Debt: The First 5000 Years - autonomous learning

THE MIDDLE AGES 259
bay, without causing a notoriously contumacious rural population to
rise up in arms. The official Confucian ideology of patriarchal authority,
equal opportunity, promotion of agriculture, light taxes, and
careful government control of merchants seemed expressly designed
to appeal to the interests and sensibilities of a (potentially rebellious)
rural patriarch.22
One need hardly add that in these circumstances, limiting the depredations
of the local village loan shark-the traditional bane of rural
families-was a constant government concern. Over and over we hear
the same familiar story: peasants down on their luck, whether due to
natural disaster or the need to pay for a parent's funeral-would fall
into the hands of predatory lenders, who would seize their fields and
houses, forcing them to work or pay rent in what had once been their
own lands; the threat of rebellion would then drive the government
to institute a dramatic program of reforms. One of the first we know
about came in the form of a coup d'etat in 9 AD, when a Confucian
official named Wang Mang seized the throne to deal (so he claimed)
with a nationwide debt crisis. According to proclamations made at the
time, the practice of usury had caused the effective tax rate (that is, the
amount of the average peasant's harvest that ended up being carried
off by someone else) to rise from just over 3 percent, to so percent.23
In reaction, Wang Mang instituted a program reforming the currency,
nationalizing large estates, promoting state-run industries-including
public granaries-and banning private holding of slaves. Wang Mang
also established a state loan agency that would offer interest-free funeral
loans for up to ninety days for those caught unprepared by the
death of relatives, as well as long-term loans of 3 percent monthly or
ro percent annual income rates for commercial or agricultural investments.24
"With this scheme," one historian remarks, "Wang was confident
that all business transactions would be under his scrutiny and the
abuse of usury would be forever eradicated. "25
Needless to say, it was not, and later Chinese history is full of
similar stories: widespread inequality and unrest followed by the appointment
of official commissions of inquiry, regional debt relief (either
blanket amnesties or annulments of all loans in which interest had exceeded
the principal), cheap grain loans, famine relief, laws against the
selling of children.26 All this became the standard fare of government
policy. It was very unevenly successful; it certainly did not create an
egalitarian peasant utopia, but it prevented any widespread return to
Axial Age conditions.
We are used to thinking of such bureaucratic interventionsparticularly
the monopolies and regulations-as state restriction on