Xinshun 1730

Chapter 1358 The Wealth of Nations ([-])

Of course, there are also some insightful people in the UK. Thinking about trade is not so simple as thinking that the goods of the East India Company cannot be sold in India and China because China and India closed their doors and raised tariffs.

In fact, even when it was the first Opium War, many people were sober, including some shareholders of the East India Company.

However, there is a difference between stupid and bad.

Those who really foolishly believe in these things are stupid.

But knowing that these things exist, but hiding these things is bad.

Generally speaking, being bad is higher than being stupid.

Serious mercantilism and free trade disputes had broken out in Britain before.

At the beginning, the free trade faction has been retreating steadily.

Because the theory of free trade has also been developed step by step.

Adam Smith, first of all, was an Englishman who loved his motherland.

Then there was an economist who came up with the theory of free trade.

But free trade has come to this point, there is a big theoretical loophole.

In other words, it is not considered a theoretical loophole, but only a "little" conflict between "theory and reality", "truth and national interests".

The early free trade theory talked about "absolute advantage".

For example, Great Britain and Dashun.

Porcelain, silk, cotton cloth, these are the absolute advantages of Dashun.

For example, can the British grow oriental mulberries?

can.

In the early days, James II introduced mulberry trees, but he could not grow Chinese mulberry species, only red mulberry trees suitable for the European environment.

But silkworms gnaw on red mulberry, and the silk they spit out is of poor quality.

So, must the UK have no way to grow Chinese mulberries?
It's not impossible.

For example, Chinese mulberries can be grown by covering greenhouses with glass at a high cost.

However, the cost must be several times, dozens of times, or even hundreds of times that of Chinese mulberry.

At this time, there are nothing more than two choices.

Or, through extremely high tariffs and an extremely perverted anti-smuggling system, it is to let Britain use glass sheds to grow mulberries.

Or, since they cannot compete anyway, it is better to completely liberalize tariffs.

Historically, Adam Smith used "the wine of Scotland and the wine of Portugal" as an example, which is similar here.

According to the theory of "absolute advantage" in the early days of free trade, the United Kingdom is still engaged in a hammer trade, returning to the era of farming, and becoming a raw material exporter, selling grain and wool...the rest is all imported.

This is where the problem lies.

First of all, Adam Smith was first and foremost an Englishman, and an Englishman who loved his country.Therefore, the basis of his free trade theory was that Britain had many "absolute advantage" industries compared with Europe at that time.

Secondly, Europe is fragmented, and a single country is not much different from a Chinese province.It is impossible for any country to achieve self-sufficiency in the entire industrial chain, and it also lacks a domestic market like Dashun that is basically more unified than Europe.

Adam Smith, considering the situation in Europe, believed that his theory of "absolute advantage" was absolutely tenable - except for the Netherlands, the rest of the countries had their own absolute advantage industries.

but!

However, after Dashun integrated the economic zones of Nanyang, Japan, North Korea, and India, something big happened.

On the whole, for most commodities at this time, the production efficiency of the East is higher than that of Europe, coupled with the conductivity of the price revolution.

This makes oriental commodities have almost all "absolute advantages".

According to the "absolute advantage" theory, if a country's products are at an "absolute disadvantage", then the country can just wait to die, and it will not be able to benefit from the international division of labor.

This, and Adam Smith's theory, is one of the most difficult problems to solve:
[If one country is absolutely superior in all aspects, while another country is at a disadvantage in all aspects, what should they do?Why does this comprehensively disadvantaged country embrace free trade? 】

Similarly, at this moment, the free trade advocated by Dashun has exactly this problem in the UK.

Free trade is neither the Bible nor the Koran.

It can't be "because the tree says so, so we must".

Free trade has to be "all participants can benefit", so everyone guesses that free trade is supported.If the participants are obviously not benefited, and under the "absolute advantage" theory, they are at a disadvantage overall, then why should they embrace this free trade?
At this time, the importance of "debating the scriptures" and "interpreting the scriptures" is reflected.

Can this doubt that Adam Smith could not solve, that is, the reality of the current trade between Dashun and Britain, be resolved within the theoretical framework of free trade?
can.

Whose doctrine?

Ricardo.

【Comparative Advantage】Theory.

Take a very crude example.

Suppose that England and Dashun both produce cotton cloth and muskets.

Cotton cloth from Dashun costs 5 yuan, and cotton cloth from England costs 10 yuan.

Dashun's muskets cost 8 yuan, and British muskets cost 10 yuan.

According to Adam Smith's [absolute advantage] theory, Britain no longer needs to produce cotton cloth, nor does it need to produce muskets. Let's find its own absolute advantage products.

However, according to Ricardo's theory of comparative advantage, there is still salvation.

England should give up the production of cotton cloth altogether.

Those who make muskets in Britain also wear cotton cloth; those who smelt iron and roll gun barrels also wear cotton cloth;The cotton cloth I used to wear was all made in the UK for 10 yuan, so the cost of the musket increased.

Therefore, as long as the production of cotton cloth is completely abandoned and cotton cloth is imported in an all-round way, no tariff will be charged at all.Those who used to rub cotton cloth all went to rub guns.

