STRATEGIC PEASANT AND AUTONOMOUS LOCAL MARKET: REVISITING THE RURAL ECONOMY IN MODERN CHINA

Abstract

Depending on conditions, Chinese peasants strategically adopted one of two types of transactions: either a single one-time transaction without reference to any particular buyer, or repeated transactions dependent on one regular broker. Based on the different sizes of market zones and responding to seasonality, Chinese peasant households allotted their labour to maximize income and avert risk. Generally, in early modern China, the volume of exchanges among peasants was much greater than the volume of exchanges between peasants and merchants from towns. One-time transactions were dominant not only by the choice of peasants for concluding local transactions but also by the petit traders who connected villages and towns. Thus, price movements in local currencies such as copper coins in local marketplaces did not follow the movements of inter-regional trade made in silver. Maintaining the independence of local trade, local merchants established a system for settlements through account books and issued native notes to respond to chronic shortages of currency. In Japan, peasant households showed similar characteristics of seasonal allocation and division of intra-household labour, but in the nineteenth century were less dependent on local marketplaces and maintained more continuous relationships among villagers as well as with merchants from towns. The differences between China and Japan during the early modern era, when economies depended heavily on small-size peasant households with less specialization, reveals the inadequacy of conventional conceptions of markets such as Smithian growth, which ignore the differences between local trade and inter-regional trade, and underestimate the importance of proximate exchanges among peasants, which reflected their desire for a higher degree of freedom when making transactions.