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Dec 07 BAKS conference report #6: Owen Miller

Dr Owen Miller – Research Fellow, Centre for Korean Studies, SOAS
The crisis of Seoul’s traditional commercial system, 1876-1895

Abstract: The guild system of late Chosŏn Seoul and the guild-government trade underpinned the commerce of the capital city and represented a significant slice of national commerce as a whole. This premodern commercial system rested on three planks: a government that could afford to pay high prices for commodities; long-term stability in market prices; and a system of mixed commodity payments. However, in the 1880s all three of these factors were undermined, primarily by severe inflation and government insolvency, but also by the entrance of foreign merchants into the market and increased levels of bureaucratic corruption. This paper traces the origins and development of the crisis that engulfed the traditional guild-centred commercial system of Seoul in the 1880s and early 1890s as well as the responses of both guild merchants and the Chosŏn government. Through an analysis of the accounting records of the domestic silk guild and an examination of government edicts, this paper will show how the Chosŏn state attempted to remedy the problems of soaring inflation and its own insolvency by switching to more market prices and introducing a new payment system. However, so long as there was no fundamental improvement in government finances and the state continued to demand goods from the guilds at fixed prices in order to fulfil its tribute duties to Qing China, there could be no lasting solution to the crisis of the 1880s. This crisis was finally brought to a head with the reforms of 1894-5 that abolished both the monopoly of the guilds and their fixed price trade with the government. This did not mark the end of the close market-state relations that characterised Korea’s precapitalist commerce, but rather the beginning of a completely new phase.

Notes (the usual caveats about my amateur efforts apply)

Long term fixed price contracts are fine in times of stability but when prices change that can spell ruin for the supplier. In the good times, the silk guild made margins of 30-50% – but the continuation of fixed prices in times of inflation (particularly when the government wanted to pay in debased currency rather than the cash, cloth and rice combination originally agreed) caused massive losses for the guild (In 1891 the guild was being paid 16 units for silk which cost 90).

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