King of Commerce, Yeonsan-gun Ch.44

 Capital and Technology

Despite the nationwide famine, Seoul was steeped in luxury and indulgence.

In Kyungsik’s first year, the introduction of paper money had led to deflation and speculation. By the second year, paper money had started being used in Seoul, though it was still supplemented by rice. In the third year, the use of paper money was finally spreading nationwide.

As regional trading posts began auctioning goods, more and more local resources were being funneled to Seoul, driven by the concentration of money there.

Ironically, this influx of goods exceeded the quantities that were formerly received as tribute.

This happened because Kyungsik, focused on state finances, had lost his sense of the value of money, casually doling out salaries in tens and hundreds of thousands of Jeon, which distorted the economic balance.

Kyungsik, thinking of one Jeon as about 50,000 won, considered a monthly salary of 10 Jeon too low. In reality, the economy of Joseon was barely above the level of the poorest African countries of the 21st century.

About 20% of the population lived in absolute poverty, earning less than one Mun a day per person, with a monthly income of less than three Jeon.

While Seoul’s clerks needed to supplement their income with side jobs to make ends meet, even there, the stable income allowed them to live better than most of the population.

Thus, soldiers receiving 100 Jeon or infantrymen getting 40 Jeon a month were considered affluent. Both military exams and recruitment were so popular that the Ministry of War suggested making the tests more stringent.

Kyungsik’s focus on highly trained troops meant that, unlike in history, where large numbers of soldiers were poorly equipped and paid with rice, the current structure allowed for a smaller but more effective military.

The artisans in the Ministry of Military Affairs, who were reluctant to return to their provincial homes after experiencing the luxurious life in Seoul, were working hard, increasing production steadily.

These goods were then sold back to the provinces, drawing even more money to Seoul.

As a result, the provinces viewed Seoul as a city overflowing with wealth, prompting an influx of refugees.

Thus, while the inner city of Seoul was characterized by luxury and indulgence, the outskirts were forming refugee camps.

Even without being a strict Confucianist, one could sense the ethical wrongness of such stark contrast between luxury and destitution.

Kang Deok-yu of the Royal Secretariat took it upon himself to submit a memorial.

"With the barley crop failing in Chungcheong and Jeolla, the people are starving. Yet, luxury and extravagance plague the nation, affecting both high and low. Outside the capital, refugees are begging, while inside, even the servants are clad in fine clothes, and wine flows freely at banquets. We must suppress these luxuries."

"Hmm..."

Having instructed potters to produce high-quality porcelain, ordered the Bureau of Palace Supplies to make perfumes and cosmetics, and urged the Bureau of Ceramics to produce blue-tiled roofing, the greatest promoter of luxury was indeed the king himself. He was in a bind.

He hadn’t anticipated a barley crop failure just after the spring scarcity.

"In my view, rather than merely suppressing luxury, it is crucial to provide stable employment for the refugees."

"Although Your Majesty's recent land redistribution has provided some with land, our country remains impoverished due to limited land and a growing population. How can we provide stable employment for all?"

The land redistribution carried out during the land survey was not comprehensive. Some households, which previously owned one Jeongbo of land, received two Jeongbo of previously borrowed land, making them small landowners. However, most impoverished farmers received at best half a Jeongbo, barely enough to cultivate, and many abandoned their plots during the famine.

Despite Kyungsik's attempts to enforce modern property rights, most people in Joseon were still entrenched in traditional concepts of land ownership.

Thus, another method was needed to create jobs for the influx of people into the cities.

"I already have a plan in place, so the Royal Secretariat may withdraw."

---

Just like the previous year, summer found Kyungsik at the temporary palace in Mapo.

Kyungsik’s answer to the problem was another New Deal.

To create jobs for refugees, he had even paved the road to the palace with gravel, and construction of the Mapo palace was in full swing.

But more importantly, a significant innovation was being showcased: a machine suited to Joseon's summer climate, with water levels high in the Han River.

"Oh! It's spinning!"

"The thread... The thread is being made without anyone's help!"

Kyungsik had been preparing since last year to invest in the textile industry. When he learned that Japan imported Joseon’s fabrics, he eagerly planned to expand trade.

While there were no foreign countries to invest capital or lend money, Kyungsik, knowing how to invest, organized local councils through regional trading posts to secure raw materials and set up transportation systems.

By exempting major raw materials for light industries from transaction taxes, he ensured smooth supply chains. As a result, materials like rushes for mats, raw silk for silk, hemp for fabrics, and cotton were amassed around Seoul since last fall.

Even though rushes weren't specifically ordered by Kyungsik, other materials were brought in through his efforts.

Many refugees from the first year's barracks, who had since found other jobs, left behind empty buildings that were repurposed into factories.

