The efficiency of division of labor: Taking the needle making industry as an example, we will explain in detail how division of labor can greatly improve production efficiency. In the needle making industry, one person originally completed a series of processes such as wire drawing, straightening, cutting, sharpening to installing needle caps by himself, and he might only be able to make a few needles a day. However, when the division of labor is refined, different workers are responsible for different processes, some are specializing in wire drawing, some are responsible for cutting, and some are focused on sharpening. Each worker can master the processes they are responsible for, thereby greatly improving the production speed. At the same time, due to the lack of frequent conversion processes, time loss is reduced and the overall production efficiency is greatly improved. Originally, several needles were made a day, but now thousands of needles can be made a day. In addition, the division of labor has also prompted people to invent special machinery to improve efficiency, such as cutoff machines specially used to cut off wires, which further promoted the advancement of production technology.

Origin exploration: It originates from human nature of interoperability and exchange of things. People have diverse needs in their lives, such as food to survive, clothing to keep warm, and housing to live in. But everyone has limited energy and ability and cannot produce items that meet all their needs alone. As a result, people began to focus on the areas they are good at producing. For example, some people are good at growing food, some are good at making clothes, and some are good at building houses. Then, people exchange the items they produce to exchange for other items they need. In this process of continuous exchange, the division of labor gradually emerges and continues to deepen.

Constraint conditions: Market scope is the key constraint. In areas with inconvenient transportation and sparse population, the market size is small and the consumer needs are limited, making it difficult to support fine division of labor. Because if the division of labor is too fine, a large number of products produced may not be sold in the local market, resulting in a backlog of products. In areas with convenient transportation, dense population and prosperous business, the market is vast, consumers have diverse needs and large quantities, which can accommodate more diverse professional division of labor. For example, in big cities, not only are there various traditional commercial industries, but many emerging professional service industries have also emerged, such as high-end financial consulting services, personalized customized design services, etc. These were developed with the support of a broad market and promoted economic prosperity.

Origin background: In the era of material exchange, the needs of both parties to the transaction are difficult to match, resulting in inefficient exchange. For example, if a person who owns food wants to exchange for clothing, he needs to find someone who happens to have clothing and is willing to exchange clothing for food. The exact matching of this need is very difficult. Moreover, there is also a problem of difficulty in measuring the value of items in exchange of items, and it is difficult to directly compare the values ​​of different items. To solve this dilemma, people gradually chose a widely accepted specific commodity as the medium of exchange, and the currency was thus generated. Initially, people might choose shells, livestock, etc. as currencies. Later, with the development of the economy, metal currencies gradually became mainstream because metals have the advantages of easy division, preservation and carrying. Currency has become a key link in economic activities, making exchanges more convenient and efficient.

Core function: As a value scale, currency gives quantitative value to various commodities, making it possible to compare value between different commodities. For example, a piece of clothing is worth 100 yuan and a pound of rice is worth 5 yuan. Through the value scale of currency, we can clearly know that the value of clothing is 20 times that of rice. As a medium of exchange, currency breaks the limitations of goods exchange and greatly promotes the circulation of goods. In the case of money, people who own food can first exchange the food for currency, and then use the money to buy the clothes they need, no longer need to find transaction objects that require exact matches. Currency also has the function of storing means, and people can store wealth in the form of money for future needs. For example, people can save a portion of their income and spend on future education, medical care, pension and other expenses.

Analysis of constituent elements: consists of labor wages, capital profits and land rent. Labor wages are the rewards paid by workers, which reflect the value of physical and mental labor paid by workers in the production process. For example, factory workers receive corresponding wage income through their daily hard work. Capital profit is the return of capital invested by capitalists. In order to produce, capitalists need to invest funds to purchase equipment, raw materials, etc. After the product is sold, the profit obtained after deducting costs is capital profit. Land rent is the income from the land owner's transfer of land use rights. For example, if farmers rent land for farming, they need to pay land rent to the land owner, and enterprises rent land to build factories, they also need to pay land rent. These three together determine the basic price of the product.

