Genocide Online
Chapter 256 – Adam Smith’s Theory and Agricultural Reform
“…Value is determined by labor.”
Here, in a room in the castle of the Grand Duchy of Camellia –where I was based– I shared this quote with the player known as Philia, who was being treated as an “Important NPC” because people thought she was the once-deceased daughter of the Grand Duke returned to life.
This “girl” –that is, the “Guy In Real Life” who is doing a poor job of passing for an actual girl– started yelling at me with her eyebrows all wrinkled up and several blue streaks on her forehead.
“Huh!? Wait… we were just talking about starting an all-out war with an actual psychopath, so what’s the deal with whatever it is that you just said? What are you going on about, huh!?”
“Young lady, your words are confusing.”
“Ohoho, first you spoke about fighting that madman… and now you suddenly started talking about something else?”
The fact that the chamberlain behind her reprimanded her, forcing her to change her tone, had already made her a little upset. And though the bitter smile on my face made her feel even worse, I would still start my explanation over.
I had to get this explanation done so I could quickly begin with our preparations… We needed to act fast and make it so we can achieve our goals if we wanted to make any relevant difference in national power.
“Even if it’s called a “total war”, it won’t start right away… Now’s the time for our countries to prepare and strengthen each other.”
“Huh… so? That’s why you said that… what was it… ‘value is determined by labor’?”
“That’s right, that was Adam Smith’s theory. Most of the mechanisms of capitalist societies in countries around the world, including Japan and the United States, operate based on his theory.”
Adam Smith was born in the United Kingdom about 450 years ago. He was said to be the one to set forth the studies of modern economics.
In other words, one could think of him as the “Father of economics.”
There are many speculations regarding what exactly Adam Smith’s model of economics was, but the first thing to be noted about his view of economics was the study of production in human society.
Adam Smith had uttered a certain phrase, which was regarded as the basic principle of all productive activities of human society.
“…And that is what you said earlier, right?”
“That’s right. He said, ‘Value is determined by labor’.”
Was it to get her to focus on my explanation, or was it to give them time to ask me any questions about what I had said so far…? Perhaps for both reasons, I gave a quick glance at the chamberlain who was quietly standing behind her before resuming my explanation.
“But to say that ‘Value is determined by labor’ doesn’t make sense, does it?”
“Well… For example, why do you think diamonds are valuable?”
“…Because there are stupid rich people who pay a lot of money for them, right?”
“Then why do you think money has that much value?”
“…I dunno.”
As she says, it was difficult to know exactly why money has a certain value… but as Adam Smith puts it, “Value is determined by labor.”
For example, with a minimum hourly wage of 1,000 yen, if you offer to pay 10,000 yen per day, you can make your employees work for 10 hours a day. And according to Adam Smith’s views, this principle was the source of the value of all the things that exist in the world.
So, even if you were to offer to pay 5,000 gold coins for an hour of work, if no one is willing to do said work, even the 1,000 yen of the previous example would be worth more than these 5,000 gold coins.
“On the other hand, if you were to offer to give, let’s say, your food scraps as payment for a week’s worth of work, and a lot of people come rushing in to take your offer, then you could say that your food scraps are worth 168,000 yen.”
“Eww. Why did you have to make an example out of my food scraps? That’s disgusting.”
“Well, when asked how much something is worth, people tend to think about its price, but money is nothing more than a convenient tool to ‘exchange valuables’. The thing that truly determines value is labor.”
Thus Adam Smith believed that the value of all things in human society was determined by labor, or to put it another way, that it was labor alone from which the value of things was born.
In other words, the value created by labor in a country is the ultimate source of wealth of that country. If this value is not enough, the country will become poor.
In Adam Smith’s time, both Spain and Portugal were in poverty despite accumulating large amounts of gold and silver. Meanwhile, America had no such riches, so the people instead worked hard, and as a result, the country became rich at a tremendous rate.
