Business In Ancient China Essay, Research Paper

The Merchant Class In Traditional China

The Song dynasty is notable for the development of cities not only for administrative purposes but also as centers of trade, industry, and maritime commerce. The landed scholar-officials, also referred to as the gentry, lived in the provincial centers alongside the shopkeepers, artisans, and merchants. A new group of wealthy commoners-the mercantile class-arose as printing and education spread, private trade grew, and a market economy began to link the coastal provinces and the interior. Many merchants were rich enough to visit and bribe princes and dukes. Landholding and government employment were no longer the only means of gaining wealth and prestige.

Once the canals were built, some merchants and craftsmen became rich. A really successful merchant might ride in a cart with a coachman, buy a title from an emperor, and built a mansion surrounded by pools and gardens. This absolutely infuriated officials and peasants. The merchants didn’t till the soil. They weren’t nobles. There ought to be a law, to stop them from doing this, and for a while, there was a law, forbidding them from riding in carts and chariots and also from wearing silk.

Huo Kuang sponsored a conference to inquire into the grievances of his emperor’s subjects. Invited to the conference were government officials of the Legalist school and worthy representatives of Confucianism. The Legalists argued for maintaining the status quo. They argued that their economic policies helped maintain China’s defenses against the continued hostility of the Hsiung-nu and that they were protecting the people from the exploitation of traders. They argued in favor of the government’s policy of western expansion on the grounds that it brought the empire horses, camels, fruits and various imported luxuries, such as furs, rugs and precious stones.

The Confucianists, on the other hand, made a moral issue of peasant grievances. Also they argued that the Chinese had no business in Central Asia and that China should stay within its borders and live in peace with its neighbors. The Confucianists argued that trade was not a proper activity of government, that government should not compete with private tradesmen, and they complained that the imported goods spoken of by the Legalists found their way only into the houses of the rich.

In old China, there was a wide gulf in power and prestige between the rulers and those being ruled. The old Chinese society was traditionally divided into four classes, which in the descending order were the scholar- administrator, the farmer, the artisan, and the merchant. The scholar administrator as an educated man, was presumed to be morally superior, exercising the power under the supreme authority of the Emperor who was normally considered as the son of heaven mandated to rule the country, consequently dominating all aspects of public life.

This concept and practice of the superiority of educated men was clearly related to authoritarian family pattern of old China, which provided a basis for social order in political as well as domestic life. The role of the emperor and his officials was merely that of the father. Just as the emperor was the father of the whole nation, so a county magistrate was called “parent ” of the people in that county. In feudalistic China only educated men could become officials through a special kind of examination; the Imperial Examination System. Even today many young people still hold an ideal of ” study hard for officialdom “.

During the late traditional period another group of scholars developed. These came from different classes. Before the Spring and Autumn Period, what learning there was had been monopolized by the nobles; they alone could use the books and documents stored by the government, and other people could not share this right. The great political and social changes during the Spring and Autumn and Warring States Periods broke the monopoly of learning by the nobles. At all levels of society-declining nobles, new landlords, free citizens, even poor people-there were people who made an effort to study and turn themselves into scholars. When rulers of states wanted wise advice that would help them to make their states rich and strong, they turned to scholars for such help and often put them into important positions.

The Han rulers modified some of the harsher aspects of the previous dynasty; Confucian ideals of government, out of favor during the previous Qin period, were adopted as the creed of the Han empire, and Confucian scholars gained prominent status as the core of the civil service. A civil service examination system also was initiated. Intellectual, literary, and artistic endeavors revived and flourished. The Han period produced China’s most famous historian, Sima Qian ( 145-87 B.C.?), whose Shiji ( Historical Records) provides a detailed chronicle from the time of a legendary Xia emperor to that of the Han emperor Wu Di ( 141-87 B.C.). Technological advances also marked this period. Two of the great Chinese inventions, paper and porcelain, date from Han times.

Throughout the centuries some 80 to 90 percent of the Chinese population have been farmers. The farmers supported a small number of specialized craftsmen and traders and also an even smaller number of land- and office-holding elite families who ran the society. Although the peasant farmers and their families resembled counterparts in other societies, the traditional Chinese elite, often referred to in English as the gentry, had no peers in other societies. The national elite, who comprised perhaps 1 percent of China’s population, had a number of distinctive features. They were dispersed across the country and often lived in rural areas, where they were the dominant figures on the local scene. Although they held land, which they rented to tenant farmers, they neither possessed large estates like European nobles nor held hereditary titles. They achieved their highest and most prestigious titles by their performance on the central government’s triennial civil service examinations. These titles had to be earned by each generation.

The Confucianists of the time, challenged the government, in favor of strict market and general control on the effects of the merchants, ironically the out come of this was that the government took a laissez-faire attitude, which suited the merchants even more. This allowed the merchants to accumulate wealth and helped them finance an increase in their social status.

