Chapter 10 3. The law of the great era: economic model transformation, igniting new economic growth points

If the meaning of stimulating domestic demand is to attract wealth from the hands of the people, then the best way is inflation rather than encouraging consumption. The effect of using an inflationary monetary policy is far greater than that of pure market means. From an economic point of view, the so-called "encouragement of consumption" does not focus on encouraging the common people to live beyond their means, take money out of the bank and spend it, and clean up the money in their pockets. system. Topic introduction: Where does the model change—the misunderstanding of the "domestic demand theory"—the theory of people's wealth—where is the growth engine—the era of zero-negative growth in the future

We talk about change every day. The meaning of change is very simple. The difference between today and yesterday is called change; when our situation is better than yesterday, this kind of change is called development; when our situation becomes worse, this kind of change is called retrogression. Each of us longs for a better situation, and economics is precisely a science that makes people happier. However, the real market is always unpredictable and often runs counter to human judgment. In the past 10 years, perhaps the most incredible thing is the change of economic model. When we talk about changes in models, we often relate to market economy and planned economy, or export-oriented economy and inward-looking economy. In fact, for the true meaning of economic model, the former refers to the system, while the latter refers to It is means, one concept is too big and the other is too small.

The so-called economic model is the internal and external mechanism of the economy. For example, the system is the environment in which we accumulate wealth, the means are the tools for us to accumulate wealth, and the model is the method for us to accumulate wealth. From the perspective of economic theory, there is only one way to accumulate wealth, and that is to expand production. Production is the only means of creating wealth. For economics, the concept of wealth creation means rice grown by farmers, products made by artisans, technology invented by technicians, ore dug by miners. In addition, whether a businessman Buying and selling, or the handling of government affairs by civil servants, and the economic behavior of other members of society, either belong to exchange or distribution, except that they do not belong to the category of production.

In historical China, the economy developed gradually based on production. It can be said that production is the biggest feature of our economic model. However, pure production is not enough for everyone to have wealth. When we re-examine economic development from a global perspective, it means that an era of wealth is coming. The perspective of each producer is limited, but the perspective of the market is global, and the value of circulation is thus revealed. Some places are full of coal, while some places are short of fuel; in many places, the trees on the mountains can only be used for fire, but the price doubles when they are brought to the timber market. In exchange for real money.

The same items and resources have different prices at different times and in different regions, and they also have different prices for different trading partners. These three points are the three major elements that determine the price, and they are also the three factors that make up a commodity. The social basis of exchange is the whole mechanism of wealth growth. Regardless of whether the state is the main body of the economy or the market is allowed to play its role, as long as the scarce resources are circulated, the total number of resources within the economy will not change, but the social wealth will increase interactively.

Therefore, the production-consumption economic model is undoubtedly the most ideal, safest, and only way of wealth accumulation within and between economies. However, when our economy has developed to a certain level, this traditional economic model is being broken, and all aspects of society are no longer focused on the old wealth accumulation model, but instead focus on the existing wealth of the society. on the division. To give a simple example, the development of the securities market is the most typical manifestation of the transformation of the economic model. When financial institutions make upheavals in the stock market and continue to carry out financial expansion, they do not rely on real production profits, but unspeakable technical operations behind the scenes; when our listed companies continue to issue additional shares in the stock market, they rely on It is not its own good performance, but exaggerated corporate financial statements and false good news about industrial development.

That is to say, our securities market has never had enough physical wealth as a support. When our people are confused by the seemingly prosperous market and invest their life savings in the securities market, it means that they will lose money. Use the wood and steel bars of your own home to add bricks and tiles to an illusory castle in the air. When this castle in the air collapses suddenly, those who are taken away will always be those who have given blood to it. Similarly, our real estate market is also going through the same process. In the process of rising housing prices, it is not the cost of materials for buildings, nor the cost of labor required for construction, but a small number of capital predators The cost of hype with ulterior motives. When we buy a house with all our money, the real wealth we get is far lower than its transaction price. Therefore, when the property market crashes, the final loser can only be the house. buyers.

