PETER BOL: Well, I think the big change--

and we have wonderful illustrations of this,

because if we look at a map of Chang'an, we can see that grid layout.

10th century Tang Empire falls apart.

The south breaks into multiple states.

The north is this succession of short-lived dynasties.

And then when it's reunified under the Song dynasty at the end of the 10th

century, the Song chooses as its capital not Chang'an.

It chooses a commercial city called Kaifeng on a canal close

to the Yellow River.

And it makes its capital there.

And now we're east of the passes.

We're on the Western part of the North China plane.

And it's a commercial center.

And all the illustrations we have of it, and all the discussion and the accounts

of the city that we have from the time describe it as a commercial center,

as a place that's not only an administrative center, but also

a center of commerce.

And it's at that moment that we start to see the development of let's say

hierarchies of cities taking place where we have a number of cities--

Suzhou, Yangzhou, Hangzhou-- cities in the South

that have become major cities as well.

ED GLAESER: Now there's one piece of infrastructure

that many of these cities have in common,

which is the Grand Canal, which seems to play a role in many of their histories.

PETER BOL: So that Grand Canal that links

the prosperous and fertile southeast with the northern capital

is done under the Sui Dynasty, so back in the end of the sixth century.

It continues on through the Song.

Then after a conquest, it's dilapidated, and it has to be restored again.

But it's a very important route.

The Grand Canal, the Yangtze River, the shift

of the center of population to the south,

gradually the shift of the center of commercial wealth to the south

is absolutely essential to this story.

ED GLAESER: One thing that is somewhat unusual about the Kaifeng story is

that it's quite often in the West that great political cities will

become commercial cities.

Think about London, for example.

It's less common that you have a city that rises first as a commercial hub,

and then becomes a political city on top of it.

PETER BOL: And remains a commercial city at the same time.

ED GLAESER: So what's different in the way that we look at Kaifeng?

How does it feel different?

And how do you see the fact that it's originally a commercial city instead

of a political city from the top down?

PETER BOL: They can't restore the Tang system of wards, or fang,

with walls around them.

They no longer, I think, have the same commitment

to the notion of a unified hierarchy of status, power, wealth, culture,

religion.

There is-- it's still--

Kaifeng is still a case where you tend to see elites congregate--

the political leaders, cultural leaders--

ED GLAESER: In particular neighborhoods, in particular areas?

PETER BOL: No, no. It just congregated there.

But in fact, it's now spread out to other cities as well.

One of the phenomena we see is that when people

retire, when leading officials-- leading cultural figures--

retire, where do they move?

In the Tang, they moved to the capital, the capital corridor in the Song.

All over the place.

They're no longer-- there's no longer the same commitment to the capital

as the center of culture.

And there's something else that happens.

And we actually have really good evidence from 1077.

What that map shows is that the economic hierarchy

and the administrative hierarchy from the capital

all the way down to the county is starting to diverge.

And you have market towns that have more commercial tax coming in

than the county seat.

You have county seats that have more commercial tax coming in

than the prefectural seat.

So there's no longer this neat Tang hierarchy,

or the imagined hierarchy of Tang where economy

is subordinate to the administration.

Now we have a world in which commerce is independent of politics,

and where, in fact, the great thing about the Song dynasty is they

learned how to tax the economy.

So more of its wealth is now coming in, more of its revenue

is now coming in from commerce than from agricultural tax.