At first, merchants were merely handy craftsmen, carpenters, builders and jewelers coming from a peasant and farming community, they eventually became producers of copper in south west china, the first industrialists. In south china they produced silk and porcelain and brought back spices shark fins abalone birds nest, which were considered rare luxuries and were widely sought after, these along with pepper, which was used for conservation of food, which made the meats keep longer. The law makers and philosophers of the time thought that traders and merchants were exposed to new ideas, from there various travels and would more likely be outspoken and compromise original ideas and undermine social authority. There was a suspicion of people who went outside china as it brought in outside values, went against social and patriarchal order, went against the idea of self sufficiency. The assimilation of new and different cultures was a repulsive idea to the Chinese. This added to the common view of merchants being of no use and value due to the fact that they did not produce anything, just provide services, and moving products around.

In history of agriculture production could not meet with consumption, emphasis was on producers in the eyes of scholars o making money form allocating resources

The problem was not the production but the method of sale. There was a common perception that merchants were selfish, money hungry deceptive and crafty; this went again the confusion idea of collective interests. Merchants brought economic activity, which lead some leaders to believe that the excess consumption in services and non-essential products would lead to a fall in the dynasty. The mandarins of the time, the most learned of the Confucian classics, they did not have an understanding of economics, thus the seeming learned of the society saw merchants as parasites, who were living off of the peasants, not contributing to the society, but getting rich anyway. In reply to this, merchants were forced to buy social status, during the Ching dynasty; they were able to lift their image somewhat. In spite of these hindrances they were able to educate their children and allow them to undertake the examinations. The family would encourage the next generation to become educated and move away from the seemingly vile occupation.

Traditional Business Structure in China.

In traditional China the basic units of social and business stratification were families. In socioeconomic terms, late traditional China was composed of a large number of small enterprises; a family, which acted not only as a household but also as a commercial enterprise, operated each. The family head also was the trustee of the estate and manager of the family business.

About 80 percent of the population were peasant farmers, and land was the fundamental form of property. Although many peasant families owned no land, large estates were rare by the eighteenth and nineteenth centuries. Peasant families might own all of the land they worked, or own some and rent some from a landowner, or rent all their land. Land owning was the main goal of economic endeavors and investments. The peasants had to pay as much as half of their crops to the landlord. Under-developed agricultural production together with poor transportation means made a typical de-centralized market pattern. A rural market center and its surrounding villages within walking distance formed a unit that could live by itself, with a High degree of inertia in spite of wars, invasions and great social changes in the administrative centers where history was recorded. Regardless of the form of tenure, the farm was managed as a unit, and the head of household was free to decide what to plant and how to use the labor of family members. Land could be bought and sold in small parcels, as well as mortgaged and rented in various forms of short-term and long-term contracts. The consequence was that in most villages peasant families occupied different steps on the ladder of stratification; they did not form a uniformly impoverished mass. At any time, peasant families were distinguished by the amount of land that they owned and worked compared with the percentage of their income they paid in rent. Over time, peasant families rose or fell in small steps as they bought land or were forced to sell it.

Most non-farm enterprises, commercial or craft were similarly small businesses run by families. Ownership of businesses was either as sole traders or in partnerships diversification of business types were also found, typical examples are restaurants holes manufacturing, banking department stalls. The basic units were owned by families, which took a long-term view of their prospects and attempted to shift resources and family personnel from occupation to occupation to adapt to economic circumstances. In all cases, the long-term goal of the head of the family was to ensure the survival and prosperity of the family and to pass the estate along to the next generation. The most common family strategy was to diversify the family’s economic activities. Such strategies lay behind the large number of small-scale enterprises that characterized traditional Chinese society. Farming and landowning were secure but not very profitable. Commerce and money lending brought in greater returns but also carried greater risks. A successful farm family might invest in a shop or a food-processing business, while a successful restaurant owner might buy farmland, worked by a sharecropping peasant family, as a secure investment. All well-to-do families invested in the education of sons, with the hope of getting at least one son into a government job. The consequence was that it was difficult to draw a class line dividing landlords, merchants, and government workers or officials.

Each individual’s family was his chief source of economic sustenance, security, education, social contact and recreation and even his main religious focus, through ancestor-worship. Of the five well-known relationships by Confucianism (those between the ruler and the subjects, father and son, husband and wife, elder and younger of the brothers and between friends), three were determined by kinship and family ties. Traditionally, China’s whole ethical system tended to be family-centered not oriented toward God or the State.

The Chinese kinship group was extensive reaching out in each direction to fifth generation. The ideal was to have all the living generations reside in a great household. Under this household pattern, filial piety was the most admired of virtues. Marriage was more of a union of a family than of individuals. However along with the rapid economic and social development under market oriented economy, the fast flowing of inhabitants and other financial and social factors have tremendously affected either the ideal or the practice of the multi-generation household today.

In late traditional times, when merchants were becoming more excepted in higher society, businessmen found it a common occurrence that they were not able to fully handle all their responsibilities. They would then commission someone to manage one particular business. The manager would assume all daily duties and be accountable to the owner. This system was popular, if certain members of the gentry did not want their entrepreneurial actions to be public knowledge, there were some cases where managers would attempt to blackmail owners into decisions, to prevent managers from disclosing details of store ownership. The factors of employment in to these businesses was usually due to kinship ties, not only due to the social attitudes of the time, but members of the same family or village, were considered trustworthy and honest. The managers however were not allowed to undertake any business on the side, and were made to payback any losses.