"I don't doubt the revolution at all, but where exactly is it leading us? What kind of situation will we go through in between? I really hope to understand this." Li Shouxian raised a very sharp question.

"Do you think private enterprises shouldn't be going bankrupt on such a large scale?" Xu Yuanshan's voice was full of surprise. There was no doubt that People's Party members didn't care about the life or death of private enterprises. As a representative of the young cadres among the People's Party's middle-level cadres who were recognized as being favored by Chen Ke, Xu Yuanshan was quite surprised by the question Li Shouxian raised.

"I think we didn't consider this in our previous predictions. This is a lack of thorough consideration, not a question of whether they should go bankrupt," Li Shouxian replied.

Thorough consideration was expected, and the cadres present had no particular objections. But Chen Ke was currently leading the People's Party's work, and so far, Chen Ke's decisions hadn't caused any deviations beyond the control of the overall situation, so Li Shouxian's question seemed a bit "foolish."

Xu Yuanshan already somewhat understood why Li Shouxian had come to ask him. Xu Yuanshan's proposal to "allow private enterprises to intervene in certain industries" made him quite an "outlier" within the People's Party. But this didn't mean Xu Yuanshan actually intended to foster private enterprises; rather, he felt that in the case of pursuing maximum efficiency, relying entirely on the People's Party itself to support all industries would be too costly administratively. In his heart, Xu Yuanshan didn't care about the life or death of private enterprises at all. When private enterprises were needed to participate in labor, it was enough for them to exist; ordinarily, they should have nothing to do with the People's Party.

He was about to speak when Chen Ke strolled into the meeting room. Everyone stopped talking, and amidst the rumbling of chairs, the comrades all stood up.

"Sit down, everyone." Chen Ke waved his hand. After everyone was seated, Chen Ke looked at everyone's unusual expressions and smiled. "It seems I've missed something."

Shang Yuan briefly introduced what they had been discussing. At the end, he said, "Chairman Chen, many comrades say this bankruptcy is a universal phenomenon. And the bankrupt landlords and gentry seem to have a lot of hatred toward us."

"Seizing someone's path to wealth is worse than killing their parents. Such hatred is quite normal," Chen Ke smiled.

"Chairman Chen, now that things have developed to this stage, I think we must include such matters in our plans," Li Shouxian said. "This contradiction is becoming more and more prominent."

"The bankruptcy of the private economy is very normal according to the laws of economic operation," Chen Ke said. "Let me ask a question first: why are they going bankrupt?"

A comrade immediately replied, "Chairman Chen, just tell us directly. Too much discussion easily leads to confusion."

"Easily confused. Hehe." Chen Ke gave a few dry laughs. "Alright, I'll tell you."

Most current private enterprises were in the grain processing industry—mills and oil processing were the main forces of these private workshops. The People's Party's control over grain production directly cut off their source of raw materials. Coupled with the cooperatives setting up similar factories, the bankruptcy of these workshops was not surprising at all.

After explaining the reasoning simply, Chen Ke continued, "Let me be clear, when the general policy direction was formulated, there was indeed no consideration targeted specifically at these private enterprises. There is another very important reason for their bankruptcy: our People's Party has distorted supply and demand."

Historically, Stalin's economic policies, the early period of the new China, and the capitalist system of free competition after the Great Depression all encountered problems that couldn't be solved without "distorting supply and demand" as one of the most basic policies. To use a more elegant term, it could also be called "industry nurturing agriculture."

If it were purely for profit, the price of industrial goods would be ridiculously high. For example, when Chen Ke was in school, political textbooks often talked about the "unequal exchange between agricultural and industrial products." Latin American countries exported several tons of bananas in exchange for one semiconductor radio. Later, as Chinese industrial goods conquered the world, this saying gradually disappeared in China. A new saying that arose was: "Foreign capital squeezes money out of China by manipulating the prices of bulk commodities." The price hikes of iron ore by companies like Vale of Brazil and Rio Tinto of Australia became examples of capitalists plundering China's wealth.

The core of "industry nurturing agriculture" is to suppress the price of production tools produced by heavy industrialization and expand the scope of sales almost regardless of cost. In the short term, this rapidly reduces costs in the production field and quickly improves production efficiency. Those who can provide heavy industry investment are undoubtedly only the state-owned enterprises under the government. For example, in the base area, the government led by the People's Party unhesitatingly undertook this task.

In the base area, the price of iron farm tools was less than twenty percent of the price outside. According to normal trade patterns, consumers "get it at the highest price." But the base area could forgo visible profits to prioritize ensuring that the masses could buy and use these iron farm tools. This was a standard case of distorting supply and demand.