Initially, these buildings were meant to be factories, but with the sudden influx of refugees, the structures had to accommodate living spaces as well. Thus, the barracks became self-contained towns where refugees rotated in and out.

The key figure was Choi Bu, who was sent to China as a special envoy.

Returning to find that the barley crop had failed, Choi Bu lamented that if he had stayed in Joseon to promote waterwheels, this disaster could have been averted.

He seemed possessed by the spirit of a ghost who had died regretting his inability to build waterwheels.

Thus, Choi Bu was tasked with bringing back Wang Zhen's agricultural book from the Yuan Dynasty.

Kyungsik's graduation thesis had included research on this book, often cited in discussions about why China didn't experience an industrial revolution.

Choi Bu, obsessed with waterwheels, studied the book upon his return and eventually created a water-powered spinning machine.

Seeing the spinning machine in action, Choi Bu looked amazed, unable to believe he had made it.

The officials were equally astonished, even more so than when they had first seen rifles or the division of labor at the Military Affairs Bureau.

Kyungsik felt a twinge of jealousy. Did the Chinese really invent this 200 years ago?

"This water-powered spinning wheel can produce thread without manual labor. Though our women have always woven cloth daily, the nation has never had a surplus. Now, like China, we will be abundant in goods."

But the king seemed displeased.

Why? He had ordered this, after all.

Kyungsik knew the limitations of this water-powered spinning machine from his studies of the future.

"It can spin hemp and silk threads, but not cotton."

The officials, who thought this invention was many times, even hundreds of times better than the old ways, couldn't understand why the king was dissatisfied.

Kyungsik's point was valid; the Chinese water-powered spinning machine failed to evolve because it couldn't spin cotton.

Cotton became the most common fabric after the Yuan Dynasty, but the short, tangled fibers couldn't be spun by this machine.

As a result, the water-powered spinning machine fell into disuse, replaced by hand-operated spinning wheels.

A machine capable of spinning cotton, the water frame, was invented by Arkwright during the British Industrial Revolution.

Arkwright's invention wasn’t completely original but improved upon the 16th-century Saxon wheel by adding a flyer to align the fibers.

Adding John Kay's flying shuttle to this setup would bring the technology to the level of the Industrial Revolution.

And Kyungsik remembered all this.

Technologically, he could jump straight to the level of the Industrial Revolution.

'But is this enough for Joseon’s current level?'

The issue was the socio-economic structure.

In discussions about why China didn't industrialize, the equilibrium trap theory suggests that China's balanced supply and demand in agriculture and industry stifled technological advancement.

As agriculture produced surplus food, people moved to cities to engage in industry, increasing the supply of manufactured goods. Prices fell, allowing rural and urban people to consume more, improving their quality of life.

But once the city grew beyond a certain point, the over-supply of industrial goods and under-supply of agricultural products lowered urban living standards, pushing people back to the countryside.

This cycle of equilibrium prevented further development.

To avoid this trap, a market was needed to supply cheap agricultural products and buy expensive industrial goods.

Britain differed in having a vast market, stretching from America to India, connected by waterways. It drew vast agricultural products and raw materials to London and sold finished goods worldwide, continuously generating profits.

---

To compare Joseon to this model, agricultural products and textile raw materials had to be sourced domestically.

The domestic market for finished textiles was limited to internal trade and minor trade with Japan.

If Japan opened up to trade, deeper market penetration might be possible, but that was uncertain.

Moreover, with the current famine, destitute farmers were abundant. Recklessly advancing mechanization would lead to what?

Raw materials would become scarce, prices would spike, unemployment would rise, reducing domestic income, and textile prices would fall due to over-supply, making the business unsustainable.

The equilibrium state would emerge much faster. Joseon, being smaller than China, would reach this state sooner.

Therefore, rapid mechanization wasn’t an option.

For now, Kyungsik decided that cotton would be spun using the Saxon spinning wheel he had designed, while hemp and silk would be spun using the water-powered spinning machine, and traditional looms would weave the fabric.

Combining the Saxon spinning wheel with the water-powered spinning machine to create a more advanced water frame would be left to the Koreans.

"Has the Ministry of Public Works completed the production plans I ordered?"

"Yes, Your Majesty. Following your instructions, we will produce 300,000 rolls of hemp cloth, 400,000 rolls of cotton cloth, and 200,000 rolls of silk."

The Ministry officials, trained in production management at the Ministry of Military Affairs, had calculated optimal production levels considering raw material supply, labor productivity, and market prices.

Hemp and silk threads would be spun by the water-powered machines, while cotton threads would be produced by cottage industries using the Saxon spinning wheel Kyungsik designed.

The state would provide the cotton and spinning wheels to the poor, who would spin the thread and sell it back to the factories.