“Then, from this theory, Adam Smith said that agriculture is the source of a nation’s strength.”
“Agriculture?”
“Basically, plowing the fields generates food, and the more food you have, the more people you can feed. Having more people means more labor, and this labor will in turn create value, which in turn will make a country richer.”
In other words, the source of the value created by labor is the fields, making agriculture the source of a country’s wealth.
To put it bluntly, a country’s wealth grows from its fields.
Adam Smith also said that “surplus food can be stockpiled, which in turn can create industries other than agriculture.”
This means that any country that works its hardest to cultivate its fields will be able to generate more food than it needs to feed its farmers, which will result in other industries being created to capitalize on this surplus food.
“If the majority of a country’s people can be fed, various industries will be born, and the country will become prosperous through more labor… And with the birth of various industries, the division of labor will advance, further increasing the efficiency of labor.”
“Division of labor?”
Even when making a single sword, instead of a single person doing it all by themselves, it would be much better to have someone mining iron, someone else transporting the iron, someone else refining it, someone else processing it, and someone else actually making the sword. This division of labor would not only allow for a much faster production speed, but the quality of the final product would be much higher.
The sword made through this process would be much better than anything that a single person would be able to make completely from scratch, and it would be done much faster and through less effort for each person involved in the sword’s making.
“By dividing labor, you will be able to concentrate on your own work.”
“Ohh~”
Though the division of labor in the previous example increased the number of people involved in making a sword from one to five, that doesn’t mean that this would directly multiply the wealth of a country by five, rather, the wealth of a country will increase by several dozens of times.
On the other hand, without any sort of division of labor, people would have to do everything by themselves from scratch, forcing them to live like in the primitive age.
“Adam Smith also said that ‘the power of a country’s labor will grow by giving its people freedom’. …Well, I think we’ve spoken enough of this. Anyway, do you understand what I’m trying to say?”
“…We have to work hard on our agriculture.”
“That’s right! We’ll bring capitalism to this world and gather manpower with Kujo-style agriculture!”
“…”
I will bring in the world’s most efficient farming method –which was invented by my grandfather and successfully implemented by my father who is the Minister of Agriculture, Forestry and Fisheries– in order to increase our self-sufficiency.
The idea is to increase our population and promote the division of labor, thereby achieving efficient modernization.
“This will allow us to send the farmer’s children to school, increasing literacy rate, which will in turn increase the power of our nation… Furthermore, surplus food can be used to attract immigrants, who will add to our workforce.”
After all, there is currently a shortage of food everywhere… In addition to the great turmoil in the western part of the continent, the United Kingdom of Barence has eaten the Meffy Commercial Nation, which was our regular trade partner.
So our Grand Duchy of Carmelia will become a food storehouse for the western part of the continent… and its workforce, that is, its population, will grow by taking it from other places.
“And one more thing. Here.”
“…What’s this?”
“It’s a blueprint for making a weaver. With this, and your extra manpower, you can create even more value, right?”
“…Ah, yes.”
Adam Smith also argued that by continuing to invest in the right tools and equipment, we can further increase the value of our labor.
We should start with things that are easy to make, and continue to increase our investments.
“But what’s with all this Adam whatshisname guy… stuff?”
“There are many theories derived from him, but I think it’s the easiest to understand, and above all, it really does fit this world, which hasn’t progressed at all as much as it should have.”
“Ah, I see…”
So, what’s next… Was it Ichijoji –whose father is the Minister of Finance– the one who’s running a bank?
Well, either way, it will take a long time for these reforms to be realized, and it would be boring to do nothing in the meantime, right?
“Hey? Where are you going?”
As she asked me that question while slowly getting up from her seat, I turned to her and answered with a very polite smile.
“…Just going to do a little destruction of our opponent’s infrastructure.”
After waving at her, who gladly sent me off with a somewhat tightened smile, I went back to my thoughts… I think I’ll destroy the main road connecting the United Kingdom of Barence’s metropolitan area with its countryside.
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