Chapter 3 examines the early nineteenth-century return of the idea of limited resources and the decline of the notion that market-based luxury consumption could have a positive effect on the economy. It is at this time that population growth, together with the rural–coastal gap, appeared to require curbing of luxury consumption of resources and a return to state intervention. By this time trade and manufacturing had been widely accepted as an important component of the economy. Chinese intellectuals and reformers, however, believed that the stimulating power of consumption should be channeled away from luxury goods and deployed in support of the production of daily-need goods as a means of solving the poverty crisis. This chapter also discusses the early impact of Western ideas of economic liberalism in the late nineteenth and early twentieth centuries and how these ideas were received by Chinese intellectuals and reformers. Western imperialism led to a shift in the main conceptual parameters of the economic discourse from dynastic stability to defensive nation-building. Pro-frugality policies acquired a new popularity in the context of confrontation with Western models of evolutionary modernity, the rise of defensive economic nationalism, and the return of the idea of economic scarcity (poverty).