Yan Fu consulted Chen Ke on "fiscal policy." Chen Ke would rather delay the work in hand for a while to talk to Yan Fu about this. Chen Ke liked talking to Yan Fu. The other comrades in the base area were about the same age as Chen Ke, and none could match Yan Fu in terms of knowledge and experience. Moreover, after studying, Yan Fu had always worked on the front line, from industry to military; he was not the kind of character floating on the surface, so he didn't have too much literati air. Of course, because he was seriously Westernized, Yan Fu occasionally acted a bit foolish. For example, he once advocated promoting English education in primary schools in the base area, which was fiercely criticized by People's Party comrades. Chen Ke's "New Chinese" education suited Yan Fu's taste, so he stopped proposing his "unique insights."

As a "political official," Education Minister Yan Fu was undoubtedly very qualified. The old handsome man praised the specific method proposed by Chen Ke to strengthen cultural education "at all times." One of the differences between Yan Fu and other literati was that he "didn't care about dignity." Although the old handsome man looked quite scary when he kept a straight face, and the children in the school often dared not breathe loudly in front of "Teacher Yan," the old handsome man was still very happy when he took the school children to stick "character learning boards" in the various "new agricultural villages" of Fengtai County.

This was a specific measure to promote cultural education in the base area. There was a "character learning board" on the wall at the door of every household, updating a Chinese character, a word, or a sentence every day. For example, the base area was currently engaging in personal hygiene, so what was written on the board was "Mosquitoes, flies, fleas, infectious diseases." "Flies and mosquitoes can transmit germs." "Bacteria can be seen under a microscope." "Brushing teeth can remove oral bacteria."

These texts were not updated casually. The glass manufacturing industry in the base area had developed well recently. Several glass craftsmen were brought from Shanghai, and the base area selected a group of people to learn glass grinding with them. Recently, a batch of microscopes capable of magnifying one hundred times were produced. The microscopes were very rough, but even rough microscopes were still microscopes. In accordance with the attitude of the people's revolution, these microscopes, which should have been "very precious" in other parts of China, were immediately put to use among the broad masses of the people.

In their spare time, the masses in the base area were organized to learn the concept of "bacteria." Farmers were scared stiff when they saw so many living "little bugs" in the tartar picked from their own mouths. There were also so many "little bugs" called "bacteria" in the dirt in fingernails and ears. The farmers finally established the concept of bacteria intuitively. And the theory that bacteria are transmitted through flies, mosquitoes, and fleas was accepted by the masses. Personal hygiene and public hygiene conditions immediately improved greatly. Not only washing faces, bathing, and brushing teeth became a new fashion, but family hygiene and public hygiene environments were also improved spontaneously by the people.

This "fashion" also brought some unexpected benefits. Many farmers were unwilling to cut their queues, and the People's Party had never forced them. But queues easily harbored lice. One of the results of this hygiene campaign was that some farmers who worried that lice and fleas would spread diseases simply cut off their queues and kept the soldier-style short hair of Chen Ke and the Workers' and Peasants' Revolutionary Army.

Yan Fu strongly agreed with this change in folk customs. The old handsome man originally didn't have short hair. Seeing the common people starting to cut short hair, he also specially cut the same short hair. The popular "short hair" in these years was the side-parted hairstyle called "traitor head" in old movies. Since Yan Fu cut a crew cut voluntarily, other comrades who still kept side-parted hair quietly cut crew cuts too.

Chen Ke couldn't help but welcome Yan Fu's style of setting an example and connecting with the masses. So when Yan Fu asked about the fiscal policy of the base area, although Yan Fu was not a cadre of the financial department, Chen Ke still explained in detail.

"The characteristic of the Manchu Qing's finance is collecting in-kind and metal currency. The drawbacks of this tax model have been discussed for thousands of years, so let's not continue to discuss it. The tax revenue of the base area is centered on the allocation of labor. This kind of tax revenue requires a prerequisite, which is a strong central government. In this era, if we want to save China, we must establish an unprecedentedly powerful government. The new government deprives a large number of powers originally belonging to the gentry and rural autonomy from the old social system. It can be said that under the new system, local power is extremely shrunken."

