Rebirth: I am in Jin-Cha-Ji

He understood that the Chairman was asking about Nanyang's history and culture. However, Wei Zhaoming was from Shandong and later became the county party secretary of Nanyang. He had studied Nanyang's geography, industry and agriculture, and population, but had never paid attention to Nanyang's history.

"Chairman, as the secretary of the Nanyang County Party Committee, I know very little about Nanyang's history. I am not a qualified county party secretary. I am truly sorry."

Wei Zhaoming spoke with great shame. It could be said that among all the county party secretaries reporting on their work this time, he was the worst.

When the Chairman heard Wei Zhaoming's words, he shook his head and said, "Comrade Wei Zhaoming, you have done a great job, your attitude is serious, your work ideas are clear, and your report is excellent."

The chairman held Wei Zhaoming's report in his hand and said, "Your work in Nanyang has been highly praised by both the province and the prefecture. You are a qualified county party secretary."

"However, as a county party secretary, you should not only care about local development and people's livelihood, but also understand local history and culture and pay more attention to the real lives of ordinary people. Only in this way can you better integrate with the masses, understand them, truly feel the people's demands, and truly integrate into the local community, so as to truly govern the land well."

“You may not be from Nanyang, but since you’re working in Nanyang, you should consider yourself a Nanyang native. You should understand Nanyang’s history and culture, and fully integrate into Nanyang.”

"I'll do the same when I work in a new place in the future. I'll integrate myself into the workplace and become a true member of the local community. Only then can I truly consider the local development and the local people."

When the Chairman said this, Wei Hongjun also sat up straight.

Because Wei Hongjun understood that the Chairman was very satisfied with Wei Zhaoming's report, he was teaching Wei Zhaoming and also telling other county party secretaries.

Of course, this was also addressed to Wei Hongjun. Wei Hongjun is currently in charge of Party affairs at the Central Committee and the Central Party School. His duties include training Party cadres.

1075 Free Market under Macroeconomic Regulation

The Chairman asked Wei Hongjun to come this time, one reason was to discuss the Huaihe River water conservancy construction, and the other was to ask Wei Hongjun to accompany the Chairman to meet with some grassroots cadres and listen to their reports.

After staying in Henan for a while, the Chairman planned to visit East China, mainly Shanghai and Zhejiang, but Wei Hongjun could not accompany him.

Because Wei Hongjun still had a lot of things to deal with. He was in charge of the day-to-day work of the Party Central Committee, so he usually had to deal with far more documents than the Chairman. Being away for too long was too much trouble.

"This time in Hebei, Shandong, Henan and other places, we saw booming county and township economies. I spoke with some cadres from rural cooperatives, and they were very supportive of the free market for agricultural and sideline products and the development of rural industry and commerce. Some provincial and municipal officials also believed that the development of rural industry and commerce brought a lot of tax revenue to the treasury."

"However, I've also heard reports from some provinces that businesses developing in counties, towns, and rural areas are growing in size and are even beginning to compete with many provincial and municipal state-owned enterprises. Many provincial and municipal state-owned enterprises have a lot of criticism of county, town, and rural enterprises. What are your thoughts on this?"

Before Wei Hongjun left, the Chairman had a private conversation with Wei Hongjun.

The Chairman is actually very happy. Although China's economy has been developing in recent years, the Chairman has always been worried about the situation in rural areas.

Because China is a backward agricultural country, a hundred years of war have taken away too much wealth from the Chinese people. New China wants to industrialize, but the initial start-up capital is far from enough. The country can obtain large-scale start-up capital from the countryside.

Therefore, after liberation, rural areas became the primary source of central government funds. In the first few years after liberation, the gap between public grain and rural industrial and agricultural revenues brought the central government 100 billion yuan. Initially, rural areas contributed over half of China's fiscal revenue, and by the time of the Eighth National Congress, they still accounted for over a third.

Later, with the development of the rural economy and the increase in grain production, the total amount of grain, industrial and commercial taxes paid to the central government, and the gap between industry and agriculture has doubled. The central government now takes more than 200 billion yuan from the countryside each year, still accounting for about one-third of China's fiscal revenue.

This high level of accumulation is what guarantees the central government's large-scale investment in industry. Otherwise, where would the central government have gotten the money to invest so much in industrial construction in recent years?

This is just the economic aspect. Besides direct financial support, rural production cooperatives participate in major national, provincial, municipal, and county-level projects every year. Furthermore, investment in such projects is limited. Farmers often contribute, even bringing their own food.

Just like the Jiao-Liu Railway, which has already started construction, it mobilized so many people around it. If it really is like a few decades later, where everything is based on money, it will be impossible to get it without tens of billions of yuan.