These seemingly ever-increasing wealth are actually not created by production at all, but a new distribution of public wealth. Every penny increase in the price of financial products and real estate commodities is extracted from the public wealth. from. Therefore, we can say that in the past 10 years, the biggest change in the economic model is the change in the distribution of wealth, which not only includes the looting of the existing wealth accumulated by human beings for many years, but also means a change in the future wealth. Changes in the distribution system and wealth distribution rules are quietly going on around us.

There is only one reason for such a change: the speed of wealth acquisition through distribution is much faster than production. There is a saying in the capital world, which is called "money has four legs, and people have two legs". The speed at which profits are generated. When an economic model tolerates the operation of capital and ordinary people cannot protect their wealth, it means that this model has begun to enslave the people. Such a situation cannot be tolerated by anyone. Although the state can entrust the market to complete economic development, when the economic model deviates from the interests of the vast majority of the people, the main function of the market will be weakened rapidly, and the functions of the government will be revealed.

In the production-consumption-distribution economic chain, if we want to bring the focus of the economic model back from distribution to production, we must go through the consumption link. It is precisely because of this that the state has implemented an investment plan of 4 trillion yuan at any cost, aiming to promote the return of the economic model by stimulating domestic demand. However, when our mainstream public opinion is focused on the topic of "stimulating domestic demand", this concept, which is not well known to ordinary people, is quietly slipping into misunderstandings.

