The Northern Song
One of the first challenges the Song faced was regularizing the various currencies in use throughout its new empire. Copper, iron, and lead coins of varying weights and composition circulated in different regions. When the Song unified China, it established a standard for copper coins and then began to issue coins in large quantities. The unit of currency was the string, with originally one thousand coins per string, but more often seven or eight hundred in practice. Over time, the Song also lowered the amount of copper in each coin from a high of 83 percent to a low of 46 percent. ... Supplementing the primary currencies of silk bolts and grain, the Tang generally produced from one hundred thousand to two hundred thousand strings per year, with the annual average somewhere around ten coins per head. In contrast, the number of coins minted annually in the Song ranged from one million to one million five hundred thousand in the first half of the eleventh century, and reached a high of six million strings in 1080. These figures break down to sixty coins per head, and by the year 1080, had increased to an average of two hundred coins per head. By the eleventh century, some six billion coins had been cast, yet the insatiable demand for coinage continued. [The Open Empire, 266]

From Iron and Bronze to Paper
The world’s first paper money emerged in Sichuan, which remained a separate currency zone even after the reunification of the empire under the Song. Facing a shortage of bronze coins, the government stipulated that only iron coins could be used in Sichuan, but iron was too bulky a metal to serve as a currency. ... In response to this situation, Sichuanese merchants developed the world’s first paper money to facilitate their long-distance transactions, and the local people made deposits of iron with merchant houses and used their deposit slips as promissory notes. This paper money gradually replaced the heavy strings of iron coins.

Sometime at the turn of the eleventh century the central government granted sixteen of these merchant houses a monopoly to produce the notes, but the difficulties persisted. Because the merchants occasionally failed to pay the value of the notes, prompting uprisings, the government took over the monopoly in 1023 when it founded the Bureau of Exchange Medium. The government initially proposed that the paper money be traded in every three years, but gradually those regulations were relaxed, and the money circulated for longer periods. The region of circulation had extended beyond Sichuan to include all of north China by the end of the eleventh century. Although the initial offering had been backed by a cash reserve of 29 percent, the percentage of backing of the later issues shrank and led to widespread inflation. Even though the value of notes with a face value of 1,000 had fallen to 940 or 960 coins in the 1070s, Wang Anshi and his followers continued to see money as the solution to the empire’s fiscal crisis. [The Open Empire, 246]

The Historicists vs. the Classicists
From Fiscal Crisis to Political Reform
The pressure from the rival empires on China’s northern border created steady fiscal pressure on the Song, who had to pay high annual indemnity charges to the alien regimes in the north. ... With the accession of a new emperor in 1068, officials split into two camps with sharply divided views of how to resolve the fiscal crisis. One group, the historicists, were led by the great statesman Sima Guang (1019-1086), who advocated incremental reforms. The other groups, the classicists, advocated radical reforms to restore the legendary age of the Sage Kings.
Sima compared a successful dynasty with a house and saw the people as the state’s foundation. Ritual and law formed the building’s pillars, and ministers, officials, generals, and soldiers served as different parts of the house. Maintaining a dynasty, then, required regular upkeep on the individual parts, not tearing the house down and building a new one. ...

