Chapter 228: Trade Discussions (Part 2)
Ji Situi said dismissively: "This is the great achievement of my Qing—not the prosperous age of the Ming."
"Though I don't want to wade into certain pointless disputes, I must say this is fact. A society that could produce capitalist sprouts necessarily had more vigorous commercial activity, which reflects higher per-capita purchasing power and living standards." A Ming fanboy immediately supported the Chemical Department Minister's viewpoint.
"Another factor is that late Qing transit taxes were extremely heavy, while the Ming had almost no customs barriers. So late Qing commodity circulation was actually quite poor—everyone tended toward localized natural economy production," Ji Situi continued.
Du Wen spoke eloquently: "The result of increased commercialization in the late Ming was intensified exploitation and social unrest. Old China's hundred years were the same. Also, the Qing's low commercialization rate was related to the suppression of landlord gentry power, population increase, and insufficient urban population capacity under old transportation conditions."
"Let's not digress too far." Ma Qianzhu stopped Du Wen's continued theorizing. Du Wen obediently stopped.
"I think the so-called capitalist sprouts of the Ming dynasty are exaggerated. How much consumption level do ordinary people have? Everyone's seen it firsthand since D-Day. How much purchasing power do you think such a society has?"
"That's not a great analogy. Even 21st-century Linggao's consumption level wasn't high."
"Even 21st-century Linggao was a commercial society, not a natural-economy society. The difference is huge."
"Using Linggao from any timeline as an example is meaningless," Wen Desi said. "Just like those foreign capitalists at the start of reform and opening who expected that 'if every Chinese person buys one of my products' they'd get rich. Ninety percent of Chinese people still won't buy their stuff. Consumption capacity has always been concentrated in major cities since ancient times. Our position is actually the same as these capitalists. The market seems vast, but we can only select regions with capacity for sales. Guangdong, Jiangnan, the capital—those are our product sales markets. Other places can be automatically ignored. The common people of the Central Plains and Northwest don't even have the chance to be peaceful dogs—they won't consume our products."
Luo Duo said: "Let's filter out those places and only discuss Director Wen's possible targets! Without transit taxes, does commodity circulation improve? The fundamental problem is that common people have no money—what would they consume with? This has nothing to do with consumption habits. Without money, you naturally economize. The reason they don't consume comes down to one word: poor!"
"I'm not so sure. Look at local landlords. No matter how much of a rural rich man they are, eating fine grain and meat every meal is actually no problem for them. But what's their consumption level? Most landlords still often eat sweet potato porridge. Meat is only for New Year and festivals."
Du Wen said: "Under clan small-peasant economic conditions, in many situations labor value plus frugality is the only path to accumulating primitive capital. Agricultural labor habits make people avoid speculative and risk-taking values."
Yu Eshui nodded: "So to go the domestic sales commercial route, we must start by transforming consumption habits. But how specifically do we achieve that?"
"Cultivate the middle class. The purchasing power of lower-class people is very limited."
"Too simplistic. Typical middle-class panacea theory." Du Wen sneered at such shallow remarks. "In my view, to change this habit we need to achieve at least three points: First, change ancient China's natural economy plus change agricultural free-market capitalism values. Second, create a 'middle stratum.' Third, raise overall per-capita economic levels. The third point is too slow a process in ancient times or before the second industrial revolution—transmigrators shouldn't expect several-fold increases in national per-capita economic levels in their lifetimes. For the second point, note: not the capitalist or landlord class, but overcoming social Darwinist natural laws to create a jujube-pit-shaped society remains quite difficult. And under ancient conditions where per-capita economic levels are limited and improvement can't be fast, a jujube-pit-shaped society still destabilizes society. In short: natural-economy society is a fairly stable system. Changing it without great social upheaval and cost is impossible."
"Whenever the Queen starts reciting doctrine, headaches are guaranteed. But stripping away those fancy words, I still think you're right," He Ying said.
Ma Qianzhu said: "No personal attacks. Discuss the arguments. Everyone stay on topic."
"I also agree with Luo Duo's view—we still need to approach consumption habits from an economic angle," Wu Nanhai spoke up. "With money, people will naturally consume. Why fuss about consumption habits? Parents who willingly wait an extra half hour every day just to save one yuan on bus fare often happily spend thousands on some so-called arts training class for their children."