As far as human nature is concerned, desire is endless. Except for a small number of ascetics, the vast majority of people in this world yearn for a richer life, and this determines people's endless consumption desire; however, The wealth in our hands is limited, and the actual purchasing power further constrains this unlimited consumption desire. In fact, each of us understands that under the current economic model, it is extremely difficult to raise our income to a higher level, especially when most companies are addicted to the capital game of distributing wealth , this idea is even more difficult to realize. Because of this, when the media frequently put forward the statement that "everyone consumes more, the economy will become better", it has actually led the concept of stimulating domestic demand astray. The purpose of the government’s “stimulation of domestic demand” is nothing more than to consume excess commodities, thus promoting a new round of wealth creation. The reason why these commodities are in surplus is not because the people have no demand, but because the prices of these commodities are relative to consumption. As far as the income of those people is concerned, they are already in an inflated state. When our housing prices soared to astonishing figures, we could not afford to buy a set of commercial housing with all our savings. However, the demand for housing will never disappear. This is why public opinion is loudly calling for the improvement of the affordable housing system. Commodity prices are too high, but the people's income does not increase, but people's desire to buy is always there. As long as the people's purchasing power does not increase, the surplus goods will never be consumed, and the work of re- dredging the internal cycle of the economy will never be completed. . From this point of view, it is not that the people refuse to consume, but that the purchasing power of the people has always been unable to afford consumption. In this regard, the media's attempt to stimulate consumption to stimulate the internal cycle of the economy is undoubtedly on the wrong track. If the meaning of stimulating domestic demand is to attract wealth from the hands of the people, then the best way is inflation rather than encouraging consumption. The effect of using an inflationary monetary policy is far greater than that of pure market means. Therefore, from an economic point of view, the so-called "encouragement of consumption" does not focus on encouraging the common people to live beyond their means, take money out of the bank and spend it, and clean up the money in their pockets. A system of active consumption. In the case of no increase in income, as long as the price of goods and services falls, the purchasing power of the people will also increase, which is in line with the economic theory that price determines demand. In this sense, the so-called stimulation of domestic demand and the so-called encouragement of consumption are focused on establishing a system that is conducive to improving the consumption level of the people. It is the government's intervention that encourages free market competition, encourages businesses to innovate in value, and maintains a normal market order. , and then improve the consumption capacity of the people, it is not to change the behavior of consumers racking their brains and create one after another large and unreasonable consumption opportunities. Then, some people will definitely ask: Isn’t this way of increasing purchasing power obtained at the cost of price cuts and discounts? Then people’s desires are endless and can never be satisfied. The price drops, but the people hope that it will be lower. Some, and who should bear the damage caused to the enterprise? To solve this problem, we must break away from the thinking of the consumer economy and enter a new round of thinking. In order to keep the internal circulation of the economy in a good state forever, there is no other path to choose except to achieve "all people are rich". It seems that a good economic internal circulation and all people are rich are the same thing. In fact, compared with the former, the latter is the specific direction. Regardless of increasing exports or stimulating domestic demand, the ultimate goal can never escape the scope of common prosperity. In this process, no matter what kind of fancy terms there are, it will always refer to the overall increase of government revenue and private revenue. In any era, common prosperity is a beautiful vision pursued by economic managers. However, in the past 10 years, there have been two completely different ways to solve this problem. The reason for the divergence is that during the transformation of the economic model, the old and new models have completely different meanings for economic activities. According to scholars who insist on the wealth distribution model, the reason why the virtuous cycle within the economy cannot be realized is that the total social assets are extremely limited, and the limited resources are scattered and controlled by the people, so it is always impossible to achieve centralized investment. It is unable to effectively convert resources into profits and realize wealth re-appreciation. Therefore, in order to solve this problem, private capital must be effectively attracted to the financial market, large-scale industrial projects, and large-scale infrastructure construction, so as to stimulate economic growth with continuous investment. Scholars who adhere to the production-consumption model hold the opposite view. In their view, the national economy constitutes the foundation of the national economy. The reason why the goal of "all people are rich" cannot be realized is because the national economy is not developed enough. , The investment in people's livelihood projects is not enough. In the process of national economic development, any policies and measures that hinder the development of the national economy will affect the ultimate goal of common prosperity. The ultimate goals of these two contradictory economic views are not different, and there is no absolute right or wrong. It is only because of the constraints of China's unique economic conditions that it has sparked debates about which is better. In the past 10 years, the asset wealth held by the people has only accounted for a quarter of the total, and this means that the benefits brought by GDP growth are absolutely difficult for ordinary people to enjoy. As far as any family is concerned, the composition of its income is basically unchanged. On the one hand, it is the monthly labor income and salary income, and on the other hand, it is the income from the appreciation of asset wealth; When too little, this income channel is basically blocked. So the contradiction arises. If we spend money on education and medical care to reduce the cost of going to school and seeing a doctor, it will undoubtedly mean an increase in the income of ordinary people. However, such investment returns are slow and hidden. The effect of spending money on infrastructure such as airports and railways, and large-scale industries such as steel factories and shipyards is undoubtedly obvious and rapid, and its stimulating effect on economic growth is also more obvious. Because of this, there are countless mainstream economists who continue to call for economic transformation and continuous investment in large-scale projects. The focus of their interests is based on the immediate, but they ignore the problems of people's livelihood for generations to come, and the damage and stimulation they bring to the economy Equally astounding. In addition, state-owned enterprises, which have a lot of wealth, have also failed