Chapter 290: Economics Mini-Lesson Begins (Not Main Text — Don't Subscribe Lightly)

I meant to post this as a free chapter, but accidentally published it as a VIP chapter————

This chapter provides some plain-language explanations for Chapter 287 so everyone can follow along. The explanations here will be very colloquial and not necessarily rigorous, haha.

I. Concept Breakdown — Trade Surplus: Jiao Island's exports exceed its imports.

Deflation: The Joseon people's silver runs out — no money, no goods — so merchants all lower their prices together.

II. The Later Jin's Two Trading Partners — 1. Joseon: The Later Jin sells goods to Joseon; Joseon smuggles them to the Great Ming, and in exchange gets grain, ironware, and gunpowder for the Later Jin.

2. The Shanxi merchants: The Later Jin sells goods to the Mongols; the Mongols sell to the Shanxi merchants; the Shanxi merchants then give grain, ironware, gunpowder,

and silk to the Later Jin.

III. Quick Q&A — Q1: What is the protagonist's method for economically blockading the Later Jin?

A: Ban the sale of ironware, saltpeter, grain, and other war materiel, so the Later Jin has no way to fight wars.

Q2: But the protagonist can't seal everything off — there are so many smugglers!

A: As long as trade is only allowed at the Jiao Island frontier market, with unified control over commerce, it can be sealed off.

Q3: Why should it be Jiao Island just because the protagonist says so? Why would smugglers listen to you?

A: Because the protagonist has bought up all the ginseng and furs — if smugglers don't come to Jiao Island, there's no profit in it for them.

Q4: But the Later Jin has two trade routes. You seal off the Joseon line, but the Later Jin still has the Shanxi merchant line and can still buy war materiel.

A: The protagonist uses the trade surplus to drain the Later Jin's silver dry, and uses unified procurement to buy up all the Later Jin's ginseng, leaving the Later Jin unable to do business with the Shanxi merchants.

Q5: Is the Later Jin stupid? Can't they just refuse to play along with the protagonist?

A: Then that's no loss to the protagonist — on the contrary, the Later Jin loses its frontier trade with Joseon.

Q6: Then why would the Later Jin let the protagonist maintain a trade surplus? Can't they just not spend money at Jiao Island? Save it up and keep it for buying from the Shanxi merchants.

A: In that case, the Later Jin doesn't gain much, but the Shanxi merchants lose their ginseng profits, and the Later Jin–Shanxi merchant alliance is weakened.

Q7: By your logic, can't the Later Jin just give the Shanxi merchants more silver?

A: Then the Later Jin buys fewer goods, and the alliance is still weakened.

Q8: Then what does this have to do with deflation?

A: The protagonist doesn't trade directly with the Later Jin, but with Joseon. As Joseon's silver continuously flows out, it experiences deflation. The Later Jin's silver will naturally flow toward Joseon, dragging the Later Jin into deflation too. No silver means no purchasing power, which means they can't buy from the Shanxi merchants — the logic loops closed.

Q9: Why must the Later Jin's silver flow to Joseon just because Joseon has deflation? Can't I just refuse to let it flow?

A: That works too — but then do you sell your goods or not? If you don't sell your goods either, that's complete decoupling, and the logic loops back to Q5.

If you do sell your goods, then Joseon's deflation drives prices down, the Later Jin can't sell its goods at high prices, and has to sell at a loss — still weakened.

Q10: If that's the case, then when Joseon has deflation, the protagonist's goods have to drop in price too, right?

A: Yes, and that triggers the lose-lose ending: Joseon gets scrapped, and nobody does business with them anymore. But the protagonist has plenty of business partners — losing one doesn't matter. The Later Jin only has two business partners, so losing even one is a major weakening.

Q11: That sounds somewhat reasonable, but if you tell the Joseon people about this scheme, won't it give the game away?

A: Even if it's exposed, it doesn't matter. As long as it's not the Q10 lose-lose ending, the protagonist can accept every outcome. And coincidentally, the protagonist never revealed the Q10 deduction.

Besides — this theory that even you great shipowner-investors find somewhat puzzling — can the Jianzhou barbarians understand it?

The protagonist tells the theory to his subordinates, his subordinates tell Joseon, Joseon tells the Jianzhou barbarians — after passing through so many hands, the information is already distorted, and they understand it even less.

Q12: What do you mean "even if it's exposed, it doesn't matter"? Wouldn't it be better if it weren't exposed?

A: If it's not exposed, how do you convince the stubborn Joseon people to open trade? Compared to exposing the scheme, isn't having less external resistance better?

Q13: Then can the Jianzhou barbarians sell ginseng and furs to the Shanxi merchants, exchange them for silver, and then buy silk from Joseon?

A: No. The Shanxi merchants lose the outbound profit on silk, and the alliance weakens.

Q14: How would it weaken? Nan'ao's silk is cheap — the Later Jin can buy more with the same money, which could make up for the weakening, or even strengthen them!

A: To maintain this trade system, the Jianzhou barbarians must keep a surplus in their trade with the Shanxi merchants and a deficit in their trade with Nan'ao. Silver will flow endlessly from the Shanxi merchants, the Jianzhou barbarians, and Joseon into Nan'ao.

And since Nan'ao has no trade relations with the Shanxi merchants, the silver will never flow back to them.

Northern Zhili and the Shanxi region have always been areas short on silver. If this continues, deflation will set in, and the ginseng and furs the Jianzhou barbarians sell to the Shanxi merchants will fetch lower and lower prices — the logic loops back to Q9.

IV. Closing Remarks — If you still have questions, feel free to leave a comment. I'll pick the valuable ones and continue with Q13, Q14, and so on.

Yahei

Fenyuan

Pen