OFFICIAL SALARIES AND EXPENSES 825a given district, and the district magistrate would retain these tax revenues to hire
a purchasing agent. He would provide the agent with funds and send him out as
his commissioner, a person colloquially called "the tribute elder" (kongmul puro),
to purchase those goods where they were produced, similar to the system used
in the capital. The government would also pay horse and transportation costs and
arrange for any emergency allocation of goods to be bought in this way on the
market rather than by continuing the practice under the tribute system of mak-
ing extra, ad hoc allocations of tribute goods on individual districts.^19
The Government-Regulated Market: Subsidized PricesYu's perception of the operation of market purchases did not include any theo-
retical proposition about the necessity for prices to be determined only by pri-
vate negotiation between sellers and purchasing agents. On the contrary, he did
argue that the government should determine liberal prices to be paid to merchants
over current market prices - an argument that followed Han Paekkyom's pro-
posal in I 608 to remedy the practice of officials to demand lower prices for goods
from merchants after the adoption ofYu Songnyong's taedong reform of I594.
Yu thus implied that to preclude merchant opposition to the taedong system the
government was obliged to guarantee the private merchants a profit for their sales
to the government and an incentive for a constant flow of goods to the capital.
He wanted the state not only to subsidize the replenishment of merchant stocks,
the continuous reproduction of goods, and the profits of the merchants, but also
to guarantee the health and viability of the market system itself. The state would
have the power to accomplish these objectives because it would be the major pur-
chaser of goods previously remitted to the king and government as tribute.
Even though the taedong system undoubtedly provided a major stimulus to
the development of the market, Yu did not develop an economic theory to jus-
tify the beneficial eflects of a theoretically free market in disciplining produc-
ers to cut costs and prices through competition or to eliminate inefficient
producers. On the contrary, his plan for a government subsidy for prices would
reduce thrift and efficiency by guaranteeing profits for higher cost producers.
He felt that since the state would be the primary consumer of many products, it
was obliged to defer the opportunity to use its monopsony on consumption to
obtain better prices from merchants because it would inhibit the operation of
the market to maintain a continuous flow of goods to the national capital and
provincial districts.
Since Yu's economic reasoning was based on moral criteria rather than value-
free analysis of the effects of impersonal economic forces, it was natural - but
also naive - for him to have assumed that government functionaries would have
subordinated their own interests to protect and guarantee the profits of the mer-
chants and producers. The opponents of the taedong reform were on solid ground
when they held that officials and clerks were more likely to underpay merchants
or force them to sell at low prices. Despite his belief, however, that the superior