Fiscal Innovation and the Origins of Paper Currency in Song China (960-1276)

Since the pioneering research of Japanese scholars in the 1920s the invention of paper currency in China in the eleventh century has long been regarded as a signal feature of China’s “medieval economic revolution,” marking the triumph of a market economy over the command economy of early imperial times.  In recent years, however, some Chinese and Japanese scholars have questioned this “rise of the market” narrative, arguing that paper bills essentially served as a means of “fiscal circulation” organized by the state rather than as market money. In this Quantitative History Webinar, Richard von Glahn of the University of California, Los Angeles, will explain how his study reaffirms the crucial role of paper currency in the Song market economy. He will also emphasize that the success of the Song state in maintaining a viable paper currency is derived from the interrelationship between state finance and private commerce. Paper currencies thus were an integral part of what he calls the “synergistic fiscal state” in Song times, in which the state sought to harness market forces for its own fiscal ends.