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This is a descriptive account of the system of consumption, production, distribution and exchange of wealth among Chinese peasants as observed in a village, Kaihsienkung, south of Lake Tai, in Eastern China. It aims at showing the relation of this economic system to a specific geographical setting and to the social structure of the community. The village under investigation, like most Chinese villages, is undergoing a tremendous process of change. This account, therefore, will show the forces and problems in a changing village economy.
An intensive investigation of a small field of this kind is a necessary supplement of the broad surveys made of present-day economic problems in China. It will exemplify the importance of regional factors in analysing these problems and will provide empirical illustrations.
This type of study will enable us to realize the importance of the background of the traditional economy, and the effect of the new forces on the everyday life of the people.
To stress the equal importance of the traditional and the new forces is necessary because the real process of change of Chinese economic life is neither a direct transference of social institutions from the West nor a mere disturbance of a traditional equilibrium. The problems arising from the present situation are results of the interaction of these two forces. In the village under our examination, for instance, the financial issues can only be understood by taking into consideration the decline of the price of silk due to the world industrial development on the one hand, and on the other, the importance of domestic industry in the family budget based on the traditional system of land tenure. Underestimation of either aspect will distort the real situation. Moreover, the product of the interaction of these two forces, as we shall see in the later description, cannot be a reproduction of the West or a restoration of the past. The result will depend on how the people solve their own problems. A correct understanding of the existing situation based on empirical facts will assist in directing the change towards a desired end. Herein lies the function of social science.
Culture is a set of material equipment and a body of knowledge. It is man who uses the equipment and the knowledge in order to live. Culture is changed by men for definite purposes. When a man throws away a tool to acquire a new one, he does so because he believes that the new tool suits his purpose better. Therefore in any process of change, there is an integration of his past experience, his understanding of the present situation and his expectation of the future consequences. Past experiences are not always a real picture of past events because they have been transformed through the selective process of memory. The present situation is not always accurately comprehended because it attracts attention only in so far as interest directs. The future consequences do not always come up to expectations because they are the products of many other forces besides wishes and efforts. So the new tool may at last prove not to be suitable to man's purpose.