(This essay was published in Hong Kong Economic Journal on 12 June 2013)


My first encounter with revolutions and modernization was in the western history class at school. The history teacher had chosen an excellent book for the class to study – Denis Richards, Modern Europe 1789-1945. It was a book that actually taught us history and not summary notes on how to prepare for the Secondary School Certificate Examinations.


The first two chapters were on the French Revolution. Richards wrote, “And yet it was not so much from the peasantry as from the more prosperous members of the Third Estate  – the educated section of lawyers and doctors especially – that the impulse towards revolution came. The reason for this is that, though not suffering the economic burdens of the peasant, they resented their exclusion from official positions …. Above all, they felt themselves unfairly excluded from all share in government. ‘What is the Third Estate?’ said one of their leaders. ‘Everything. What has it been hitherto in our form of government? Nothing. What does it want? To become Something.’ It is not surprising that almost all of the revolutionary leaders came from this class.”


Richards continues, “Soon in the Assembly, on August 4th, occurred one of the most remarkable nights in history. A nobleman suddenly rose to propose the abolition of all feudal rights and dues. Others followed. An emotional atmosphere was created, akin to that of a Salvationist meeting. Noble after noble rose, amid scenes of weeping and embracing, to announce his agreement in the surrender of his own privileges. An orgy of self-sacrifice set in (and naturally others got sacrificed in the process), and by eight o’clock next morning thirty decrees had been passed and the whole fabric of French law altered. The night of August 4th gave the peasants practically all they wanted from the Revolution; as time went on and extremism and violence grew, the peasants turned naturally to anybody who could promise them security in their newly won rights. They were not democrats, and they happily accepted Napoleon later because he seemed to make secure for them their principal gains from the Revolution.”


Richards’s book interpreted for us the complex history of the French Revolution in simple language that a fourth-form student could understand. And he made it intoxicatingly interesting.


Origins of Divergent Paths to Modernity


My knowledge of the Chinese Revolution started at university when I read Moore’s work. He came to the novel conclusion that China’s modernization can have only one political outcome – and that is a Communist dictatorship. His conclusions were totally surprising to me, and quite startling.


Forty years later I read Moore’s work again. I believe his thesis on China to be essentially correct. It is the best starting point for students who wish to explore what happened in the Chinese Revolution and wonder what will happen next. And like Moore, I believe that the search for an answer should begin with going back to China’s past.


Moore’s thesis proposed the contrasting forms of 20th century political systems – dictatorship versus democracy and their variations – should be traced all the way back to their agrarian origins, especially what happened to landlords and peasants as agriculture became commercialized in the first stage of modernization.


The key features of China’s economic and political institutions had emerged even before unification by the Qin Dynasty. This system was refined in the Han and Tang Dynasties, and had since remained essentially unchanged from dynasty to dynasty despite violent political upheavals resulting from internal peasant uprisings and external marauders.


In feudal times, all the land belonged to the King, and all the produce thereof went to the King and his retinue of nobles. The serf had to contribute his entire yield to the feudal nobility at certain times of the year. At his convenience the nobility distributed produce back to the peasant. This was probably how the ancient “well-field” system actually worked. The Chinese “feudal” form was abandoned to varying degrees during the Warring-States Period; long before European feudalism had first appeared.


Ending Feudalism Unleashing Land Value


The process was most advanced in the State of Qin, when Shang Yang in 356 BC, with the support of Duke Xiao enacted a series of far reaching reforms that create many of the key elements of China’s economic and political institutions. Shang Yang moved the capital of Qin to reduce the influence of nobles on the administration and initiated measures to deprive landed nobles of hereditary privileges. He introduced many reforms but the most relevant for our purposes were the land reforms and the creation of a state bureaucracy.


Shang Yang privatized land, awarded land to individual households, encouraged farming, immigration and population growth, allowed trade in land, and set up a household register system for tax and management purposes. He also established a centralized bureaucracy of government appointed officials to replace the landed nobility for administering the state. The “feudal” administrative arrangements of the Zhou Dynasty were replaced by a rudimentary system of “commanderies and counties” that were to be refined and made permanent in the Han Dynasty.


Shang Yang’s reforms laid the foundations for the rise of the Qin State as an economic and military power in the Warring States Period. The relatively poor State of Qin was transformed into a prosperous military power and defeated rival states to unify the country. A unified China without hereditary privileges for the landed nobility, administered under a centralized state bureaucracy, with private ownership of agricultural land was achieved in the year 221 BC. This was 2000 years ahead of the French Revolution.


