From 1913 to 1917, in the early days of the Republic of China, the Guanghan area of Sichuan Province was far from peaceful. Along the Sichuan-Shaanxi highway, several groups of bandits brazenly set up checkpoints in broad daylight, robbing travelers at will. Bullets flew, and terrified travelers fled for their lives. Soon, no one dared to use the road, causing trade to wither and the bandits’ income to dry up. They glumly pointed their guns at an empty road, wondering where their next meal would come from.
From chaos to collaboration: The bandits’ brainstorming session
To overcome their growing “financial difficulties,” several groups of bandits who rarely interacted before came together for an unprecedented “joint meeting.” After thoroughly discussing various proposals, they finally reached an agreement: divide the road into roughly equal sections, with each group setting up a “toll station” at the entrance of their section to collect “insurance fees” from travelers.
The fee structure was clearly defined: a salt carrier would pay 50 cents, those traveling on foot or with small bags would pay one yuan, and rates for cloth and silk merchants would be negotiable, ranging from a few yuan to a hundred yuan depending on their goods. Once travelers paid the fee, they received a pass allowing unrestricted travel through that section. The bandits agreed to collect fees only once and never to double-charge. Moreover, they took responsibility for protecting travelers within their designated area, with penalties for those who failed to do so.
The road to prosperity: A win-win situation
The bandits diligently implemented this new system, and the situation quickly improved. Travelers began to trickle back onto the road, and soon, the Sichuan-Shaanxi highway regained its former bustling atmosphere. Both travelers and bandits benefited from this arrangement. Travelers paid a fee, but gained valuable security in turbulent times, while bandits enjoyed a stable income source without resorting to violence. This unusual system persisted for many years; some even claimed it was more effective than the local government’s management.
Lessons in economics and politics from unlikely teachers
Scholars have used this fascinating case of institutional reform to illustrate complex economic and political principles. Let’s break it down:
1. Fair and transparent taxation
The bandits set reasonable “tax rates” without unnecessary add-ons. After all, if travelers still faced hefty charges, why would they return to this route?
2. Building trust through accountability
The bandits strictly adhered to their set rates and even punished their own for violations. In one instance, when a traveler reported being double-charged, the leader executed the offender on the spot – a harsh but effective way to demonstrate their commitment to their new rules.
3. The power of cooperation
Instead of fighting over scraps, the bandits learned to cooperate for mutual benefit. By providing “public services” like security in exchange for fees, they created a system where travelers willingly paid for tangible benefits.
4. Long-term vision and self-discipline
During the transition to the new system, the bandits endured temporary hardships, showing remarkable self-restraint for a group accustomed to instant gratification. This patience ultimately paid off as their situation improved.
From highway robbery to agricultural innovation
The bandits later applied these principles to other areas, including agriculture. Guanghan was known for its abundance of bandits, causing farmers to abandon their fields out of fear. The bandits recognized this issue and offered farmers a deal: “We won’t rob you anymore. For every mu (about 0.16 acres) you cultivate, we’ll only take one dou (about 10 liters) of grain.”
This “tax rate” of roughly 5 percent was even lower than government levies. True to their word, the bandits collected only this agreed-upon amount and protected farmers from other bandits or extortionists. The result? People gradually returned to the area, agricultural production increased, and farmers’ lives improved.
In this unexpected tale of reform, we see how even those society deemed outlaws found a path to create a more stable and prosperous community through cooperation, fair practices, and mutual benefit. It’s a reminder that the most innovative solutions can sometimes come from the most unlikely places.
Translated by Katy Liu
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