions made two millennia ago continue to influence our modern understandings of commerce and governance, specifically the intersection of money, power and civilization.
Speaker 1:The ancient Chinese civilizations emerged from humble beginnings, initially lagging behind the advanced societies of Egypt, mesopotamia and the Indus Valley. While these early cultures were constructing monumental architecture, developing complex writing systems and engaging in long-distance trade, china's Neolithic communities were still in the process of settling along the Yellow and Yangtze Rivers. Once Chinese civilizations took root, it advanced at a remarkable and unique pace. Isolated by vast deserts, towering mountain ranges and distant seas, china developed largely independent of outside influences, forging its own distinct path in technology, philosophy and governance. Unlike Mesopotamia and Egypt, which exchanged ideas through trade and conquest, early China's relative seclusion allowed it to cultivate innovations like bronze casting, silk production and the mandate of heaven without direct external inspiration. By the time of the Shang, which was from about 1600 to 1046 BCE, and the Zhou dynasties, which was about 1046 to 256 BCE, china had not only caught up with, but in some ways surpassed its ancient counterparts. The development of Chinese scripts, advanced metallurgy and large-scale hydraulic engineering set the stage for an enduring civilization that would later influence all of East Asia and eventually, the rest of the world.
Speaker 1:There is a powerful parallel between ancient Chinese legalist philosophy and European real politique, both of which prioritize state power, centralized control and pragmatic governments over moral idealism. In fact, donald Trump's America is pushing the United States and even the rest of the world backward into the days of the European-style realpolitik. With regards to legalism, which is China's philosophy of power, its core tenet is the state's strength depends on strict laws, harsh punishments and absolute authority, not virtue or tradition. Basically, what they argued was that humans are inherently selfish and must be controlled through clear rewards and brutal punishments. Prior to the Han the Qin dynasty, which was a relatively short dynasty it was only 221, to say 206 BCE it had adopted legalism to unify China and also used it to standardize laws and crush any kind of dissent and therefore prioritize military and agricultural outputs over Confucian ethics. The result was a hyper-centralized, efficient state, but one so oppressive that it collapsed quickly after the first emperor's death.
Speaker 1:European and Trump's realpolitik is often described as power over morality. The core tenet is practical power politics. The most famous people associated with this thought process were leaders such as Machiavelli and later Bismarck of Germany, and, and now Trump, as they rejected idealism in favor of strategic dominance. Now, trump, out of the three, is probably the most selfish of the three, so maybe he's a bit of an outlier because ultimately, the decisions that are made under Trump's America is to benefit him directly, not so much the state.
Speaker 1:There are key similarities between ancient China and European and Trump's realpolitik. Realpolitik rejects ethical constraints, even in the case of war or diplomacy, for example, balance of power if they weaken the state. The key difference between realpolitik is that it emerged in a competitive, multi-state, european and even international competition where rulers had to maneuver between rivals, while the Chinese legalism operated in a unified imperial system with little to no external checks. Now I bring all this up so you can see how ancient China had operated in comparison to modern times, especially under Trump and pre-World War II Europe. Both philosophies share a cynical view of human nature. In other words, people obey out of fear, not goodwill. They focus on state survival over individual rights or ethical governments. However, I would caveat that I don't think Trump's view on how to govern is so much for the state as it is so much for him, but it is a little bit of both. They both weren't afraid to use force and manipulation as primary tools of control.
Speaker 1:Chinese legalism was codified into law, such as Qin's draconian punishments, while realpolitik was more of a strategic mindset in diplomacy more of a strategic mindset in diplomacy. Confucianism later softened legalism's extremes in China, whereas realpolitik remained a guiding force in European statecraft right up through World War II. And of course, we're taking a major step backwards and we're going back into that nowadays because of Donald Trump. While legalism shaped China's imperial bureaucracy, realpolitik influenced Europe's balance of power. Wars. Both prove a timeless truth Unchecked power, whether it's in ancient China or even modern geopolitics, follow its own ruthless logic.