But the government didn't have that kind of money, so the rural cooperatives mobilized along the route received very little from the state, or most received no money at all. They all worked voluntarily, contributing to national construction. The Jiao-Liu Railway's biggest expense was raw materials like steel.

According to their calculations, the Soviet Union provided China with a sum of money and raw materials. This loan was not actually used for the Jiao-Liu Railway. After the Soviet loan was registered with the Bank of China, it was subsequently used to purchase other machinery and equipment. The resulting domestic RMB was also used for other investments.

Because of the contributions of rural areas, the President is very concerned about rural development. During his visit to Hebei, Shandong, and Henan, he witnessed the vibrant rural economy.

The Chairman was particularly pleased with the prosperity of the agricultural and sideline product markets and his observations of factories in some counties, towns and rural areas.

Rural development has even surpassed the Chairman's imagination. He even observed that in some counties and villages, industrial products are in short supply. Rural cooperatives have money but cannot buy anything.

This shows that the rural economy has developed quite well in recent years.

However, some officials at both the central and local levels worry that as factories in counties, towns, and rural areas grow, they will compete with state-owned factories built with government investment. This has already happened in some places, with state-owned factories failing to compete with factories in counties, towns, and rural areas.

The Chairman has received numerous reports on this matter this year. Many cadres believe that large collectively owned state-owned factories are government-owned and a manifestation of the socialist economy. Now, a group of peasant-owned factories are actually taking business away from government-owned factories. This isn't just a rebellion against the will of heaven; it's an act of undermining the socialist economy. Therefore, some cadres hope that the central government will put a stop to this undermining of the socialist economy.

However, after receiving these reports, the Chairman did not express his position. This is because one party is a small collective, and the other party is a large collective, and both belong to the socialist economy.

"Chairman, when it comes to the production of some daily necessities, large collectively owned state-owned enterprises are too strictly controlled. There are many restrictions from top to bottom, so they are far less flexible than the small collectively owned cooperative enterprises in counties, townships and rural areas."

"Let me give you a simple example. A state-owned enterprise used to produce standard furniture that was two meters wide. But many families in the local area thought two meters was too wide and wanted furniture that was 1.8 meters wide. It was very difficult for the state-owned enterprise to change this standard because it needed approval from all levels."

"But small collective-owned enterprises in counties, towns, and rural areas are much more flexible in this regard. They can adjust their products at any time according to the needs of the people. This leads to the fact that our large collective-owned enterprises are relatively rigid in the production of daily necessities and lack the flexibility of enterprises in counties, towns, and rural areas. The ultimate result is that they cannot compete with small collective-owned enterprises in counties, towns, and rural areas."

"For now, the problem is not very serious. This is because our country is currently in a period of material shortage, and the overall market demand exceeds supply. So even if the product has some minor problems, it can still be sold in the end."

"But as my country's economy develops, it will eventually overcome the current shortage of supplies. By then, the supply of many materials on the market will no longer be in short supply, but will likely be in oversupply. By then, these large collectively owned enterprises will be eliminated by small collective enterprises in counties, townships and rural areas."

The Chairman listened to Wei Hongjun while smoking.

After Wei Hongjun finished speaking, the Chairman said, "Marx studied the capitalist economy and believed that the capitalist economy is subject to periodic economic crises."

"The main manifestation of an economic crisis is overcapacity. Large quantities of goods will go unsold, large amounts of means of production will be idle, a large number of manufacturing companies, shops, and banks will go bankrupt, large numbers of workers will be unemployed, production will decline rapidly, and the entire social life will fall into chaos."

"So socialist countries use a planned economy to plan their economic development and avoid the periodic economic crises of capitalism."

"The rapid development of small collective economies in counties and townships and rural areas has also led to the rapid growth of local free markets. If this rapid growth of free markets is not restricted, will it lead to periodic economic crises similar to those of capitalism?"

Wei Hongjun is now becoming more serious and cautious.

Because these weren't just ordinary questions. They were direct inquiries to Wei Hongjun about his thoughts on the future of China's economy.

In particular, the rapid development of local free markets has begun to affect local state-owned enterprises, thus forcing central policies.

Either the central government restricts or even stops the free market, or the local free market is fully integrated into the socialist economic system.

Although Chairman Mao had previously stated in his political report at the Ninth National Congress that the free market was an effective supplement to the socialist economic system, neither he nor other Party leaders had anticipated its rapid development.

Faced with the burgeoning free market, there are various currents of thought within the Party. However, now that the free market has developed to this point, Wei Hongjun will definitely not turn back.

There is a market within planning, and planning within the market. Any single, extreme plan or market is problematic.

So Wei Hongjun calmly said, "Chairman, looking at the history of world industrial development, there are two important characteristics of industrial development. One is that as industry develops, the division of labor becomes increasingly detailed, and the types of industries become more diverse and complex. Let's talk about the steel industry, for example."