This system was perfected in the Han and Tang dynasties. Land became the private possession of the cultivator to be freely bought and sold. The government concerned itself only with collecting the land tax and not with the question of who should own the land. Buying and selling land created a contractual relationship between the two parties involved. These were purely economic relationships without political significance to the Emperor. The new class of great landowners created by land transactions was not feudal nobles in any sense of the term. The landlords of feudal times under the “well-field” system were created, and sustained in power, by political alignments. During the Han and Tang times these were sustained through solely economic ties.


The new system was economically more efficient. Private property rights in agricultural land created a highly prosperous economy and made China more productive than any other agrarian economy. In pre-industrial times, China was probably the wealthiest economy in the world on a per-capita basis. The early demise of the system of hereditary landed nobility in China removed access to economic power through political privilege. In principle, this also made the Chinese political system more open to the commoner than in feudal Europe.


At the same time it also allowed land ownership to become concentrated over time. Agricultural production is subject to the vicissitudes of bad weather, and prone to environmental and natural disasters. During periods of poor yield caused by droughts, floods, or blight, the peasant often found it impossible to make his fixed tax payments to the government. At these intervals land transactions became prevalent, and ownership of land gradually became concentrated in the hands of the wealthy. Once a cultivator sold his land, he became a sharecropper, a kind of tenant farmer.


Although this relieved him of the obligation to pay the land tax to the government, he still had to pay a very high rent to the landlord, often running as high as 50% of the yield. The lighter the land tax demanded by the government, the more the landlord stood to benefit. From the 50% cut received from the tenant farmer, the landlord had to give up only about a small fraction of the total to the government. The benefits of a low land tax were not passed onto the tenant. In this way a lower land tax tended to be regressive and fostered a more unequal distribution of wealth, even though it had positive incentive effects on production and population growth.


Private Lands Rise of Landlords


As a result, land policy had always been disputed throughout Chinese history. Political thought had been torn between two concepts. On the one hand, some yearned for the ancient “well-field” system with its equal division of land; on the other hand, some championed ownership by the individual farmer. The issue might be stated as the state-sanctioned right to equal participation in a commune versus freedom to acquire private property. Despite these continuing disputes the basic system of private property rights in agricultural land remain unchanged for over 2000 years until the Communist Revolution.


The early demise of the hereditary landed nobility in China following unification was an extremely significant development for another reason. Without a hereditary landed nobility to serve as officials, the state had to develop its own civil service to administer the state. European feudalism was a cheap administrative system suitable for kings and princes who had to run their kingdoms with a smaller budget.


The reason European governments collected smaller tax revenues than the Chinese system is not difficult to understand. China had a more efficient system of agricultural production embedded in the private ownership of agricultural land with active land markets that were absent in European feudal manorial system. Furthermore compared to European kings and princes that were incessantly at war with each other, unified China was relatively peaceful and stable. State military expenditures were probably lower in China than in Europe. Both higher revenues and lower spending made it marginally feasible for China to financially support a central bureaucracy without having to rely on unpaid nobles to administer the state, whose loyalties were often unreliable. The rise of effective state bureaucracies in Europe could only occur in the modern era with growing prosperity. Paying for the central state administration was nevertheless a challenging problem in pre-modern China and probably accounted for the prevalence of corruption as a deep rooted problem in agrarian China.


The attempt to recruit administrators from among the commoners began in the Han Dynasty and was perfected in the Tang Dynasty with the establishment of a written examination and the creation of the “nine grade” civil service classification system. This was perceived as a fair and meritorious system open to all. It was politically a very “democratic” arrangement for recruiting administrative elites. European elites under feudalism were primarily hereditary even in the seventeenth century. A system that recruited those who were competent and in principle open to all ensured a higher standard of administrative efficiency and legitimacy compared to the closed political systems in feudal and other agrarian economies.


In the seventeenth century, the French King Louis XIV initiated the first serious European attempt to build a state administrative bureaucracy for collecting taxes and administering justice. To do so he had to entice the hereditary nobles to uproot themselves from their fiefdoms and move to the capital. A magnificent palace was therefore built at Versailles as “bribe and excuse”. This then sow the seeds for absentee landlordism. Agricultural productivity probably fell as supervision became more lax, but taxes remained high and the peasants’ burden grew heavier. The collection of taxes also became more corrupted over time. In so doing the attempt by the king to control his nobles also paved the way for the French Revolution.


