Summary: If a person only needs to read an economics book, this is probably the "Economics in One Lesson" was. Want to make a "sensible" in a complex society, everyone may need to learn some economics. From the broken window fallacy machine will lead to the value system of mass unemployment, price, value and supply and demand relationship between the three formed, then rent the impact of government regulation of the economy and people's livelihood, the minimum wage law is not really help the poor, then in the end who stole my wallet? Inflation. Compared to those formulas intricacies of economics, this book by a vivid examples to help us better understand the economics knowledge to help us escape from ignorance and not knowing the state.
table of Contents
01 Everyone needs to learn some economics
02 broken window fallacy
03 no opportunity to eliminate courier post it
04 is not full employment should be encouraged
05 to encourage exports, discourage imports, and we'll get rich friends
How it works 06 value system
07 government regulation renting is right or wrong
08 minimum wage law is not really to help the poor
09 Who stole my money? inflation
01 Everyone needs to learn some economics
Many partners have little doubt that we are not an economist, so why should learn some economics knowledge? This is not simply because the economics of research money only, or research collaboration between strangers a regular discipline. Whenever live in this complex society formed by a large number of strangers, we are inevitably dealing with strangers. More reality we see the world through intuition and understanding of the world, if only by intuition then it is easy to fall into a state of ignorance without realizing it. The rational way of thinking in economics can help us to escape from this state of ignorance without realizing it. By wisdom economics, let us make a "sensible" in a complex society, which is why knowledge of economics point to learn.
Some may be satisfied with a small partner, Why the hell I say ignorance without realizing it? Then come a few simple ideas, new machines will take away jobs? Encourage exports, discourage imports in our country will become more prosperous? Setting the minimum wage to protect the interests of the poor? By intuition, we may think that this is right, but if you want to really see behind things, we may need to learn some knowledge of economics.
Beijing University economics professor Xue Zhaofeng said: change the world, not economics director, but the world is changing strengths economics. Have the correct, rational world view is based on our current social top priority.
02 broken window fallacy
Let's look at a little story which leads to broken windows theory. If you are a shopkeeper, I have a child one day you shop glass broken, people have not caught this time you can only spend 1000 dollars to re-install a piece of glass. This time the neighbors to comfort you, though you spent 1000 dollars for a glass, but also promoted the development of the glass industry. Glass shop owner get the money they will spend the money elsewhere, this is equivalent to indirectly promote the development of the industry. The final development of the whole industry up, then you will be the ultimate beneficiaries. If your glass has not rotten, then the glass shop may close down, resulting in the entire industry is in the doldrums, the whole society will not, and eventually you will too well, so it is a good thing smashed glass. This is the broken windows theory proposed by economists.
Why this is called the fallacy of the broken window theory, thin materials, the only sobering feeling. At first glance, although this small broken child chooses your glass broken, but eventually promote the development of the industry, looks like a little truth. But deep analysis, if your glass is not smashed, you do not need to spend 1000 enchant the glass. You can buy this 1000 phone, buy clothes, buy food, etc., as you promote the development of other industries, so that the whole community developed. Originally this 1000 dollars should be able flowers to a more appropriate place to go to better meet your needs, now only brought a change of glass, for you in the end is a blessing or a curse glance. Although this is a very simple example, but a lot of economics behind the phenomenon down to get to the bottom of this has actually broken window fallacy shadow. Do not believe me have a look.
03 no opportunity to eliminate courier post it
Because before working for some time in SF, so the courier industry or slightly understand. Some time ago the brush vibrato often see that with the continuous development of the UAV and robotics final courier this career will disappear. So the question comes, the new machine will really lead to mass unemployment it? At first glance, that must be it. After the new machine manufactured, will replace a lot of labor, these had to manually complete the work been replaced by robots, these people will certainly be laid off friends.
Then we look deeper. Take for example the textile industry, because of the emergence of the textile machine, so a lot of textile workers laid off. But the manufacturing and maintenance of the machine also needs manpower, so here increases the post part of the machine manufacturing and maintenance. Then, the machine appears to enhance the work efficiency, but also to expand production, and promote the development of the textile industry, industry capacity higher, lower product prices so that more people can from the consumption of this product, it adds more many machines manufacturing and maintenance jobs. On the other hand, the development of the textile industry will also promote the development of other related industries are not even related industries, will add more jobs. Needless to say related industries such as the textile industry developed, it will promote the development of downstream industries. Not related industries such as the service sector will be developed, those people were making money wealth consumption will also promote the development of service industries, which also increased the number of service sector jobs.
