Chapter 6 Chapter 3 How We Became a Developed Country: The Truth About the Rich and the Poor in the Contemporary World

We start with a simplified question, that is, why are urban people rich and rural people poor? This is a simple yet complex economic question.It is simple because it is simple; it is complicated because a large number of parallel import economists have made it complicated. You go back to Europe 100 years ago, in the early stage of industrialization, to explain why the city people are rich and why the rural people are poor, you only need to use a very simple economic principle, which is the perfect competition in any microeconomics textbook. The theory of markets and imperfectly competitive markets.

In a perfectly competitive market, the price of a product is always the lowest, and the manufacturer that produces it only earns zero profit in the long run (meaning that the money earned is only enough to pay for the manufacturer's own labor, which is equivalent to making no money). Commodities in a non-perfectly competitive market have a certain degree of monopoly. According to the strength of monopoly power, manufacturers can control the market price of commodities to varying degrees to maximize profits.A monopoly firm can always obtain higher profits than a competitive firm, and a firm producing a competitive product is certainly not as profitable as a monopoly firm.

Competitive manufacturers exchange their products with those of monopolistic manufacturers, and they will definitely suffer a lot. Although this kind of exchange is not reflected in the exchange of things in reality, but competitive manufacturers sell their products to obtain currency, and then use the currency to buy what they need. If what he buys happens to be a monopoly product, He was at a disadvantage. Just imagine, if you are the only one who can supply TV sets in this country, then you can change ways to get the maximum profit. For example, you sell the first TV set to the richest person for 100 million , do not buy and pull down, and so on, you can always sell each TV to the person with the highest bid, and your profit will be the largest.Or you think it may be unrealistic to set different prices for the same TV set in this way, you can still find an optimal combination of output and price.Assuming that the cost of the TV is 4,900 yuan, the price is 20,000 yuan, and 1,000 sets can be sold; the price is 10,000 yuan, and 4,000 sets can be sold; Then you can produce 4,000 TV sets and sell them at a price of 10,000 yuan to get the maximum profit.

But if countless TV manufacturers like you suddenly appear in this country, you will be miserable. You will find that you can no longer set prices and determine production at will, let alone sell every TV to the highest bidder. people.The reason is very simple, if you don’t sell it at this price, countless people are waiting to sell it, so the competition of the same TV will eventually bring the price down to a price close to the cost, such as 5,000 yuan. Farmers are inherently in such a tragic state. They are such a kind of "television manufacturers" facing countless competitors. Of course, their products are grain rather than television sets.

Yes, why are farmers poor? The reason is that farmers are all competitive manufacturers, and the products provided by farmers are almost all competitive products. Numerous individual farmers compete with each other, and the agricultural products of different farmers are close to being completely substituted for each other, which is enough to reduce the price of agricultural products. At minimum, individual farmers have no influence over market prices. At the same time, what urban residents provide are more or less monopolized industrial products, some of which are highly monopolized products, such as medical care, transportation, high-end brand products, financial services, etc., the prices of such products It is ridiculously high; some are moderately monopolistic products, such as ordinary brand clothing, various home appliances, various electronic products, etc. There is a certain degree of competition among different manufacturers of this type of product, but it is not fierce, and the price is still much higher In a state of perfect competition; some are slightly monopolistic products, such as cheap clothing, cheap packaged food, etc. This type of industrial products, because they are too low-end, there are a large number of domestic manufacturers competing, and their competitiveness is basically close to that of agricultural products Yes, its monopoly is slight.

It is doomed that the vast majority of farmers engaged in agricultural production cannot make a fortune from agriculture, because you produce competitive products, but you have to exchange them with monopoly products produced by urban residents, and you will suffer a loss every time you exchange. , The more you produce and the more you exchange, the more you will suffer.This is the true meaning of scissors - the result of exchanging a competitive product for a monopoly product.Since urbanites provide products that are more monopolistic than ruralites, urbanites must be wealthier than ruralites on the whole.

There are only four ways for farmers to make a fortune: 1. Break away from agriculture and enter industries with monopoly such as industry, commerce and finance that can produce monopoly products. 2. Try your luck.Pray that the national production of the agricultural products you plant will be reduced by half due to natural disasters, but your agricultural products will not be reduced.Or buy lottery tickets and stocks to win big prizes and get lucky. 3. Produce monopoly agricultural products.Only some farmers in Shandong have achieved this in China.Their greenhouse vegetables are of high quality, forming a difference and irreplaceability from ordinary similar agricultural products. Farmers who grow greenhouse vegetables in some areas of Shandong earn less than 100,000 yuan a year. Their good products are sold to Japan and South Korea. The worst only consider selling domestically.