"Not so fast. Economic conditions are just one factor. For example, everyone thinks selling soap is a direction. Actually, whether for one's own home or as hired help, those who actually touch soap are basically lower-class laborers. And such frugal habits often aren't from some sense of responsibility, but purely habit—even those working in foreigners' houses habitually make unnecessary savings for their employers."
"Our soap counts as luxury-grade. Specifically for ladies and young misses—oh, famous courtesans work too. The Eight Beauties of Qinhuai should already be famous by now. Give them trial samples and they become living advertisements!"
"How many bars can you sell that way?!"
"Actually, demand for soap should be very large. Any major service industry has considerable need. Whether brothels, food inns, pharmacies, bathhouses, theaters, art houses, or mines, weaving workshops—these already constitute a huge market. Even without soap, soap powder is the same concept. Besides, soap's cost isn't high. Middle-class resources are sufficient. Must only ladies and misses have demand? Practical users are many."
He Ying said: "That's true, but having demand doesn't mean your product can satisfy that demand. Without soap, there are alternatives. Also, soap's functional use doesn't disappear without it—just gets replaced by other methods. Like pig pancreas, saponin pods. Especially saponin pods, which are almost free. No matter how cheap soap is, can it compete with free pods picked from trees?"
"In the end it still comes down to the word 'poor'! This consumption habit didn't form without reason," Wang Luobin said. "Those materials Yu Eshui described—time, effort, comfort, convenience are all 'free.' As long as you can save even one copper coin, you can freely squander these 'free' elements. And even now, some elderly people's consumption concept is to only look at price, not quality. Therefore I believe, rather than considering how to use advanced future products to open markets, the commercial route should use technological advantages to lower costs in producing products that are already popular in this era, earning profits through price advantages."
"For example, if transmigrators can make better paper at lower cost, that's a huge opportunity. Or if there's a way to make better, more oil-efficient lamps—also a huge opportunity. Even a good creative idea—making ceramic items more functional and artistic—is equally a huge opportunity. New iron-smelting techniques, improved ironware, better quality at better prices—isn't that opportunity? Even at luxury-goods level, as long as you grasp creativity, high-end market profits can similarly create good opportunities."
No matter how self-sufficient a natural-economy society is, it still needs to import goods. Common people don't not consume—they just don't have better products to consume. The steadily rising import figures after the late Qing's Five Treaty Ports prove this point. Why could kerosene and matches capture the Chinese market? Chinese people didn't suddenly become wealthy in those several decades of late Qing. It's just that kerosene and matches were much more convenient than previous products, yet usage costs hadn't increased much.
This is how the small-peasant economy and natural economy in the real world's China was broken. Not many new concepts—just cheaper, slightly better foreign goods flooding in and breaking the original small-scale economic system.
"So it seems we don't actually need too many fancy export goods."
"Hmm, in my view, once the three acids and two alkalis go into production, our most advantageous mass product is paper."
Paper consumption was enormous, with many consumption levels—from writing imperial edicts to wiping bottoms, all requiring various kinds of paper. With the transmigrators' chemical pulping technology, they could put every paper workshop in this timeline out of business—assuming the transmigrators' commercial network could reach the whole country.
"Sewing needles and matches work too. Let's focus on sales of these three products," Ma Qianzhu said. "The current trade mainstay, glassware, can still only serve as luxury goods."
"Luxury goods should also be viewed dialectically," Wen Desi said. "Glass mirrors are currently luxury goods. At Guangzhou prices, even egg-sized mirrors sell for over a hundred liang. At such prices, only wealthy people can afford them—don't be dazzled by sales volume. Guangzhou is simply the most prosperous city in southern China, with more wealthy people. We need to look at the market more broadly. Let those of middling means also be able to afford it."
"Lower prices?"
"Not simply lowering prices. Rather, differentiate product tiers." Wen Desi had considered this question for a long time. Small quantities of high-margin luxury goods couldn't compare in total profit to massive quantities of mass consumer goods. Just look at the 20th century's Fortune 500 companies—those occupying the top positions in enterprise scale, profits, and sales figures were basically all those providing ordinary mass consumer goods.
"Mirrors present no technical difficulty. Once we've mastered glass manufacturing technology, batch-producing glass mirrors is just a matter of time and raw material supply," Wen Desi said. "Let's take this opportunity to develop a complete mirror product series. From full-length large glass mirrors for the wealthy to small rough-edged mirrors that ordinary commoners can afford—we must produce them all."
(End of Chapter)