Giant Ship Across the Song Dynasty: My Supplies Come from My Motherland

Chapter 82, Eh...

Lin Zhou, a young man of the new era, was given an economics lesson by an "ancient person" from nearly a thousand years ago.

However, Teacher Li's level is really good; even a slacker like him can listen attentively.

"Silver is not money; it merely represents money. Do you understand? Behind money is not silver, but something that grows from the ground, is melted down in ironworks, dug out of the mountains, and dredged up from the river. Ultimately, money comes from human labor. Another layer of the tribute we pay to the Jin Kingdom is that we are handing over what we have created with our own hands."

Teacher Li looked up at his three disciples and continued, "Money is merely a medium for barter, and what the Song and Jin dynasties exchanged wasn't money, but labor. You might say that's called 'money not being worthless.' But I want to ask you a question: if money is not worth money, who will die faster? It's certainly not the Jin, because the Jin also had its own production, while the Song made its own production cheap. That way, the Jin could exchange less for more, resulting in a deficit even greater than paying tribute."

"Why are the prices of goods soaring in the Song Dynasty at that time? Because most of the goods were taken by the Jin Dynasty. Scarcity drives up prices. When there are fewer goods on the market, prices naturally rise. And when the Jin Dynasty dumps goods into the Song Dynasty, it is no longer a business transaction, but plunder."

"What is being plundered? It is the price difference, and this price difference is the blood and sweat of the people of the Song Dynasty who toil in the fields from dawn till dusk."

These words left Ke Zi and Zhang Yong completely bewildered. Zhang Yong even tilted his head and fell asleep again, but Lin Zhou alone slammed his fist on the table and shouted, "I know! I know!"

"You know?" Teacher Li looked at Lin Zhou with great interest. "Then can you tell me how to break this deadlock?"

Despite Lin Zhou's shortcomings, he's incredibly skilled at business; it's his specialty, and he's also very interested in it.

He wasn't stupid, he just didn't like to study, but he was particularly interested in business. He would even pay for business classes himself. After hearing what Teacher Li said, he immediately got excited.

"The way to break the deadlock is actually quite simple. I only know two ways. One is to fight back on the battlefield, and the other is to exploit the industrial scissors difference to turn the tide." Lin Zhou leaned back and clicked his tongue. "In the current situation, the industrial scissors difference is more suitable, but it's easy to trigger a passive effect—getting desperate after losing."

"Scissors difference...that's an interesting term."

Teacher Li's eyes lit up immediately. His vision cleared, and he sobered up. He asked excitedly, "What is the scissors difference? Tell me."

"It's simple. Take a pair of scissors, for example. The cost is eight coins. But I can make them while you can't, and you still want them. So, how about I calculate it at three hundred coins a pair? Take it or leave it!" Lin Zhou raised his chin and said, "Including transportation, losses, and labor, the cost of a pair of scissors increases to fifty coins. On that basis, I still make a profit of two hundred and fifty coins. People use three hundred coins to buy something that costs eight coins. That's called the scissors profit margin."

说到这林舟嘴里啧了一声：「但是唯一的问题就容易触发对方被动，把你揍一顿，然后剪子拿了你的然后不给钱，甚至把造剪子的铁匠都给抢过去，在这边叫啥我不知道，但在我们那边叫广场协议。」

Upon hearing this, Teacher Li clapped her fan loudly in her palm, and her gaze towards Lin Zhou changed completely.

"So, how do we break this deadlock?"

"That's not difficult." Lin Zhou's eyes darted around. "There are still two methods: one is called scarcity marketing, and the other is called supply chain advantage."

"Okay, okay, tell me everything."

Teacher Li simply pulled up a stool and sat down next to Lin Zhou. He had a stubborn air about him, and he really gave off the feeling of "among three people walking together, there must be one who can teach me." He even personally poured Lin Zhou a cup of Lei Cha (a type of tea) with a strong ginger flavor.

Lin Zhou, having been a fool for so many years, was naturally delighted when someone finally appreciated his talent in this area, and he put on a little show. He picked up his teacup, took a sip, forced down the nauseating taste, and began to speak eloquently.

"The first type of scarcity marketing is simple: reduce production capacity. The more someone wants something, the less they give, making the other party feel that it's not worth waging a war for such a small amount of goods. Fix the production capacity and sell at a higher price. The advantage is that it's safe and reliable, but the disadvantage is that it's difficult to defeat others using this method, since the scale is small."

When Lin Zhou got to this point, Teacher Li nodded hurriedly: "That's right, over time it becomes a chicken rib that's tasteless to eat but a pity to throw away."

"Another advantage is the supply chain."

What is an industrial chain?

Upon hearing this, Lin Zhou's sense of superiority exploded. He smugly began to explain the industrial chain to Teacher Li, who nodded eagerly: "Indeed, indeed! From ore to scissors, it's truly like a chain, an industrial chain... Not bad, not bad, a good term. I've got it."

