Solovyov in Tsarist Russia 1796.

"Can we guarantee long-term stability by allocating resources according to rank?"

"No, Your Majesty."

Solovyov knew much more than Nikolai, after all, he knew more.

"What's going on here?"

"Reform can solve problems for a period of time, but the new system will soon undergo new changes over time. Your Majesty, you must understand that there will always be new problems. For example, I have liberated the serfs on the manor, but their tools and livestock also need to be taken care of. If the serfs leave my protection, will they be exploited or oppressed? These are all unknowns. This can even be considered a summary of many things I have considered since the three-day decree. But there will be further changes in the future."

What changes are you concerned about?

"It is a change that is inevitable, Your Majesty. A working class will emerge. In the past, we considered the people in the mines and factories as serfs. Some of these people have acquired technical skills. For example, in the Urals, a father and son independently developed a steam locomotive for mining. Although its efficiency is lower than Count Bezukhov's locomotive, it is very useful in the distant Urals. After their release, they will become engineers. Correspondingly, the status of some former serfs will also change. Now they are workers in machine factories, miners in mines, female workers in textile factories, and brewers in breweries."

Besides farmers, a large number of workers will be generated, and Nikolai has seen this before on the railways.

Those railway workers, thanks to the Emperor's favor, received an extra work allowance whether they worked for the state-owned railway company or Pierre's private company, because Nicholas, who had been working in the boiler since he was a teenager, knew all too well their working conditions.

These people were originally separate from the status of serfs and urban citizens, and their identities were never clearly defined.

What Nicholas could understand now was that serfs in factories and mines would be transformed into workers, thus creating a new social class.

The upper class of workers consisted of the bourgeoisie, big and small business owners, and nobles of all levels who invested in industry and commerce. Even wealthy peasants, if they had some money, could become small shareholders in a company.

There are many different opinions among these people.

Solovyov still had to rack his brains to recall if he had returned all his knowledge to the bearded lawyer's son, the bearded young master of the textile factory, the tailor's grandson, the coachman's great-grandson, and the Hunanese roast king.

At least the bearded man's theory is still quite useful.

But Nikolai had to ask first: "You mentioned these workers, so of course you also mentioned the factory owners and mine owners, right?"

"Among the middle class, they possess a great deal of property and should be considered the 'bourgeoisie,' while some citizens are probably the petty bourgeoisie. Your Majesty, you should have already seen the citizens of Paris when we were there, and there are many such people in London, perhaps even more. In addition, the workers there have already formed a considerable number."

In Russia, if workers were to emerge now, it is estimated that around 1850, one million people would leave the countryside to work in cities or mines. By 1900, the working class would have expanded to three or even four million people.

In this way, it becomes a considerable force, a force capable of bringing about earth-shattering changes in Russia.

Then, due to his ingrained habitual thinking, Solovyov would also consider the union of workers and peasants.

Although Russia's wealthy peasants were powerful, in this version, Solovyov placed the third and sixth ranks of nobles above them, and below them were the self-reliant middle peasants and poor peasants, as well as the tenant farmers who worked in various places. There was also a logistics system and market regulation. Grain speculation would also face the Tsar's grain requisitioning teams.

Indeed, before Solovyov returned from Persia, Russia had experienced a small-scale famine. However, because Nicholas personally supervised the work of provincial governors and officials at all levels, there was no widespread starvation. During this period, grain hoarding occurred in the local areas.

In response to this problem, Nicholas dismissed some nobles, but the effect was limited.

Solovyov's return was intended to transform Russia into a unified nation over the next thirty years. Class differentiation would weaken the power of the wealthy peasants, whose contentment with modest wealth would create a natural divide between them and the nobility. Commoners could change their social class through education and military service.

However, it was somewhat unfair to the nobles because they were the first to arrive.

However, this unfairness was also determined by the Russian system. Although some serfs were able to accumulate wealth after gaining their freedom or while serving their masters, most of them did not.

Nikolai Ulyanov, an old tailor, was in this situation; although he was skilled, he rarely managed to save any money.

Even though Solovyov left him some money, he was still somewhat strapped for cash. He remembered his master's words and was to use the money for the education of his two sons.

The fact that a citizen is living a very difficult life means that there are huge disparities in the distribution of wealth in society.

Nikolai was not without understanding of the issues of workers and the bourgeoisie.

He also recalled that Tsar Paul had believed during his lifetime that peasants would become an important force, and that workers might also be a possibility.

“So what should we do? It sounds like, Mikhail Sergeyevich, that the relationship between nobles and peasants, and our factory owners, what you call the ‘bourgeoisie,’ and workers, is a good analogy.”

“Your Majesty, compared to the fixed relationship between peasants and nobles, after we redistributed the land, at least some of the ‘exploitative’ relationship was eliminated. However, the relationship between workers will always exist.”

Solovyov also wanted to test Nikolai and see what his judgment would be.

Nikolai, at this moment, also had a strong sense of curiosity.

"I'd also like to hear you explain the secrets behind this."

"The relationship between the bourgeoisie and the workers also involves exploitation. This relationship exists between slave owners and slaves, landowners and peasants, noblemen and serfs; it's just that the exploitation of land rent and labor makes this relationship very obvious. The situation is different between capitalists and workers. This relationship is not apparent on the surface, especially with the British. Workers are paid for their labor, yet they remain poor while capitalists become increasingly wealthy. Of course, there are also some unfortunate individuals who are affected and eventually lose their wealth. Your Majesty, why do you think this is?"

“Mikhail Sergeyevich, you are of merchant noble birth.”

