Monday, May 15, 1645, Port Oriente. In the office of the Economic Countermeasures Committee of the Government Council, Qiang Quansheng, who is also the director of the State Administration of Precious Metals, is immersed in writing documents. As one of the several major leaders in the domestic currency and economy, Qiang Quansheng is still full of enthusiasm for the domestic economic construction.

It's 1645 now, nearly fifteen years after the first crossing with two or three kittens. In the past 15 years, the country that was founded by the people has developed from scratch to the prosperous situation it is today. Every time I think of this, Qiang Quansheng is full of emotion, and then I am full of passion for doing business.

With the development of the country's economy and the increase of population, various economic activities are becoming more and more active. Last year alone, the Ministry of Industry and Commerce granted more than 50 individual or enterprise business licenses in one go, which fully illustrates the current situation in which the domestic commodity economy is becoming more and more developed. However, in the process of national economic development, there have also been some discordant status quos.

At the beginning of last year, the state gradually relaxed price controls and monopoly operations in some non-key industries, and some private capital poured in, resulting in a considerable increase in prices. Taking beef as an example, the largest source of fresh beef in the country is the import of La Plata beef through the Colonia Free Trade Market. After the expiration of the previous agreement with the people of La Plata for the supply of beef cattle on December 31, 1643, negotiations between the two parties broke down due to a 50% increase in price by the people of La Plata. Coupled with the country's financial constraints caused by the decline in foreign trade revenues, the Government Council simply abolished the monopoly on beef and instead responded to the call for market-oriented reform put forward by some liberals in China. Private capital is allowed to enter the industry. At the same time, several business licenses were approved in one go. Among them, there is a slaughterhouse operating license. There is also a business license for import and export trade enterprises.

Immediately after the establishment of these enterprises, they organized a group to negotiate with the people of La Plata and accepted the terms of their price increase, that is, the CIF price of each beef cattle was tentatively set at 15 yuan. Such prices have unsurprisingly caused a sharp rise in the domestic beef market, and coupled with the profit-seeking nature of private capital, which demanded higher profit margins than state-owned enterprises, the price of beef in one town and five townships in the capital region has directly doubled. Except for a small amount of cheap beef produced by the state-run ranch slaughtered by the state-owned meat factory, the prices of the rest of the imported La Plata beef, South African yellow beef, and New China Hump beef have skyrocketed. The whole market was silent for a while.

Although they understand that the previous market of low-priced beef is abnormal and unsustainable, and is the result of long-term disguised financial subsidies by the state, ordinary people do not think about these problems, they only curse the retailers and even wholesalers who raise prices too high. And these people are also very depressed, the price of imports has risen by half, and the private import and export enterprises, slaughterhouses, wholesalers/retailers who handle them cannot make no money or only make a little money like the state-run stores, if the profit margin does not satisfy them, why should everyone invest their money in this industry? It's hard to break the monopoly, everyone has to make some profits, and it's not so surprising that the price has doubled.

Coincidentally. Other industries with no thresholds, such as imported fish and shrimp, sugar, fruits and other commodities, have also experienced skyrocketing prices. The sharp rise in these prices has undoubtedly formed a lot of inflation in the country, coupled with the continuous rapid development of the country's economy for many years. The wealth of the people continued to increase, and so did the total amount of currency of the people of the whole country, just as happened in the new Chinese colonies, and the whole society was drowned in inflation. Although the degree of these inflation is much lighter than that of those countries in Europe, it still causes great dissatisfaction among the common people, social contradictions have generally risen, the assimilation effect has generally declined, and some social problems that have been covered up due to rapid economic development have gradually emerged.

Faced with this situation, the Government Council also held several meetings in succession to discuss countermeasures. At the meeting, there were calls for the government to reinstate financial subsidies so that prices could fall. However, the argument that this is clearly a spokesman for vested interests was quickly refuted by some cadres with military backgrounds, and the original intention of the government to liberalize these industries and implement thorough market-oriented operations was that the government did not have enough financial resources and needed to cut off some so-called burdens. At the beginning, it was these people who strongly encouraged the government to open up the market, and the military representatives strongly opposed it, and now that domestic inflation has risen, these people have begun to encourage the government to restore subsidies, so should you take back the business licenses that have been issued to you and return to the old way? The two sides engaged in a fierce confrontation, but in the stronghold of the civilian faction, the military or sympathetic military forces could not prevail, so their proposal to return these industries to the government did not pass.

