Relaxing whilst doing Competition Law is not an Oxymoron

On Salt and the Role of Monopolies in History

with 5 comments

A few days ago the Chinese government announced that it will put an end to what is perhaps the oldest monopoly in the world, that of salt, which has been in force for well over 2,000 years (see here).

As of 2016 salt prices will be liberalized in China, and in 2017 the government will commence to grant new licences to operate in the market. Many citizens have expressed their reluctance to see the salt monopoly go (see here).

The salt monopoly was adopted in China by the Han dynasty in 119 B.C. with a view to funding the largest expansion in the history of China.  Over the years, salt came to be the origin of 80-90% of the public revenues in certain Chinese states. The role that the salt monopoly has had in Chinese history, at all economic and even philosophical or religious levels is determinant, having been at the roots of major debates on foreign relations, wealth and inequality and the role of the State in the organization of the market. Or that’s at least what I’ve read…

Interestingly, salt monopolies also played a key role in other parts of the world, as, btw, did salt taxes (with the British salt tax in India eventually leading to Gandhi’s Salt March or Salt Satyagraha in 1930 and the French “Gabelle” contributing to the uprise that became the French Revolution). Salt is not the only monopoly that has had a transforming impact in history; think of the East India Company or the Casa de Contratacion (among many others).

I started reading about all this stuff almost by accident, and then spent part of Sunday evening reading a bit more with the idea to write a post on the role of monopolies in history.

On a second thought, that’s too ambitious a goal, but the subject is -I think- fascinating.

If any of you knows of any books or studies that touch on the role of monopolies in history, please send them my way and we’ll give them due publicity here.

Written by Alfonso Lamadrid

9 December 2014 at 12:27 pm

Posted in Uncategorized

5 Responses

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  1. You are a real geek, Alfonso… There is an interesting book published in the 30’s called “Industrial Germany: A study of its Monopoly Organisations and their Control by the State”, by Hermann Levy. Quite useful to understand where do we come from in the EU.

    Miguel Troncoso Ferrer

    9 December 2014 at 10:35 pm

  2. Congratulations for this refreshingly geeky insight on the role of monopolies in history, and why, how and when it was that monopolies were perceived to be harmful.

    For an earlier Western reflection beyond the Sherman Act, just refer to Darcy vs. Allin, when a court in Elizabethan England ruled for the first time that the Crown had not the right to limit the economic freedom of its subjects by granting monopolies (in that case, for playng cards). And for an even earlier sample, refer to the surprisingly modern Title 59 of the Book VI of the Justinian´s Code, that prohibited public and private monopolies upon penalty for the monopolist “of being deprived of all his property and sentenced to perpetual exile” (10 point for deterrent effect).

    Borja Martínez Corral

    10 December 2014 at 9:46 pm

  3. Alfonso, look also at ”The world that trade created” by Kenneth Pomeranz and Steven Topik, M.E. Sharpe, New York, 2006.

    Valentin Mircea

    10 December 2014 at 10:04 pm

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