Chapter 5 The first world is a ladder introduction

Speaking of the world before the First World War in 1914, Keynes said in The Economic Consequences of the Peace: "In these happy years we lose what the founders of political economy had. A world view that contains profound ideas. Before the eighteenth century, people did not have false hopes. In the late eighteenth century, such fantasies became popular, and to appease these fantasies, Malthus revealed a demon. For half a century, all serious Economics works have made a clear vision of this demon. In the next half century, this demon was controlled by us and faded out of people's vision." This demon is the "Malthus Population Trap".After Malthus's "melancholy" economics faded, people's economic world began to be ruled alternately by laissez-faire and Keynesianism, who believed that there were eternal investment opportunities, and that human economic problems were mainly on the side of aggregate demand, not supply.Hegel once said: "The lesson that human beings have learned from history is: Human beings never learn the lessons of history."After the Second World War, the world economy experienced unprecedented high growth, so that the real cause of the Great Depression in the world from 1929 to 1933 was blurred, and people collectively lost their memory and were in a state of irrational optimism, forgetting the existence of economic life. The danger of a huge effective undersupply.

When Thomas Friedman's view of "the world is flat" was widely accepted, the whole world was still groaning in pain in the financial crisis in 2009, and the opportunities available to everyone in the "flat world" were almost gone. live.When people lamented that "the world is new" and cheered for emerging market economies, European and American financial institutions "deleveraged" in 2008, and international capital fled in large numbers from emerging market countries such as Iceland, Ukraine, and Hungary, and capital accounts appeared. Crisis risks, have asked the International Monetary Fund for rescue.As a result, the IMF's stature has been significantly strengthened, returning to the spotlight on the world stage. In 2009, the G20 London Financial Summit reached a consensus that the IMF's total loan amount of US$250 billion is not enough and should be doubled.And in 2005, when I left the IMF, fewer and fewer countries were turning to the IMF, and its $250 billion in total loans seemed more than enough to spend at all.

In 2009, mankind fell into the world financial crisis and economic recession.In fear, people already lack the depth of thought and are at a loss.Because of this, we need to deeply reflect on the correctness of mainstream economic thinking and explore the fundamental answer to human long-term economic growth.In this book, on the basis of the fundamental views of Marxist economics, I discovered an eternal challenge to human economic life, which is the "productivity revolution".I think the productivity revolution is uncertain and imperceptible, but it is bound to happen.It is both a fundamental force changing the world and a new investment opportunity.Economic history has long demonstrated that the productivity revolution has incalculable potential for creating new industries.However, the existing economic system lacks sufficient adaptability, and the adjustment of economic structure is also a painful process, which will result in insufficient effective supply.Some economies are able to seize the opportunity of the productivity revolution and create new industries; while some economies are often unable to seize the investment opportunity, and the economy stagnates or declines.Therefore, the world is not flat, nor is it new.

In fact, facing the eternal challenge of the productivity revolution, the best state of mankind is neither excessive pessimism nor excessive optimism, but a kind of cautious optimism.The way to deal with the challenge is to insist on reforming the economic system and build an economic system that complements each other, that is, a "learning economy".If we explore the internal mechanism by which the economic system adapts to the productivity revolution, we will find four key "parts": a flexible labor market, an efficient capital market, a national learning system, and a moderately open balance of payments account.I made an in-depth analysis of these key mechanisms in my book "Learning Economics" published in 2002, so I won't go into details in this book.

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