However, the re-issuance of subsidies is not financially permitted. If we take beef as an example, the nationals and slaves (South African labourers) of this country with a "long-standing" tradition of eating beef today consume about 40-50 adult beef cattle a day, or about 16,700 a year. If you want to return to the previous price, then you have to subsidize about 8 yuan per cow. This is a huge financial subsidy of more than 100,000 yuan, and judging from the fact that the government is heavily in foreign debt, the foreign trade situation is gradually deteriorating, and a large number of female slaves need to be imported, the government will definitely not be able to come up with this money to implement the subsidy. As a result, the debate turned into a pointless war of words, as neither side could come up with a practical solution to the problem.

"The question of the real purchasing power of money is very important because it involves the prestige of the government and many other aspects, which need to be taken particularly seriously in our country of immigrants. To this end, on behalf of the Economic Measures Committee, I solemnly propose to the Government Council that a price index table be compiled to fully show the average price changes of various types of commodities in the country, which will have a role that cannot be underestimated in formulating economic policies, because this will reflect a series of circumstances, including the purchasing power of money, the increase in the price of commodities, and even changes in the quantity of domestic currency. Qiang Quansheng said that it is difficult to stabilize the prices of several industries that have risen in price in a short period of time when the government refuses to implement financial subsidies. If the market is regulated alone, it will take a long time to achieve this when the vast majority of beef cattle need to be imported, at least until the family farming industry in the northern pasture ridge region develops greatly.

However, before that, the Government Council does need to compile a table of price index changes including many commodities that are easy to count in the country, which will enable the Government Council to grasp the country's economic trend more calmly and intuitively.

"We can take the price of this year (1645) as the base year, set the price of the basket of goods to be examined at 100, and then convert the price of the following years into a percentage of the price of the base year, which is the arithmetic index table. Of course, we can do it in more detail, such as compiling a price index table on a monthly basis, so that the seasonal changes in the price of a basket of commodities will also be seen at a glance. ”

"Of course, the importance of each type of commodity to the people is not the same. For example, even if the price of a pair of whale leather boots quadruples, it will not hurt the people as much as the price of a bag of South African sorghum will rise by 20%. Therefore, we must admit that the various commodities in the index table are not equally important, and when compiling the price index table, we also need to multiply the price of each commodity by the weight, that is, to make a 'weighted arithmetic index table', and the changes in this price index are often of practical reference significance. ”

"We can either extract the data on customs imports, or we can go to the wholesale market to count the prices, or we can also draw data from some representative retail stores, that is, we must try to obtain the most original first-hand and real data. Generally speaking, the price of daily necessities should account for the largest weight, followed by general consumer goods that ordinary citizens occasionally buy, and luxury goods at the bottom. ”

"The necessities of life should include food (sorghum, potatoes, beef, sheep and pork, vegetables, edible oil, fish and shrimp, flour, rice, sweet potatoes, corn, sugar, cream, cheese, eggs, etc.), cloth (cotton, woollen, linen, shoes, hats, belts), rent (this item is omitted), transportation expenses (trains, carriages, ships), fuel (honeycomb coal, charcoal, peat), lighting (lights, candles), etc.; General consumer goods include soaps, brushes, tools, feed, newspapers and books, yerba mate, metal utensils, etc.; Luxury goods include porcelain, tea, wine, high-end leather goods and other goods, and the specific prices of all more than 100 kinds and the weights of the price index are listed in the following table. ”

"It's fair to say that the main expenditure of the people today is on food, which is about two-thirds to three-quarters. Of course, this only refers to the workers, and the peasants will be better off, because they can often consume the food they produce, which will save a lot of money. Correspondingly, the amount and channels of cash they receive are far from those of workers. In fact, I still wrote the food part of the price index table in a rather crude way, and the real situation should be that food is also divided into grades, that is, the main food (flour, oilseeds, etc.) that has the greatest importance to ordinary people, and some secondary foods that are not often consumed (meat, sugar, eggs, cream, etc.), each of which should not have the same weight. All in all, in an environment where food spending dominates one's spending, the government should be more sensitive to changes in the prices of these commodities, and this is the meaning of the price index change table. (To be continued......)