Speaker 1:This all evolved out of Chinese society that was sharply divided into two main groups the feudal elite and the peasant commoners. However, as Chinese civilization grew more complex, social stratification became increasingly defined by wealth and occupation. During the Han Dynasty, just below the nobles and the officials were the wealthy merchants, the landowners and the industrialists. However, the industrialists were often put in a very difficult spot, as they would often face restrictions due to state monopolies. Industrialists engaged in mining, salt production, large-scale manufacturing and even animal breeding. In addition, they often owned complementary or even vertically integrated businesses throughout their mines and workshops. This would have maximized their profits and also would have gotten economies of scale. Wandering merchants, meanwhile, traded valuable goods across a network of cities. Notably, these groups frequently overlapped, as a single individual might combine land ownership, manufacturing and trade. Landowners typically did not work their own fields, but instead rented them out to tenants or hired laborers while residing in the cities. Below them were craftsmen who produced specialized goods like weapons, jewelry and artistic items. Their social standing depended entirely on their skill. Some gained wealth and prestige, while others remained low-status laborers.
Speaker 1:Following Qin's precedents, the Han closely supervised urban marketplaces. For example, all shops in a given trade were typically confined to the same street. Within the marketplace, the officials signaled the opening and closing hours by striking a great drum mounted on the watchtower at the center of the marketplace. It was sort of like an ancient version of the New York Stock Exchange, with its opening and closing bells. Local traders and small merchants occupied a lower rung, often despised by the gentry, and were often legally marginalized. In some cases, they were forced to wear distinct clothing to signify their inferior status.
Speaker 1:Farmers and peasants who worked the land were viewed with respect by the elites for their humble yet essential labor. However, few actually owned their own fields. In fact, many were tenant farmers renting land from the wealthy landowners. Farmers made up roughly 90% of the population. They formed the foundation of the economy. Therefore, natural disasters that devastated their livelihoods could cripple the entire nation and severely destabilize the entire kingdom. Additionally, they were the primary source of conscription. They would have supplied the military recruits and a corvée labor force, which were unpaid workers obligated to serve their feudal lords, which were unpaid workers obligated to serve their feudal lords. This idea of corvée labor was very popular in Egypt as this was a means to pay taxes. So in other words, in Egypt one could pay the state not with coin or wheat, but instead with labor. Of course, in Egypt coinage didn't really become part of the economy until the Greek Ptolemies took over. The use of corvée labor probably has led people to believe that Egyptians used significant slave labor when slavery played a minor role in society. So, in other words, people saw people were working for the pharaoh to pay off taxes and assumed that was slavery, but technically it really wasn't.
Speaker 1:Speaking of slavery, at the very bottom of Chinese society were the slaves, who were divided into two main categories the state slaves and private slaves. Most slaves became so through debt, bondage or as prisoners of war. However, they never constituted a significant portion of the population, possibly no more than 1%, and thus did not play a vital role in the economy. In contrast to the Roman Empire, estimates of their slave population were in the range of 10% to 40% of the total population. Some estimates suggest that at the peak of its empire, particularly in Italy, the slave population could have been roughly 30 to 40%. Others indicate that across the empire, the percentage of Roman slaves was closer to 10 to15%. During the Han Dynasty, the morality of slavery came into question. Therefore, slavery was briefly abolished. Additionally, laws were enacted to protect slaves, prohibiting owners, even vassal kings and nobles, from killing them. Despite these reforms, children born to slaves remained enslaved, perpetuating the system across generations.
Speaker 1:Chinese society was also shaped by a horizontal division into powerful clans. Officials at all levels frequently promoted and assisted their kin, allowing certain lineages to amass significant influence, sometimes even challenging imperial authority. This system fostered widespread corruption and nepotism within the administration. Additionally, it was the local clans that often served as the source of rebellions and ultimately undermined central control. The imperial government understood this all too well as they struggled to curb their power, because the clan system was deeply embedded in Confucius' traditions, making it a fundamental and unchallengeable social institution.
