China has the largest education system in the world today. It educates more than 260 million people and employed 15 million teachers in 2015. Besides its social impact, educational development has often been argued to be one of the primary reasons behind China’s stunning economic growth after the economic reform implemented in 1978. It is therefore of paramount importance to understand how education evolved in Chinese history.

Indisputably, the Great Leap Famine of 1958–61 stands out in Chinese history as the most profound demographic catastrophe after six centuries of nearly uninterrupted population growth. As some 30 million, or 5 percent of a population of 660 million, were wiped out within a short period of three years, it was by far the deadliest famine in human history. However, until the demographic consequences of this catastrophe were fully revealed in the 1980s, the outside world assumed that China had solved its food problem following the founding of the People’s Republic, when in fact the greatest famine in human history was just beginning to unfold.

Many studies of the history of Chinese finance lack systematic empirical investigation, are limited to the period before the outbreak of war in 1937, or focus on Shanghai, skewing our understanding of the full scope of Chinese finance in this period. This chapter draws heavily on new work, as well as on the empirical work of the two authors, though many areas for further research remain.

At the turn of the twentieth century, Chinese scholars eager to assimilate the historical sciences of the West and incorporate their history into universal historical narratives readily adopted the tripartite periodization of Western civilization divided into ancient, medieval, and modern epochs. This framework of linear, stadial progression toward modernity offered liberal intellectuals in China the promise of emancipation from China’s stultifying past and rebirth as full citizens in a modern world of equal nation-states. Marxist scholars invoked a parallel tripartite periodization divided into slave, feudal, and capitalist epochs, but adapted to accentuate the defining feature of Chinese history: the rise of a “bureaucratic, centralized feudal state” that fostered “economic stagnation” throughout the longue durée of the imperial era, from the first universal empire of Qin in the third century bce to the irruption of Western imperialism in the nineteenth century.1 The ideas of “oriental stagnation” and the “Asiatic mode of production” likewise inflected Western historiography on China, and the notion of an unchanging “traditional China” prior to the advent of the West in the post-Opium War era predominated in Western scholarship on Chinese history down to the 1970s.

Foreign trade always mattered in imperial China. Especially during the middle period and early modern times, China experienced enormous growth and expansion of foreign trade. According to Confucian concepts, merchants belonged to the lowest echelon of society; agriculture, not trade, was considered the basis of a stable state and society. Most Chinese governments indeed sought to maintain more or less strict control over foreign commerce and those who were responsible for it. But one has to emphasize the co-operative rather than antagonistic relationship with markets and with the merchant class during most of China’s imperial history. In addition, we can observe certain characteristics and qualitative changes throughout the centuries.

Money serves as a means of exchange in any society and in any period. However, depending on place and time, money exhibits distinct characteristics. Chinese imperial monetary history spotlights a blind side about money that mainstream thinking overlooked. Chinese historical experience is replete with examples of money use transcending the theoretical frameworks of those who attribute the acceptability of money to its intrinsic value as well as those who emphasize enforcement by public authorities. Chinese monetary history may appear highly irregular from the viewpoints of contemporary foreign observers and modern social science, but a coherent system surely existed in an endogenous way behind the apparent disorder.

These two epilogues present practical applications of money minder thinking to two major policy problems that faced the UK and the world in 2016 and then in 2020. The long march to increased globalisation that would lead to “increased shares for all” from trade juddered to a halt following the financial crisis and, given sluggish economic growth subsequently, opened up a debate about the true costs of economic openness, particular to labour flows. This manifested itself in the UK as a push for referendum on continued membership of the EU. Much of the debate in the run up to the referendum and subsequently once the people had spoken was on the likely, or forecasted, economic effects of a decision to leave. The debate then rapidly descended into a search for clues as to whether the fears or gains from leaving had been exaggerated by popular forecasting narratives. And indeed whether we should rely on the views of ‘experts’. The first epilogue, written in early 2017, thus confronts the value of economic forecasting against the sharp focus of a country trying to understand to what it had just agreed. The money minder needs to tell a number of stories that are consistent within their own terms, that is the purpose of a model. But as she cannot really know which story will unfold, she, as a consequence of outlining these stories, also has to be prepared to respond to any of the outcomes. And so this is the message of the second epilogue, written in the spring of 2020 just as the magnitude of the COVID-19 pandemic was becoming clearer. Here I make the money minder case for supporting fiscal policy by helping to create fiscal space with lower funding costs and absorbing any excess issuance of public debt. This was a “once-in-a-century” shock and outside the distributions beloved by econometricians and yet precisely the time that monetary policy – if credibly committed to price stability – could provide support to the functioning of markets and provide support for an economy in temporary free-fall. But with a clear eye on how to do so without undermining long price and monetary stability. For which the eye may need the support of a commitment to exit from extraordinary measures when we recovered. The absence of that clear commitment will test credibility increasingly as the recovery builds momentum and price pressures build. The critical ability to act flexibly if hemmed in by hard won credibility and can disappear with it, depressingly easily.

The great Migration started in World War I as the demand for war work rose. The United States broke the European stalemate and ended the war. The Treaty of Versailles created a lot of economic trouble that led to World War II. Unrest during the 1920s led to women’s suffrage and immigration restrictions. The Great Depression was partly the result of the Versailles Treaty. Roosevelt’s New Deal alleviated American worker’s problems, but Blacks were excluded from the New Deal programs. World War II enlisted Black soldiers who were victimized as they returned to Southern homes after the war.

The foundations of knowledge, which include language and even economics, can be subject to intellectual earthquakes.1 Such earthquakes test the robustness of established views and may lead to previously unanticipated directions for thought. A classic example is the impact of the Great Depression on the direction of economics, as it led to the development of an obligation for the government to run countercyclical economic policies and subsequently to the growth of national income accounting, which laid the basis for the development of macroeconomic modelling. These earthquakes expose fissures between different schools of thought, and economics continues to be torn between those who are, broadly speaking, expansionists and those who are more conservative.2 Indeed, the spectre of the Great Depression with its images of long food queues and marchers asking for work has had a particular hold on central bank thought; so much so that at the time of the financial crisis and in its aftermath, both the Chairman of the Federal Reserve and the Governor of the Bank of the England were academic economists who had written on the events of the Great Depression.

Over the past two generations a fundamental change has taken place in the scholarly understanding of the commercial world of late imperial China. Lasting from the Song (960–1279) to the end of the Qing dynasty (1644–1911), this millennium of Chinese history had long been judged a period of decline, its initial economic breakthroughs never fulfilling their promise. The commercial and technological innovations of the eleventh and twelfth centuries were thought to have given way to economic stagnation and cultural conservatism, as the enterprising peasantry and merchants of south China lost out to the prerogatives of Confucian scholar-officials and their state-sponsored culture in the Ming (1368–1644) and Qing dynasties. Tested by a highly competitive examination regime and thereafter sheltered by a host of privileges, these scholar-officials acquired and retained an unrivalled hegemony that was cultural, political, and, some would add, economic. When China suffered a severe economic downturn during the nineteenth and twentieth centuries, the once-admired stability of the Qing regime was criticized for its backwardness, and the late imperial economy of these scholar-officials’ rule was condemned for its stagnation.