The big man has a living father

Chapter 37 Creating Value

Xun Zhu shouted: "Hey! I'll tell you! I'm not lying! Old Xun is not a liar!"

"Your Majesty is mumbling something, he must be summoning the guards to chop Huo Hai down!"

Liu Che had already run to the front, and stretched out his hand while running: "Pass it on! Pass it on..."

Liu Che gasped. Xun Zhui said, "Send the Imperial Guards to bring beheading swords!"

Liu Che: "Call Sang Hongyang! Bring the abacus beads!"

Xun Zhi: “???”

Then, the princes and nobles saw Liu Che walking back and forth, muttering to himself.

Xun Zhi whispered: "Possessed?"

Meng Qing: "Stop talking nonsense, Your Majesty might be... enjoying the rural scenery."

The drinking princes and nobles responded: "What a beautiful scenery, what a beautiful countryside, what a beautiful countryside."

In fact, if there was no Sang Hongyang, Liu Che would have done the math himself and would have thought about the logic behind what Huo Hai said.

However, Liu Che still waited for Sang Hongyang.

Liu Che and Sang Hongyang discussed for a long time. Sang Hongyang wrote a page of questions on a piece of white paper and then came to Huo Hai.

At this time, Huo Hai was squatting by the field studying the clay.

Sang Hongyang came over and put the table on the table, then spread out the paper and began to ask formally: "Master Huo, I have also heard about your economic theory. I have a few questions that I would like to verify in detail."

Liu Che stood behind with his hands on his hips and watched.

It was obvious that Liu Che was not very convinced either.

It's like a person who has been eating noodles all his life, always picking up the noodles whole, more than a meter away from the bowl, and then eating the noodles from the bottom. Then he hears someone say that he can actually wrap the noodles up and eat them by turning the chopsticks a few times. The shock he feels is the same.

It's so simple, why didn't I think of it?

Huo Hai played with mud and said, "Okay, ask."

Sang Hongyang felt a little helpless. Why was he still playing in the mud?
Liu Che blew his beard and said: "Be serious, we are talking about national affairs and people's livelihood now!"

Huo Hai: "The clay I am kneading now is no less important than the economic strategy you are asking about, Your Majesty. It is equally important."

Although Liu Che didn't know what Huo Hai meant, he didn't worry too much about it.

In the distance, the historian recorded: [Your Majesty sent Sang Hongyang to ask Huo Hai about economic strategies. Huo Hai was working in the fields and gave a frivolous answer~]

Sang Hongyang then asked: "Master Huo, let me ask you, according to your theory, can low tax rates and high incomes promote business...prosperity? If commodity transactions are accelerated, more taxes can be collected?"

Huo Hai: “That’s right.”

Sang Hongyang: "If the tax rate is increased and people's income is reduced, should the tax be reduced?"

Huo Hai nodded: "That's right."

Sang Hongyang: "Then I have a question, this doesn't seem right."

"That is to say, if we give ordinary people high incomes, they will trade more. Because there are more transactions, we will collect more taxes. If we use a 5% tax rate, if there are 10,000 coins circulating among the people, and every complete transaction of 10,000 coins, we can collect 500 coins in tax. After 20 consecutive complete transactions of 10,000 coins, wouldn't all the 10,000 coins be taxed away?"

"So, does this mean that money is being spent less and less?"

Huo Hai kneaded the mud while looking at Sang Hongyang: "What nonsense! If there is not enough money, just print money? Do you understand coinage?"

Sang Hongyang glared: "What you mean is..."

Huo Hai: "For example, if copper coins are circulated more than five times a year, the circulation efficiency will be too low and commercial transactions will be hindered. So 10,000 coins can be circulated at most five times a year."

"Now, there are 200,000 coins in the market, and we only have 10,000 coins in circulation. If we mint another 30,000 coins and put them in the market, wouldn't that mean 40,000 coins will be in circulation? If each coin is circulated five times, wouldn't that mean there are exactly 200,000 coins in the market?"

Sang Hongyang continued to ask while recording: "In other words, these newly created 30,000...are actually the income of the court? Hiss!"

