The afterlife of Marx’s footnote on Chinese currency

The number of times a Chinese person has cited Marx is by now, with the Chinese Communist Party approaching its centennial, surely uncountable. The number of times Marx cited a Chinese person is countable, and small.

It is an interesting piece of socialist trivia that in his Capital, Marx mentions only one Chinese person by name: Wang Maoyin, who held a position something like chancellor of the exchequer under the Xianfeng emperor of the Qing dynasty. He appears in footnote 36 to Volume 1, Chapter 3, the chapter on money and the gold standard, where Marx mentions Wang being reprimanded for a monetary proposal he had made to the emperor.

This mention has not, of course, escaped notice in China. The English-language Peking Review in 1983 excerpted an article about Wang that explains the background:

The debate took place between 1853-54 during the reign of Emperor Xianfeng of the Qing Dynasty. Wang Maoyin, Vice-President of the Board of Revenue and Population, opposed a proposal to mint copper coins in large denominations. During the debate, Emperor Xianfeng was in favour of coining this devalued currency. He and his ministers mistakenly held that the value of metal currency was determined by the state and that the people could not violate it. At the time, the capitalist commodity economy was not developed in China. Wang Maoyin understood that “the state may determine the value of the currency, but cannot impose restrictions on the prices of commodities.” To counter devaluation which results from issuing unconvertible metal currency, Wang suggested that a limited amount of convertible banknotes be issued. The emperor not only refused to accept his suggestions, but dismissed him from office.

The economic historian David Faure, in his China and Capitalism: A History of Business Enterprise in Modern China, also credits Wang for being one of the early Chinese thinkers to be aware of the “independence of the market”: the reality that the state could not simply dictate economic outcomes, because companies and people would respond to its actions. This idea was an independent development out of China’s own “statecraft” tradition of literature on the practical management of resources, taxation and markets. Faure summarizes Wang’s argument as “although the government had the power and means to devalue the coinage, it did not have same power and means to prevent the people from raising prices.”

At the time of the Peking Review article, the idea that economic activity was a realm subject to laws of its own was making a comeback in China. The people who were trying to move China away from arbitrary, politicized decision-making argued that the government had to respect reality and “seek truth from facts.” The idea that there were economic laws, and that China needed to figure them out and respect them, was an important piece of the intellectual framework of the early reform era. It’s interesting how vehement the author of that 1983 piece is on this point:

This footnote by Marx indicates that there is an economic law governing the relationship between currency and commodities, which is independent of man’s will. Marx affirmed the correct view of Wang and jeered at the self-indulgent rulers who knew nothing about the objective laws of economics.

It’s pretty obvious who the author is using Marx to implicitly criticize here, just a few years after the death of Mao, the end of the Cultural Revolution and the trial of the Gang of Four.

But while the invocation of objective laws of economics was, in the political context of the 1980s, usually a way to argue for the government to step back from interference in the economy, it does not have to serve that function. Xi Jinping is himself clearly a believer in such objective laws, but he sees them as enabling rather than preventing a strong government. Because such objective laws exist, they can be understood and mastered; as I put it in an earlier post, Xi thinks that there are laws of history, and they work in China’s favor.

Statue of Wang Maoyin in his ancestral village in Anhui

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