This system provided employment for the poor and outsourced raw material production to the public, benefiting both.

Kyungsik, upon reviewing the Ministry’s calculations, suddenly doubted the scale of production.

'Is this a lot or a little?'

Kyungsik rechecked the figures himself.

"...With 20,000 people, this is all we can produce? And this uses all the raw materials?"

The Ministry officials were taken aback, expecting praise for their detailed plans but instead facing scrutiny.

Each worker could weave about 50 rolls a year, making 90-100,000 rolls from 20,000 workers. This scale was unprecedented in Joseon, capable of clothing one in ten people and meeting the state's needs.

Even purchasing the raw materials last year had consumed much of the regional hemp, cotton, and silk.

'Last year, we barely armored 3,000 soldiers due to iron shortages...'

Though new iron production techniques had improved supply, supporting the production of cannons and rifles for the newly formed naval unit, the textile industry still faced supply constraints.

The raw materials amassed in Seoul represented less than 10% of the national production. Farmers sold only a portion of their surplus to the state.

With market reforms only three years old, few areas had fully embraced commercial crop production.

As market economy principles spread and plantation-like cultivation increased, raw material supply would grow.

But to Kyungsik, aiming for 20-30% urbanization during his reign, the prospect of raw material shortages even with limited industrial expansion was alarming.

'If a 20,000-person factory uses 10% of the national textile raw materials, scaling to 200,000 workers would exhaust our resources! Even without full mechanization!'

Kyungsik swiftly reached a conclusion reminiscent of British colonialism.

'We need colonies!'

---

Luckily, Kyungsik’s reign of terror over East Asia had just begun.

So far, he had only been a disaster for the Jurchens and Tsushima. Early Joseon rulers, including Sejong, often had similar conflicts, so Kyungsik wasn’t exceptionally harsh by historical standards.

Britain’s superior maritime technology allowed it to break free and "civilize" the world, but Joseon lacked such prowess.

Joseon’s maritime achievements were limited to direct voyages to Hakata, bypassing Tsushima. Even reaching Ryukyu was a stretch.

Consequently, regions like Ryukyu, Taiwan, Hokkaido, the Philippines, and Borneo were spared from Kyungsik’s reach for the time being.

Instead, Kyungsik focused on the northern frontier, particularly the newly acquired territory beyond the Tumen River.

He recalled content from modern Korean history textbooks compiled by the Imperialist Education Committee.

'During the Japanese occupation, they promoted southern cotton and northern sheep... cultivating cotton in the south and encouraging sheep farming in the north.'

Cotton could grow up to southern Pyongan Province, so he would promote cotton and flax there.

The challenge was the northern regions, including Hamgyong and the newly acquired lands north of the Tumen River. These areas couldn’t support cotton cultivation.

There, flax would be grown, and sheep would be raised. Flax was heavily cultivated in Russia, so it should thrive in Manchuria as well.

Given the mountainous terrain north of the Tumen River, sheep farming would utilize the land effectively.

Though Kyungsik initially thought Joseon lacked sheep, they were used in sacrificial rites and for making felt and textiles.

Sheep meat had an unpleasant odor due to a lack of spices, but woolen clothing was considered a luxury, restricted by social status, making it potentially profitable if production increased and usage restrictions were lifted.

Imagining vast sheep farms and flax fields in Manchuria, Kyungsik envisioned a grand strategy similar to British colonial policies, applying it equally to Japan and Korea.

While the immediate influx of refugees due to the barley failure was addressed through the textile factory, the long-term issue was the shrinking average landholding size, necessitating relocation to new farmlands in Manchuria.

Though the timing was missed this year, plans to continuously send settlers to Manchuria were underway.

'Hopefully, the militia is doing well. Winter is over, and the ginseng season has ended. They were complaining about a lack of income...'

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Notes:

*1: In actual history, Choi Bu was sent as an official to China in the third year of King Yeonsangun’s reign, having gained expertise in Chinese language and systems during a previous journey. Here, he is sent as a special envoy with a focus on acquiring information related to waterwheels.

*2: This theory, studied by Kyungsik for his graduation thesis, is known as the High-level equilibrium trap proposed by Mark Elvin. It suggests that China's balanced supply and demand between agriculture and industry hindered technological advancement. High agricultural productivity and population growth led to low wages and reduced incentives for innovation, exemplified by the stagnation of technologies like the water-powered spinning machine.

*3: Although wool isn’t prominently associated with Joseon’s clothing culture, felt (Jeon) and woven woolen fabrics (Gye or Dam) were used, particularly as high-status items, often restricted by law. Felt was used for military hats, and woven woolen fabrics were considered luxurious, occasionally banned for civilian use. Kyungsik’s policies are once again altering the course of Joseon’s history to extract economic value.