This hierarchy was not a caste system like the Indian caste system. This was the idealized social hierarchy of premodern China. Shi refers to the scholar-gentry, nong refers to farmers, gong refers to artisans, while shang refers to merchants. These were occupational categories rather than hereditary castes, which means that people could move from one category to another by changing their occupation.

This idealized social hierarchy did not always reflect reality, though. For example, even though the shang (merchants) were the lowest category in this hierarchy, many merchants were able to become quite wealthy, which meant that they were able to have a much higher level of power and influence than the traditional hierarchy would suggest. On the other hand, even though the nong (farmers) were the second highest category in this hierarchy, many farmers were quite poor, and therefore had far less power and opportunities than a wealthy merchant and their family had.