The merchants were despised, as merchants everywhere are; the rich farmers weren't. And a hereditary distinction between commoners and nobles was gone by the tenth century.
So I'd want to hear a little more context to the claim that "the iron industry was shut down because of the effrontery of commoners getting rich there".
The right take away after reading Stark is to become skeptical of a non-trivial amount of historical scholarship regarding the issues he covers, and skeptical of Stark as well.
Stark says, "Eventually, Mandarins at the imperial court had noticed that some commoners were getting rich by manufacturing and were hiring peasant laborers at high wages. They deemed such activities to be threats to Confucian values and social tranquillity[sic]. Commoners must know their place; only the elite should be wealthy. So, they declared a state monopoly on iron and seized everything. As Winwood Reade summed up, the reason for China's many centuries of economic and social stagnation is plain: 'Property is insecure. In this one phrase, the whole history of Asia is contained.'"
Footnotes for sources list "Hartwell 1966, 1967, 1971, McNeill 1982" for the info on the iron industry, and "Reade 1925: 108" for the quote.
"Hartwell 1971" resolves to 'Hartwell, Robert, 1971. "Historical Analogism, Public Policy, and Social Science in Eleventh- and Twelfth-Century China." The American Historical Review 76:690-727.'
Hartwell 1966 is "Markets, Technology, and the Structure of Enterprise in the Development of the Eleventh-Century Chinese Iron and Steel Industry." The Journal of Economic History 26:29-58.'
(No Hartwell 1967 is listed in the bibliography.)
McNeill 1982 resolves to 'McNeill, William H. 1982. The Pursuit of Power: Technology, Armed Force, and Society Since A.D. 1000. Chicago: University of Chicago Press'
Finally, Reade resolves to 'Reade, Winwood. 1925. The Martyrdom of Man. London: Watts.'
I'm not sure that Reade is important for more than the quote. I suspect that Hartwell and McNeill are the source of the actual info on what happened in China.
And, presuming that Stark summarized adequately, the problem may have been hiring peasants for high wages. That may in fact have been somewhat disruptive to the existing social order...
Vikings transported Crucible steel all the way from Afghanistan to make high end swords. Damascus steel(actually manufactured in India) and then forged into weapon in Damascus.. etc
There got to be other reasons. Better or equivalent to Crucible steel but en masss.. you can have forged plate for everyone, horse full armor, heat treated crossbow bolt heads etc.
But there was never a Chinese ideological opposition to peasants becoming rich; the theory advanced by AnimalMuppet makes no sense.
The assumption here is that every thing works in a clear way so you can see the military or whatever advantages of a particular phenomenon. Now I don't know if AnimalMuppet is literally correct that the bureaucracy simply shut down the steel industry -- but if it happened it would be because all that cheep steel was not being used for obvious things, like the imperial army, but for other unexpected uses. Maybe arms and armour still had to be made the old fashioned way anyhow, so there was no immediate military advantage.
More likely, things were subtler. Things innovations can strangled long before their importance is clear. Imperial China had a vibrant merchant class, but it isn't the kind of place that is likely to tolerate the "disruptive innovation" which fuelled Britain's Industrial Revolution -- where a bunch of upstarts come and do things with unexpected things. Even modern China (or for that matter the modern United States) struggles with it.
Bernhard J. Stern, "Resistances to the adoption of Technological Innovations" (1937)
https://archive.org/details/technologicaltre1937unitrich/pag...