Changes Frustrated by Traditional System


The Chinese system was probably the most efficient arrangement among pre-modern agrarian economies. And this accounted for its resilience through repeated dynastic changes. There was another reason why the system was also resistant to change. Land under the Chinese system was privately held by a wealth landlord class that wielded considerable political influence in the local village community and also within the central bureaucracy.


The emperor and the central government were always concerned about whether officials sent down to the “commanderies and counties” would be captured by the landlord class, corrupted, and justice subverted. A system of frequent rotation of officials every three years was introduced to minimize such happenings. But preventive measures can never be foolproof. The vigilance to guard against capture and corruption eroded over time with growing decadence. This is well recognized cause of dynastic decline. In all probability corruption might have been even tolerated as a means of supporting a civil service in an agrarian economy, whose ability to finance expensive internal administration and defense against external marauders were necessarily limited.


Still for over 2000 years and despite the change of dynasties, the system survived. A crucial feature accounting for its permanence was the recruitment of officials that had little interest to challenge the landlord class. The cost of studying for the examinations was very expensive that only the rich landlord could afford. A wealthy landlord who did not have a promising son could recruit and sponsor the studies of poor promising young men, often from the same clan, who would naturally be grateful. The financing of those who took the examinations completed the circle whereby economic success, academic success, and political success became mutually reinforcing.


The civil service administration and the landlord class needed each other. The landlord class depended on the bureaucracy to guarantee his property rights and to enforce the collection of rents. The landlord class could also pressure government to construct water-control systems valued by them. Entry into the bureaucracy created an opportunity for a wealthy family to sustain its economic fortunes across generations. At the very least, it allowed the official to acquire land through his tenure in office.


An economic system based on private ownership of agricultural land and non-hereditary political elites (except for the imperial household) recruited through open examinations is arguably a more open political system. The coincidence of land ownership and success in examinations could be partially rationalized and legitimized. In addition, the landlord and bureaucracy partnership also served as a device to transfer the agricultural surplus from the peasants and turning it into the amenities of civilization. Such a system had to be one of the most sophisticated institutional arrangements in pre-modern times.


This system had very little incentive to change and did not facilitate the transition from pre-modern subsistence forms of farming to a commercial one. Unlike Europe, manufacturing in China did not develop in urban centers, but took place largely in rural areas. In the absence of a big urban market, there was little reason to change and commercialize agricultural production for export to urban markets. When urbanization eventually occurred, the Chinese landlord faced with abundant labor found it much easier to raise the rent on land than to innovate and commercialize. They became rentiers rather than agrarian entrepreneurs. They resisted entry into the modern era. Some were attracted to the amenities of urban living and became absentee landlords like the French nobles. The economic condition of the peasants worsened.


The arrival of foreign imperialists in China in the late Ching period increased the demand for modern military spending on an unprecedented scale in history. This coincided with a state of central administration whose effectiveness was already in decline. The stresses placed on China’s traditional institutions became unbearable and most of it fell on the peasants.


When the Ching Dynasty collapsed, the landlord class could no longer rely upon the Imperial bureaucracy to protect their rights. It was not surprising that they turned to regional warlords and the Nationalists in the urban centers for protection just as the French peasants had turned to Napoleon. The agrarian policy of the Nationalists and the warlords was to try to maintain or restore the status quo, which had to be borne by the peasants and further exacerbated the tensions between the landlord class and the tenant peasants.


The Chinese Revolution, which had started in 1911 as a nationalist revolution to overthrow imperial rule and to install a republic ended in a social revolution to eliminate the landlord class. It had ended not only imperial rule, but overthrew more than 2000 years of partnership between private landlords and central bureaucracy. The strong resistance put up by the landlord class required an even stronger power to overcome that resistance. Dictatorship is thus born. The private ownership of agricultural land was replaced with the commune system, which is of course similar to the “well-field” system Shang Yang had abolished 2300 years earlier.


But why did Moore thought a Communist Revolution was inevitable in China and how did it differ from the peasant revolutions the Chinese have known throughout history? This is the topic of next week’s article.



“Barrington Moore on Dictatorship and Democracy” series, Part II

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