In my opinion, the current appearance of the machine industry will bring some people's pains, such as those who are temporarily unemployed textile technology. But the machine to bring innovative technology to enhance productivity, and ultimately enhance the productivity of the entire industry, will bring more jobs. Courier jobs are drones to destroy the most fundamental reason is that the job productivity should be improved.
There are also worth considering, how much they can not be replaced, so the more you away from unemployment. When you work very easily be replaced by a machine, please be assured that once the technology can replace you, evil capitalists cut you will certainly find ways to improve the efficiency of enterprises. Because if you do not cut, do not increase the efficiency of enterprises, the profits do not increase, the probability of companies to survive will be reduced. So find ways to make themselves irreplaceable workplace is the most basic rule of thumb, but also make you more valuable in the workplace law. A little off topic, just emotion. The purpose of reading is not to enrich our brains, we had a guide in the real world better?
04 is not full employment should be encouraged
Another issue is that the more the number of jobs is not the government should encourage employment, so that job better? Primitive hunter-gatherer era, because the extremely backward mode of production, basically men and women have the specific division of labor, the man in charge of hunting in general, women are responsible for collecting, elderly and children will have a specific division of labor. With the progress of society, we slowly realize a sense of security, children receive more education, or even part of the family in the care of women and serve the family. Because the use of human progress is the same manpower to get more production, not the goal of full employment, full production is the ultimate goal.
A positive example is, compared to our country and rice country, employment rates are lower than the United States of our family members. When a family requires only a small number of people employed will be able to complete the acquisition of household wealth, then let a sense of security, children can feel at ease reading, women can wholeheartedly care of the family, this is a happy (want to have your own career woman here exclude ha). The country is composed of thousands of families, when a country through fewer employees will be able to complete the expansion of production throughout the country, we can say that this is happiness. The progress of civilization is reflected in the reduction of employment rather than adding on. As long as there are more products are allocated, fewer jobs and why not? I believe there should be some people will be eager to do the work can be enough to live comfortably live it.
Negative example is Hitler's Germany during World War II the power to rule, and virtually full employment, even a prisoner inside the prison are in employment, but the production of the entire country and there is no much increase, the result is well known.
05 to encourage exports, discourage imports, and we'll get rich friends
Many small partners there is a relatively narrow idea to look at the issue of international trade: we sell to foreigners something more than, less foreigners to import some products, we will become more and more wealthy. Here take an example to illustrate, for example, the cost of rice country sweater is $ 30, and the same quality of China only $ 20, or even less. This time because there are tariffs on this thing, so The United States imposed tariffs of $ 10, then we sell sweaters meters countries has become a $ 30. The United States for people who need $ 30 can buy a sweater. This is the tariff barriers to trade. The United States one day said to reduce tariffs, the original $ 1 now only need to pay $ 500 on the line. This time the United States sweater enterprises firmly quit. The same sweater United States of $ 30 to $ 25 in our country, then the sweater The United States is certainly not sell it, so resolutely resist the reduction of tariffs.
From here we analyze the deep-seated economic point of view, a $ 20 sweater itself because of trade protection into a $ 30, then the consumer will need to spend $ 30 to buy. Which is equivalent to the $ 10 to get consumers to subsidize the country's rice sweater factory. So to speak, sweater productivity The United States itself is very low, so that production resources and human waste in these low-productivity industry itself is a waste. If we put these to productive resources and human resources into more productive industry is not able to bring more productive? If the United States of these tariffs reduced or even eliminated, then the rice its people can only spend $ 20 to buy these sweaters, then the rest of dollars to spend in other areas. Here, some small partner thought, well familiar with it. Yes, here we went to the front of the broken window fallacy we said. A central goal is to make the market economy of production and human resources into more productive place to generate greater value, instead of wasting broken window fallacy in all this. The demise of the old industry, it makes faster growth of new industries.
Coming back to international trade, we earn export dollars and not in domestic circulation, can only be paid out at the time of import. Foreign trade in favor of the fact that we import, use cheaper prices to buy cheap foreign goods this is the core purpose of foreign trade and export purpose is to make money to meet the demand for imports. Able to look at this, we suppress the morbid morbid craving for export and import issues will be able to have a broader perspective.
Here a small partner might say, if imports of foreign quality and cheap goods that will inevitably lead to the demise of the old domestic industry, then it will be easy to foreign trade monopoly, and monopolies will exploit dominance severely monopoly profits . In fact, you do not have to worry about this, in a free market economy, as long as you dare to play monopoly want higher profits, then there will be numerous businessmen intend to cut the head and rushed to your share. Coca-Cola to take an example here of it. Now Coca-Cola and Pepsi on a global scale should be in the cola industry monopoly right, but why he did not sell very expensive price, but the price is still very low profit pressure in the price of three dollars it? One reason is to monopoly profits cola industry, only continue to drive down the price, so that other unprofitable businesses, which continue to broaden their moat, improve profits by increasing productivity, firmly keep their monopoly position.
