Merchant Capital And Usury Capital In Rural China

Chapter Summary

Rural credit is the crux of the great financial problem facing China today. The credit sources are mediaeval in form and pre-capitalistic in character. They may be grouped in two general categories, which for lack of better terms in the English language may be called usury capital and merchant capital. In fact, in most of the cases no distinction can clearly be made even between usury capital and merchant capital. They are usually mingled together in one mechanism. They are only different manifestations of the same pre-capitalistic system, namely the usury-merchant-landlordism with the landlord as the fundamental and central figure. The ever-increasing inability of the peasants to pay their debts is necessitating more and more hesitation on the part of the landlords and merchants who extend loans. The choice for the peasants is either continued collapse of their economy or a complete alteration of the usury-merchant-landlord system.

Keywords: China; debts; loans; merchant capital; peasants; pre-capitalistic system; rural credit; usury capital; usury-merchant-landlordism