Chen Ke didn't explain the financial system directly; he started from the overall political system. If one couldn't understand this change in the political system, even a figure like Yan Fu wouldn't be able to understand the financial system alone.

Yan Fu nodded frequently; as the Minister of Education, he felt this deeply. The education system created by the People's Party was vastly different from the imperial examination. The imperial examination system was an examination system where the state controlled the selection of officials, while the basic education system itself was actually out of the state's control. The People's Party was different. The basic education system was completely under the control of the government. Through this education system, the state popularized various knowledge it hoped to instill in the people among the people through various methods. As a pragmatist, Yan Fu had been working in education for nearly twenty years. He felt that compared to the total education popularization in those twenty years, it was hard to say which side was more compared to his work in the base area in these few months. The old handsome man was very satisfied with this.

Having personally handled so much work, Yan Fu could also understand Chen Ke's thoughts. He laughed, "I originally thought officials were incompetent vegetarians, and the gentry being in the countryside would be better at least. Now it seems the gentry are even worse than those officials. It is right to seize their power."

Chen Ke might not necessarily support Yan Fu's idea, but since the People's Party wanted to completely destroy the old system, neither officials nor gentry could escape, so Chen Ke didn't dwell on the matter of who was more reliable between officials and gentry.

"Mr. Yan, put plainly, the old tax revenue was also collecting products produced by labor. But there were layers of middle classes between the government and the people: officials, gentry, landlords. After this layer-by-layer exploitation, originally ten percent tax fell on the people, actually amounting to at least twenty or even forty percent exploitation. So the core of the new finance in the base area is to eliminate all middle classes. The government contacts the people directly, and grassroots political power is built directly into the villages. I won't talk about other forces, but the landlords must inevitably be eliminated."

Confucianism did not oppose the political view of "land to the tiller" at all. Historically, radical Confucian disciples even always hoped to restore the well-field system. Yan Fu also had land in his family. He didn't mind distributing his family's land to the common people. What Yan Fu cared about was whether this distribution method was reasonable. Hearing Chen Ke's view on eliminating landlords, Yan Fu nodded slightly but didn't speak.

"In our base area, each person gets three *mu* of land. We try to pick good land for the people just to ensure social stability, so as not to trigger comprehensive resistance due to radical land policies. In these years, how many people have fifteen or sixteen *mu* of land per family? What proportion of the rural area do they account for? I think less than thirty percent. According to the investigation summary of our base area, it's actually less than fifteen percent. Even within this fifteen percent, it's only thirty to fifty *mu*. Their loss on land is actually limited. Moreover, we are in a disaster area, so the resistance is even weaker."

Yan Fu couldn't help smiling bitterly after hearing this. When Yan Fu read Chen Ke's books back then, he thought Chen Ke was like other people who wrote books and established theories, liking to talk about great principles. But after contact these days, Yan Fu already knew that Chen Ke was actually more like a guy who loved to calculate people. Although he wouldn't haggle over every ounce and only care about petty profits, once touching the question of "who is a friend, who is an enemy," Chen Ke wasn't sloppy at all; he would definitely figure it out.

"But since each person is allocated three *mu* of land in the base area, that means one person only has three *mu* of land. Other lands and resources on the land belong to the government. This is the most critical thing. Because no matter what, it is absolutely unrealistic for the common people to rely on these three *mu* of land for birth, aging, illness, and death after paying grain tax. It is also absolutely impossible. One person, three *mu* of land. Now our base area runs cooperatives. There is much slack time in farming and little busy time. We must let the common people work to earn money. If they work spontaneously, it would be too wasteful of labor. And heaven knows what the common people will do. At this time, the government has to step in. The government opens many factories and workshops, and the common people earn Renminbi through labor. We are lucky to have encountered a flood. The things the common people want to buy are still simple, just some basic household items. And our Chinese common people are particularly reasonable. They know that some things really can't be bought now, but they don't blame the new government's supply and marketing cooperative for not being able to provide products."

Hearing this, Yan Fu somewhat understood the financial characteristics of the base area. "According to Wenqing, our base area occupies public land, uses minerals and materials produced on public land to run handicraft industries. The common people work in factories or participate in production, thus earning money, and then use this money to buy daily necessities."

