Wang An-shih

The unprecedented development of large estates under the Song Dynasty whose owners managed to evade paying their share of taxes resulted in an increasingly heavy burden of taxation falling on the peasantry. The drop in state revenues, a succession of budget deficits, and widespread inflation prompted the emperor to seek advice from one of China's most fascinating statesman and economists.

Wang An-shih, a remarkably modern thinker, believed that the state was responsible for providing its citizens the essentials for a decent living standard. This quotation capsizes his views particularly well: “The state should take the entire management of commerce, industry, and agriculture into its own hands, with a view to succoring the working classes and preventing them from being ground into the dust by the rich”.

Accordingly, under his direction the state initiated an agricultural loans measure to relieve the farming peasants of the intolerable burden of interest extracted from them by moneylenders in difficult times and to ensure that the ensuing lack of capital would not impede agricultural development. To destroy speculation and break up the monopolies, he initiated a system of fixed commodity prices; and he appointed boards to regulate wages and plan pensions for the aged and unemployed. Wang An-shih also revamped the state examination system so that less emphasis was placed on literary style and memorization of the Chinese classic texts and more practical knowledge, irking the Confucian scholar gentry and state bureaucracy. These reforms were known as the "new laws."

However, vested interests bitterly opposed these reforms. The tide tilted in favor of the conservatives due to renewed foreign conflict.

Modern observers have noted how remarkably close his theories were to modern concepts of the welfare state and planned economy[?].