4. Collusion.All farmers unite and set prices jointly, and calculate a combination of output and price with the greatest profit. I will not sell it to you below this price.If this can be done in reality, it will be a disaster for urban residents, because if you don’t eat food, you will starve to death, so farmers can set the highest price arbitrarily. Now you know why the slogan "Proletarians of the world unite" is so terrible. If it is really united, I am afraid that no capitalist can afford to hire workers, because workers demand skyward prices for their labor. Not to mention that the proletarians of the world united, look at the United States, the workers of the United States united, and brought down General Motors in the United States. When the financial crisis broke out, the boss of GM finally tricked the US government into giving them 30 billion Dollar relief.As a result, GM's labor union rejected the boss's proposal to cut wages. When the American people heard it, you bastards are so shameless. Forget about not giving you money. You can fend for yourself. The American government listens to the people. , Immediately canceled the relief fund.

The above analysis seems to perfectly explain why urban people are richer than rural people. However, I want to tell you that this explanation was perfect a hundred years ago, but it is lacking today.Because, what we are now in is an economy that has entered the world of the human mind. We need new interpretations, or in other words, we need to be specific, modernized, and keep pace with the times. Let me tell you that there is such a law in the contemporary economy, that is, fiction and reality alternate, and fiction is higher than reality. The imaginary here does not only refer to the virtualization of the form of the product, but refers to all products used to meet the needs of the human mind. Such products can be in physical form or virtual.For example, a piece of fashionable clothing is material, but in addition to keeping warm and concealing shame, it is more important to bring spiritual pleasure and fashion vanity satisfaction; there are more virtual products in themselves, such as financial products, such as TV programs , movies, etc., and even the opening and closing of the doors of the doormen who appear in five-star hotels at any time mentioned above.

The "real" here refers to other traditional products, that is, those products that can only meet people's instinct and physiological needs. False and real alternate, which means that there are two types of product industries coexisting in the contemporary world. False is higher than real, which means that fictitious products always have higher value and higher profits than real products. Proceeding from this principle, urban people are richer than rural people because urban people produce "virtual" things, while rural people can only produce "real" things.

