Title

The making of a fiscal state in Song China, 960–1279

Document Type

Journal article

Source Publication

The Economic History Review

Publication Date

2-2015

Volume

68

Issue

1

First Page

48

Last Page

78

Publisher

Wiley-Blackwell Publishing Ltd.

Abstract

In light of the Schumpeterian paradigm, this article explores the rise of the tax state in eleventh-century China and its further transition towards a fiscal state until the Mongol conquest in 1279. By the late eleventh century in the Song dynasty, two-thirds of state revenues came from taxing non-agricultural sectors, especially from the collection of excise. The Song state became the first sustainable tax state in global history, as manifested in three major aspects: monetization; indirect taxation; and centralization and professionalization in the tax administration. The boundary of the Song tax state was largely confined to urban settlements. In rural areas, the state gave up the collection of commercial taxes by farming out this right to local elites. In the twelfth century, as traditional tax revenues fell far short of supporting military defence, the Song administration utilized credit instruments. Around 1200, the amount of redeemable promissory notes first exceeded that of annual tax revenues. This shift from tax-based public finance to credit-based public finance completed the transition towards a fiscal state. Nonetheless, this development in the fiscal state was still at an early stage and proved to be unstable. Toward the end of the Southern Song, hyperinflation caused by the over-issuance of promissory notes seriously threatened the economy.

DOI

10.1111/ehr.12057

Print ISSN

00130117

E-ISSN

14680289

Funding Information

The research was funded by the National Science Foundation (Global Prices and Incomes, 1200–1950, Stage 2) and the Hong Kong RGC Grant (ref: 642410).

Publisher Statement

Copyright © Economic History Society 2014. Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Recommended Citation

Liu, W. G. (2015). The making of a fiscal state in Song China, 960–1279. The Economic History Review, 68(1), 48-78. doi: 10.1111/ehr.12057