Price type analysis: Natural prices are determined by the natural rate of each factor and are the price trend of commodities in a long-term stable state. In a completely competitive market environment without external interference, the price of commodities tends toward natural prices. For example, in long-term and stable agricultural production, the natural price of agricultural products will be determined based on factors such as seeds, fertilizers, labor, etc., as well as the fertility of the land. Market prices are affected by supply and demand. When supply exceeds demand, prices will fall; if supply is less than demand, prices will rise, and fluctuate around natural prices. For example, in the season of fruit harvest, if the supply of fruits is sufficient in the market and oversupply, the price of fruits will drop; and in the years when the fruit production decreases, the supply of fruits in the market will be in short supply and the price will rise.

Analysis of influencing factors: Labor supply and demand relationship plays a leading role. During the period of economic prosperity, the demand for labor in enterprise expansion is strong and wages rise. For example, during the period of rapid economic development, emerging industries are constantly emerging, and enterprises need a large amount of labor to produce and operate. In order to attract talents, enterprises will increase their wages and benefits. In the recession, companies lay off employees, oversupply of labor, and wages fell. In addition, living costs, industry development prospects, etc. will also affect wage levels. In areas with higher living costs, such as first-tier cities, companies often need to pay higher wages in order to maintain the basic living of employees. For some emerging industries with good development prospects, such as artificial intelligence, new energy, etc., due to the large demand for talents and the future development potential of the industry, the wage level of practitioners is also relatively high.

Discussion on wage differences: The work environment, work intensity, responsibility size, skill requirements and learning costs of different occupations are different, resulting in significant differences in wages. For example, doctors need to go through years of professional study, invest a lot of time and energy, learn medical knowledge and skills, and shoulder important responsibilities at work, and be responsible for the life and health of patients. Therefore, doctors’ salary is usually higher than that of ordinary manual workers. Some occupations with difficult working environments and high work intensity, such as construction workers, miners, etc., will also have relatively high wages in order to compensate the workers for the hardships they have paid in their work.

The law of profit change: Countering from capital supply and demand, capital supply increases, competition intensifies, and profits decline. For example, when an industry is profitable, a large amount of capital will pour into the industry, resulting in an oversupply of products in the market and fierce competition among enterprises. In order to compete for market share, enterprises have to lower product prices, thereby reducing profits. Capital supply decreases and profits rise. At the same time, factors such as economic situation, policies and regulations will also have an impact on capital profits. During the economic boom period, market demand is strong, and corporate sales increase, profits will also increase accordingly; during the economic recession, market demand shrinks, and corporate profits will be affected. In terms of policies and regulations, the government's tax incentives, subsidies and other policies for certain industries will reduce the costs of enterprises and increase profits; while strict supervision of certain industries may increase the operating costs of enterprises and reduce profits.

Reasons for industry differences: The degree of risk, market demand stability, capital turnover speed, etc. of different industries lead to differences in capital profits. Emerging high-risk industries, such as high-tech entrepreneurship, will make great profits once they succeed. Because these industries are innovative and highly growing, once they develop products or technologies with market competitiveness, they can quickly occupy the market and obtain high profits. But at the same time, these industries also face risks such as failure in technology research and development and fierce market competition. The profits of traditional mature industries are relatively stable but low. For example, the daily necessities production industry has relatively stable market demand, but due to sufficient market competition and serious product homogeneity, the profit margin of enterprises is limited.

Definition of essential attributes: it is the income obtained by land owners by land ownership, which is derived from the scarcity of land and natural productivity of land, and is the cost of using land. Land is a limited resource, especially high-quality land is even more scarce. The landowner owns the ownership of the land and when others want to use the land, they need to pay rent to the landowner. For example, farmers who rent land for farming need to pay rent to the land owner; developers who rent land to build houses also need to pay rent.