If we want to explain the so-called "virtual" things produced by urbanites more specifically, firstly, the products of urbanites can more or less meet certain spiritual needs and have spiritual effects, not just stay at the material level. .For example, branded clothing is not only used to keep warm and cover up shame, but also to show off. This wonderful function of showing off is valuable; the second is that urban residents have a virtual industry, mainly referring to the financial credit industry. What about farmers?It can only produce unprocessed food that meets the minimum physiological needs, or a small amount of industrial raw materials. These are the real deal. Rice is for eating, and it has no great spiritual effect, so rice will not have added value. In this way, city people exchange high value-added imaginary things for peasants with no value-added real things. Of course the peasants are poor, but the city dwellers are of course rich. These days, home appliances and cars have all gone to the countryside. How many pigs do farmers have to raise and how much rice do they sell to get a car? Not to mention cars, but all kinds of brand-name clothing sold by businessmen in the city. If rural people want to buy them, how much rice will they have to exchange for a suit? How much fabric and labor does a suit cost? People in the city are just playing around, making suits a kind of spiritual product, and the peasant brothers who care about face can't help but buy them. They always buy some during the holidays, weddings and celebrations, right?You will be fooled as soon as you buy it, and you will lose money once you buy it. City people exchange imaginary things for peasants' real things. This is the explanation of the rich and poor in contemporary urban and rural areas. You have seen how similar our picture of the relationship between town and country is to the reality of rich and poor countries today. Yes, in today's international economic structure, the fundamental difference between developed countries and developing countries lies in this. Developed countries provide the world with imaginary products, while developing countries provide real products. Let's see if the financial system in today's world is firmly in the hands of developed countries in Europe, America and Japan, and no one can shake it. The virtual financial products they provide can swagger around the world and sweep away wealth. Looking at the fashion industry again, who is leading the world trend? Those fashions sold at sky-high prices are acting as a powerful tool for Europe and the United States to exploit the world. Wealth is exchanged for these expensive fashions. In the entertainment industry, the United States is the only leader in the world, followed by Europe, Japan and South Korea, detonating their box office all over the world. Luxury goods, this is the patent of Western Europe led by France. ... Yes, developed countries dominate the world spiritually. We are all proud of their products. Any product with their labels will have infinite magic and charm. Let us fall in love with them and be intoxicated by them. , in our obsessed dreams, they are counting the money we contributed noblely, the money that can never be counted. I don’t know if you are familiar with this saying, horses don’t get fat without night grass, and people don’t get rich without windfall. I want to tell you that our ancestors were really full of economic wisdom. This saying that has been handed down expresses an eternal economic principle: "exploitation" is the only way to get rich. First of all, please note that I am using this word here not to go back to Marx’s theory of proletarian revolution. This has nothing to do with his theory. I am doing pure and objective economic analysis. With any ideological overtones. How a person can get rich and become rich is very simple, that is, he pays very little but returns surprisingly high. This is called getting rich. If a person relies on labor for a penny, he can support himself at most. If he wants to make a fortune, he must find a way to get the fruits of other people's labor for free. As for how to get it, there are many ways. For example, you can master violence so that you can rob directly; become an emperor to collect taxes, and all the people in the world will work for you; If you accumulate more, you will get rich, such as the Ponzi scheme mentioned earlier; you can also use money to make money. In ancient times, you could only lend usury, do business, and hoard. In modern times, you can speculate in stocks by chance or have a strong Of course, there are other financial methods; of course, many modern products are "financialized", such as houses, you can speculate in real estate, double it a year, and you transfer other people's wealth to you . All these ways of getting rich rely on the word "exploitation", that is, taking the fruits of other people's labor as your own. No matter what tricks you use to cheat or speculate, you can get rich if you get rich. People have one head, two arms and two legs. It is really impossible to directly create any wealth that can make a fortune on their own. You questioned, didn't Bill Gates become the richest man in the world by himself? Yes, he relies on his own patents, but please understand my words. I mean that it is impossible for people to directly create wealth that can reach the level of wealth. The reason why Bill Gates became the richest man in the world is of course not because he directly created wealth. It is precisely because he used his first patented product as a tool of "exploitation" that countless people created wealth for him. Understanding these principles is very important for us to rise to the national level to understand the truth of the country's rich and poor countries. Some propositions established by individuals can also be established between countries. I can tell you the answer first: there is no developed country in the world today that does not become rich and powerful by "exploiting" other countries, and there is no developed country that does not use various well-designed intermediaries to let people in poor countries work for them and create for them. Heavenly wealth.This is contemporary international exploitation (again, I am not talking about this from an ideological point of view). Intuitively speaking, 100 years ago, the difference between Western countries and other countries was that they exchanged highly productive industrial products for agricultural products and raw materials in backward countries, so they were rich; today, the difference between developed countries and backward countries is that they Exchange our "material products" with high value-added "spiritual products", so they continue to prosper. Deeply speaking, 100 years ago, in the few first industrialized countries in the world, they produced industrial products with high efficiency, which were scarce for most countries, and they had pricing power , because