Nikolai's statement was also a gesture of respect for his teacher; Solovyov had always jokingly referred to himself as "from a family of unscrupulous merchants," and the Tsar's way of putting it was already quite tactful. "Yes, I come from a merchant family."

"Merchants do business for profit. To make a profit, they need to sell goods. These goods are made by workers, and capitalists pay wages, raw material costs, and machine costs to sell them."

"This theory is very close, Your Majesty."

"It was you who taught me that no matter what status one holds, whether a grand duke or a monarch, one should read more books. I know some of Adam Smith's theories."

"Your Majesty, Adam Smith or Ricardo, their economic theories are all inherited and developed. What is truly frightening is that capitalists will force workers to work by signing contracts with them, thereby generating more value. This is already very common in England."

Nikolai frowned slightly after hearing this.

"Given your habits, there would have been a next sentence even when I was still looking at picture books in the children's room, or you might have even reminded me of it before."

Nicholas and Solovyov were indeed ruler and subject, as Nicholas was the Tsar, which inevitably created a separation between them. However, although they were called ruler and subject, Solovyov was more like an elder brother and mentor to Nicholas, and in terms of the elder brother aspect, he was even more important than Alexander and Constantine.

When I made mistakes as a child, he would patiently teach me, and he would often lecture and guide me more than criticize me harshly.

Therefore, he got used to it; when Solovyov spoke, he would always leave some pauses, which might be the topic for the next stage.

Solovyov knew of the tacit understanding between Nikolai and himself, so he then spoke up as well.

"It started as a small workshop. After using machines, it became more efficient and the production time was shortened. However, it also increased the time for re-production based on the workers' labor. This improved work efficiency and generated more profits."

"These two parts are the residual value you wanted to mention, right?"

"Technological progress is nothing more than this. You should remember the brewery I bought in Ireland, right?"

"Yes, you don't drink yourself, yet you want to run a beer business in England. You should hire a qualified manager to maintain profits."

"I don't trust those British idiots. They managed to blow up beer barrels in East London and drown eight slum dwellers, mostly women and children. They don't even know about pressure and material strength, yet they want to make beer. These idiots have absolutely no management skills. I'd rather trust that old Irish guy and his granddaughter!"

Nikolai knew that Solovyov placed great emphasis on production safety, and that this was a standard operating procedure in the military.

He made his living through technology; when his father was alive, the "boss" loved to tinker with small inventions.

Now he has finally extended his reach to the economic sphere, because as a Russian State Councilor, although he does not hold a specific position, he is to provide the Tsar with valuable advice.

"Therefore, you always adhere to standardized production practices and prefer to use more barrels for storage."

"This is for safety and also to improve efficiency. Those people's big barrels may seem to save on materials, but they're extremely dangerous. Okay, let's not talk about the brewery anymore. Your Majesty, you should know about that sabotage operation, right?"

"Of course I know that. You also submitted a memorial to my brother, mentioning the efficiency of machines and labor costs. Although my brother approved and praised your memorial, there was no follow-up."

Alexander's laziness in governing in his later years did indeed bring a lot of trouble.

"That movement was about destroying machines because machines would replace workers, requiring fewer workers to do more work, so some people destroyed machines. But labor efficiency would also increase. If a conscientious entrepreneur were to work in three shifts, allowing workers to rest. But I rarely see such people. Perhaps Goncharov was like that before he went mad, but he later became mentally unstable, as Your Majesty knows."

Because of his long service in the army, Solovyov had never taken Nikolai to experience life among the workers, but he still knew about the situation on the estate, and he had also been in contact with the railway system, Pierre's railway company and the state-owned railway company.

The two men sitting here probably both thought that Count Pierre Bezukhov, with his sincerity and kind nature, was a capitalist with a conscience.

However, there is a prerequisite: he must be a responsible nobleman. Nobles and some established capitalists always have a conscience when running their businesses. Not every company is like Edison, who has no conscience.

Ironically, in the Western world, these unscrupulous companies might survive even longer.

"Your Majesty, you should also know that even if we liberate serfs and turn them into workers in our factories in the cities and mines in remote areas, they will still face exploitation. Your Majesty, what do you think we should do?"

“I think we should pool these assets and put them into the national treasury through taxes and contributions. Then, a portion of it could be used to pay workers’ wages. Only when wages are raised will these workers be willing to work. After all, I have met those railway workers, and I will never forget the sincere look in their eyes when they saw me.”

Ultimately, Nikolai was driven by the same kind of hotheadedness as his father, just like the Romanovs.

Solovyov was satisfied with the answer. Under his guidance, Nikolai had grasped Master Luo's 95% tax method. He knew that it was a great improvement to let the money go into the national treasury instead of his private coffers.

You can't expect a feudal autocrat to do too much; he was familiar with the railway workers and knew what to do.

However, it is also necessary to maintain good relations with capitalists and industrial and commercial elites, because problems will inevitably arise with these people during reforms.

"Your Majesty, you have grasped some of the essentials. This path has never been walked before, but it will certainly be walked in the future. In France, doing these things might be even more troublesome, as the bankers there possess considerable power. As for Your Majesty, during your reforms, a new class will inevitably emerge in Russia. We must establish regulations in advance and adjust them gradually later. This way, we have a great chance of success."

The Tsar needed to listen to the voices of the common people, compromise with the nobles and capitalists, extract wealth from them, give a portion to the national treasury, give a portion to the workers' wages, and give the rest to these people so that they could expand production.

Although Solovyov himself considered this model outdated, it was nonetheless able to forge an unforeseen path through Russia's unique means. (End of Chapter)