Speaker 1:Now I know it may be hard to believe, but people in ancient China knew how to have fun and even played a game that is the most popular sport played globally to this very day, kujo, an ancient Chinese ball game that was recognized by FIFA as the earliest form of football in history or soccer here in the United States. Kuju dates back to the Warring States period, which was roughly from 475 to 221 BCE, and became especially popular during the Han Dynasty, which ran from 206 BCE to 220 CE, and then later on it would become popular again during the Tang Dynasties, which was from about 618 to 907 CE. It was first mentioned in the 3rd century BCE texts as it was used as a military exercise to improve soldiers' strength, their agility and develop teamwork. The sport was later adopted as courtly entertainment and even played by a few emperors. Emperor Wu of Han was a fan. The way it was played was players had to kick a leather ball that was stuck with feathers or hair through a small hole in a net. Later versions used bamboo goals and no hands were allowed. Similar to the modern version of the game, it was also played by men and women. For example, in the later Tang dynasty court, ladies had their own teams. However, it declined after the Ming Dynasty, which was from 1368 to 1644 CE, due to Confucian scholars seeing it as frivolous. In 2004, fifa officially acknowledged Cujo as the earliest form of football, predating other ancient ball games, like Greek's game called Episkairos or Rome's Harpetson.
Speaker 1:Tea drinking in China spans thousands of years, evolving from a sacred medicinal brew to an everyday stimulant and a cornerstone of Chinese culture. Earliest evidence suggests tea was consumed in Yunnan and Sichuan as early as the Shang Dynasty, which was from about 1600 to 1046 BCE. Initially, tea was used as a medicinal tonic. It was either chewed or boiled as a remedy for digestion and fatigue. By the Zhou Dynasty, it was part of ritual offerings to spirits and ancestors. By the Han Dynasty, tea shifted from medicine to a beverage used amongst the nobles and scholars.
Speaker 1:Upon marriage, women became part of the husband's clan, participating in ancestral worship while retaining her natural surname. Although monogamy was the standard practice, wealthy, nobles and imperial families sometimes took multiple wives or concubines. The emperors famously did that. So, in other words, what was good for the emperors wasn't necessarily good for the commoners, not unlike today, of course. Confucian tradition demanded that women obey their husbands and male relatives Through the mother. The clan leader often held considerable authority as a senior female figure.
Speaker 1:While most women were confined to domestic duties such as weaving, cooking and childcare, some found opportunities beyond the household. A few assisted in field work or produced high-value textiles like silk for extra income, particularly widows who needed to support themselves. Divorce was permitted, but it was frowned upon. However, it was principally at the husband's direction. Grounds for divorce included a wife's disobedience, infidelity or even infertility. So even though the Chinese were kind of secluded from other ancient societies when it comes to treating women, a lot of them kind of had the same views by the Han Dynasty.
Speaker 1:Legal protections for women improved. Husbands were prohibited from physically abusing their wives and rape was criminalized. Women could even bring their assailants to court, making a rare but significant avenue for justice. The Han's dynasty legal system was quite complex, with some early legal codes reportedly containing 26,000 articles. Unlike many contemporary systems, incarceration was rarely used as punishment. Instead, the judiciary typically imposed death by beheading, forced labor, exile or monetary fines. The Phoenicians kind of had a similar view as well. However, commercial transactions remained primarily governed by customary practices in private agreements. During the Han era, written contracts became the standard practice. These documents thoroughly specified details including payment amounts, delivery dates and other important terms. Such contractual formalizations significantly enhanced trade and made it more secure and reliable, and ultimately contributed substantially to the dynasty's economic growth Overall. Having a strong legal code in any society, especially ancient ones, allowed for the Han dynasty's economy to expand greatly, even though the state controlled many of the sectors. Therefore, the strong economy allowed for the feudal nobles to transform themselves into a class of scholarly gentry.
Speaker 1:The wealthy elite of China's Han dynasty devoted their leisure time to scholarship. Dynasty devoted their leisure time to scholarship, just like Renaissance Europe's aristocratic class. Unlike Renaissance Europe's private patronage, han scholarship was tightly linked to the state bureaucracy. The wealthy, especially the landowners and officials, pursued classical studies, particularly Confucianism, which was passed to civil service exams which allowed people to secure government positions. Emperor Wu, who ruled from 141 to 87 BCE, institutionalized Confucianism learning. As a result, intellectual salons emerged among the wealthy elites where they would discuss Confucianism, taoism and legalism. If you're comparing this to Renaissance Europe, they were more politically charged than the humanist discussions in Europe. Since the wealthy had more time and resources, they were able to fund innovations such as papermaking and even astronomical instruments.
