
If you look at the official historical records, Yuan Shu didn't try to declare himself Emperor from the start. In fact, when his subordinates urged him to do it, Yuan Shu said it was too early since Cao Cao was still alive. This means Yuan Shu, unlike his modern meme representation, had at least some political sense and judgment.

But Honey Water (꿀물, Yuan Shu's nickname) became Emperor while Cao Cao was alive, as we know, so you might think that's weird. From here on out, this is just my personal speculation as to why Yuan Shu might have said that.

It seems Yuan Shu calculated that Cao Cao would quickly fall due to 'Holding the Son of Heaven Hostage' (He-tianzi). While taking the Emperor gives you legitimation, it's a critical weakness because it's a money-eating hippo. Salaries for officials, maintaining the dignity of the Emperor and the court, administrative costs, etc.—it costs a metric ton of cash. Chang'an and Luoyang, which were supposed to be good lands?

Dong Zhuo, Li Jue, and Guo Si's crew totally ruined them (후루룩 말아드셨다). They say 300,000 households starved to death, and even a powerful local clan leader named Wang Chong ate human flesh because there was nothing else—that says it all. And was Cao Cao's base, Yan Province, doing any better? Nope.

Just one year before taking the Emperor, Cao Cao's forces were cut in half by Zhang Miao's rebellion, and people were dying left and right due to locust plagues. Even though Cao Cao eventually managed to suppress Zhang Miao's rebellion, the human cost must have been significant, and Cao Cao's home base was in serious trouble.

You might think, "Still, Cao Cao's family was super rich, so couldn't he afford the costs of 'Holding the Son of Heaven'?" Well, Zhang Kai killed Cao Cao's dad and ran off with his family's massive fortune. Thank goodness Cao Hong was a major millionaire; without Cao Hong, Cao Cao would have been completely screwed. But no matter how rich Cao Hong was, he probably wasn't as rich as Cao Cao's dad, so I think relying on Cao Hong's wealth alone to cover the costs of He-tianzi was a stretch.

In other words, from Yuan Shu's perspective, Cao Cao—who had taken the Emperor when his home base was a total mess, his money wasn't as abundant as people thought, and Luoyang and Chang'an were also trashed—was likely doomed to fail quickly.

But Cao Cao managed to overcome this and expand his influence. Need more money? -> Grave robbing. Need more food? -> Implement the Tuntian (military farm) system. Short on workers? -> Actively bring in refugees. Need more talent? -> The Xun Yu Cartel + the prestige of He-tianzi brought people in. On top of that, Cao Cao himself actively scouted talent. Thanks to this, Cao Cao rose to a position where he could challenge Yuan Shao, the strongest warlord of the time. Yuan Shu, judging that he was screwed if things continued this way, decided to...

Declare himself Emperor to expand his influence. Of course, in the eyes of talented people, Cao Cao—who had amazing military talent and was highly capable—was better than Yuan Shu, who had terrible military talent and was useless. So, talent flocked to Cao Cao, and Yuan Shu's power rapidly collapsed... I guess.
"A historical roast session: Was Cao Cao a political genius or just OP in combat? Either way, the consensus is that Honey Water Yuan Shu was a clueless 'golden spoon' who fundamentally failed due to being a rich idiot who couldn't fight."
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