"The second approach mainly focuses on low profit margins and high volume. We're not going to use the high-price strategy anymore; we'll open up new channels. Opening up new channels means opening up the market, letting everyone join this fierce competition. The advantage of the Song Dynasty is its complete and concentrated industrial chain. Let's say each link is cheaper by one coin, the total cost is half that of other countries. In other words, whether it's the Mongols or the Jin Dynasty, we can produce the same batch of goods with the same technology, the same process, and even the same people, but..."

Lin Zhou looked up and said, "Your costs are only about twice as high as mine, but even with shipping, I'm still 30% cheaper. Merchants, they're all dogs! Who would do something without profit? If nobody does it, then naturally they'll import from here. And if they import too much, their own production capacity will collapse. Meanwhile, their people back home will realize, 'Hey... I can make money just by making this round trip, why should I bother with the hardship of running a small workshop?'"

"Yes!" Teacher Li nodded hurriedly, "Then their own workshop went bankrupt. Hiss... The Eighty-Fourth Chapter of the Book of Changes: Converting Rice Paddy to Mulberry Trees!"

"Once their domestic workshops are gradually wiped out, the entire industrial chain will collapse. Eventually, they might have to send all their iron ore here for smelting. I saw before that iron ore costs eight copper coins per pound, pig iron thirty-seven copper coins per pound, refined iron can even reach one hundred copper coins per pound, and refined steel is even priced the same as silver. So tell me, using their iron ore that costs eight copper coins per pound to create refined steel that costs one string of cash per pound, isn't that a price scissors effect? ​​The key is that they have no reason to attack you. Why?"

"Because they can't build it; even if they had the technology, they still couldn't build it."

Teacher Li slammed his hand on the table and stood up: "Brilliant! Absolutely brilliant! If I were a Jin citizen, I would have killed you with a single stroke right now."

"No, please... Teacher Li." Lin Zhou clasped his hands together and begged for forgiveness: "I was just saying that, just repeating what others have said."

Teacher Li didn't dwell on it too much. Instead, he paced back and forth in the room, his sleeves tucked in, muttering, "A calculated scheme, an unsolvable one!"

"If it really succeeds, wouldn't that be a victory without a fight?"

"War is inevitable, but we won't be afraid then. Think about it, once they realize they're no longer capable and prepare to counterattack, what about the money? It's all here. As you just said, money isn't money; what matters is the output. How will they fight? By throwing coins at us? We'll use their needs to support our industries, and use those industries to fuel our military strength. That's why development is the only true principle."

Lin Zhou crossed his legs and showed off, while Teacher Li fell silent: "But what if... they realize what's going on and try to copy us?"

"Learn it, of course," Lin Zhou said nonchalantly, spreading his hands. "I'm open source, so I can learn anything. But how? Take a pair of scissors, for example. From exploration to digging, then smelting at the smelter, processing into ingots, and finally delivering to the blacksmith, each step requires several, even a dozen, processes. Starting from scratch would take ten or eight years, wouldn't it? And during that time, wouldn't you need to eat and drink? By the time you finally finish, I've already gone through eight iterations. Guess what? My cost is 30% lower than yours. Then I can just kick down their door in full armor and say, 'Open the door, free trade!'"

"Ha ha ha ha……"

Teacher Li was pleased with Lin Zhou's words and burst into laughter. After he calmed down, he looked intently at Lin Zhou.

"You do have some talent, buddy."

"It's nothing to mention, nothing to mention at all, just the tip of the iceberg."

Lin Zhou wasn't being modest; he genuinely only knew a little bit. But the problem was that Teacher Li took it as humility, staring at him for a long time before standing up and saying, "You can study on your own."

After saying that, he hurriedly left the classroom, and no one knows where he went.

At this moment, Lin Zhou moved closer to Ke Zi and asked, "Ke Zi, do you have any plans for tonight?"

"No." Dou Ke moved her stool further away. "Where did you learn all that you were saying to the teacher just now?"

"I paid for the course on Douyin, it cost me 9.9 yuan."

"What? Where?"

"It's nothing." Lin Zhou waved his hand: "Fangcun Mountain, Slanting Moon and Three Stars Cave."

At that moment, Teacher Li was leaning on the table with both hands, excitedly repeating what Lin Zhou had just told him, while the person opposite him was Headmaster Chen.

After listening carefully, Headmaster Chen's eyes suddenly lit up: "Did that auditing student say all of this?"

"I was just kidding!"

"Oh dear, Yizhi! Your temper!" Headmaster Chen shook his head helplessly, then said with interest, "This is interesting, this kid has some talent."

"I think it's feasible. See if the Ministry of Industry can give it a try. Supply chain concentration... that's a brilliant term, we should include it!"

Teacher Li really loved the little phrases Lin Zhou used; they were all perfectly matched and incredibly precise.

"It's probably going to be difficult right now..."

Chen Shan sighed and said, "However, I can make some moves. There just happens to be a steel mill under construction outside the city. I'll go and discuss it with the people from the Ministry of Works to see if we can give it a try and get into that industry..."

"Industrial chain concentration".

"right!"

"You, a Grand Tutor, must not disappoint me." Teacher Li tapped on Headmaster Chen's desk: "I'm afraid this is the only way to save the country."