882 FINANCIAL REFORM AND THE ECONOMYDespite the problems of private minting and debasement, however, Chia I did
not call for the permanent withdrawal of cash from the marketplace. On the con-
trary, he argued that prohibiting the private minting of cash was also fraught
with difficulty because it would reduce the supply of cash and increase the value
of coins remaining in circulation, enticing more counterfeiters to risk even greater
profits. The state could increase its laws and prohibitions and decapitate coun-
terfeiters by the dozen without bringing an end to the practice. In the end, the
only solution to counterfeiting and private minting was not only for the state to
prohibit minting of coins, but also to collect all available coins in circulation,
and return all the private minters to agriculture. The circulation of adulterated
coins would cease, and trust and confidence could be restored to the people once
the state gained exclusive control over the minting process.
Rather than assume that metallic currency might be replaced by another
medium of exchange or barter, he apparently supposed that after the govern-
ment had collected all outstanding coins, it could recirculate them and use them
to regulate grain and commodity prices by buying and selling goods on the mar-
ket. The only one who could become rich from this system was the government,
while the "persons engaged in the lesser occupations" - not only merchants and
artisans but presumably counterfeiters and profiteers as well would have a hard
time making a living. In effect, cash would remain legal tender but its volume
would be restricted to the amount possessed or disbursed by the government,
as if greedy men and ex-counterfeiters would have permanently abandoned the
opportunity for profiteering by minting debased coins.
Chi a I then argued that the surplus cash generated by monetary retrenchment
could then be given as gifts to the hated Hsiung-nu, the nomads who constantly
raided the Chinese frontier. to destroy their society by enticing their own peo-
ple to engage in the nonproductive and contemptible struggle for profits that
was then plaguing Han society. Chia I's lesson for policy planners was not an
optimistic view that cash or unrestrained free market activities were beneficial,
but a livid fear of the capacity of money to induce illegal and immoral behav-
ior, and of private minting and adulterated coinage to wreak inflationary havoc.
Cash might have been a necessity, but its misuse had to be checked by state con-
trol over the money supply and commodity prices.^8
Yu also cited another Former Han statesman, Chia Shan, who shared a pes-
simistic view about the deleterious effects of private minting and private con-
trol of cash, but from a slightly ditferent perspective. Chia Shan told Emperor
Wen that although cash had no utility in itself, it could be transformed into "wealth
and nobility," which situation posed a danger to the ruler of a state because pri-
vate parties would have the power to enrich and ennoble themselves irrespec-
tive of the rulcr's wishes. Since control over wealth and nobility was the means
by which the ruler of the state held power, he should not allow any private par-
ties the ability to create their own independent wealth.
Emperor Wen ignored the advice, and his neglect only exacerbated the prob-
lem. The plutocrat Wu Wang-bi not only earned enough money by minting cash