Chapter 9 3. "Market Fundamentalism" Doesn't Work
The dominance of capital power has also attracted the attention of some insightful people in the West. One of the themes of the 2012 Davos Forum in Switzerland was "Reform Capitalism". Many participants focused on the "Washington Consensus" formed on the basis of neoliberal economics, that is, the core concept of "market fundamentalism" is The "invisible hand" of the market can automatically restore economic balance without any government intervention.However, with the spread and deepening of the financial crisis, debt crisis, and economic crisis, its reputation throughout the West has never been as bad as it is today. However, in our country, especially in the theoretical circles, "market fundamentalism" has still had a considerable impact.In fact, Deng Xiaoping, the chief architect of reform and opening up, was the one who spoke best about market issues.In a talk in the South 20 years ago, he said loudly: "Capitalism also has planning, and the market economy is not equal to capitalism. Socialism also has markets. Planning and markets are both economic means." That's why we have "socialist market economy." The core of the theory is to organically combine the "visible hand" of the government with the "invisible hand" of the market, organically combine planning with the market, and organically combine the state-owned economy with the private economy. stand up.Judging from the practice of the past few decades, our "socialist market economy" model, although it still needs to be continuously improved, has brought about the rapid rise of China.
Some of our economists always believe that there is an ideal and complete market competition model formed on the basis of private ownership in the world, but they have not answered a question: In addition to textbooks, where is there such a market economy in the world?Is the United States a complete market economy?Obviously not. American agriculture is highly subsidized. How many difficulties do Chinese companies encounter in merging and acquiring American companies, and how many obstacles Huawei encounters in entering the United States. During the Asian financial crisis in 1997, the United States asked Asian countries to abandon government intervention and let the market decide everything; but when the US financial crisis broke out in 2008, the US government itself carried out a large-scale rescue of the market.Is Switzerland a complete market economy?No, Switzerland’s agriculture is also highly subsidized, and the state controls the construction industry very strictly to prevent other countries from competing. The secrecy law of the Swiss banking industry has lasted for hundreds of years, which is a typical example of unfair competition.It is difficult to find a complete market economy country in the world.If there is, it is probably some transitional countries in Eastern Europe.During the transformation of Eastern Europe, there were two "shock therapies", one political "shock therapy", which changed the one-party system into a multi-party system; the other economic "shock therapy", which completed liberalization and privatization overnight.The most typical example is Hungary. Even the water company and the taxi company were completely privatized and sold to foreigners. But if you ask the Hungarian people whether their lives are better now or 20 years ago, most people say 20 years ago Even better, Hungary's sovereign credit rating has been at the junk level in recent years.
In fact, the ills of "market fundamentalism" have long been exposed in the non-Western world: the "economic restructuring" promoted by the West in Africa in the 1980s and 1990s continued to weaken the already weak government functions. "Adjustment" can only end in economic and social crises; the "shock therapy" promoted by the West in Russia in the 1990s also ended in complete failure, but market fundamentalists are still obsessed with it, and finally dragged the West itself into today's financial crisis and debt crisis. crisis and economic crisis.
The main limitation of neoliberal economics lies in its assumption of "rational man". In fact, man is both rational and irrational, or "bounded rational".Former Federal Reserve Chairman Alan Greenspan, who reflected on this "rational man" assumption and its disaster in the aftermath of the financial crisis, said he was in a state of "utter shock and disbelief" because "the whole edifice of sanity" had "Crash", he "cannot believe that his beliefs about the market and understanding of how the market works are wrong".In addition, in today's world, the "invisible hand" has included a large number of false "invisible hands".Today is a globalized economy, and the funds used for speculation in the world are dozens of times the total world trade.In a country like China, without the necessary government intervention and protection, all of China's assets could be looted by Western speculators.