This approach was too gradual for the opposing faction of officials, led by Wang Anshi (1021-1086). ... The classicists’ stated goal was to return to the hallowed age of the pre-Confucian Sage Kings, and the only way to do so, they argued, was through a campaign of massive and radical reform.
The two groups disagreed fundamentally over the pace of reform as well as the causes of the financial crisis the empire faced. ... Although much of the debate with the historicists was phrased in terms of the Dao, or way, and how to recover it, the underlying disagreement between the two groups concerned money. Suspicious of money, the historicists wanted to limit the government’s economic activities. ... Wang Anshi and his followers took a diametrically opposed stance: the government should intervene to hasten economic development, create prosperity, and draw in the higher tax receipts the government so desperately needed. Wang also believed that the traditional relationship between rich and poor required massive alteration. [The Open Empire, 244-5]
Wang’s most important schemes for economic intervention were his state trading system and his crop loan program. In both, the state was to get into competition with private business, offering better terms to consumers but at the same time earning some additional money for itself. The crop loans program, called the Green Sprouts Law (qing miao fa), grew out of the need of many farmers for loans of grain to keep their families from starving in the spring, while they watched the beautiful green sprouts grow in their fields and their stores of grain run out as they waited for the new crop to ripen. The state set up crop loan bureaus all over the empire, loaning grain or cash to farmers at lower rates of interest than the commercial lenders charged, thus benefiting the farmers and finding in the interest charged a new source of revenue for the government. ... The State Trading System also sought to undercut the profiteering of private merchants, in this case the guilds that controlled various lines of interregional trade, by putting the state into direct competition with them ... [in goods such as] foodstuffs, coal, and cloth.  [Mountain of Fame, 159-60]
The Green Sprouts reforms established granaries that loaned grain to cultivators when they were short, to be repaid after the harvest. These loans were supplemented by the  Green Sprouts loans made to peasants at planting time and to be paid back, at low interest, after the harvest. Wang hoped that these loans would enable cultivators to pay their taxes.
       But the goal of the program shifted almost as soon as it was implemented. Within months of making the loans, officials recognized the economic revenue potential if they charged more interest. Initially these officials raised much money, and in keeping with Wang’s view of merit, they were promoted on the basis of the amount of revenue they took in. Within ten years so many peasants were in arrears that the entire Green Sprouts program, once so profitable, was losing money. The most successful loans were those made to the rich and to moneylenders, the very groups the program was intended to eliminate. [
The Open Empire, 247]
Su Dongpo (1037-1101)
Political Reform & the Examination System

When the Song founder [Zhao Kuangyin (r. 960-976)] took power in 960, the new emperor realized the threat his own military posed to the stability of his regime. Accordingly, he persuaded the generals who supported him to retire in exchange for generous pensions, and he structured his government so that the military were subordinate to civilian officials, not separate from them as they had been in the Tang and the successor states of the Five Dynasties. The military governors, who had become so powerful after 755, were replaced with civil officials. [The Open Empire, 242-3]
Since the seventh century, the number of officials recruited via the civil service examinations had been increasing steadily. In the Tang, a number of officials were still appointed on the basis of recommendations, but during the Song, civil service examinations became the primary means of recruiting officials, and the practice of appointing officials who had not taken the examinations died out. This shift to recruitment by open examination did not mean that officials came from all social levels. ... The civil service examinations in the Song were structured to benefit those with family ties to officials already in the bureaucracy. The yin, or shadow, privilege was granted to the male kin of officeholders. Depending on one’s rank, one’s sons, grandsons, nephews, sons-in-law, brothers, and cousins could sit for an easier examination with a higher pass rate — often close to 50 percent — than the open examinations. A degree granted on passing these restricted examinations did not have the same prestige as success on the open examinations, but it allowed entry into the lower levels of officialdom. The talented relatives of officeholders could always opt to sit for the open examinations and take the faster route of advancement in the bureaucracy if they were successful, but the system of the shadow privilege meant they did not have to risk the open examinations unless they wanted to. [The Open Empire, 242-3]
The Song rulers astutely exploited the rivalries among the southern states, always finding allies as they subdued them one by one. In the longer run, the loyalties of the southern elites were secured by a great expansion of opportunities for bureaucratic advancement. The annual average numbers passing the civil service examinations were the highest of any time in Chinese history, and there also was a generous but less prestigious system by which each high official was entitled to recommend one son or other relative for a beginning official position. ... Song administration had considerable deficiencies, but the real glue of the new unity lay not in bureaucratic uniformity but in the attractions of bureaucratic employment to the provincial elites and the openness of the system to ambitious new men from the provinces, rising through the examination system and the system for recommending relatives. [Mountain of Fame, 152]
The essays Su Shi (i.e. Su Dongpo) wrote for the examinations of 1057 and 1061 have been preserved in his collected works. They include essays both on the classical sources of political values and on contemporary problems of administration. The Confucian Way (Dao), he insisted, arose from what people could put into practice and was not an external standard that could be applied to change people into what they were not. ...
Bamboo and Rocks
Su thought the Song state of his own time was strangling itself in rigid bureaucratic regulation and losing the necessary capacity to respond to changing circumstances. Supple and tactful dealing with human nature, human feeling, human relations was fundamental to sound politics. These apparently academic exercises, done when he was just twenty, show signs of approaches to life and politics from which he would never waver: the importance of feelings and joy, a realistic and flexible conception of politics partly derived from his father’s ideas, and a suspicion of ahistorical conceptions of the Way that sought to use the past to produce major changes in the present or impose unity on the marvelous diversity of human experience and action. Already he may have been reacting against two currents of cultural change just beginning to appear that sought to impose ahistorical uniformities on human nature and human society: the moral absolutism of Confucian revivalists like Cheng Yi and Wang Anshi’s advocacy of new, uniform, and systematic political institutions. [Mountain of Fame, 155-6]
The immense variety and changeability of human situations and of appropriate responses to them could be seen clearly in the Yi [i.e. the Yijing], and this was precisely what made literature so important: its ability to portray vividly the infinite variety of things. The literary man thus exemplifies the ability of the sage to let everything develop and flourish in its particular way; this was precisely, he said, where Wang Anshi went wrong, in his determination to make all men think and act alike. [Mountain of Fame, 164]
Tzu-chi of South Wall sat leaning on his armrest, staring up at the sky and breathing — vacant and far away, as though he’d lost his companion. Yen Ch’eng Tzu-yu, who was standing by his side in attendance, said, “What is this? Can you really make the body like a withered tree and the mind like dead ashes? The man leaning on the armrest now is not the one who leaned on it before!”
       Tzu-ch’i said, “You do well to ask the question, Yen. Now I have lost myself. Do you understand that? You hear the piping of men, but you haven’t heard the piping of earth. Or if you’ve heard the piping of earth, you haven’t heard the piping of Heaven!”
       Tzu-yu said, “May I venture to ask what this means?”
       Tzu-ch’i said, “The Great Clod belches out breath and its name is wind. So long as it doesn’t come forth, nothing happens. But when it does, then ten thousand hollows begin crying wildly. Can’t you hear them, long drawn out? In the mountain forests that lash and sway, there are huge trees a hundred spans around with hollows and openings like noses, like mouths, like ears, like jugs, like cups, like mortars, like rifts, like ruts. They roar like waves, whistle like arrows, screech, gasp, cry, wail, moan, and howl, those in the lead calling out yeee!, those behind calling out yuuu! In a gentle breeze they answer faintly, but in a full gale the chorus is gigantic. And when the fierce wind has passed on, then all the hollows are empty again. Have you never seen the tossing and trembling that goes on?”
       Tzu-yu said, “By the piping of earth, then, you mean simply [the sound of] these hollows, and by the piping of man [the sound of] flutes and whistles. But may I ask about the piping of Heaven?”