Chen Ke nodded. "Exactly so. The core point is the issue between state ownership and private ownership of land. Now the common people are full of thoughts about harvesting more grain. So oil, cloth, and daily necessities are very scarce. On the public land of the base area, cotton, hemp, rape, peanuts, bamboo, alfalfa, and trees are planted. The water surface of lakes is used to raise fish and ducks, and there are various breeding farms raising sheep and pigs. Although many things won't show results in the short term, they are very effective in the long run. To buy daily necessities and ironware, the people must get Renminbi. Since they can earn Renminbi by labor, the common people naturally refuse to exchange gold and silver for Renminbi. Plus everyone needs a lot of things, Renminbi is definitely not enough. For the time being, there is no need to worry about the common people running on the bank's gold and silver with Renminbi. And in the long run, after this year's cotton harvest, we can open textile factories. On the one hand, it provides a lot of employment; on the other hand, the people can also have money to buy cloth by working in textile factories. Moreover, the cloth in the supply and marketing cooperative is also cheap. As long as cloth tickets are issued, we are not afraid of people reselling cloth."

"This is indeed a large fiscal revenue." Yan Fu suddenly saw the light.

"This revenue is not large at all. We cannot set the price of products within the base area very high. If the price is very high, people reselling goods outside will have an opportunity. We forcibly distort prices through the system of supply and marketing cooperatives. As long as it is a commodity we can produce ourselves, goods from outside cannot break into the market of our base area. This is a trade barrier."

Fortunately, Yan Fu was considered a modern figure and had a relatively strong ability to understand new vocabulary. Even so, he asked Chen Ke to write down "distort prices" and "trade barrier" specifically to understand what they meant. Yan Fu originally thought Chen Ke's economic policy aimed at a society of "men plowing and women weaving," but he didn't expect it to be not the case at all.

"Then what is the use of distorting prices and trade barriers?"

"Very simple. Distorting prices can allow the people to buy more commodities, and many commodities that were originally very expensive are now affordable for everyone. Without distorting prices, the lives of the common people cannot improve in the short term. For example, our new farm tools. Relying on the grain produced by those three *mu* of land, many common people may not be able to afford them in a year. If we don't distort prices, everyone can't afford our products. After everyone buys these products, the promotion effect on production is immediate. The standard of living has also improved a lot. As people's lives improve, coupled with our propaganda and education, the people naturally know that the new system is beneficial to everyone. It is worthy of support. As for trade barriers, it's even simpler. The money of our base area cannot be earned by other places. And by limiting purchases per household, we can also avoid someone using the space of our distorted prices to engage in reselling activities."

"Then aren't we losing money?" Yan Fu was confused. The purpose of distorting prices was to let the common people afford products. So what was originally worth five yuan is now sold for three yuan. This is tantamount to losing money.

"How can we lose money? This is the advantage under the new system. Our finance is integrated. Some projects lose money, but some projects make money. As long as a fiscal balance is maintained. For example, our base area issued one million yuan of Renminbi at the beginning of the year. By the end of the year, we withdrew this one million yuan of Renminbi. We don't owe the people, and the people don't owe us. But on the originally barren land, many new workshops have been built, many trees have been planted, and we still have a large surplus of products. In this year, the people's living standards have improved significantly, so we have made a big profit overall."

This concept was a bit difficult to understand. Yan Fu thought for a long time before suddenly realizing it. "No wonder I didn't figure it out before; so that's how it is. I still felt that it counts as a surplus only when gold and silver are in hand, but I forgot that improving people's lives is the purpose of the revolution. So that's it, so that's it."

"Our fiscal surplus is not the improvement of people's lives, but those factories built and these surplus products. Now the base area is not just Fengtai; other new base areas also need daily necessities, and the common people have no money or grain. These surplus products can be used exactly in other new base areas. In this way, the issuance of Renminbi is larger. On the one hand, it can ensure the implementation of the new system, and on the other hand, it can exchange for more labor. It can also do more things. This is like rolling a snowball. We use Renminbi to buy labor, and the common people use Renminbi to buy cheap daily necessities. So the people's living standards have improved, and our product output has also increased. The new system has also received the support of the people."