Soon after the outbreak of the financial crisis in 2008, many people in the West began to reflect on the causes of the financial crisis.The Queen of England once asked scholars at the London School of Economics: Why did you not predict the coming of the financial crisis.Many Western scholars have participated in this reflection on the financial crisis.Nobel Laureate in Economics Paul R. Krugman (Paul R. Krugman) wrote "Why Is Economics So Wrong?" They often take beautiful mistakes dressed in sophisticated mathematics as truth...Most economists cling to the idea that capitalism is a perfect or near-perfect system...turn a blind eye to many things." American economist Brad Bradford De Long (Bradford De Long) believes that: the subprime mortgage crisis and the financial crisis, in the final analysis, are all caused by "market fundamentalism".He notes that self-regulation by financiers has been a disaster: "While it is generally in the long-term interests of financial firms to be regulated, financiers are too stupid to realize this, they just want to make money and say 'I'm dead. , even if the flood is raging'. If this view is indeed true, then the United States will be in great trouble."
Although China's mixed economic model is not perfect, it at least guarantees our rise.Some people in China are criticizing the state-owned economy every day. Of course, our state-owned economy has huge room for reform and improvement, but why don’t these people see that the Wall Street banks that ignited the financial crisis are all privately owned, and TEPCO, which has nuclear pollution problems in Japan, is also privately owned. of.Our state-owned banks also have their own problems and need more reforms, but we ordinary people can at least rest assured about the money we put in the bank, knowing that it will not disappear in a flash, while Russia carried out "shock therapy" in the 1990s "When the US financial crisis hit in 2008, how many people's life savings and investments were looted?
After the outbreak of the Asian financial crisis in 1997, many Western economists used a term called "crony capitalism" (crony capitalism, translated into "crony capitalism" seems more appropriate), but many East Asian scholars pointed out at that time: "crony capitalism "Crotonyism" (crony capitalism) is indeed a problem that needs to be addressed, but there is an even bigger problem, and that is unregulated "casino capitalism".If the U.S. government had heeded this advice, the 2008 financial crisis might have been avoided.The Chinese model encourages competition, but does not allow Chinese banks to become casino capitalism, or the common people will be looted of their money.Our general thinking is that the Democratic Party is advancing and the country is advancing, and the two sides have division of labor and cooperation. This process has not yet achieved its ideal goal, but this thinking is correct. "Market fundamentalism" does not work in the West, nor does it work in China.Regarding the issue of "transformation of capitalism" discussed at the Davos meeting, in my opinion, what needs to be done most is to abandon "market fundamentalism".
Interestingly, when some scholars in China were talking about China’s so-called “crony capitalism” (crony capitalism), the Economist, the flagship magazine of Western liberalism, published the global “crony capitalism (crony capitalism) in 2014. Capitalism) rankings, the result is that Hong Kong ranks first, Taiwan ranks eighth, the United States ranks seventeenth, and mainland China ranks nineteenth. I don’t know how these scholars judge such rankings. "The Economist" magazine Says: "The 'Gilded Age' of the late 19th and early 20th centuries in the United States is seen as the peak of monopoly capitalism, with plutocrats like Rockefeller controlling most of the nation's wealth and bribing politicians to benefit themselves.The ensuing Great Depression once made Western countries wake up to this and established a fairer economic system.But today the developed countries are ushering in the second era of 'crony capitalism', while emerging countries are also experiencing the first great concentration of wealth in history.In the last 20 years of globalization, the 1% of the wealthy class are gaining huge economic benefits improperly, turning the world into a new "Mammon Kingdom" (Mammon is a demon in Christian legend, representing money and wealth ). ""These tycoons are keen to grab benefits through 'rent-seeking', and they are committed to getting a bigger part of the cake, rather than making the cake bigger.Casinos, energy, national defense and other fields have become the hardest hit areas for rich people to "rent-seek".The index of crony capitalism in Hong Kong is much higher than that of other countries and regions, and the wealth of rich people accounts for nearly 80% of GDP. "Russia ranks second with about 20 percent. The U.S. government took care of the interests of Wall Street, which led to the severe financial crisis in 2008 and was also the main reason for the U.S.'s rise in rankings. The Economist said that mainland China "has One reason for this is that the state controls most banks and natural resources, keeping these important sources of rent-seeking out of private hands.In addition, the openness of China's emerging industries has cultivated a group of healthy business owners." The report said that countries that performed well on this list all have better bureaucratic systems and institutions, while the Hong Kong government's anti-monopoly Chronic weakness.
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