"Depending on the different uses of steel, such as structural steel for building bridges, rails for railways, steel for vehicles, steel for use in high-temperature environments, and steel for agricultural tools, different technical standards are required. To produce steel with these different technical standards, different smelters are needed."

"If we say that steel mills used to have less complex uses, the steel industry was relatively simple. But now, with the wide range of uses for steel, the steel industry's production chain involves many factories, and the division of labor is becoming increasingly detailed."

"The second characteristic is that with the increasing division of labor and the diversification of industrial sectors, the number of industrial workers has increased dramatically. The Netherlands, the earliest maritime power, had a population of only a few million, yet they were able to roam the seas and were known as the 'Coachmen of the Sea.' This was because industry was only just developing at the time, and a few million people was more than enough."

"However, with the outbreak of the Industrial Revolution in Britain, Britain became the world hegemon. Later, countries like France and Germany became industrial powers. At this time, industry was primarily fueled by coal, oil, and electricity. These industrial nations had populations of tens of millions, with the two hegemons, Britain and France, in particular, boasting populations of around 4000 million. In other words, this population was sufficient for industry at the time."

"However, with the further development of the oil and electric power industries, and the subsequent emergence and growth of emerging industries like aviation and electronics, the populations of countries like Britain and France could no longer support the continued development of their industries. This was during this time when the Soviet Union and the United States rose to prominence, as they had sufficient populations to support these industries."

"That is, the United States and the Soviet Union now have a population of over 100 million, which can roughly cover the currently developed industries."

The Chairman was very interested in listening to Wei Hongjun talk about the relationship between industry and population.

Because the central government had previously focused solely on industrial development and had never conducted such a clear study of the relationship between industry and population, Wei Hongjun's statement, while novel, was logically sound.

The simplest ones are China's coal industry and steel industry.

After the founding of the People's Republic of China, the coal and steel industries developed rapidly. Currently, there are over 500 million coal workers nationwide, and 100 million steel workers. And this is just the direct workers at the steel mills; the total number of workers throughout the steel industry chain adds up to several million.

After the founding of the People's Republic of China, the number of workers increased by tens of millions in the 11 years since then. However, China's current industry has only just established a certain foundation.

If China's industry is as developed as that of the United States and the Soviet Union, how many industrial population will be needed?

"But this is only happening now. In fact, after the end of World War II, the Soviet Union already faced a situation where its population was insufficient to support its industry. The Soviet Union focused on the development of heavy industry, so most of the industrial population was employed in the heavy industry, causing their light industry development to almost stagnate. One-third of the improvement in the living standards of the Soviet people in recent years is due to my country's role as a supplement to the Soviet light industry and agriculture."

"As industries like the petroleum industry, atomic energy industry, and electronics continue to develop, the types of industries will increase, and the industrial workforce will be even greater. By then, if we want to cover all industrial sectors, the industrial workforce we'll need will be hundreds of millions."

"The United States lacks an industrial population, so it will inevitably develop a new division of labor within the imperialist camp to stabilize all industries. But my country has a sufficient population, so it is completely possible to develop industry across the entire industrial chain."

The chairman nodded slightly.

Because China has a large population, the central government has begun discussing family planning, but the current technology is limited, so are the options.

You can't stop couples from sleeping, and if they get pregnant while sleeping, you can't stop them from having children. So at this stage, the central government can only promote the idea of ​​late childbirth and late childbearing, and good quality of birth and childrearing.

But now that Wei Hongjun has said this, a large population also has its advantages.

"Chairman, one of the main reasons we chose a free market for agricultural and sideline products was because there are so many varieties. Wild vegetables, vegetables, and fruits alone easily number in the dozens, and even hundreds, of common varieties. If you add in some of the less common varieties, the number would be in the hundreds."

"The state-owned supply and marketing cooperatives and state-owned commercial companies simply don't have the staff or the energy to sort through so many different kinds of wild vegetables, fruits, and vegetables. As a result, many disputes arise when the state-owned supply and marketing cooperatives, state-owned commercial companies, and rural cooperatives trade agricultural and sideline products."

Especially for wild vegetables, different places have different eating habits and different understandings of wild vegetables.

Wild vegetables that are not eaten in some places are commonly eaten as delicacies in others. The state supply and marketing cooperatives and state-owned commercial companies themselves are clueless. How can they tell which ones are edible and which ones are not?

"Chairman, compared to agricultural and sideline products, industrial products are more complex. There are hundreds of thousands of different industrial categories. Just looking at canned products, which are currently the most exported, there are over 1300 varieties nationwide. There are dozens of canned fish, and countless canned vegetables and fruits. Although all canning factories in the country are now under the Ministry of Light Industry, it is impossible for the Ministry of Light Industry to dictate production quantities for all products."

