The early Han state largely preserved the imperial order erected by the Qin Empire. The imperial government supported a smallholder agrarian economy through land grants, public investments in agricultural technology and infrastructure, and regulation of the marketplace to protect producers and consumers alike. Emperor Wu enlarged the regulatory role of the state and reorganized its fiscal structure for the purposes of military expansion and administrative control of a far-flung empire stretching into Central Asia, Korea, and Vietnam. But in the post-Emperor Wu era, in the face of swelling costs and the philosophical rejection of its mercantilist principles by a thoroughly Confucianized officialdom, this apparatus of imperial control no longer could be sustained. As the state retreated from Wu's fiscal policies, economic inequality sharpened.

In the early years of the first century CE, the statesman Wang Mang's brazen attempt to reestablish an aggressively interventionist imperial state went so far as to usurp the throne in the name of returning to the golden age of ancient Zhou. But the political and economic chaos that ensued, followed by Wang's overthrow and the swift restoration of the Han dynasty, further discredited state activism. The decision in 30 CE by the first Eastern Han (25–220 CE) emperor to end military conscription marked a key watershed in the abdication of the Qin-Han imperial order. The principle of service to the state as the foundation of social order had been abrogated, and instead increasing numbers of people became subject to the rising class of magnate landowners.

Nonetheless, domestic peace nourished economic growth. The intensification of agriculture through new technologies and the great expansion of arable land supported a growing population that numbered 60 million people on the eve of Wang Mang's coup-d’état. Trade and money remained vital to the manorial economy that reached full flower during the Eastern Han period. But over the course of the second century CE the imperial state, wracked by partisan conflict, weakened and collapsed. The final dismemberment of the Han Empire by competing warlord regimes in 220 CE ushered in a Period of Disunion that would last for nearly four centuries.

The centuries of disunion were characterized by the privatization of power – military, political, and economic.