they have a monopoly worldwide.They sell this kind of product with pricing power and monopoly to the whole world, and exchange agricultural products and raw materials that are everywhere in a large number of poor countries. This is the original version of international exploitation. Western countries 100 years ago relied on this kind of international exploitation to make a fortune and sweep global wealth.In a word, they exchange monopoly products for competitive products of others, which is the meaning of the original international exploitation. Why do I call this market transaction exploitation? It's very simple. In this kind of transaction, Westerners exchanged a small amount of labor for several times, even dozens of times, or hundreds of times the amount of labor of poor countries in the world.The basis of this kind of exchange lies in the monopoly of a few industrial countries on industrial products. You don’t have what I have, and you have what you have everywhere. Therefore, I can exorbitantly ask for prices and exchange your “lower” labor products. Today, 100 years later, every country has an industrial system and a complete range of industrial products, which means that traditional international exploitation cannot continue. What should we do? If this continues, other countries will soon be Catch up with the developed countries, and if the developed countries cannot make the people of other countries pay huge amounts of labor for them in vain, they will no longer remain rich: as I said, it is impossible for a single person to rely on his own labor alone. Directly create wealth that can make a fortune. It is impossible for a country to directly create material wealth that can reach a level of prosperity by relying on its own citizens. Don't worry, today's developed countries have already invented a new set of exploitation methods, which is an upgraded version of international exploitation, that is, using a developed spiritual economy to compare your real economy, and using "virtual" to Exchange your "real". Well, didn’t you foolish countries say that you also have industrial products? Then, let me tell you, my industrial products look the same as yours on the surface, but in fact they are a hundred times more expensive than yours, because I It is an international famous brand.One of mine is equivalent to one hundred, you have to exchange one hundred products that look the same with mine.We foolish countries were fooled by them and thought it made sense, so we made a deal immediately.This is the international trade between developed and developing countries that happens every day. Do you understand that today's developed countries only need to play with a concept, and their labor can be exchanged for a hundred times our labor. Under such an exchange, can they not be extremely rich?And how can we not be in the state of "hardworking but not rich". In fact, contemporary developed countries are far more than just playing this labeling game. They also need to produce material products for labeling. What’s more, they don’t even need to produce material products at all, and sell you virtual things directly. This is The financial products and entertainment products we mentioned earlier. As a tool of international exploitation, virtual things are more powerful, because they can often be copied infinitely, and there is no need for cost and repetitive labor. For example, if you are a Hollywood blockbuster, a film is recorded on film after it is shot. In the film, the labor paid by the Americans is basically over. It is just a few months of labor paid by a small number of actors. Then this film can be copied infinitely, released worldwide, and sweeping the world's wealth; after the release, You can also distribute video discs worldwide, and you can also copy them unlimitedly. Financial products are even more virtual. Films or CDs are needed to copy movies, while financial products only need a few electronic symbols.These imaginary products require very little labor, but what about their prices in the international market?But it is quite high. The global box office of a Hollywood movie is worth billions of dollars. Don’t be fooled into thinking that Hollywood has created billions of dollars of wealth. wealth is transferred to them. In essence, they have achieved the strategic goal of exchanging a very small amount of labor for hundreds of times our labor through the trick of movies. Am I crazy enough to dare to burn this great book called the economic bible? I believe that as long as you understand my previous narration, you will not think that I am crazy, but will only agree with my point of view from the bottom of my heart. What is "The Wealth of Nations"? It is just an economic work suitable for describing the era 100 years ago. In the economic era that has entered the human spiritual world, this work is completely out!I hope you don't look at it any more, and burn what you buy. What the heck is "The Wealth of Nations" talking about? "The Wealth of Nations" is divided into five volumes. Let's take a look at the main content of each volume: Volume 1, a total of 11 chapters, the main content is to analyze the reasons for the formation and improvement of labor force productivity, and the principles of national wealth distribution; Volume 2 , a total of 5 chapters, the main content is to discuss the nature of capital, the way of accumulation, and analyze the demand for the quantity of labor depends on the nature of the work; the third volume, a total of 4 chapters, the main content is to introduce the general emphasis on urban industry and commerce at that time, and despise Reasons for agricultural policies; volume 4, a total of 9 chapters, the main content is to list and analyze various economic theories in different countries at different stages; volume 5, a total of 3 chapters, the main content is to analyze the use of national income, is Serving the whole people or only a few; how many kinds of expenditure items are there for serving the whole people, and what are their advantages and disadvantages; why contemporary governments have deficits and national debts, and the impact of these deficits and national debts on real wealth, etc. Well, everyone, you don’t need to read it. From these introductions, you can know that it does not involve any aspects of the rich and poor countries in the contemporary world. Such a book may make the country rich and strong a hundred years ago. The era when a small number of industrialized countries exchanged industrial products for the agricultural products and raw materials of a large number of poor countries guided a country how to become rich. It is suitable for explaining the state of rich countries and poor countries in the era of traditional international exploitation; but today only I have proposed Only the upgraded version of the international exploitation theory can explain the truth of contemporary countries being rich and poor, and can point out a clear