In the early decades of the Han dynasty, the emperor Han Wudi instituted an empire-wide state monopoly of salt, concentrating its production, transport, and sale in official hands. The purpose of this salt monopoly, the first monopoly in Chinese History, was to secure his centralized feudal monarchy as well as to raise revenue for this vast empire.
In the system of monopoly monopoly sales, the Han state restricted entry into the market, took ownership of all salt, and assumed command over production, which had been in the hands of small local producers. The producers of salt, often landless peasants drafted into salt production had to submit all salt had to be submitted to the state, which punished private production. After collecting the salt, the state transported the salt to all parts of the country and sold the salt at prices that greatly exceeded the costs of production and distribution.
The Han salt administration ran separate from and parallel to other central and local government administrations. The Office of Agricultural Supervision established salt offices around the country, controlled prices, and managed distribution.
In the system of monopoly monopoly sales, the Han state restricted entry into the market, took ownership of all salt, and assumed command over production, which had been in the hands of small local producers. The producers of salt, often landless peasants drafted into salt production had to submit all salt had to be submitted to the state, which punished private production. After collecting the salt, the state transported the salt to all parts of the country and sold the salt at prices that greatly exceeded the costs of production and distribution.
The Han salt administration ran separate from and parallel to other central and local government administrations. The Office of Agricultural Supervision established salt offices around the country, controlled prices, and managed distribution.
The salt monopoly does not exist today. Actually, the monopoly came under broad criticism upon Wudi's death. In 81 BC, a Salt Debate was called at court by Confucians and Legalists to deliberate over the continuation of the monopoly. On one side, the "literate and virtuous" Confucians sympathised with the common people and argued against the monopoly that placed such a burden on them. But in the context of a centralized bureaucratic state, neither the Confucians nor the merchants could stand up to bargain with the ruler. The Legalists, on the other hand, stressed the financial deficit and the absolute necessity of maintaining the salt monopoly as a prime revenue source. At that time the Legalists won because the land tax was insufficient to support the government. The salt monopoly continued down and was not ended until the turn of the twentieth century. As The trend towards privatization in 'modern China' escalated in 20th Century, the salt monopoly gradually disappeared.
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