New Shun 1730

Of course, there are some knowledgeable people in Britain. They don't think so simply about trade, thinking that the East India Company's goods can't be sold in India and China because China and India closed their doors to the outside world and raised tariffs, etc.

In fact, even at the time of the First Opium War, many people were sober, including some shareholders of the East India Company.

It's just that there is a difference between stupid and bad.

Those who really believe these things are stupid.

And knowing that these things exist but hiding them is bad.

Generally speaking, bad is higher than stupid.

Before, Britain had already erupted in a serious dispute between mercantilism and free trade.

At the beginning, the free trade faction had already retreated step by step.

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

Adam Smith was first a British man who loved his motherland.

Then he was an economist who proposed the theory of free trade.

And free trade has a big theoretical loophole at this point.

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

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

For example, Britain and Dashun.

Porcelain, silk, cotton cloth, these are all Dashun's absolute advantages.

For example, can Britain grow oriental mulberry trees?

Yes.

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

And the silk produced by silkworms chewing red mulberry is of poor quality.

So, is it impossible for Britain to grow Chinese mulberry?

It is not impossible.

For example, at a high cost, using glass to cover the greenhouse, you can grow Chinese mulberry.

However, the cost is definitely several times, dozens of times, or even hundreds of times that of Chinese mulberry.

At this time, there are only two choices.

Either, through extremely high tariffs and extremely abnormal anti-smuggling systems, Britain is forced to grow mulberry in glass sheds.

Or, since it is impossible to compete anyway, it is better to completely liberalize tariffs.

Historically, Adam Smith used the example of "Scottish wine and Portuguese wine", which is similar here.

According to the "absolute advantage" theory of the early free trade, what kind of trade would Britain have? It should just go back to the farming era and become a raw material exporter, selling grain and wool... The rest would all depend on imports.

This is the problem.

First of all, Adam Smith was first and foremost a British man, and a British man who loved his motherland. So the basis of his free trade theory was that Britain had many "absolute advantage" industries relative to Europe at that time.

Secondly, Europe was fragmented, and the difference between a single country and a province in China was not much. No country could achieve self-sufficiency in the entire industrial chain, and it also lacked a domestic market like Dashun that was basically more unified than the fragmented Europe.

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

But!

However, with Dashun integrating the economic zones of Nanyang, Japan, Korea, and India, something big happened.

Overall, at this time, the production efficiency of most commodities in the East was higher than that in Europe, coupled with the transmission of the price revolution.

This makes Eastern goods have almost all "absolute advantages".

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

This is also the most difficult problem to solve in Adam Smith's theory:

[If one country is at an absolute advantage in all aspects, and another country is at a disadvantage in all aspects, then what should they do? Why should this country with a comprehensive disadvantage embrace free trade? ]

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

Free trade is not the Bible or the Koran.

It cannot be "because the scripture tree says so, so we must do it."

Free trade must be "all participants can benefit", so everyone guesses to support free trade. If the participants obviously have no benefits, under the "absolute advantage" theory, they are at a disadvantage in all aspects, then why should they embrace this free trade?

At this time, the importance of "debating" and "interpreting" is reflected.

This doubt that Adam Smith could not solve, that is, the reality of the current trade between Dashun and Britain, can it be solved under the theoretical framework of free trade?

Yes.

Whose theory?

Ricardo.

[Relative Advantage] Theory.

Let's take a very crude example.

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

Dashun's cotton cloth is 5 yuan, and Britain's cotton cloth is 10 yuan.

Dashun's musket is 8 yuan, and Britain's musket is 10 yuan.

According to Adam Smith's [Absolute Advantage] Theory, Britain does not need to produce cotton cloth or muskets anymore, and should find its own absolute advantage products.

However, according to Ricardo's Relative Advantage Theory, there is still hope.

Britain should completely give up the production of cotton cloth.

In Britain, those who make muskets also wear cotton; those who smelt iron and roll gun barrels also wear cotton; and those who mine and rub lead also wear cotton. The cotton fabrics originally worn were all made in England and cost 10 yuan, so the cost of the muskets also increased.

Therefore, as long as we completely abandon the production of cotton cloth and fully import cotton cloth, there will be no tariffs at all. Those who were rubbing cotton cloth now went to rub muskets.

