Chapter 3 Introduction to Understanding the Modern Economy

If you want to talk about China catching up with and surpassing the United States, you must first talk about how to become a developed country. If you can't even become a developed country, how can you talk about surpassing the United States. So the first part of this book is to discuss with you what kind of country can become a contemporary developed country, and what is the basic logic and truth of the contemporary country's rich and poor countries. To understand this logic, we must first understand what kind of economy the modern economy is. Let's start with the word "confidence" that Premier Wen often talks about.

Premier Wen's visit to Europe during the Spring Festival in 2009 was positioned as a "journey of confidence"; moving forward, Premier Wen visited Jiangsu from January 9th to 11th, and the word "confidence" was the most frequently mentioned in every company he visited. ; On September 24, 2008, Premier Wen proposed the famous slogan "Confidence is more important than gold" during the crisis when he held a discussion with people from the American economic and financial circles in New York. Confidence is Premier Wen's consistent key word in this global economic crisis, and it is also what he thinks every day.Since Premier Wen repeatedly emphasized the relationship between confidence and economic recovery on so many occasions, it might as well be called "confidence economics".

In the face of a crisis, why not first emphasize the objective aspects of efforts, but repeatedly emphasize confidence first? This is because the modern economy is already an economy of the soul, and the "invisible heart" has become the same force as the "invisible hand" to manipulate the modern economy from the micro and macro levels. To be precise, the invisible hand of the market is still at work, but more subtly, the invisible heart is manipulating the invisible hand, which is the deepest decisive force. The invisible hand refers to the adjustment of the economy by the market mechanism; the invisible heart refers to the spiritual power that directly acts on the economic operation, and this spiritual power is directly externalized into specific laws of economic operation. The combined force of the subject mind.

Before the completion of industrialization, the laws of the mind of economic laws were not obvious. After the completion of industrialization, on the one hand, due to the well-developed production, the general public still has a lot of surplus wealth to pursue higher spiritual satisfaction after satisfying their food and clothing. This spiritual demand has led to the development of various corresponding industries, such as the film and television entertainment industry, various cultural industries.In addition to following market prices and the laws of supply and demand, these industries that satisfy spiritual needs are also directly controlled by the laws of the public mind; The modern economy of the laws of the mind.

The difference between modern behavioral economics, behavioral finance and neoclassical mainstream theory is that the "invisible heart" is used instead of the "invisible hand" to explore the laws of the mind in finance. Specifically, the invisible mind manipulates the entire economy at three levels: The first level is the virtual economy level, that is, the financial securities market, where the invisible heart directly determines the direction of the market.The operating laws of the capital market are indeed determined by the invisible mind. Empirical research in the field of economics also shows that there is no correlation between the stock market and the real economy in the long run.For example, the difference between a bear market and a bull market is neither the level of the stock index, nor the level of price-earnings ratio, nor the rise and fall of stock prices. The key to distinguish between a bear market and a bull market is actually the investment mentality of investors: Let us review the "5.30" in 2007 "In the Chinese stock market in the past and the Chinese stock market after "5.30" when the Shanghai stock index hit the 6,000-point mark, as long as the stock index dared to fall, some people dared to buy. This is a bull market.Look at the Chinese stock market after the stock index peaked at 6124 points. Every time it rises or rebounds, some people want to sell, unwind, and cut their meat. This is a bear market.All technical indicators are nothing more than a concentrated reflection of the psychological state of stock investors.

The second level is the trend of the macro economy. The invisible heart directly determines the trend of the macro economy. After the economic depression begins, the economic depression leads to the loss of confidence, which leads to the shrinking of investment and consumption, which further accelerates the economic depression, and this infinite vicious circle continues. , is a disaster. Therefore, to regulate the economy, we must first start from the heart, and break the first chain of this vicious circle, so that it cannot go on, and the economy will stop falling and recover. What exactly is Premier Wen's confidence?

I think it is this force that breaks the chain of vicious circles, a spiritual force that makes the economy bounce back.In a crisis, the invisible heart plays the most important role in determining the direction of the macro-economy. When the economy turns better, we must first have confidence, have the confidence to drive at full speed, and create a new starting point for recovery. Only then will there be a sustainable economy in the future. It can be said that when confidence is restored, the macro economy will start to take off again.Faith comes first, objective effort comes second. The third level is the economic field that purely meets the spiritual needs of human beings, and the operating laws of these fields are completely determined by the social mind.

For example, celebrity entertainment economy, conspicuous economy, "ideological economy" (to know the meaning, please search for my article "Cyber ​​is a Big Market" on the Internet), brand virtual economy, the laws of these economies must follow the traditional market laws , but also to be drawn by the soul. The spiritual economy based on the above aspects has penetrated into various economic fields, not only affecting everyone's life in a subtle way, presenting in the micro-economy in various fields, but also having an immeasurable effect on the operation of the macro-economy.

In fact, the entire modern economy is already an economy that has entered the world of human minds. The logic of the country’s wealth and the country’s poverty in such an economic era needs us to grasp again. This logic is different from the logic of the country’s wealth and the country’s poverty in the early days of industrialization. Adam · Smith's "The Wealth of Nations" is ready to be placed.