path for a country to become a rich developed country. Of course, when I said that "The Wealth of Nations" should be burned, it was a joke, not from its significance to the birth and development of economics, but from its practical value to our era.In fact, this book is the pioneering work of economics. It is it that opened the history of (political) economics as an independent discipline, and the invisible market economy principle that we are familiar with is the central idea of ​​"The Wealth of Nations" .It is really great to realize this point a hundred years ago. It should be noted that the process of our reform and opening up is just the application of this idea. Adam Smith recognized in his day that the seemingly disorganized free market is actually a self-regulating mechanism, automatically inclined to produce the quantities of the kinds of goods that society most desperately needs.For example, if the supply of a desired product is in short supply, its price will naturally rise, and the price increase will lead to higher profits for the manufacturer, and because of the high profit, other manufacturers will also want to produce this product.The effect of increased production is to moderate the original shortage of supply, and as the various producers compete, the increase in supply reduces the price of the commodity to its "natural price," or its cost of production.No one is purposely helping society by eliminating the shortage, but the problem is solved.In Adam Smith's words, each "only wants his own interest" but is "led, as if by an invisible hand, to an end which he has no intention of attaining...they promote the interest of society, The effect is often better than they really intend to achieve." (The Wealth of Nations, Book IV, Chapter 2) However, what I want to tell you is that it is far from enough to simply establish a market economic system by only knowing the "invisible hand". The missing heart". The "invisible hand" is no longer enough to make a contemporary country a rich country, it will only bring you into the international market and become an object of exploitation by developed countries, because the developed countries have highly skilled use of the theory of "invisible heart" and Strategy, through an upgraded version of international exploitation, let you work for them and work for nothing.Therefore, Adam Smith's "The Wealth of Nations" can only create a poor country in the contemporary era, rather than make a country rich. Not only is the theory of the "invisible hand" impossible to create a contemporary rich country, but another important logic of national wealth in the book also needs to be revised today.In "The Wealth of Nations", he believed that the production of national wealth depends on two factors, one is the technology, skills and judgment of the labor force, and the other is the ratio of the labor force to the total population.What he means is easy to understand, that is to say, the more people involved in the production of products in a society, the higher the skill of labor, the more wealth will be produced.This logic was obviously valid in his era 200 years ago, because there was basically no overcapacity in that era. The more labor force, the higher the technology, the more products produced could be sold and recognized by the people. Enjoyment, in other words, as many products are produced, as many products are enjoyed by the people, and the more products produced, the richer the people are. Today's world is an era of overcapacity and underconsumption, and this logic needs to be revised slightly. why? As long as you think about it a little, you will know that the two items mentioned by Adam Smith actually determine the total production capacity of a society, not the total product output (that is, the total amount of wealth) of a society.Only when there is no excess capacity, the total capacity will be equal to the total output.It is a pity that the economies of all countries in the world since industrialization are economies with severe excess capacity, and this is still the norm today.No matter how much labor force you have, no matter how high the overall technology is, it is only high production capacity, but due to insufficient market demand (mainly insufficient consumption), a large part of this very high production capacity cannot be fully employed, that is, a large part ( A considerable portion) of what it would have been able to produce, but could not.That is to say, a large part of the wealth that could have emerged in modern society has not emerged due to "insufficient consumption".How to find a way to produce the wealth that should have been produced is another important logic of contemporary national wealth! In fact, both Marx and Keynes had a deep understanding of this problem, and their economic theories, systems, and policy concepts were mainly used to solve the problem of overcapacity (few people can see this clearly).Because both Marx and Keynes recognized the crux of modern economic problems: the contradiction between production and consumption has led to the failure of the very huge wealth that could have been created in society to be produced. The socialism conceived by Marx is to solve this problem, and this is the great advantage of the (conceived) socialist system over the capitalist system: with the same labor force and technical level, the socialist system can produce more Capitalism has much higher social wealth, and people can live a much richer life than capitalism.In Marx's logic, there is no problem with this. A more detailed discussion of this issue can be found in Chapter 8, Section 2 of this book, which introduces the solutions to overcapacity that Marx and Keynes envisioned respectively. As we all know, the planned economy under the public ownership conceived by the former failed in the end. , while state intervention under market economy conditions envisaged by the latter has achieved great success in capitalist countries. And what is my idea? This is still in Chapter 8. I will tell you the conclusion that only printing money for shopping can perfectly solve the overcapacity of the modern economy and make the society produce the greatest wealth. So, what kind of country will become a modern developed country? I can give a simple conclusion first, first, this country must formulate its national development strategy from the "heart", and the "invisible hand" must give way to the "invisible heart"; Money shopping strategy to solve the problem of overcapacity.These two points will be the two cores of the rest of this book, and all my expositions will revolve around these two points. As for China specifically, I will tell you that we have the opportunity to get rich overnight. As long as we implement money printing and shopping, we can become a rich developed country overnight, and as long as we implement the strategy of heart at the same time, we will It must be able to surpass the United States economically at some point.