Essay: The salt tax and salt monopoly

Another reason behind the Salt tax and salt monopoly was to contain the growing sphere of political and economic influence of the salt merchant community. For much of ancient China’s history, the state’s staunch presence in major trading nodes in domestic and foreign customs expresses its intention to control the salt merchant network in China as the country’s wealthiest entrepreneurs grew in wealth and influence. By the arrival of the Ming Dynasty, salt tax has evolved from direct state control during the Han Dynasty to indirect revenue farming.

A selected group of merchants were granted rights to mining, transporting, and selling salt, exchange for the promise of fulfilling the salt tax and donations. This policy change subjected the salt merchants to the mercy of a predatory state with largely state interests in mind. There was a unilateral partnership between the State and salt merchants as the Ming government never declared any general policy or guidelines in dealing with salt merchants. Most administrative details were left up to the decisions of individual officials, which varied according to circumstances and allowed the state to make unprecedented demands on salt merchants when needed. Apart from regarding the salt merchant community as a cash cow, there was little political concern for their financial viability. The general consensus behind the salt trade then, was that the salt merchants were required to serve and submit to all requests of the supreme state.

Parker states that: ‘The syndicate of traders who work under the Salt Commissioner at Tientsin are invariably largely in debt to the Government.’ He too is of the view that salt merchants were tightly controlled by the Chinese government. Moreover, frequent alterations to trading procedures were made to obtain more state revenue from salt merchants and contain their expanding sphere of influence. Thus, it can be seen that salt merchants were exploited by the state to facilitate of ‘revenue farming – a method of raising revenue without a bloated bureaucracy consuming much of what it collects.’ As a result of such, the Chinese government was able to achieve increased net gain in salt taxes through a more convenient system of taxation. At the expense of salt merchants, the government’s monopoly over the salt trade was to their interests.
Opponents of our view would argue that the salt monopoly was not always to the advantage of the Chinese government as in reality, merchants would undermine the rule of the state and benefit from such. During the Ming Dynasty, the bureaucracy was largely disapproving of proposals from merchants to purchase government salt at steady, specified prices. In the 1560s, influential businessmen with connections in Peking and the salt merchant community managed to amass imperial support for their proposals through secretive transactions, to much chagrin of many officials. On all occasions, the Ministry of Revenue demanded the arrest and punishment of these businessmen, to little avail.

Nevertheless, we argue that such instances of successful assertion of merchant interests were rare. Most of the time, the treatment of the merchant community received fluctuated with the unpredictability of government regulations. Salt merchants gained little from the salt trade as they were exploited and even when officials occasionally voiced out against the unfair treatment of salt merchants, they did so in defense of the image of government benevolence, rather than out of true justice for salt merchants. Thus, salt merchants were most definitely exploited by the state and there are rare instances of salt merchants benefiting from the system of state supervised salt trade. Yet, we have to acknowledge that state control over the salt merchants diminished in the later years as salt merchants carefully nurtured a networking culture, which granted them increasing access to the officials and influence in state decisions that helped them in preserving their privileges and wealth by opening the floodgates of bribery and cronyism. Parker is of the view that ‘the trade is now connived at, and pays -the people, the speculators, and the officials -all very handsomely.’ He suggests that merchants and government officials were able to benefit from the salt trade in the later years of the Ming Dynasty. With reference to Tao’s views of how: ‘the taxation falls much more oppressively and directly upon the people than in former days,’ we can thereby see how the interests of the citizens of the state is undermined as corruption between salt merchants and government officials leads to increased salt prices. While the salt merchants eventually benefitted from the salt trade, it was at the expense of the common people while government officials benefitted from bribes. Thus, the salt trade and monopoly was more beneficial to the Chinese government as it eventually marginalized the interests of the citizens when state institutional control over the salt merchant community gradually loosened.

Source: Essay UK -

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