Analysis of influencing factors: The fertility of the land and the advantages and disadvantages of the geographical location are key factors. Fertile land output is high, and land rent is correspondingly high. For example, planting crops on fertile farmland will yield much higher yields than on barren land, so land owners can charge higher rents. Land with superior locations such as urban centers and transportation hubs have high commercial value and far exceeds that of remote rural land. In the city center, due to the large flow of people and frequent business activities, merchants can get more business opportunities when opening shops here, so they are willing to pay high land rent. For remote rural land, due to inconvenient transportation and limited market demand, the rent is relatively low.

Consumer assets: mainly used for current direct consumption, such as food consumed by families, clothes worn, furniture used, etc., and do not have the ability to directly generate profits, with the purpose of meeting people's living needs. Food is to maintain the human body's life activities and provide energy. Clothing is used to keep warm and beautiful, and furniture is used to improve the comfort of life. These consumer assets will be gradually consumed during use, and their value will gradually decrease with use.

Fixed capital: It is invested in production and operation and continues to play a role for a long time. For example, the value of the factory's machinery and equipment, the company's factory buildings, etc. is gradually transferred to the product, which can significantly improve production efficiency and is an important material basis for enterprise production. Machinery and equipment are continuously operated to process raw materials into products. In this process, the value of machinery and equipment will gradually be transferred to the produced products as the use time increases and the wear level deepens. The factory provides space and place for production activities to ensure the smooth progress of production. Fixed capital investment is usually large, but its service life is longer, which is of great significance to the long-term development of the enterprise.

Liquid capital: Continuously flows in the production and sales process, including raw materials required for production, inventory goods for sale, and monetary funds for transactions, etc., to maintain the continuity of production and sales and ensure the smooth progress of economic activities. Raw materials are the basis of production, and enterprises need to continuously purchase raw materials, put them into production process, and convert them into products. Inventory goods for sale are the results of the enterprise's production, waiting to be sold to realize value. Monetary funds play an important role in all aspects of enterprise procurement, production and sales, and are used to purchase raw materials, pay wages, and pay for goods. The faster the turnover of liquid capital, the higher the efficiency of the enterprise's capital use and the better the economic benefits.

The capital role of money: As a core component of liquid capital, money plays a key role in commodity exchange, accelerates capital turnover, promotes the connection and operation of all links of the economy, and is a lubricant for economic activities. During the production process of an enterprise, monetary funds are used to purchase raw materials, pay wages, etc., so that the production activities can proceed smoothly. In the sales process, enterprises obtain monetary income by selling products, and then use these monetary funds to conduct a new round of production and procurement. The existence of currency makes commodity exchange more convenient and efficient, greatly shortens the time for capital turnover and improves the efficiency of capital use.

Economic impact of banks: By issuing paper money, banks can expand the scale of social capital on the basis of appropriate reserves, provide more financial support to enterprises, and stimulate economic growth. Banks absorb idle funds from society and then distribute these funds to enterprises in the form of loans. Enterprises can use these loans to expand production, technology research and development and other activities to promote economic development. However, if the issuance of paper money goes out of control and exceeds the actual economic demand, it will trigger inflation and undermine economic stability. When there are too many paper money in the market and the supply of goods and services does not increase accordingly, it will lead to rising prices, depreciation of currencies, increasing the cost of living for people, and disruption of economic order.

Difference between productive and non-productive labor: productive labor can directly increase the value of goods, such as factory workers process raw materials into products to create new value. Through their own labor, workers use machinery and equipment and other production tools to convert raw materials into products with higher value. In this process, workers' labor is condensed into the product, increasing the value of the product. Non-productive labor does not directly create value, such as the services of domestic servants, which mainly meet the needs of convenience of life. Although the cleaning, cooking and other services provided by domestic servants have brought convenience to people's lives, they have not directly created the value of goods that can be used for exchange.

Capital accumulation method: Frugality is the main way to accumulate capital, reducing unnecessary consumption expenditures, investing funds in the production field, using them to purchase equipment, expand production scale, etc., to promote capital growth and promote economic development. For example, if a business owner can save daily operating costs, reduce unnecessary waste, and use the saved funds to purchase more advanced production equipment and expand production scale, he can improve production efficiency and increase product output, thereby obtaining more profits and realizing capital accumulation. At the same time, improving production efficiency, innovating technologies, etc. can also promote capital accumulation. By improving production efficiency, enterprises can reduce production costs, improve product quality, enhance market competitiveness, and obtain more profits; innovative technologies can develop new products or new production processes, open up new markets, and bring more benefits to enterprises.

