Finance is the money that the state collects through taxation to the central government, which is then used to support bureaucrats, maintain the military, and support local police forces.

Since fiscal revenue is collected from the people through taxes, we can draw two conclusions: if too much is collected, the economy will naturally wither, and the people will suffer, potentially leading to rebellion; but if too little is collected, the people will be relieved, but the state's finances will not be guaranteed.

Let's give a few examples to illustrate that the relationship between finance and the economy is not significant.

For instance, the Tang Dynasty, often associated with the phrase "powerful Han and prosperous Tang," is also linked to "local warlord separatism." Why would the Tang emperors entrust local financial, military, and administrative powers to a single person? It was to suppress rebellions and expand territories. Military expenditures spiraled out of control, and although the civilian economy was prosperous, the government was unable to effectively manage land and household registration, resulting in a lack of sufficient fiscal revenue. The central government was short of funds, so they left it to the localities to figure it out. The Tang Dynasty also adopted other unconventional measures to solve the problem of lack of funds, such as giving officials money and land, allowing them to lend and manage their own finances, and confiscating temple properties to supplement the finances, among others.

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For example, the Song Dynasty is often described in historical records as having an extremely prosperous economy and culture, with a "GDP accounting for 85% of the world's total." However, it is also said that the Song Dynasty was "long-term impoverished and weak." Many people might think the Song Dynasty was crazy, with ups and downs. In fact, the Song Dynasty was a typical example of a strong economy with weak finances. The economy was incredibly prosperous, but the finances were in a mess. Despite high taxes that led to several large-scale peasant uprisings, the country remained poor.

In order to raise funds, the Song Dynasty, as an ancient feudal empire, reached an unprecedented level of skill in the use of "currency," almost trying all the financial techniques that human imagination could involve. What about coinage tax, credit money, gold standard, salt standard, and even central bank funding for the construction of new rural areas? If the Southern Song Dynasty could issue currency as collateral for government bonds like the United States does today, it would be truly extraordinary.

Why was the Song Dynasty so capable of making trouble? It was short of money. The government's funds were not enough to spend, and they had to pay compensation to the northern ethnic minorities while supporting millions of imperial guards and an unprecedented number of civil officials. It would be strange if the financial funds were enough to spend. If the funds were not enough, they had to find ways, and the sky was the limit for their reckless actions.

The Song Dynasty had a strong national economy but was on the verge of bankruptcy at any time, but the Qing Dynasty was exactly the opposite. At the beginning, the country was extremely poor, but the finances were not weak. When the Qing Dynasty first entered the Central Plains, the country was very desolate. After decades of war, the country had just been established, with smoke rising everywhere, and everything was in ruins, and the state affairs were chaotic. The emperor was even forced to abdicate (Emperor Shunzhi may have died, but historical records say that he really couldn't bear the dual pressures of work and emotions, which led to symptoms of depression such as suicidal thoughts, world-weariness, and irritability, so it was normal for him to abdicate or commit suicide, or to die prematurely due to psychological health issues), but at that time, they still maintained a terrifying standing army. According to Huang Renyu's estimation, when the Qing Dynasty was just established, the land was half of the Ming Dynasty's, and the tax burden was twice that of the Ming Dynasty's.What about the Ming Dynasty? At the beginning of the Ming Dynasty, which was quite peculiar, the country was also extremely poor. It was engaged in building the Great Wall and launching large-scale expeditions against the Mongols beyond the Great Wall again and again, as well as voyages to the Western Seas. However, after more than two hundred years of turmoil, the economy had grown several times, and the south had cultivated a brilliant industry and commerce. On the contrary, mobilizing an army of more than 100,000 people for a battle would be exhausting, which is quite speechless.

What is the problem?

The problem lies in the fact that the taxes of the Ming Dynasty have not changed much for more than two hundred years. The founding emperor Zhu Yuanzhang, who came from a poor background, could not sleep when he thought of the excessive taxes and levies at the end of the Yuan Dynasty. He set up a sign similar to "Daming never increases taxes" in the Ministry of Revenue, which clearly stated how much each tax should be collected. However, the national expenditure has been expanding, the population has increased, the number of parents and police has increased, and the number of public servants that the government needs to support has increased. Naturally, the financial expenditure will continue to expand, and the Ming government will gradually become more and more constrained. Moreover, the Ming Dynasty has always had a problem, which is that the tax collection ability is very poor, and it is not bad to collect 80%.

The Qing Dynasty also claimed "never to increase taxes," but in the later period of the Qing Dynasty, commercial taxes were levied, and the suppression of the Taiping Heavenly Kingdom and the indemnities to the powers were all solved by commercial taxes and customs revenues.

The blogger specifically checked the views of the Ming Dynasty expert Huang Renyu. The tax rate at the beginning of the Ming Dynasty was about 3%, and at the end of the Ming Dynasty, it was about 2%. Considering inflation, it has hardly changed. This is also why many people say that the Qing Dynasty was much stronger than the Ming Dynasty, because the Qing Dynasty's finances were always in the hundreds of millions of taels of silver, while the Ming Dynasty was always in the tens of millions of taels.

Generally, books will say that too much taxation is not good, but few people say that too little is even worse.

We talk about the market, order, and other various good things all day, which all need to be maintained by force. If you can grab it, you will definitely not go to catch production. If the national finance has no money, it is impossible to support the army. Without the army as a backing, all of these will be without protection.