"Private enterprises are clearly not within the scope of our 'care' regarding distorted supply and demand, so naturally they cannot survive," Chen Ke concluded.

"So how long will this policy of distorting supply and demand last?" Li Shouxian asked, his eyes shining after receiving such a theoretical explanation.

"The ideal state is like this: with the development of productive forces, production costs drop rapidly, and the final market sales price is already the same as the distorted price. At that time, prices can be completely freed, and private enterprises and state-owned enterprises can all compete freely together," Chen Ke replied.

"How long will that take?"

"What kind of process must be completed in the middle?"

Almost at the same time, Xu Yuanshan and Li Shouxian asked.

These two questions greatly reflected the personal qualities of the questioners. Chen Ke didn't rush to answer but carefully looked at the two comrades. Xu Yuanshan, after all, was no ordinary person; at Chen Ke's pause, he already knew he had spoken wrongly and immediately corrected himself, "What kind of process must be completed in the middle?"

Shang Yuan admired this in his heart. Xu Yuanshan had always been in the logistics department, so it was normal that his vision couldn't compete with Li Shouxian's, but Xu Yuanshan was by no means stubborn. His eagerness to correct his mistakes and improve was already remarkable. Scanning the other comrades, some showed approval of Xu Yuanshan, while others had mocking expressions. Still others didn't understand what had happened at all.

Be generous toward others and strict with oneself—this was the style the People's Party had always promoted. But this attitude itself was a reflection of one's own qualities. Xu Yuanshan didn't feel that correcting himself was disgraceful because he simply didn't think that saying the wrong thing had anything to do with "face" or "shame." Therefore, while Li Shouxian, with his extremely upright attitude, was very worthy of high regard, Xu Yuanshan, with his equally upright attitude despite his lack of understanding, was also a promising talent. But as for those comrades who showed approval or mockery, their qualities were worth considering.

Thinking of this, Shang Yuan suddenly realized that if he hadn't had a good teacher, and if his teacher hadn't given him a sharp scolding at a critical moment, he probably wouldn't have realized these things at all. He felt a wave of lingering fear. Teacher Li Hongqi's teachings resurfaced in his mind: "See the darkness within yourself, find the way to overcome the tyranny, cruelty, and shamelessness in your heart. Just be a true laborer and live honestly. Then tyranny changes into courage, cruelty into determination, and shamelessness into humility."

During this moment of distraction, Shang Yuan missed a significant part of the discussion. By the time he came back to his senses, the topic had shifted to "the relationship between labor accumulation and private enterprise bankruptcy."

"Comrades, currently two situations exist simultaneously for rural labor in China. First, labor is expensive. Second, labor is cheap. Besides having their own land, ordinary people also need to learn a craft. During busy farming seasons, they naturally plow the fields, and during slack seasons, they earn money through their craft. This kind of skilled labor falls into the category of expensive labor. After all, the scope of production in the countryside is narrow, with only a few types. In my hometown, we like to say, 'the wise eat by their wits, the unwise eat by their strength.' And those who eat by their wits generally belong to the more expensive labor force. In this regard, they have also been greatly affected by the distortion of supply and demand."

In terms of technical content, the industrial system the People's Party was currently working hard to build was undoubtedly the system with the highest "concentration of intelligence" in China. This system was also constantly spreading within the base area. Now every county had its own ceramic factory, so daily-use bowls and chopsticks were no problem at all. Since enamel bowls began to be sold, they were even constantly squeezing the traditional food container market. State-owned enterprises had the technology, capital, and market. If traditional workshops could survive the competition from such enterprises, that would be truly strange.

"As for cheap labor, such as women, the elderly, and of course, some child laborers—the base area also provides great employment opportunities. Animal husbandry goes without saying. During the annual silk production period, those with strength go to carry loads, those without strength but with patience go to take care of the silkworms, and those lacking both strength and patience but willing to learn can work in the mulberry orchards. So labor that was originally extremely cheap, or even completely unsellable, can now earn wages through labor. And these wages are even quite significant..." Chen Ke talked eloquently. The comrades smiled as they matched his words with the work they were responsible for.

"This large-scale acquisition of cheap labor is also one of the major reasons for the bankruptcy of workshops." Chen Ke's conclusion made everyone surprised again.

"Private workshops, in the final analysis, are meant to make money. Using apprenticeship to teach a craft as an excuse, these workshops compress the cost of wages to the limit. But our large-scale acquisition of cheap labor has led to a general rise in labor prices. The result is that private workshops have encountered a labor supply shortage. They naturally cannot continue."