Agricultural field: It is the foundation of the national economy. Investing in agriculture can improve land, introduce advanced planting and breeding technologies, improve agricultural product output and quality, ensure food security, and provide raw materials for other industries. This is crucial to national wealth growth and social stability. For example, investing in and purchasing advanced agricultural machinery and equipment, such as combine harvesters, drones, etc., can improve agricultural production efficiency and reduce labor costs. Introducing excellent crop varieties and advanced planting technology can improve the yield and quality of agricultural products. Agricultural products are not only necessities for people's daily life, but also provide raw materials for food processing, textile and other industries.

Manufacturing field: Process raw materials into finished products with higher added value, promote technological innovation and industrial upgrading, absorb a large amount of labor to find employment, improve production efficiency and product competitiveness, and promote economic structure optimization. Through continuous technological innovation, the manufacturing industry has developed more advanced production processes and products, which has increased the added value of products. For example, the transformation of the automobile manufacturing industry from traditional fuel vehicles to new energy vehicles has not only promoted the upgrading of the automobile industry, but also promoted the development of related industries such as batteries and motors. The development of manufacturing has also absorbed a large amount of labor force to find employment, increased people's income level, and promoted economic development.

Trade field: Wholesale trade connects producers and retailers to realize large-scale circulation of goods and optimized resource allocation. Wholesalers purchase goods in batches from producers and then sell them to retailers. In this way, the goods are transferred from production to sales, meeting the needs of consumers in different regions. Retail trade is directly targeted to consumers, meets personalized consumer needs, promotes market activity, and promotes economic circulation. Retailers provide diverse goods and services according to consumers' needs. After consumers purchase goods, funds flow back to producers and retailers, promoting the circular development of the economy.

Order of industrial development: In the early stages of economic development, people mainly rely on land resources, and agriculture is the first to develop to meet basic living needs. Because agricultural production can provide food, vegetables and other daily necessities, it is the basis for human survival. As agricultural products surplus increases, labor is shifting to manufacturing, driving the rise of manufacturing. When agricultural production efficiency increases and agricultural products surplus occurs, part of the labor force can be liberated from agricultural production and invested in manufacturing to engage in the production of industrial products. Afterwards, the domestic market was saturated and foreign business expanded, and domestic products were promoted to the international market and further economic prosperity. When the domestic market demand for industrial products gradually became saturated, in order to seek a larger market space, enterprises began to export products abroad and participate in international market competition, which promoted the development of foreign trade and promoted further economic growth.

Interactive relationship between urban and rural areas: urban and rural areas are interdependent and coordinated. Cities provide rural areas with various industrial finished products, such as agricultural machinery, daily necessities, etc., and provide a market for agricultural products. Urban industrial production can produce advanced agricultural machinery to help farmers improve agricultural production efficiency, and also provide various daily necessities to meet farmers' living needs. The city has a large market demand, providing a broad sales channel for agricultural products. Rural areas provide cities with abundant raw materials and food to support urban industrial production and residents' lives. Rural agricultural products are important raw materials for industries such as food processing and textiles, and also provide urban residents with daily necessities such as food.

Historical background of agriculture blocked: After the fall of the Roman Empire, feudal systems such as the law of inheritance and limited inheritance were prevalent, and the land was concentrated in the hands of a few families, making it difficult to freely transfer and effectively improve. The eldest son inherits the land by the eldest son, and other children cannot obtain the land, which makes it difficult to allocate land reasonably. The limited inheritance system restricts the sale and transfer of land, making it impossible for land to be optimized according to market demand. In addition, due to frequent wars, people have no time to take care of agricultural production, which seriously hinders agricultural development. During the war, the lives and property of farmers were threatened and they could not engage in agricultural production with peace of mind. Agricultural production facilities were also damaged, resulting in a significant decline in agricultural output.

