AHC: Song monetary policies

As many of you may know, the Song Dynasty saw the popularization and development of fiduciary currency (paper money). This development had great potential to develop into a proto-credit, proto-capitalist tradition, and indeed the Song at the same time saw a great rise in production, land development, and registered population. Unfortunately, the side effects included rampant hyperinflation. This, combined with the gentry’s mass accumulation of land and resentment of the New Policies, which may have stifled growth while exacerbating hyperinflation and causing artificial problems such as food crises, was perhaps a major cause of the crises that caused the Song to lose the north after the Jiankang incident and again of the Song loss to the Mongols. Was there a way for Song monetary policy to be more informed and linked to the private sector? Was there a way to avoid disastrous hyperinflation? What would he consequences of this be?
 
When you say the "new policies," what are you referring to? Inflation was an issue particularly during the wars with the Mongols, which were over a hundred years after the New Policies I am familiar with.
 
A pandemic or outbreak of civil war would do good to reduce the labor pool and increase GDP per capita solely through depopulation, meaning inflation would be less of an issue and also meaning the common trope of industrialized Song might actually come to fruition with investment into labor saving technology being profitable
 
When you say the "new policies," what are you referring to? Inflation was an issue particularly during the wars with the Mongols, which were over a hundred years after the New Policies I am familiar with.

I read that what happened was: revenues decreased as tax-free gentry landowners gobbled up land, the government was starved of revenues (with a fourth of revenues coming from Shaanxi, for example, which wasn’t one of the most developed or abundant province). Wang Anshi’s idea was to make up for the deficiency by printing greater amounts of paper money, thus triggering hyperinflation and even leading to the famine of 1074 (I think that was the year). Though the blame upon him was largely painted as scapegoating by an angry aristocracy, and I believe they played it up to get rid of him, I have read that his New Policies were not wholly blameless either. By attempting to install strict and often inflexible controls on the economy, he may have inadvertently hindered growth while making the Song base of support and economy more brittle.

So even during the time before the Jurchens, I believe there was some hyperinflation. It is posited by some to have lead to the first Song collapse, as after Bianjing was lost, the landed aristocracy in the north did not heavily resist Jurchen control. The Song were only saved by virtue of a strong navy that repeatedly defeated Jin naval attacks combined with a very defensible frontier (Huai/Yangzi River), a competent Emperor (Gaozong), and the Jin surprise at their unprecedented victory and inability to press further into China.

It’s not to say that the New Policies are entirely to blame, or that’s it is certain that they were a large cause of collapse. However, the New Policies should also be looked into with more detail and objectivity, rather than simply accepting the traditional view that they were reforms ahead of their time stalled by an unreasonable, selfish, and backwards aristocracy. Though this image may hold grains of truth, it is certain that it is, as a whole, far from the truth.
 
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