Then, the original 10 yuan musket in the UK can be reduced to 7 yuan, or even 8 yuan.Isn't this cheaper than Dashun's [-] yuan musket?
Those who produced muskets in Dashun rubbed cotton; those who rubbed cotton in England rubbed muskets.

In this way, the total amount of labor may not change, but the total amount of cotton cloth and the total number of muskets have increased, and both countries have benefited.

In this way, it is not solved [If one country has an absolute advantage in all aspects, while the other country is at a disadvantage in all aspects, then what should they do? 】Is there a problem?

Although, this theory actually revolves around a fragmented Europe.

In other words, this theory does not consider the situation of "full-scale industrialization of hundreds of millions of people". Rubbing situation.

However, obviously, this set of scriptures has solved the real problem of early free trade [If there are no absolute advantages, all are absolute disadvantages, why should I embrace this free trade].

So, obvious.

Dashun, or the theory of "free trade" exported by Liu Yu.

Up, it is not the 1.0 version of [Absolute Advantage].

Rather, what was first advocated was version 2.0 of [Comparative Advantage].

Even, some 2.0plus versions about "currency issues" were added to it.

The introduction of this set of "commentary" has strongly supported the supporters of free trade in the UK.

Facing the tragic situation of the impact of Dashun commodities and the absolute disadvantage of the UK, they were denounced as "traitorous", "it doesn't work at all", and "this is a critical moment that will cause the British economy to collapse".

This "commentary" undoubtedly gave them a shot in the arm, allowing them to rekindle hope and find theoretical support again.

This is the importance of "jing".

Without this 2.0plus version of free trade, the set of free trade proposed by Dashun will inevitably become stinky shit in Europe, and Colbert and Cromwell will become masters of economics.

With the 2.0plus version of free trade, this set of free trade, proposed by Dashun, can still gain supporters in Europe, so Colbert and Cromwell are stinky shit.

The scriptures, sometimes, do not depend on whether they can justify themselves and be logically consistent.

A lot of the time, it's about whether this stuff is good for me.Use it if it is beneficial, discard it if it is not beneficial.

After all, economists also have nationality.

Thus, an economics pamphlet based on the free trade 2.0plus version proposed by Liu Yu, which was actually written in Asia, but was polished by British free trade supporters after it spread to the UK, appeared in George III In front of others.

The full title of the pamphlet is "Using Shock to Clean Up Unreasonable Elements in the British Economy and Find the Right Direction for British Industry After the Shock Awakens".

…………

Now this booklet is placed in front of the core members of the "Royal Party" such as George III, Lord Bute, and the Earl of Halifax.

Britain is not without talent.

However, do people's correct thoughts fall from the sky?I'm afraid not, it needs to rely on practice and reality.

Lao Ma said: People create their own history, but they do not create it at will, not under the conditions they choose, but under the conditions they directly encounter, established, and inherited from the past. .The traditions of all dead fathers haunt the minds of the living like nightmares.

And before Dashun was fully involved in European trade, what was the current situation in Britain?
Indeed, Dashun's new school, along with Liu Yu, ridiculed Pete, saying that Pete is an old conservative, although he may seem radical, but he still has the British trading system inherited from the Cromwell era in his mind.Pete was just a good tinkerer, because even if he made it, he just made the system bigger.

But in fact, if the East India Company hadn't conquered the city in India, had no intention of inserting willows and willows, and finally achieved Peter, who had always kept his eyes on the Caribbean and North America, then Peter's policy would have been a disaster.

The Caribbean, North America, and West Africa, this is history, this is reality, and this is the root of British prosperity in experience.

And this is precisely the most helpless reality. People can only create history under the conditions they directly encounter, established, and inherited from the past.

From past experience, that's not bad.

But the question is, in the past, there was a situation where Dashun’s cargo ships brought Dashun’s products to Europe to sell, and products such as cotton cloth made Europe completely uncompetitive?

Since there is not, then, now facing such a situation, such a situation of inevitable defeat, and the collapse of the internal economy, how many British talents can jump out of the past to solve the current problems?

The past experience, the past system, will collapse.

At this time, this book "Clean up the Unreasonable Elements in the British Economy in the Way of Shock and Find the Right Direction of the British Industry after the Shock Awakens" is undoubtedly like a straw caught by a drowning man.

At least, it gives a workaround.

An approach that was not oriented towards the past, based on Cromwell's laws of navigation and the colonial trading system.

It is a new system approach that faces reality and the future, with the inevitable defeat of the UK and the inevitable liberalization of tariffs.

　What happened in India has little to do with Pete in history.

　　If the East India Company hadn't opened up the situation in India, the mess left by Peter... National debt, North America, Caribbean slave uprising... What else would Britain have left?The big news that the East India Company made in India, Pete was not a "prime minister" at that time.

　　Therefore, it is not without reason that Peter is the "virtuous minister" respected by Churchill.One lost the sun, one lost North America; one gave way to America, and the other created Prussia.Someone has warned Pete a long time ago, don't fight so hard in North America, you drove the French away, can those people in North America be honest?
　　
　
(End of this chapter)