Speaker 1:But there were some key differences between Renaissance Europe and Han China. The primary motivation for the Han was state service and political legitimacy, whereas the primary motivation for Renaissance Europe was individual glory and artistic patronage. Han was government exams and bureaucratic advancement, whereas in Renaissance Europe it was for independent academies and universities. The scholarly output for the Han was for its histories, its commentaries and, of course, for statecraft, whereas in Renaissance Europe scholarship revolved around original treaties, art and literature and, of course, rediscovering ancient writings from the Greeks and Romans. Social mobility during the Han was meritocratic, through exams, but usually for the elites, whereas in Renaissance Europe social mobility was patronage-driven, usually from the rising merchant class. There are a lot of similarities, of course.
Speaker 1:Both elites used scholarship to assert status. High intellectuals threw a bureaucratic rank, whereas in Renaissance Europe the Renaissance nobles were through cultural refinement. Both elites used scholarship to assert status. Han intellectuals through bureaucratic rank, renaissance nobles through cultural refinement. Textual revival occurred in both. The Han scholars reconstructed burned Confucian texts, while the Europeans were rediscovering Greek and Roman works. Wealthy women in both eras were limited, but there were occasional contributions despite all the roadblocks. While both groups leveraged wealth, the Han's elite scholarship was state-centric and utilitarian, whereas Renaissance patrons embraced individualistic and artistic expressions. The Han system reinforced centralized order, while the Renaissance, decentralized patronage, spurred diverse innovations.
Speaker 1:The education system in imperial China was a system that was based on privilege and preparation. The Han dynasty social hierarchy played a major role. In its formal educational system, there was a blend of private instruction with state-sponsored learning, just like in our modern society. Private educational schools were operated, whereas they educated students in exchange for substantial tuition fees, making such learning accessible primarily to affluent families. As imperial administration grew more complex, local governments, which were the commandaries, established public schools to train future officials.
Speaker 1:The pinnacle of education was the imperial university in the capital, which was reserved for the nation's most promising scholars. Admission required recommendations from high-ranking officials, which would ensure that only the elites or the exceptionally talented gained entry. It's not unlike the Ivies in the United States, or even Oxford and Cambridge in the UK or the Indian Institute of Technology, just to name a few. In those particular schools they're the elites of the elites and, generally speaking, the majority of the population that's going to get into those schools come from elite backgrounds, because they have the private education and all the resources to get them there. Not to say that they didn't work hard to get into those great schools, but the fact of the matter is someone that comes from a wealthy background has a much better chance of getting into those schools than someone that comes from a working class background. These public institutions in China were overseen by a central minister. So, for example, the Imperial University focused on Confucius' philosophy, law, mathematics and writing, subjects essential for civil servants. Graduates were groomed for high-ranking positions in the central bureaucracy, which would have reinforced the link between education and political power. Now, just to reiterate, educational opportunities were almost exclusively limited to wealthy young men and systematically excluded the poor and women. Furthermore, clan and familial connections also ordained one's access to schooling and career advancement, abetting education within the broader structure of social status.
Speaker 1:The earliest writing systems can be traced back to Sumer in southern Mesopotamia. The earliest writing systems can be traced back to Sumer in southern Mesopotamia. Their script, known as cuneiform, originally developed anywhere from 32 to 3500 BCE. It was initially developed for practical purposes, primarily to manage complex economic transactions. It was used for record-keeping and administrative functions in a society that had growing agriculture and trade. The precise origins of Chinese writing systems remain shrouded in mystery. The earliest confirmed examples date back to 13th century BCE, shang Dynasty's Oracle Bones. However, it appears that writing had already been developed centuries prior.
Speaker 1:Chinese script wasn't developed specifically for trade. Instead, it was mainly used for divination rituals, where questions were inscribed on animal bones and turtle shells to seek guidance from ancestors or deities on matters such as the royal family affairs, military campaigns and, of course, agriculture. Over time, these primitive signs evolved into a logographic system where characters represented entire words or concepts. Bronze script, which was often found on ritual vessels, and seal script, which was often used for official inscriptions, emerged during the spring and autumn period, which was from about 770 to 476 BCE. By the late Warring States period, the Qin state developed a proto-clerical script, a faster, more practical writing style suited for bureaucratic documents. When Qin Xinghuang unified China in 221 BCE, he enforced a standardized script based on clerical form, enforced a standardized script based on clerical form. By the early Han Dynasty, clerical scripts had fully matured, becoming the official writing system of the imperial administration. Eventually, the foundation of modern Chinese characters took shape.