Seeing Yan Fu nodding repeatedly, Chen Ke added another sentence, "Renminbi was originally just a paper note, useless in itself. The banknote only has meaning when Renminbi can be exchanged for labor and commodities. This is the significance of the general equivalent mentioned in *Das Kapital*. As long as we can ensure fiscal balance, all surplus products are our profit."

Yan Fu was Yan Fu after all. Although he felt extremely happy, he didn't get carried away. Yan Fu then asked a very technical question, "But constantly expanding production like this, there must be a limit."

"Mr. Yan is absolutely right. Certain products in our base area will inevitably reach a limit in the short term. In the long run, all products will encounter production limit problems. Then since we can ensure fiscal balance, we can dump at extremely cheap prices outside the base area. Every penny earned is our profit. Exchanging for products that cannot be produced in our base area but we need very much is all our profit."

"Why does this sound like foreigners?" Yan Fu asked somewhat doubtfully.

"Foreign commodity dumping in China is also like this, but their dumping is far incomparable to ours. Foreign dumping is enterprise dumping; every enterprise's goal is to make money after all. Foreign dumping is dumping by a certain enterprise, and the product is relatively single. But ours is the joint dumping behavior of state-owned enterprises under the leadership of the government because we have an overall accounting internally. So dumping is even more unscrupulous and pervasive."

Chen Ke's answer left Yan Fu speechless. At the beginning, listening to Chen Ke talk about financial issues still had a somewhat warm flavor, but when financial issues rose to higher and higher levels and involved wider and wider scopes, the discussion unknowingly became cold and ruthless. Yan Fu knew the result caused by foreign commodity dumping in China; it directly caused the bankruptcy of Chinese workshops and economic chaos. And the dumping of the base area would undoubtedly cause the same problems in areas outside the base area. Thinking back and forth, Yan Fu found that he had no sense of guilt at all. If the dumping of base area commodities led to this chaotic situation, then other areas could completely resolve this contradiction by joining the revolutionary ranks.

"Mr. Yan, the economy of our base area will definitely improve greatly in the near future. The biggest reason is the change in the system. The biggest problem in rural China now is hidden unemployment. Everyone has no other means of making a living besides farming. Under the new system, the people own land equally, and by eliminating the middle rentier class, the government directly mobilizes the people's labor force, which greatly increases the employment rate. Labor force can also be effectively utilized. Moreover, our base area advocates equality between men and women. Equality between men and women is not just about those few *mu* of land. Equality between men and women is first of all a question of political correctness. We guarantee equality between men and women institutionally and legally. And the manifestation of equality between men and women in the economy is that we provide a large number of employment opportunities to women. Besides having land, women can also earn money. Coupled with institutional support, after the implementation of the new *Marriage Law*, women can request a divorce. And without the consent of the husband's family, government consent is enough. In such a situation, who dares to discriminate against women and bully women? Women can just get a divorce if they can't stand the bullying. Women can feed themselves by relying on themselves, and the state protects women's personal freedom. Women don't have to live by relying on men. This is first of all liberating the people. Secondly, women will also join the labor army. It invisibly increases the labor force we can mobilize."

The combination of politics and economy has always been cruel and ruthless. Yan Fu silently looked at Chen Ke, who was talking with fervor. An enthusiastic revolutionary and a cold-blooded ruler—these two almost completely different images were strangely combined together, and then constituted the person Chen Ke. Chen Ke could not only construct a political concept from a moral height but also use extremely realistic means to ensure the execution of this concept. Yan Fu couldn't quite distinguish whether this young man Chen Ke was enthusiastic or cold. But what Yan Fu knew was that Chen Ke had absolute confidence and an unwavering attitude. And the talent Chen Ke possessed was absolutely incomparable to other Chinese politicians of this era. Yan Fu also supported improving women's status and had some ideas, but compared with Chen Ke's design ideas, Yan Fu was far behind in terms of magnanimity or feasibility.

Chen Ke didn't notice Yan Fu's expression. At this moment, he also spoke with some excitement. "To ensure that this liberation will not be distorted, to ensure that women will not be tied at home by children, we must vigorously run education. From nurseries to primary schools, we must run them all. On the one hand, we solve the pressure on families; on the other hand, we also place children in our education system and start educating the next generation of New China from an early age. In this regard, Minister Yan, you will have to work hard."

