China Upside Down: Currency, Society, and Ideologies, 1808-1856 (review)

Man-houng Lin offers a sweeping and bold reassessment of nineteenth-century Chinese history, claiming that China entered a new global era around 1775, when Latin American silver came to dominate the Chinese economy. Chinese socio-economic fireworks exploded in the early nineteenth century, along with Latin American wars of independence from Spain. Flapping metaphorical Western "butterfly wings" (p. 1)—in the form of severely reduced Latin American silver production during the first half of the nineteenth century—caused a devastating socioeconomic hurricane (1808–1856) that contributed to the Taiping Revolution, nearly destroyed Qing China, and led to Japan's ascendancy as the dominant East Asian power. Powerful stuff, this metal called silver!

The chronicle of silver worked as follows. For centuries, silver had been practically the only Western product with sufficient demand inside of China to warrant importation in exchange for massive Chinese exports of ceramics, silks, and teas. Not only did silver imports cease with the collapse of Latin American mine production, but China actually came to export significant amounts of silver during the first half of the nineteenth century. Clearly, the Chinese economy could not continue to export traditional items (in addition to silver exports) unless a significant new import product could be found to substitute for silver imports. Lin accepts the traditional argument that Chinese opium imports substituted for Chinese silver imports. So, in one sense, disruptions in Latin America contributed directly to the famous Opium Wars; had silver continued to enter China as before, there would have been no need to substitute opium for the white metal. But the situation within China was more complicated than merely swapping opium imports for silver imports; indeed, Lin furnishes new evidence to show that both silver and opium were imported into China in large quantities during the second half of the nineteenth century. So what was so special about silver during the first half of that century?

Lin claims that restricted silver production led directly to what is labeled the "silver-copper coin crisis" that plagued the first half of nineteenth-century China. The shortage of silver—exacerbated in turn by exports of silver from China—led to a 250 percent rise in the purchasing value of silver vis-à-vis copper cash. (Actually, Lin's numbers show a rise of 150 percent above early nineteenth century figures—not 250 percent as is stated repeatedly.) This wreaked havoc for ordinary Chinese paid wages in copper cash, since the purchasing power of copper monies declined to less than half its previous market value. Horrible times prevailed; the Qing dynasty itself nearly went bankrupt. The Taiping and other rebellions raged on, and the Chinese population fell by tens of millions (some even claim a decline of over a hundred million). Lin goes to great length to show how these unique circumstances led to changes in intellectual debates on statecraft and why China eventually turned more and more toward a strong state. Fortunately, Latin America's silver industry (along with other parts of the world, like Nevada) experienced a huge explosion of production around the middle of the nineteenth century, and this led to recovery for Qing China as well. The old depressive mechanisms were reversed as China's economy surged ahead along with new infusions of imported silver, although an authoritarian Chinese state was now in place and Japanese ascendancy already assured.

China Upside Down contains a treasure trove of useful information about conditions in nineteenth-century China, especially for those of us incapable of reading Chinese sources. As a bonus, Lin provides a fascinating summary of theoretical and practical arguments by important contemporary Chinese thinkers of the time (as did Richard von Glahn in his 1996 Fountain of Fortune classic volume on Chinese monetary history). Yet, I cannot accept the overall conclusions of China Upside Down. Although the criticisms to...