This is not just a tax. The circulation of 200,000 coins, with a 5% tax rate, is a tax of 10,000 coins. In addition, 30,000 coins of new currency are put in. This is not just a tax of 10,000 coins. Liu Che saw that Sang Hongyang could not get to the point for a long time, so he asked, "What if my 30,000 coins are not 30,000 coins of full weight?"

Huo Hai smiled: "The market is here, and more money needs to circulate. At this time, it doesn't matter whether there is enough money or not. What matters is whether the money can continue to circulate."

Liu Che: "Why should I pay the miners more in the first place? Can't I just give them new money and collect taxes directly?"

In fact, this is what Liu Che and Sang Hongyang planned!

They were going to implement commercial tax, vehicle tax and vessel tax, and the five-zhu coins starting from the next year!
Moreover, Liu Che's plan was to exchange ten three-zhu coins from the public for one official five-zhu coin, and one official five-zhu coin for one ten-zhu coin from the public.

This baht is a unit of weight.

In other words, Liu Che planned to stipulate that thirty taels of silver from the people could be exchanged for five taels of silver from the government, and five taels of silver from the government could be exchanged for ten taels of silver from the people.

Seeing this policy, people who understand economics will definitely say: "This can't be implemented."

It’s hard to say whether he understands economics, but he definitely doesn’t understand the law.

When Liu Che introduced the Wuzhu coin, he would introduce new laws, making it a crime to secretly keep private coins, and the informant would get one-third or even half of the person's property. Failure to pay taxes would be a crime, and the informant would get half of the person's property.

What does the economy mean? It is no match for human nature.

Liu Che didn't understand economics, but he understood human nature.

As soon as the law came out, he directly reaped the benefits of all the people. Just this move alone created hundreds of billions of dollars out of thin air! Of course, the money was spread out over several decades, not just in one year.

At the beginning, Liu Che kept thinking that Huo Hai's strategy and his own strategy seemed to have the same purpose.

But, there seems to be something different in the middle.

But Liu Che didn't think it through.

If someone else has only superficially read economics books, they may not know the difference between the two.

But the answer to this question was particularly simple for Huo Hai: "Your Majesty, are you sure?"

"You lower people's income, then increase taxes, and then print money and create coins. Isn't this just plundering the market and robbing people from their pockets?"

"But if you increase people's income, reduce taxes, promote business prosperity, increase the frequency of transactions and thus increase tax revenue, then printing money and minting coins at this time will conform to market needs."

Liu Che tilted his head and spread his hands: "Is there a difference?"

Huo Hai: "Let me put it this way. If the people have more money, merchants, craftsmen, and farmers will all know that now everyone has money. As long as they work hard enough, they can make more money and become rich themselves."

"Then their enthusiasm for production will increase and they will produce more products."

"If the previous situation was that there were 100 products on the market, then after their enthusiasm increases, there will be 500, 1,000, or 2,000 products on the market."

"At this time, Your Majesty, if you invest new money and buy goods, you are also completing a normal transaction and helping producers become rich."

"If this cycle continues, both the country and the people will become richer and richer."

Liu Che grasped the key point: "You mean, if it is a normal transaction and normal tax collection, there will be more goods..."

Huo Hai: "Your Majesty, are you mistaken? Do you think money is wealth? Do you think collecting money is collecting wealth? No, money is a tool for trading. It is the same if you use shells or silk cloth instead of money. Money is just a medium."

“Products are wealth!”

"To ensure that money is not spent all, we don't have to extort money from the people, but to stimulate them to produce products and increase the number of products. The number of products corresponds to the amount of wealth!"

"It's like a coal mine. It's just rocks on the mountain. Someone has to dig it out and make it into washed coal, anthracite, and coal briquettes. Only then can it be considered a product. Do those workers get high wages? No, they are creating wealth. The wages they receive are to stimulate their enthusiasm for producing products."

Huo Hai placed the clay mold in his hand on the edge of the field and was very satisfied with the clay mold of the vase in front of him.

Liu Che gave Dazao as he was thinking, and praised him, "You made a good urinal."

"Sang Hongyang, let's discuss this again."

Huo Hai: ???
(End of this chapter)