"Oh? What brilliant views does Wenqing have on child education?" Yan Fu replied reluctantly.

"Not child education, but national education. I think kindergarten from three to six years old is enough. Children in kindergarten need to receive common sense education. First of all, they must know from kindergarten that the earth revolves around the sun. The changes of the four seasons, twenty-four hours a day. Be disciplined, pay attention to hygiene. Learn to line up, listen to commands. These are also common sense things. Of course, when singing and playing games, try to learn Pinyin and speak Putonghua (Mandarin). Simple counting is enough. In general, children at this stage just need to learn some necessary common sense. We don't need to strive to cultivate geniuses who can read at three and write poems at four."

"This is natural." Yan Fu couldn't help laughing.

"Primary school education is from six to eleven years old. Of course, because universal education has not been achieved now, it can be relaxed appropriately. Six to twelve years old can be enrolled. Since many older ones have already participated in work, adult education is carried out through remedial classes. Of course, during the busy farming season, children also have holidays to participate in labor, and school starts again after the busy season."

"Mn, children over twelve are already treated as adults in many places." Yan Fu also agreed with this.

"The two foundations of revolution are science and democracy. These are what we want to start educating among adults in the near future. The people pursue a better life, and this better life can only be realized through science and democracy. Science is not just educating cultural knowledge but also cultivating a worldview. There are no gods and ghosts in this world, only natural laws. Children can also accept the cultivation of this theoretical knowledge systematically in schools. But in the short term, we must fight for the people's awakening through science point by point."

"Just like we use microscopes to let the common people know what bacteria are?" Yan Fu was deeply impressed by this matter.

"We use glass bottles to grow plants; haven't the common people finally known what the root systems of various plants look like?" Chen Ke referred to an important activity in the recent popularization of agricultural technology. The base area didn't lack glass. The newly established agricultural technology department started planting many plants in glass bottles from spring. During the growth of plants, many root systems grew against the glass bottle walls, and various exquisite and subtle root structures could be observed very well. The common people were very interested in this.

"Mn." Yan Fu didn't understand agriculture, so he could only agree roughly.

"By the way, Mr. Yan, speaking of this, I have to talk about another problem in finance, which is the problem of long-term investment and short-term investment. Short-term investment, for example, we planted rape. Planting rape invested labor at the beginning. A few months later, the rape was harvested and pressed for oil. Selling the oil recovered the cost. The cycle of this investment is a few months. But for example, steelmaking, we have to select ore, build blast furnaces, and debug. This process may take a year or even longer. These staff engaged in steelmaking need to be paid wages, and the production or purchase of these equipments also requires wages. When the first furnace of iron, the first furnace of steel comes out, our cost is far from being recovered. It is very likely that the cost can only be recovered in the fifth year. The cycle of this investment is five years."

Yan Fu was already a bit dizzy from Chen Ke's complex explanation. Although he didn't regret asking Chen Ke about financial issues, Yan Fu never expected that a fiscal policy could involve such extensive political and economic issues when asking. Moreover, Chen Ke obviously still had many things not fully explained. Yan Fu looked at his young "disciple"; he really couldn't figure out where exactly Chen Ke learned so much knowledge.

Chen Ke didn't care about Yan Fu's thoughts. He thought there was a most important issue that must be made clear to Yan Fu, the Education Minister. "The longest-term investment is not even industry. The longest-term investment is education. Mr. Yan, if a child goes to kindergarten at three, primary school at six, junior high school at eleven, and high school at fourteen. When he graduates from high school, he is seventeen. This is fourteen years. If this child goes to university after high school, four years of university, this is eighteen years. In these eighteen years, the teacher educating this child may educate fifty people at the same time. And this education system needs eighteen years to educate a person. In these eighteen years, this education system is a gold-swallowing beast."

"Ah?" Yan Fu had never considered the education system like this. At this moment, he was completely unable to consider the education system from a financial perspective.

Chen Ke asked, "You can probably understand what a fiscal budget is now, right?"

"No, Wenqing, I completely don't understand what a fiscal budget is now." Yan Fu admitted frankly. "Our base area only has half of Anhui. If finance can really be considered so thoroughly, when we govern the world, we will definitely not lack financial talents."