Speaker 1:This script not only endured in China, but it also influenced the writing systems of Japan, korea and Vietnam. Now, if you factor in the Oracle Bone script dating back to the Shang Dynasty, which was from about 1200 to 1046 BCE, chinese would be considered the oldest continuously used writing system in the world. Its development was pivotal, enabling the recording of complex ideas, facilitating communications and spreading Chinese culture across East Asia. Cuneiform writing might be the oldest writing system, but it became completely extinct by the 1st century CE. Yet, due to its complexity, literacy remained largely confined to the educated elite, leaving the majority of the population illiterate for much of China's early history. Despite this, the writing system's endurance and adaptability cemented its role as one of humanity's most significant intellectual achievements. This was the genius behind the Phoenician alphabet, for example, in that it was developed around the 11th century BCE because it was much simpler and therefore even the illiterate could kind of understand some of the text. So that's really the main difference between our modern alphabet versus the Chinese script, where our modern alphabet was developed originally from the Phoenician alphabet and it was adapted by the Greeks and then that was really adapted throughout the Europeans. But the original beauty behind the modern alphabet was it was designed so that even the person that couldn't read and write might be able to pick up some certain words or understand some of the writing.
Speaker 1:During the Han Dynasty, chinese metallurgists revolutionized metalworking technology. Initially, the Chinese used blast furnaces to smelt iron ore into unrefined pig iron. However, they later developed much more efficient furnaces which turned low-grade iron into higher quality cast iron. This technology would not be developed in Europe until the French developed it in the 18th century. By 300 BCE, the Chinese discovered that introducing excess air into the furnace could further refine the iron, producing raw iron, which was stronger and more malleable. This innovation rendered bronze obsolete for most practical uses. 2nd century BCE, han metallurgists realized that combining cast iron and raw iron created steel, a superior alloy that was both harder and more durable. This breakthrough laid the foundation for stronger tools, weapons and agricultural implements. To increase efficiency, the Han dynasty employed water-powered blowers driven by hydropower. This innovation reduced reliance on manual labor and significantly boosted furnace temperatures, improving metal quality which allowed them to scale up their operations, thereby making iron cheaper. These advancements ultimately strengthened China's military and agricultural output.
Speaker 1:By the 4th century BCE, chinese engineers had already mastered the use of wooden and bronze gears, revealing a remarkably advanced grasp of mechanical force transmission. These gears would later form the core of intricate inventions such as water-powered trip hammers and astronomical instruments. Among China's earliest mechanical innovations was the belt drive, which was developed in the 1st century BCE. This system used flexible belts to link rotating shafts, enabling efficient power transfer between them. Its first recorded use appeared in the quilling machines, which wound fine silk threads into spools An early example of engineering ingenuity serving the needs of the textile manufacturing sector. By 132 BCE, zhang Zhang Heng invented the world's first seismograph. This device, made of bronze, could detect distant earthquakes. By the 2nd century CE, chinese astronomers had cataloged over 2,500 stars and mapped 120 constellations. Stars and mapped 120 constellations. They had correctly theorized that the moon and the planets merely reflected sunlight, while the sun emitted its own light. They also recognized celestial bodies as spherical objects, challenging earlier flat earth misconceptions which, for some crazy reason, is making a comeback in the United States.
Speaker 1:Chinese engineers discovered deep borehole drilling during the Han Dynasty, which, for some crazy reason, is making a comeback in the United States. Chinese engineers discovered deep borehole drilling during the Han Dynasty. They used a method where a draft animal would rotate the drill while laborers would jump on top of it to drive it downward, and as such, they achieved depths of up to 600 meters, or about 2,000 feet. No other society was even coming close to drilling this far down at the time. These narrow shafts were primarily used to extract brine, a concentrated saltwater solution which was then boiled to produce salt.
