These were the main events in internal and external affairs during the Sung period until 1068.  It will be seen that foreign affairs were of much less importance than developments in the country.

3 Reforms and Welfare schemes

The situation just described was bound to produce a reaction.  In spite of the inflationary measures the revenue fell, partly in consequence of the tax evasions of the great landowners.  It fell from 150,000,000 in 1021 to 116,000,000 in 1065.  Expenditure did not fall, and there was a constant succession of budget deficits.  The young emperor Shen Tsung (1068-1085) became convinced that the policy followed by the ruling clique of officials and gentry was bad, and he gave his adhesion to a small group led by Wang An-shih (1021-1086).  The ruling gentry clique represented especially the interests of the large tea producers and merchants in Szechwan and Kiangsi.  It advocated a policy of laisser-faire in trade:  it held that everything would adjust itself.  Wang An-shih himself came from Kiangsi and was therefore supported at first by the government clique, within which the Kiangsi group was trying to gain predominance over the Szechwan group.  But Wang An-shih came from a poor family, as did his supporters, for whom he quickly secured posts.  They represented the interests of the small landholders and the small dealers.  This group succeeded in gaining power, and in carrying out a number of reforms, all directed against the monopolist merchants.  Credits for small peasants were introduced, and officials were given bigger salaries, in order to make them independent and to recruit officials who were not big landowners.  The army was greatly reduced, and in addition to the paid soldiery a national militia was created.  Special attention was paid to the province of Shensi, whose conditions were taken more or less as a model.

It seems that one consequence of Wang’s reforms was a strong fall in the prices, i.e. a deflation; therefore, as soon as the first decrees were issued, the large plantation owners and the merchants who were allied to them, offered furious opposition.  A group of officials and landlords who still had large properties in the vicinity of Loyang—­at that time a quiet cultural centre—­also joined them.  Even some of Wang An-shih’s former adherents came out against him.  After a few years the emperor was no longer able to retain Wang An-shih and had to abandon the new policy.  How really economic interests were here at issue may be seen from the fact that for many of the new decrees which were not directly concerned with economic affairs, such, for instance, as the reform of the examination system, Wang An-shih was strongly attacked though his opponents had themselves advocated them in the past and had no practical objection to offer to them.  The contest, however, between the two groups was not over.  The monopolistic landowners and their merchants had the upper hand from 1086 to 1102, but then the advocates of the policy represented by Wang again came into power for a short time.  They had but little success to show, as they did not remain in power long enough and, owing to the strong opposition, they were never able to make their control really effective.