The driving factors for the rise of cities: the development of commerce and handicrafts has prompted the gradual rise of cities. Urban residents accumulate wealth through trade and handicraft production, get rid of the shackles of feudal lords, and gain certain autonomy. With the development of commerce, cities have become the center of commodity exchange, attracting a large number of merchants and handicraftsmen to gather. Handicraftsmen made various handicrafts through their exquisite skills, while merchants sold these handicrafts to various places, thus accumulating wealth. In order to protect their own interests, urban residents began to organize themselves and fight against feudal lords, gradually gaining a certain degree of autonomy, attracting more populations to gather, and promoting the expansion of the city's scale and economic prosperity.

Market expansion role: Cities open up broad markets for rural products, rural areas adjust production structure according to market demand, realize the commercialization and specialized production of agricultural products, and improve agricultural production efficiency. Urban residents have diversified their demand for agricultural products, not only need basic agricultural products such as grain and vegetables, but also fruits, meat, dairy products, etc. Rural areas adjust planting and breeding structures according to the needs of urban markets, develop characteristic agriculture, and realize the commercialization and professional production of agricultural products. For example, some rural areas develop organic vegetable planting and specialty fruit planting according to market demand, which increases the added value of agricultural products and increases farmers' income.

Technology communication and driving: The city’s advanced production technology, management experience and business concepts are spread to rural areas, and promote changes in agricultural production methods, such as introducing new planting technologies, breeding methods and agricultural management models. New irrigation technologies, soilless cultivation technologies, intelligent breeding equipment developed by agricultural research institutions and enterprises in cities have gradually been applied in rural areas, greatly improving agricultural production efficiency. At the same time, modern agricultural enterprise management models, such as refined cost accounting and supply chain management, also help rural agricultural production organizations optimize operations, reduce costs and increase profits. Some agricultural cooperatives have begun to learn the brand marketing methods of urban enterprises, create distinctive brands for agricultural products, broaden sales channels, and further promote rural economic development.

Core theory analysis: advocates achieving national wealth growth through trade surpluses, believes that gold and silver are the only form of wealth, encourage exports and restrict imports, so as to accumulate more gold and silver currencies, and regard foreign trade as the main source of wealth. Under the guidance of mercantilism, the government will introduce a series of policies, such as providing subsidies and tax refunds to export enterprises, and setting high tariffs and quota restrictions on imported goods to promote exports and reduce imports.

Review of policy drawbacks: Long-term restrictions on imports will trigger retaliatory measures from trading partners and hinder the normal development of international trade. For example, when one country imposes high tariffs on imported goods, other countries will also take the same measures on the country's export goods, resulting in the continuous escalation of trade frictions and the shrinking scale of international trade. Excessive pursuit of trade surpluses may lead to shortage of commodities in the domestic market and rising prices. Because of the large amount of commodity exports, the supply of commodities in the domestic market has decreased, but the money supply has not decreased accordingly, which has triggered inflation. At the same time, it is not conducive to domestic enterprises to improve their competitiveness, because there is a lack of external competitive pressure, enterprises do not have enough motivation to innovate and improve production efficiency.

The main point of view is to regard land production as the only or main source of wealth of various countries, to believe that only agriculture is truly productive labor, to emphasize the core position of agriculture in the economy, and to ignore the role of other industries. Agriculturalists advocate reducing intervention in agriculture, allowing agriculture to develop naturally, and at the same time adopting restrictive policies on industry and commerce.

Analysis of theoretical limitations: Overly one-sided emphasis on agriculture and neglect the important contributions of manufacturing and commerce to the economy. In fact, various industries are interrelated and promote each other. The manufacturing industry can improve production efficiency and increase product added value. Through technological innovation and large-scale production, raw materials can be transformed into more valuable commodities, meeting people's diverse needs. Commerce promotes commodity circulation and resource allocation, so that the produced commodities can reach consumers smoothly and realize the value of the commodities. Commercial activities can also drive the development of related service industries, create more job opportunities, and promote the comprehensive economic development.