Tzu-ch’i said, “Blowing on the ten thousand things in a different way, so that each can be itself — all take what they want for themselves, but who does the sounding?” [The Complete Works of Chuang Tzu, 36-7]

“Returning from a day spent enjoying the flowers,
I ride my horse like the wind.
When the wine had worn off and I was sober,
it was already dark.”

It Snowed in South Valley
It snowed in South Valley
— a priceless sight.
I raced my horse to get there before it could melt,
Pushing back branches, following the trail alone,
Ahead of dawn, first to cross the ocher bridge

To find roofs caved in, nowhere to spend the night,
Villagers starving: their listless voices show it.
Only the twilight crow knows how I feel

He flies up and the cold limb sheds a thousand flakes.
[Mountain of Fame, 156-7]

The Moon Festival
Bright moon, when was your birth?
Winecup in hand, I ask the deep blue sky;
Not knowing what year it is tonight
In those celestial palaces on high. I long to fly back on the wind,
Yet dread those crystal towers, those courts of jade,
Freezing to death among those icy heights!
Instead I rise to dance with my pale shadow;
Better off, after all, in the world of men.

Rounding the red pavilion,
Stooping to look through gauze windows,
She shines on the sleepless.
The moon should know no sadness;
Why, then, is she always full when dear ones are parted?
For men the grief of parting, joy of reunion,
Just as the moon wanes and waxes, is bright or dim:
Always some flaw and so it has been since of old.
My one wish for you, is long life
And a share in this loveliness far, far away!

[Mid-Autumn Festival Poems]