Speaker 1:While drilling for brine, chinese miners accidentally discovered natural gas deposits. By 500 BCE, they constructed bamboo pipelines to transport the gas and used it to evaporate, brine for salt production and for boiling seawater to produce drinking water. And for boiling seawater to produce drinking water. By the 1st century BCE, they had also begun to utilize unrefined crude oil. Therefore, it appears that the Chinese were the first society to develop the use of fossil fuels and therefore they had developed a fossil fuel market.
Speaker 1:Also, the Han Dynasty had developed the use of negative numbers. While the Greco-Roman mathematicians dismissed negative values entirely, the Chinese embraced them as a valid mathematical solution for certain equations and problems. The use of negative numbers also aligned with their yin and yang philosophy of duality. Their pi calculation correctly approximated it as 3.14. In addition, they independently discovered what became known as Pythagorean theorem, which proved the relationship between right-angled triangle sides.
Speaker 1:During Emperor Wu's reign, expansion of sturdy iron tools and more intensive farming techniques produced a steady growth in agricultural production and population. Cropping patterns and food consumption underwent the most monumental transformation since the Neolithic era. Millets remained the essential crop, but cultivation of wheat and barley spread in the north, while rice spread in the south. Wheat needed more inputs as it depended on irrigation, more so than millet did in the central plain. Therefore, during Emperor Wu's reign, the state funded numerous irrigation projects in the Guangjiang region. Officials also promoted the cultivation of wheat, which yielded twice as much grain per acre as millet. The spread of wheat largely came at the expense of soybeans, which were a long staple food in North China soybeans, which were a long staple food in North China. Additionally, other legumes had declined from about 25% in the eastern Zhao to about 8% in the Han. Chinese diet was also augmented by new crops such as watermelon, cucumber, garlic pepper, sesame grapes and alfalfa, which was introduced to China via the Central Asian trade routes.
Speaker 1:In the Han period, the south of China had the opposite problem and they were more focused on keeping water out. Therefore, they weren't concerned with the irrigation projects as much as they wanted to build seawalls to protect farmland in the coastal areas from flooding by seawater. During Wu's reign, government officials took an active role in generating more intensive farming techniques in the Guangjiang region and the garrison colonies in the northwestern frontier through the development of large-scale irrigation projects such as the ridge and furrow fields. Furrows helped drain excessive water from the field, which would have prevented water logging of certain crops. The ridges provided better aeration for plant roots. Ridges tended to be warmer than the furrows, which could be beneficial for certain crops as well.
Speaker 1:Despite these innovations by Emperor Wu, there was a noticeable decline in state agricultural investment by the late 1st century BCE. During the early Western Han, the state actively promoted irrigation projects, iron and tool distribution and land reclamation projects. But by the late Western Han, which was like the 1st century BCE, the fiscal crisis that had developed and the hoarding of lands by the elites and corruption reduced state investment in farming. Small landholders reverted to extensive farming, where they would have had lower yields, but it would have also involved less labor and less risk, as opposed to the intensive methods which involved crop rotation and careful weeding that was encouraged in the previous periods. As a result, there was a significant cash burden on farmers, as they needed about 25% of the income in cash to pay the poll tax, which equated to a per capita head tax. Plus, they needed to buy salt, iron, tools and other market goods. If they didn't have coins, they had to use in-kind payments. The problem with in-kind payments is grain is bulky and hard to transport and may decay or get eaten by rodents. Plus, cash was essential for taxes. Ultimately, this forced families into side hustle industries. It's really not unlike the United States, considering the rentier class has made it so expensive to live that a large portion of the American population is forced to get second and even third jobs. Therefore, rural households needed additional strategies to generate cash.
Speaker 1:A natural split occurred between genders. Women's work generally included silk production, which included raising silkworms in the spring and summer. The reason this turned into female tasks was this was conflicting with the peak farming labor that was needed. In addition, the spinning of hemp was vital for household textiles, even if it was considered a low-status job, although labor-intensive reeling silk proved to be a great source of excess income for the family. Men's work typically included plowing, harvesting and toolmaking. Weaving could be a shared task between men and women, especially when producing higher value cloth when there was sufficient market demand. Han records show cloth was substituted for cash taxes in large part because it was often used to clothe the military. The reason being was the Han armies required enormous amounts of cloth supplies. Soldiers typically required two to three bolts of cloth per year for their uniforms, plus tents, sacks and banners were made of hemp or even silk. A farming household's tax quota might require 20 to 30 bolts of cloth per year. Other means to generate income for farming families included food processing work, such as fermenting soybeans and milling grain, fuel and fodder gathering was another source of income generation, as this included selling firewood or fodder in local markets. Lastly, there was also seasonal wage labor, which included hiring out labor for construction or transport.