National defense and security expenditure: Ensuring national sovereignty and territorial integrity and safeguarding national security is the primary responsibility of the country. It is used to build and maintain the army, purchase advanced weapons and equipment, conduct military training and national defense scientific research, etc. For example, the army needs to be equipped with advanced fighter jets, tanks, missiles and other weapons and equipment to improve national defense strength. At the same time, a large amount of money is also needed to be invested in military training, military exercises, etc. to ensure that the army has strong combat effectiveness.

Judicial system expenditure: Establish and improve the judicial system, ensure social fairness and justice, and maintain social order. Including payment of judges’ salaries, construction of court facilities, and maintaining judicial administration operations. An efficient and fair judicial system requires a professional team of judges, and in order to attract and retain outstanding legal talents, reasonable salaries are required. At the same time, it is also necessary to build a modern court building and equip it with advanced office equipment to ensure the smooth progress of judicial work.

Public works expenditure: Invest in the construction of infrastructure such as roads, bridges, ports, and water conservancy to improve transportation and production and living conditions, promote economic development and regional exchanges, and improve the overall welfare level of society. Good transportation infrastructure, such as highways, railways, etc., can reduce logistics costs, promote commodity circulation, and strengthen economic ties between regions. The construction of water conservancy facilities can ensure agricultural irrigation and urban water supply, and provide guarantees for economic development and residents' lives.

Royal and administrative expenditure: Maintain the dignity of the monarch and the operation of the palace, as well as the daily administrative management of the government, but the scale should be reasonably controlled to avoid extravagance and waste, and ensure the effective use of fiscal funds. For example, the daily expenses of the palace and the ceremonial activities of the monarch all require certain expenses to support. The government's administrative expenses include the salaries of civil servants, office expenses, etc. The expenditures of these expenses should follow the principles of saving and efficiency to improve the efficiency of the use of fiscal funds.

Income from state-owned assets: including the income from land, mines and other natural resources owned by the royal family, as well as the operating profits of state-owned enterprises, are an important part of the national fiscal revenue. For example, the income obtained after the sale of ore mined by state-owned mines and the profits obtained by state-owned enterprises in market competition can all contribute to the national finance.

Tax revenue: levying various taxes on land, houses, commodity transactions, personal and corporate income, etc. is the main pillar of fiscal revenue. Taxes should follow the principles of fairness, determination, convenience and economics to ensure that the tax system is reasonable and efficient. For example, personal income tax is levied based on the level of personal income, reflecting the principle of fairness; value-added tax is levied in the production and circulation of goods, which is certain and convenient. At the same time, the formulation of tax policies should take into account the impact on the economy and avoid excessive taxation from hindering economic development.

Exploration of the reasons for issuance: When the country faces large-scale funding needs such as war and major infrastructure construction, and the fiscal funds are insufficient, funds will be raised from the public by issuing public bonds to meet the needs of national construction and development. For example, during war times, states need a large amount of funds to purchase weapons and equipment, pay military expenses, etc., and fiscal revenue cannot meet these needs, so public bonds will be issued. Major infrastructure construction projects, such as the construction of high-speed rail and large-scale water conservancy projects, also require huge amounts of funds. Issuing public bonds is a common method of financing.

Economic impact analysis: Moderate issuance of government bonds can raise funds for public project construction, drive economic growth and create jobs. For example, the government used public debt funds to build highways, which not only improved traffic conditions, but also promoted the development of related industries such as construction, steel, and cement, creating a large number of jobs. However, excessive issuance of government bonds will increase the country's fiscal burden, increase the risk of debt default, and may trigger inflation and affect economic stability and sustainable development. When the issuance of government bonds is too large, the country needs to pay high interest, and fiscal pressure increases. If the debt cannot be paid on time, it will trigger a debt crisis and affect the country's credit. At the same time, excessive issuance of government bonds may also lead to excessive money supply in the market and trigger inflation.