In “Notes on the Dynamics of Human Civilization: the Growth Revolution” and “A Flawed Comparison: Inequality, Ancient and Modern” I contended that the process through which premodern societies and individuals acquired their riches is fundamentally different from the way fortunes are created and acquired today. An interesting example is provided by the Song Dynasty and their competitors on the Eurasian steppe.
The Song Dynasty is not famed for its military victories or the extent of its domain; for much of its existence the dynasty controlled only half of China, pushed south of the Huai River by Manchurian armies. What the Song lacked in conquests they made up for in culture, refinement, and economic prosperity. The Song Dynasty benefited from what has been termed the “Commercial Revolution” or the “Medieval Economic Revolution” of premodern China, which started during the Tang Dynasty and reached its apogee when the Song Dynasty was forced into the Mongol world empire. During this time banking and credit institutions first emerge as major part of China’s economy, Chinese sailors master the techniques of seafaring and become the dominant traders across the South China Sea and Indian Ocean, thousands of new irrigation projects boosted agricultural production to unprecedented heights, the trading networks of the Silk Road reach all the way to Europe, and the world’s first paper currency is issued in Southern China. No other Chinese empire can claim an economy as open to outside influence or as important to global economic production.
If any premodern society could claim that its wealth was the product of commerce, it would be the Song and the neighbors with whom they traded. These neighbors varied from time to time. In the dynasty’s early days (known as the Northern Song) their chief rivals and trading partners were the Liao Dynasty, founded by nomadic Khitan invaders but thoroughly sinicized by the time of the Song, and the Xi Xia of northwestern China, whose Tangut language and ethnic identity are related to modern Tibetan. Travelers on the Silk Road would pass through one of these kingdoms on their way to Song China.
|The Northern Song, Xi Xia, and Liao Empires c. 1000 AD
Image Source: Asia Topics for Educators. “Song Engagement With the Outside World.” ©2008.
Economic interactions between the three empires were of two types: trade and tribute. The trade was a natural by product of the Silk Road network; the tribute was paid by the Song Dynasty to stop their Northern rivals from cutting the trade off. The scope of these interactions is captured by Shiba Yoshinobu in his essay for China Among Equals: The Middle Kingdom and Its Neighbors, 10th-14th Centuries:
The Song had agreed to send 100,000 taels of silver along with 200,000 bolts of silk to the Liao as annual tribute. The amounts were later raised to 200,000 and 300,000 respectively. But this did not result in an increase in Liao’s bullion holdings. Song exports normally exceeded imports by a great margin. On the average, Song’s foreign trade with the Liao showed an annual favorable trade balance of 800,000 strings of cash, of which the government’s share through official trade accounted for about 400,000 to 500,000 strings. This excess of exports over imports enabled the Song to regain all of the silver sent to the Liao as tribute. 
Through trade and commerce Song society regained everything that it sent in tribute and still managed to turn a profit. Trade relations with the Xi Xia were a bit more equal (with one of their horses equal to 20 bolts of silk, the 20,000 horses sold to the Song dynasty every year managed to balance the accounts) but they still ended up trading all of their treaty silver back to the Song. 
Alas, Song’s fortunate position did not last. Afraid of Liao’s military power, the Song dynasts lent support to a Jurchen tribal confederation in Manchuria. The Jurchen military machine was spectacularly successful; by 1125 the Jurchens had destroyed the Liao Dynasty in its entirety. They did not stop there. Turning on their benefactors, they invaded Song lands and settled down to form their own dynasty, the Jin.
| Jurchen conquests in Northern China.
Image Source: GeoNova. “Song and Jin Dynasties.” mapshop.com. Accessed 29 April 2013.
Professor Yoshinobu describes the riches the Jurchens claimed through their conquest:
The Jurchens, who founded the Jin dynasty, were enriched after the surrender of the Northern Song capital. They acquired an enourmous amount of Song silver reserve, valued at 40 million taels, along with 3 million ting of gold, 8 million ting of silver, 54 million bolts of silk, and 15 million bolts of silk brocade. (emphasis added) 
After the Jurchen conquest trade began again. In time Song’s economic relations with the Jin mirrored its earlier dealings with Liao. The Jin made great profit from the Silk Road – but the goods they traded over the years never matched the treasure seized in a single year’s conquest. This is a consistent pattern seen across pre-modern society. Before the growth revolution, sacking a prosperous city promised profits that only decades of plenty and peace could provide.
 Shiba Yoshinobu. “”Sung Foreign Trade: Its Scope and Organization.” China Among Equals: The Middle Kingdom and Its Neighbors, 10th-14th Centuries. (Berkeley: University of California Press). 1984. p. 98
 Shiba Yoshinobu. ibid. p. 100-101.
 Shiba Yoshinobu. ibid. p. 102