On May 17, Zhang Taisu, Professor of Yale Law School, taught a Topics in China Studies Lecture Series class at Yenching Academy titled “The Ideological Foundations of Qing Taxation.” Hosted by Associate Dean Brent Haas, the lecture, which focused on Prof. Zhang’s new book that bears the same title as the class, discussed how belief systems shaped traditional political ethics, and how politics, in turn, shaped fiscal institutions in imperial China.
Prof. Zhang began the class by explaining that the Qing dynasty was a shockingly weak and fiscally poor regime defined vis-à-vis control over society and resource mobilization and allocation. To understand how small the Qing fiscal regime was, the guest lecturer compared the Qing dynasty to other states around the same time, dividing the fiscal capacity (tax to GDP) across three categories of political entities: small island countries (e.g., England, Japan, etc.); mid-sized land-based states (e.g., France, Spain, Germany, etc.); and Central Eurasian empires (e.g., Russia, Persia, etc.) that recorded around 15%, 8-10%, and 5% tax rates, respectively.
Prof. Zhang also compared the Qing to other imperial Chinese dynasties, noting that those regimes, including the Ming, the Song, and the Tang, had heavier fiscal structures similar to the Russian Empire. “The Meiji state had around 3-4 times more fiscal resources than the Qing, and as these other states and imperial regimes kicked off their modernization process, they boosted the absolute volume of agricultural taxes to grow their fiscal base. Nonetheless, the Qing era is unique, in that, across its history, it lost the absolute volume of agricultural taxes,” stated Prof. Zhang.
The question arises: Why did the Qing adopt an exceptionally low tax regime? Prof. Zhang described that the Qing dynasty treated non-agricultural and agricultural taxes differently, increasing the proportion of the former and stagnating its agricultural tax extraction rate even as the economy grew. He further discussed and constructively criticized three categories of theories that sought to explain the stagnation of agricultural taxes: peace dividend (a period of peace meant the government did not have to impose heavy taxes to fund a large military), fiscal capacity (internal administrative constraints), and elite capture or resistance (local elites secure exemptions and lower tax rates for themselves, effectively reducing the tax base).
Given the shortcomings of those arguments, Prof. Zhang offered a more nuanced explanation, drawing on the interplay of the Chinese tradition of Confucianism and political institutions. He argued that the fiscal conservatism of the Qing era deepened over time as it was a product of the ideological biases that stressed the sociopolitical dangers associated with tax hikes epitomized in the perceived possibility of social unrest among the peasants. Prof. Zhang described that “this ideological bias stemmed from the Qing’s understanding of the reason for the collapse of the Ming dynasty – high tax regimes. Hence, the Ming collapse changed the tone, tenure, and substance of political rebellion against government taxation and reinforced the moral skepticism expressed in Confucianism.”
Prof. Zhang noted that maintaining the tax burden below the Ming “red line” became dominant in the Qing era and was sustained by the institutional nature of high politics (that is based on authoritative manufactured information). In this vein, the Qing’s failure to conduct a nationwide land survey until the early 1900s froze the institutional prerequisite to raising agricultural taxes, thereby blocking the flow of financial information to the government and creating a Malthusian crisis where the country’s population tripled, but the production capacity remained the same. Nonetheless, the convergence of several shocks prompted the Qing to break its ‘empirical’ presumption that the peasants could not tolerate more taxation; thus, the Qing’s long-held fiscal practice perceived as indispensable for political survival sowed the seeds of its decline and demise.
Yenching Scholars raised several questions during the Q&A session, including an inquiry that focused on the nature of the socialization process in facilitating the intellectually self-perpetuating belief of avoiding tax hikes. Prof. Zhang explained that the evidence shows that the process of change featured a phase where officials who pushed for tax hikes were ridiculed by other officials but not punished, and a second phase – around the early 19th century – where the consequences for such proposals was demotion or dismissal. This idea influenced the psyche and operation of the local elites to pursue self-preservation, and was passed down to aspiring and incoming members of the political class for two centuries through a process of socialization.