"The Ministry of Light Industry previously set annual production limits for certain products. However, once implemented, serious problems arose. For example, there's demand for canned fruit, and the production volume is sufficient. However, due to production regulations, a good opportunity is wasted."

"Canned food is one example. The same is true for other products. With hundreds of thousands of industrial categories, the central government simply doesn't have the capacity to formulate accurate production plans and issue production tasks. Even if all the computers currently used in scientific research were brought out, they wouldn't be able to formulate accurate production plans and tasks."

"This is also why small collectively owned enterprises have grown rapidly since the free market for agricultural and sideline products was liberalized and the development of industry and commerce in counties and townships was encouraged. Unlike some state-owned enterprises, which are bound by production targets, they can adapt to the market more flexibly."

The Chairman took a puff of his cigarette and said, "Aren't you worried about an economic crisis from this kind of unplanned, disorderly competition and production?"

"Chairman, this free market may appear to be disorderly competition and disorderly production, but it has always been developed under the socialist economic system and is under state control."

Wei Hongjun stated confidently, "The central government, including local provinces and cities, currently lacks the ability to control hundreds of thousands or even millions of industrial production lines, let alone formulate detailed plans for these industries. However, the central government and local provinces and cities can firmly control the basic industries that are crucial to the national economy and people's livelihood."

"Such as basic energy industries such as steel and coal, basic financial industries such as banking and insurance, basic transportation industries such as railways and highways, basic communications industries such as postal services and telecommunications, basic education industries such as school newspapers and magazines, basic medical industries such as hospitals, and basic livelihood industries such as water and electricity."

"As long as these basic industries directly related to the national economy and people's livelihood are state-owned or large collectively owned and directly controlled by the central government and local provinces and cities, the central government and local provinces and cities can obtain the information they want from these basic industries and understand the overall economic operation of our country."

"No matter how much daily necessities manufacturers develop, they cannot do without these basic industries. As long as they produce goods, basic industries will be able to obtain data. The central government and provincial and municipal governments can use the data collected by these basic industries to formulate plans for my country's economic development and conduct macroeconomic regulation."

"This way, the general direction of my country's economic development remains firmly in the hands of the state. The government can assess emerging problems in my country's economic development based on various data and adjust economic policies to avoid economic crises caused by disorderly production. It can also use the free market to compensate for any lack of dynamism in planned development."

"Besides, the small collective factories currently emerging from rural counties and towns are themselves part of the cooperative economy. At the same time, the Finance and Economics Working Committee has already stipulated that once small collective factories reach a certain scale, they will be converted into mixed-ownership enterprises that combine ownership by the whole people, large collectives, and small collectives."

"This type of mixed-ownership enterprise, while ensuring vitality, can also develop both public and collective assets. It embodies the 'common development' and 'common prosperity' of the socialist economy."

In fact, Wei Hongjun's work at the State Council over the past few years has largely implemented his economic philosophy. Without Wei Hongjun's promotion, there would be no thriving free market for agricultural and sideline products, nor would there be the development of small collective industries and commerce in counties, townships and rural areas.

In terms of political ideology, Wei Hongjun clearly stated that the difference between socialism and capitalism is not economic means, but the ownership of the means of production.

At the same time, the concept of the primary stage of socialism and the concept of "common prosperity" in the development process of the primary stage of socialism were put forward.

So what Wei Hongjun said was not surprising to the Chairman. Moreover, this time, Wei Hongjun explained his political and economic ideas more clearly and comprehensively.

Rather than a Soviet-style planned economy, it will be a free market under the government's macroeconomic regulation of the national economy and people's livelihood. At the same time, we will develop a mixed economy of public ownership, large collective ownership, and small collective ownership, making this mixed ownership economy a key part of socialist "common prosperity."

The Chairman generally agreed with these things. Without the Chairman's tacit approval and support, Wei Hongjun's economic policies would not have been implemented over the years.

But the Chairman wanted to know more about Wei Hongjun's thoughts. So he continued, "What if a company fails in free market competition?"

1076 Unified Social Security Concept

If the central government leaves local free markets alone and allows them to develop freely, some poorly managed factories will surely emerge.

We are currently experiencing a shortage of supplies. With the exception of a small number of products, most are in short supply. Furthermore, the free markets in counties, towns, and rural areas have only been around for a short time, so the situation isn't serious yet.

Even if there are some poorly managed businesses, the counties, towns, and villages will absorb the damage themselves. These small businesses are forced or semi-forced to close down. Because they are small and have little impact, they don't receive much attention.

But what if the free market continues to develop and some large and medium-sized enterprises begin to perform poorly? What if this leads to the performance of some state-owned enterprises?