In recent years, there had indeed been such problems in the base area. The masses were working hard for themselves, which directly resulted in many projects that previously only needed to provide some food to recruit many people now becoming very difficult to find labor for. Even those who did participate were old men and women who came more to get a bite of food and save some for their families than to actually participate in labor. The government was truly the great savior of the people; without the government, how many more people would have died in various disasters, and how many more would have been ruined? Even so, when people could seek interests for themselves, they naturally pushed the government aside. If they treated the government this way, they naturally treated private enterprises even more so.

This time, there were no smiles on the comrades' faces. Everything in the base area was created by labor. If there wasn't enough labor invested in production in the public sphere, forget everything else—just the recently massive basic water conservancy construction work wouldn't be completed on time.

"After the first census, I said that we would face a period of extreme labor shortage. With a population of over sixty million in the base area, to build an industrialized base, we will face a difficult situation that requires us People's Party members to be the first to put in great effort," Chen Ke said.

In the silence, there were a few scattered rounds of applause, but it didn't lead to enthusiastic clapping from all the comrades. Chen Ke's explanation left the frontline comrades silent.

Chen Ke knew very well that these were situations that had actually occurred in history. When he recalled how he dared to call on the People's Party comrades to put in great effort with him, he realized he himself had to pay a great price first. According to normal labor and compensation, Chen Ke should now be the richest man in the base area. For example, the prize money for each individual Nobel Prize was 150,000 Swedish kronor, which was equivalent to 20 years' salary for a Swedish professor at the time. Because it was a joint award, Chen Ke received half, which was still 10 years' salary for a Swedish professor. This money naturally became capital for purchasing machinery and equipment. As for the various patent and stock income Chen Ke should have received according to foreign laws, it all belonged to the base area's finance.

The only exception was five thousand taels given by Chen Ke's father-in-law, He Ruming, which was He Ying's dowry and a meeting gift for Chen Ke's daughter. Chen Ke felt this money was hard to decide. It wasn't that he cared much about the five thousand taels, but he didn't dare to easily set such a precedent. If gifts from the relatives of the People's Party members had to be handed over, it wasn't a question of whether it was good or bad, but once it became a regulation, it would definitely be the start of many bad things. Finally, after discussion in the Party Committee meeting, the property disclosure system was introduced.

Chen Ke examined his heart; he truly had given everything to the Party. He could be called a saint in financial matters. But the purpose of doing so was only to increase the persuasiveness of his speech. Otherwise, if those below used Chen Ke's actions as a shield, given the current extreme capital shortage in the base area, where would there be so much money to pay wages?

This might be proletarian consciousness? Chen Ke thought. The reason he easily accepted this practice was not because of any special thoughts at the time. Instead, he remembered words he had heard before: "If during the Twenty-Five Thousand *Li* Long March, the leading cadres sat in eight-person sedan chairs, each with a little wife in his arms and an opium pipe in his hand, could they have walked twenty-five *li* of those twenty-five thousand?"

Thinking of this, Chen Ke continued, "Although we've gone off-topic, let me say a few more words at the end. What our People's Party is doing now is lowering the price of expensive labor and raising the price of labor that was originally so cheap it couldn't be sold. The final result might lead to a so-called inversion of physical and mental labor, where those who wield a pen can't earn as much as those who wield a carrying pole. Those who build atomic bombs might have an income lower than those who sell tea eggs. The income of our People's Party comrades might eventually be lower than that of ordinary laborers. This kind of thing might exist for a long time. I didn't carefully deduce the tide of bankruptcy for private workshops back then, but I have deduced this income problem this time. I hope the comrades are mentally prepared for this."

"Haha." This time, quite a few comrades gave dry laughs.

After the discussion, Li Shouxian approached Chen Ke. "Chairman Chen, this tide of bankruptcy will lead to social instability."

"I heard about someone wanting your head. You've worked hard." Chen Ke patted Li Shouxian's shoulder.

"Since this bankruptcy is bound to appear on a large scale, the landlords and gentry we let go before will probably really rebel this time," Li Shouxian said. "How many people did we kill during land reform? This time..."

"Hehe." Chen Ke smiled. The number of people killed by the People's Party in the four provinces during land reform was no less than two hundred thousand. This didn't include regular warfare at all. If the landlords and gentry really rebelled this time, suppression would be a good choice. But Chen Ke wanted to try a more moderate approach for the time being.

"Comrade Li Shouxian, I want to turn Wuhu into an Economic Development Zone. What do you think?"

"Economic Development Zone?" Li Shouxian was very puzzled.