Speaker 1:This economic model for the family farm had some unintended consequences for the family farm had some unattended consequences For one family. Prosperity was fragile. A bad harvest, a flood or a silk market crash could ruin a family. Since the farmers were often short of coin, many would have taken on debt. As such, many small landowners fell into debt to the moneylenders. Defaults would ultimately lead to tenant farming or serfdom on elite estates. Despite the fragility of the farming sector, the Han depended on taxes from free farmers. Therefore, if they're going to go into any sort of macro level decline, the empire would be put into a fiscal bind.
Speaker 1:Although the family farm remained the basic unit of agricultural production, over the long term, a trend towards concentration of land ownership arose, just as the corporate consolidation is taking over the small farmer in the United States. However, unlike ancient China, americans have a much wider array to generate wages, as the US doesn't depend on the farmer to shore up its tax base. But, just like in ancient China, it was the middle and working class person that ended up paying a disproportionate share of their income to taxes. Proportionate share of their income to taxes. Despite Emperor Wu's aggressive measures to curb land concentration, powerful elites consistently circumvented reforms, leading to a persistent growth of a Latifundia-style estate, which was just like the large agricultural land holdings in ancient Rome. These estates were a significant feature of the Roman economy and social structure, often owned by the wealthy elites and produced agricultural goods for profit.
Speaker 1:The goal of Emperor Wu's reforms was to prevent merchants and local magnates from buying land designated for military nobles and smallholders. However, the reality was merchants often colluded with local officials to register land under proxies such as using family members. Additionally, the law lacked any kind of enforcement mechanism, so after Wu's death in 87 BCE, this was ignored completely. The other goal was to resettle landless peasants on state-owned frontier lands and other wastelands. When settled, they would have been charged with low rents. But the reality was the elites exploited loopholes. Local officials, who were often landowners themselves, allocated the best plots to their allies. Therefore, the unconnected peasants often defaulted due to the allocation of lands with poor soil and harsh climates, forcing them to sell tenancy rights to the magnates to sell tenancy rights to the magnates.
Speaker 1:These values were ultimately due to structural issues. For one, there was a weak bureaucracy. The Han local government relied on cooperation with elites for tax collection, giving them leverage. Additionally, there wasn't any land surveys and, without accurate records, elites underreported holdings or disguised purchases altogether. Therefore, the elites, just as they do now, executed tax evasion strategies. Magnates used tenant farmers to avoid poll taxes, as only free households pay taxes. When you factor in all these issues, this led to the rise of the powerful landlords by the Eastern Han, which was about 25 CE to 220 CE. The elites controlled private armies and vast estates, undermining central authority as small landowners dwindled. Tax revenue collapsed, contributing to the Han's fall. Tax revenue collapse, contributing to the Han's fall. Likewise, wang Meng's radical land nationalization failed as well.
Speaker 1:The Tang equal field system tried and failed to replicate Wu's goals. In the end, the Han reforms resulted in land ownership that compared considerably to the development of Roman land ownership, as the wealthy elites absorbed the small farms, creating unfree labor in tenant farming or even slaves. In the end, the Han reforms resulted in land ownership that compared considerably to the development of Roman land ownership, as the wealthy elites absorbed all the small farms. This created unfree labor in the tenant-farmer or slave mechanism. The major difference was Rome relied on war captives as slaves, while the Han elites exploited debt bondage. In the end, the Han society experienced extreme gaps in wealth between the average family and the elites. I want to thank you for taking your time to listen or watch this episode. If you like what you hear and want to donate to this show, you can visit us at patreoncom. Slash history of money bank and trade or you can visit our website at moneybankandtradecom. Thank you very much. Talk to you soon.