to fulfill their responsibilities when it comes to the delay in improving people's income. For example, in the past 10 years, our state-owned enterprises have lost millions of jobs every year, and employment is precisely the most important factor affecting people's income. Compared with investment in state-owned enterprises, it can The number of job opportunities created is really disproportionately small. On the other hand, although we invest very little in private enterprises, the private economy still silently provides a large number of job opportunities. In the face of such a comparison, it is self-evident why the income of the people has not increased for a long time. Therefore, the key to solving the bad internal cycle of the economy is to let the people get rich first, and fully return to the old economic model from production to consumption. When income increases, it means that people's livelihood problems are solved. This plan is irrefutable, but it is at the cost of slowing economic growth. Therefore, it has become a historical necessity to develop new economic growth points and find stronger and longer-lasting economic growth engines. . Once again we're at the forefront, only this time it's a little more violent. In the past 10 years, the rapid development of our economy has relied on exports, investment, real estate and productivity improvement. With the pull of many aspects, the economy has even maintained double-digit growth, and it has become the third largest economy in the world. As a whole, it acts as the engine of global economic growth. With this, the eyes of the world will naturally focus on China. However, when we consider this high-speed development, we can find that the foundation of its growth is far from being as indestructible as we imagined, and in the global economic crisis, it is even more shaky. There are nothing more than two factors driving our high economic growth. The first is the stimulating effect after joining the WTO. When the myth of "Made in China" resounds around the world, it means that we are acting as a "world processing factory". As long as our products continue to flow to the global market, it is enough to maintain a substantial increase in trade surplus. The second factor is quite intriguing. Strictly speaking, it is not simply a way to create wealth through production, but a redistribution of existing wealth, that is, to achieve wealth re-appreciation in the form of capital speculation. . This factor is the real estate boom that has been rampant in the past 10 years. The development of the real estate industry fundamentally comes from the needs of urbanization construction. In recent years, we have frequently talked about the issue of urbanization. Many people have joined the in this discussion. The so-called urbanization includes two processes, one is the process of changing the rural population into an urban population and the rural area into an urban area, and the other is the process of the diffusion of urban civilization such as urban culture, urban lifestyle and values ​​in rural areas.The former represents quantity and the latter represents quality. An obvious problem is that although the urban population has exploded at a geometric rate as a large number of migrant workers have migrated to the city, this change has not been obvious in terms of the improvement of the quality of life. Our real estate market is developing every day. We are building more and more buildings, and the prices are getting higher and higher. However, this kind of ever-increasing price is unaffordable for the vast majority of urban residents, not to mention those who go to work in cities. of migrant workers, even urban residents who were born and raised in this country, do not have such a large consumption capacity. Thus, the problem arises. When the economic crisis sweeps across the world, everyone tightens their pockets, which means that our export products are no longer easy to sell; and the sale of real estate, which is already unsustainable, suddenly becomes more difficult.This means that the two previous super factors no longer exist. Therefore, before new economic growth points are found, it will be very difficult to achieve the ultimate goal of "all people are rich" or to solve the poor economic cycle. Make a big difference. Because of this, the question of where the new economic growth point is is actually an unpredictable false proposition. Our economy has been growing, but that refers to the growth of GDP, not the real wealth of the people. As we said earlier, when the capital wealth in the hands of the people is too little, no matter how much GDP increases, They have nothing to do with people's livelihood. The so-called "guaranteed seven and eight" GDP growth is actually not a difficult task. As long as we spend money on infrastructure construction, build more railways, and build more airports, it will be enough to ensure stable growth.However, this kind of investment is of no benefit to people's livelihood. Ordinary people will never earn a penny more because of these investments, and the waste of resources caused by redundant construction is inevitable. Conversely, if we look at the problem in a different way of thinking, it means that an era of wealth is coming. It can be said that our financial system is not developed, and it is actually at the end of the transmission chain. Under such circumstances, for China, ensuring full employment is the key to economic stability and social stability. As for how much GDP will increase? Percentage points are not important. From a general point of view, the economic crisis is only a normal state in the economic cycle. Before 2020, it is bound to get out of such a trough. The new round of global economic recovery and even growth will inevitably be driven by the national economies of various countries. Short-sighted acts of pulling seedlings and encouraging growth can only go further, not faster, only if they are based on the long-term. If we can't plan ahead, it is still necessary to make up for it. If we do the things in front of us well, then the things behind will come naturally. In this sense, in order to achieve the goal of economic growth, the safest and most important thing to do is not to try to find economic "stimulants", but to make the people rich and provide food, clothing and medical care for all. Serving, ensuring children's education, and putting all people in jobs with reliable incomes is what we need to fix. Our nation has a unique thinking inertia, which means that when we get used to a certain fixed state, it is difficult to adapt to the new situation in the new situation. For example, we are used to GDP growth of more than 8% per year, and when this growth momentum weakens, we fall into panic. So, what if one day our GDP growth drops to 3% or even lower? It is foreseeable that such a day will appear sooner or later. In fact, our changes in the next ten years will definitely occur in terms of economic models. When we are based on the long-term and no longer rely solely on large-scale investment to create GDP growth, it is also when our GDP growth slows down. day. With the development of the economy, it is inevitable for China's economy to catch up with the United States, Japan and other countries, and there will inevitably be growth stagnation after a highly developed economy, which means that China will inevitably experience zero growth or even negative growth in the future. The best stage may last for several years, ten years, or even decades. When that day comes, how can we still survive, continue to accumulate wealth, ensure continuous growth, and ensure that we are not pessimistic or desperate? This is really a question worth thinking about.