Then, a musket that originally costs 10 yuan in the UK can be reduced to 7 yuan, or even 6.5 yuan. Isn’t this cheaper than Dashun’s 8 yuan musket?

The people who make muskets in Dashun rub cotton cloth, while the people who make cotton cloth in Britain rub muskets.

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

In this way, doesn't it solve the problem? [If one country has an absolute advantage in all aspects, and another country is at a disadvantage in all aspects, then what should they do? 】Is it a problem?

Although, this theory actually revolves around a fragmented Europe.

In other words, this theory does not take into account the situation of "full industrialization of hundreds of millions of people". In other words, even if 100 million people go to rub cotton cloth, there will still be 200 million people without work. What can we do? Rubbing something.

However, it is obvious that this set of scriptures has solved the practical problem in the early days of free trade [If there are no absolute advantages, all are absolute disadvantages, why should I embrace this free trade].

So, obvious.

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

Come on, it’s not version 1.0 of [Absolute Advantage].

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

Even the 2.0plus version includes some "currency issues".

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

At a critical moment when they were faced with the impact of Dashun commodities and Britain's absolute disadvantage, they were denounced as "traitorous", "unworkable", and "this is going to collapse the British economy".

This "Sutra Annotation" undoubtedly gave them a shot in the arm, rekindling their hope and rediscovering theoretical support.

This is the importance of "Sutra".

Without this 2.0plus version of free trade, free trade, as 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, the free trade thing proposed by Dashun can still gain supporters in Europe, so Colbert and Cromwell are just stinking shit.

Classics, sometimes, are not about whether they can be self-explanatory and logically consistent.

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

After all, economists also have nationalities.

As a result, an economics pamphlet whose core is 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 being spread to the UK, appeared in George III In front of others.

The full title of the pamphlet is "Clean up the irrational elements in the British economy through shock, and find the right direction for British industry after the shock wakes up."

…………

Now this pamphlet is placed in front of the core members of the "royal party" such as George III, Lord Bute, and the Earl of Halifax.

The UK is not without talent.

But do people’s correct thoughts fall from the sky? I'm afraid not, it needs to be based on practice and actual conditions.

Lao Ma said: People create their own history, but they do not create it as they please. They do not create it under conditions chosen by themselves, but under conditions that are directly encountered, established, and inherited from the past. . The traditions of all the dead ancestors haunt the minds of the living like a nightmare.

What was the current situation in the UK before Dashun fully integrated into European trade?

Indeed, the new school of thought in Dashun followed Liu Yu in mocking Pitt, saying that Pitt was an old conservative. Although he seemed quite radical, what he had in mind was still the British trading system inherited from the Cromwellian era. Pete was just a good tinkerer, because even if he did it, he would only make the system bigger.

But in fact, if the East India Company had not conquered cities in India, unintentionally planted willows, and finally achieved Pitt, who had always set his eyes on the Caribbean and North America, then Pitt's policy would have been a disaster.

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

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

Judging from past experience, this isn't bad.

But the question is, in the past, there were cargo ships from Dashun that brought Dashun products to Europe for sale, and were products such as cotton cloth making Europe completely uncompetitive?

Since there is no such thing, then, now faced with such a situation, such a inevitable defeat, and a situation where the internal economy has begun to collapse, how many British talents can jump out of the past to solve the current problems?

Past experience and past systems will collapse.

At this time, this book "Clean up the unreasonable elements in the British economy by shock, and find the right direction of British industry after the shock awakens" is undoubtedly like a straw for a drowning man.

At least, it provides a solution.

A method that is not based on the past and based on Cromwell's navigation law and colonial trade system.

Rather, it is a method that is based on the reality and the future, based on the new system that Britain will inevitably lose the war and tariffs will inevitably be liberalized.

The things in India have little to do with Pitt in history.

If the East India Company had not opened up the situation in India, the mess left by Pitt... national debt, North America, Caribbean slave uprisings... what would Britain have left? The big news made by the East India Company in India, Pitt was not a "prime minister" at that time.

So it is not without reason that Pitt is the "wise prime minister" advocated by Churchill. One lost the British Empire, and the other lost North America; one gave way to America, and the other created Prussia. Someone had warned Pete a long time ago not to fight so hard in North America. If you drive the French away, will those people in North America be obedient?