Introduction: This document records the arguments made by the two sides in a debate on government fiscal policy during the Former or Western Han dynasty (206 BCE-8 CE). The debate took place in the court of the Han Emperor Zhao in 81 BCE.

Introduction: This document records the arguments made by the two sides in a debate on government fiscal policy during the Former or Western Han dynasty (206 BCE-8 CE). The debate took place in the court of the Han Emperor Zhao in 81 BCE. Government officials, led by Lord Grand Secretary Sang Hongyang, and a group of Confucian scholars gathered to debate the economic policies of the preceding emperor, Emperor Wu (r. 141-87 BCE). The most famous of these policies were state monopolies on two important goods: iron and salt.

Questions:   [choose one]

-What was the purpose of the monopolies on salt and iron?

-What relevance do the arguments expressed in this debate have for other times and places?

-Are the arguments relevant today?

A Record of the Debate on Salt
and Iron

In the sixth year of
 the era Shiyuan [81 BCE], an imperial edict was issued directing the chancellor and the imperial secretaries to confer with the worthies and literati who had been recommended to the government and to inquire into the grievances and hardships of
 the people.

The literati responded: We have heard that the way
to govern men is to prevent evil and error at their source, to broaden the beginnings of
morality, to discourage secondary
occupations, and open the way
 for the exercise of
 humaneness and rightness. Never should material profit appear as a motive of
government. Only
then can moral instruction succeed and the customs of the people be reformed. But now in the provinces the salt, iron, and liquor monopolies, and the system of
 equitable marketing have been established to compete with the people for profit, dispelling
rustic
generosity
and teaching
the people greed. Therefore those who pursue primary occupations [farming]
 have grown few and those following
 secondary
 occupations [trading] numerous. As artifice increases, basic
 simplicity declines; and as the secondary
 occupations flourish, those that are primary
 suffer. When the secondary
 is practiced the people grow decadent, but when the primary
is practiced they are simple and sincere. When the people are sincere then there will be sufficient wealth and goods, but when they
become extravagant then famine and cold will follow. We recommend that the salt, iron, and liquor monopolies and the system of
 equitable marketing
 be abolished so that primary
 pursuits may
 be advanced and secondary
 ones suppressed. This will have the advantage of
 increasing
 the profitableness of agriculture.

His Lordship

[the Imperial Secretary
 Sang
 Hongyang]


 replied: The Xiongnu have frequently revolted against our sovereignty
and pillaged our borders. If
we are to defend ourselves, then it means the hardships of
 war for the soldiers of China, but if
 we do not defend ourselves properly, then their incursions cannot be stopped. The former emperor [Wu]
took pity
upon the people of
the border areas who for so long
had suffered disaster and hardship and had been carried off
 as captives. Therefore he set up defense stations, established a system of
 warning beacons, and garrisoned the outlying
areas to ensure their protection. But the resources of
these areas were insufficient, and so he established the salt, iron, and liquor monopolies and the system of
 equitable marketing
 in order to raise more funds for expenditures at the borders. Now our critics, who desire that these measures be abolished, would empty the treasuries and deplete the funds used for defense. They
would have the men who are defending our passes and patrolling
our walls suffer hunger and cold. How else can we provide for them?
Abolition of
these measures is not expedient!

His Lordship stated: In former times the peers residing
in the provinces sent in their respective products as tribute, but there was much confusion and trouble in transporting
them and the goods were often of
such poor quality
that they
were not worth the cost of
transportation. For this reason transportation offices have been set up in each district to handle delivery
 and shipping
and to facilitate the presentation of
tribute from outlying
areas. Therefore the system is called “equitable marketing.” Warehouses have been opened in the capital for the storing of goods, buying when prices are low and selling
 when they
 are high. Thereby
the government suffers no loss and the merchants cannot speculate for profit. Therefore this is called the “balanced level”

[stabilization]

. With the balanced level the people are protected from unemployment, and with equitable marketing the burden of
 labor service is equalized. Thus these measures are designed to ensure an equal distribution of
goods and to benefit the people and are not intended to open the way to profit or provide the people with a ladder to crime.

The literati replied: In ancient times taxes and levies took from the people what they were skilled in producing
and did not demand what they
were poor at. Thus the husbandmen sent in their harvests and the weaving
women their goods. Nowadays the government disregards what people have and requires of
them what they
have not, so that they
are forced to sell their goods at a cheap price in order to meet the demands from above. …
 The farmers suffer double hardships and the weaving
 women are taxed twice. We have not seen that this kind of marketing
 is “equitable.” The government officials go about recklessly
 opening
 closed doors and buying
everything
at will so they
can corner all the goods. With goods cornered prices soar, and when prices soar the merchants make their own deals for profit. The officials wink
 at powerful racketeers, and the rich merchants hoard commodities and wait for an emergency. With slick
merchants and corrupt officials buying cheap and selling dear we have not seen that your level is “balanced.” The system of
equitable marketing
of
ancient times was designed to equalize the burden of
labor upon the people and facilitate the transporting
of
tribute. It did not mean dealing in all kinds of
commodities for the sake of profit.

The 
Literati Attack
 Legalist Philosophy

The literati spoke: He who is good with a chisel can shape a round hole without difficulty; he who is good at laying foundations can build to a great height without danger of
collapse. The statesman Yi Yin made the ways of
Yao and Shun the foundation of the Yin dynasty, and its heirs succeeded to the throne for a hundred generations without break. But Shang
Yang
made heavy
penalties and harsh laws the foundation of the Qin state and with the Second Emperor it was destroyed. Not satisfied with the severity of the laws, he instituted the system of
mutual responsibility, made it a crime to criticize the government, and increased corporal punishments until the people were so terrified they
 did not know where to put their hands and feet. Not content with the manifold taxes and levies, he prohibited the people from using
the resources of forests and rivers and made a hundredfold profit on the storage of
 commodities, while the people were given no chance to voice the slightest objection. Such worship of
profit and slight of
what is right, such exaltation of
power and achievement, lent, it is true, to expansion of
land and acquisition of
territory. Yet it was like pouring
more water upon people who are already suffering
from flood and only
increasing
their distress. You see how Shang
Yang
opened the way
to imperial rule for the Qin, but you fail to see how he also opened for the Qin the road to ruin!

Confucian 
Literati 
Ridiculed

His Excellency spoke: … Now we have with us over sixty worthy men and literati who cherish the ways of
the Six Confucian Arts, fleet in thought and exhaustive in argument. It is proper, gentlemen, that you should pour forth your light and dispel our ignorance. And yet you put all your faith in the past and turn your backs upon the present, tell us of antiquity
 and give no thought to the state of
the times. Perhaps we are not capable of
recognizing
true scholars. Yet do you really
presume with your fancy
phrases and attacks upon men of
ability
to pervert the truth in this manner?

See them

[the Confucians]


now present us with nothingness and consider it substance, with emptiness and call it plenty! In their coarse gowns and worn shoes they
walk
 gravely
 along, sunk
 in meditation as though they
 had lost something. These are not men who can do great deeds and win fame. They do not even rise above the vulgar masses.

From Sources of Chinese Tradition, compiled by Wm. Theodore de Bary and Irene Bloom, 2nd ed., vol. 1 (New York: Columbia University Press, 1999), 360-363. © 1999 Columbia University Press. Reproduced with the permission of the publisher. All rights reserved.

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