State-Made Elites

An entitlement system from 200 years ago sheds light on inequality in China today.

by SHUANG CHEN

Members of the Eight Banners in an Imperial huntring trip, 17th century. Public domain via Wikipedia.

In 2000, 85 percent of the global wealth was concentrated in the hands of 10 percent of the world’s households, and about 60 percent of households had nearly nothing. China is emblematic of this wealth disparity: As of 2014, the top 1 percent of the Chinese population shared a third of the wealth in the country, despite its formerly socialist system. Thomas Piketty and others have shown how unequal patterns of wealth distribution today have their origins in a time prior to the development of capitalism and the market economy. And while increasing wealth inequality is a worldwide phenomenon, the origins and processes that led to such inequality vary across regions and countries, each instance emerging from particular political and economic systems of individual societies.

While we nowadays pay much attention to the influence of the market economy and capitalism in wealth inequality, a case in nineteenth-century China reveals a type of inequality formed under a state-dominated system. Under such a system, the state controlled material wealth, classified its subjects into distinct categories, and allocated these groups differential entitlements to wealth. The inequality under such a state-dominated system is noteworthy not only because the state’s ability to assign unequal entitlements is remarkable, but also because of the ways people responded to such state initiatives, which, consciously or unconsciously, made this inequality durable. In many ways, this nineteenth-century entitlement system parallels the social stratification of post-1949 China and looking into this historical case can help us reflect on how we typically conceive of continuity, change, and modern phenomena.

In Qing-dynasty China the state saw such an entitlement system as a courtesy to the military that had helped the Manchu-led Qing conquer China proper in the seventeenth century. This elite military population, which was organized under an institution called the Eight Banners (the soldiers therefore being referred to as bannermen), enjoyed a special status in the eyes of the Qing government, who conferred onto them the privilege of state stipends in perpetuity. However, beginning in the mid-eighteenth century, with the growth of population, the court was no longer able to offer material support to all bannermen, a crisis that only deepened in the nineteenth century. To relieve the fiscal burden of supporting bannermen in Beijing, the Qing court decided to move them to Shuangcheng, a largely unpopulated place in northern Manchuria, substituting state lands there for state stipends. Prior to the settlement of the Beijing bannermen, the state had also relocated bannermen living elsewhere in rural Manchuria to assist with farming in Shuangcheng. In the end, 3,698 households—698 from Beijing and 3,000 from Manchuria—moved to Shuangcheng and settled in 120 state-planned villages.

Shuangcheng society was divided into two segments comprising the haves and the have-nots.

Shuangcheng society was thus divided into two segments comprising the haves—metropolitan bannermen from Beijing and rural bannermen from other areas in Manchuria—and the have-nots—unofficial migrants who moved to Shuangcheng without government order. Whereas the have-nots were excluded from state land allocation, the haves enjoyed free land entitled to them by the state, each household receiving one plot. Yet a wedge was driven between the haves, for the plot size of each metropolitan banner household was twice as much as that of a rural banner household, and the government kept separate registration of metropolitan and rural bannermen, updating the registers every year to define and maintain the membership of the haves. Thus the Qing used population registration and resource allocation to create a social hierarchy that upheld the elite status of the Beijing bannermen. As such, the unequal assignment of entitlements was based not on merit or achievement, but rather on ascriptive characteristics that were arbitrary and hard to change, such as immigrants’ institutional affiliation, official immigrant status, and places of origin.

This state-endowed social hierarchy eventually played out on the ground through the interaction between state policies and local activities of land clearing and transfer. By stipulating that each household of the haves could only have one plot of land, the state tried to maintain an allocation of land distribution that was unequal between the population categories but equal within each category. However, like any state project initiated from the top down, the implementation of the state-designed hierarchy was replete with challenges, from the difficulty of settling the metropolitan bannermen on a rural frontier, to the potential of have-nots encroaching on the land of the haves, to immigrants’ private land cultivation and transfer that would change the egalitarian distribution of land within each population category.

Savvy immigrants utilized various resources to pursue their own interests: The privileged metropolitan and rural bannermen used opportunity hoarding and rent seeking to maintain their elite status, while underprivileged groups (sometimes including the rural bannermen) also tried to promote their socioeconomic standing despite systemic barriers—some of whom succeeded in doing so. Finally, however, despite dramatic upward and downward mobility at the individual household level, the overall pattern of land distribution shows that, a century after the founding of Shuangcheng, metropolitan bannermen succeeded in maintaining their elite status.

State-Sponsored Inequality: The Banner System and Social Stratification in Northeast China

State-Sponsored Inequality » explores the social economic processes of inequality in nineteenth- and early-twentieth-century rural China.

The Shuangcheng story illuminates the role of state power in shaping and guiding the process of social formation. The centralized government system produced multiple state representatives, including central, provincial, and local government officials. These state representatives did not necessarily share the same interests, thereby providing local people multiple channels through which to appeal to state authority. Aware of these multiple representatives, local people tactfully formed allies with some state representatives while resisting others, to pursue their own interests. Therefore, the state became the major source of power for local people. By actively using state power to pursue their interests, local people internalized the structural inequality sponsored by the state. After such a process, the social hierarchy was so durable that it persisted even after the state institution sponsoring it was removed.

The Shuangcheng case has many parallels with the hukou household registration and the subsequent process of social stratification undertaken in post-1949 China. During this time, under the goal of developing heavy industry, the Chinese Communist Party divided the population of the entire country into two categories—rural and urban—based on their household registration. Urban households enjoyed state employment and the material support associated with it, whereas the rural households had no such benefit. Of course, the state-dominated system in Shuangcheng was established in an agrarian society and only applied to a specific county, while the hukou system was established across the entire country during an age of industrialization. Yet while these two systems developed independently of one another, the parallels between them indicate that the hukou system is not a uniquely socialist innovation; this statecraft—the creation of structural inequality that aims to direct resources to the state-designated elite population—has existed and succeeded in China’s past.

Just as the social hierarchy implemented in nineteenth-century Shuangcheng continued to endure even after the system’s official end, so too have the social inequalities in contemporary China continued to develop along the categorical boundaries built by the hukou system after the dismantlement of the planned economy. Beginning in the 1980s, rapid economic development and industrialization brought about by economic reform significantly enlarged the income gap between urban and rural residents. In the transitional economy in the post-socialist era, entitlements defined by the hukou system and political capital—connections to government and the party—have become prominent determinants of socioeconomic status. Residents with an urban household registration in the more developed regions, and especially those with connections to government, rise to the upper strata of society. By contrast, and despite their great contribution to the economy, migrant workers from less developed rural areas are denied entitlements in the cities and, as a result, are especially vulnerable.

Start reading State-Sponsored Inequality »

Shuang Chen is Assistant Professor of History at the University of Iowa and author of State-Sponsored Inequality: The Banner System and Social Stratification in Northeast China.