How it works 06 value system
Remember when the school learned some relevant knowledge of economics, what price, value, supply and demand gradually getting better, the concept of a bunch of formulas out there, let the charm of economics is covered with these may be a bit of knowledge. For us ordinary people, how to make us relaxed knowledge studying economics is actually very important. The book by Robinson Crusoe to vivid description of how the value system is running.
If there are a group of people drifted to an island. In order to survive, we will solve the problem of the division of labor to the most basic clothing, housing. After these and other basic questions to get, some people want to wear beautiful clothes, some people want to eat delicious food, and some people want to build cars, demand for myriad. But so many people, it can be used in production so much, and who meet the priority needs it? This is determined by the value, price and supply and demand.
When everyone on beautiful clothes demand increases, then the price will go up clothes, the same cost of profit commodity will increase, there will be more of the businessman got into this industry. Because there are more traders into the industry, competition will become fierce, in order to survive in the competition, only to provide affordable commodities. By increasing production efficiency, the cost of goods down, the profit is going up. After this round of competition, low productivity enterprises basically out of the game. When you turn the demand for clothes and small, then the price will fall clothes, the same profits will decline, more and more businessmen flee to more profitable industry. Production of every product are sacrificing the production of other products to replace, what specific production of goods is determined by the value, price and supply and demand. Price is determined by supply and demand relationship, when a certain amount of production, the increase in demand when the price will rise, because of scarcity. Conversely when reduced demand, unwanted, and naturally the price down. As a business, the profits method is to increase productivity, rather than raise prices. The above also spoke, as long as you dare to increase prices, consumers will decisively abandon you, to choice of inexpensive goods.
07 government regulation renting is right or wrong
Now society, as more and more people into the major cities, as most people can not afford housing, so the rent is just to be. Here again it brought back some "deep drift" memories. 17 years working in Shenzhen in villages near the university city rent, more than a dozen single room flat monthly rent is 1000. Such as the end of the 18 when the rent had risen to 1600. You can only use the word "terrible" to describe. Increasing rent is placed in front of most of the "deep drift" of people a problem. If you rent through government regulation, so there are more people able to rent a room from, the provisions of this seemingly well-intentioned it is right?
Some economists said that if you want to destroy a city, there are two ways, first is to send bombers, and the second way is to rent control. Rent control will bring several serious problems: First, rent control will encourage tenants tight space wasted resources. We can think, why these first-tier cities of Shenzhen rents rose year after year, and some eighty-nine line city house may not be rented? The fundamental reason is the influx of large numbers of people in Shenzhen, Shenzhen and housing resources are limited, in short supply, leading to higher prices. So now many of the original need to plan carefully choose to rent because the rent or a shared set of people will go rent a set of two, so there was a great waste of space resources if the government price controls. Not only that, but also makes a lot of people simply do not rent a house. Then, rent control would certainly discourage the building. Because rental make money, no one will go to build new houses. A lot of people buy a house and not just their own lives, more investment is gradually getting rent. Rentals make money, nothing would people buy a house, no one will buy that building a natural. Finally, rent control will greatly reduce the life of the rent. Because the rental profits nothing, so naturally, the landlord will not spend a lot of money to repair the house. Because of lack of maintenance, resulting in greatly reduced life expectancy house, eventually leading to housing resources become less.
08 minimum wage law is not really to help the poor
Minimum wage laws by restricting the minimum wage in order to protect the interests of the poor, but to really help the poor it? Now if you are an SME owner, since the introduction of the minimum wage law was originally part of the factory low productivity workers only 2000 per month salary, the minimum wage is now since 2500, so how would you do? So naked issue before I think most people will choose to cut staff this part of it. So to speak, forced to raise the minimum wage law lowest level employee productivity, and lower than the level of the employees or the company will slowly out. Those employees can not generate the minimum wage benefit will be ruthlessly dismissed the company, because your productivity is low, companies need to pay higher salaries, it will drag down overall production efficiency, reduce corporate profits, leading companies eliminated. Itself is a well-intentioned initiative to help poor disguise indeed increased unemployment.
09 Who stole my money? inflation
Speaking of inflation should be little friends are hated. For example by a repair of the bridge, said the different impact of inflation on our put. Now the government wants to repair a bridge, it takes 5000W. Compared to obtain money through taxes, the government now to get this 5000W by way of issuing currency. First, the government printing money to go home and shut the door, crashed we easily got 5000W. The first round we put it to the bridge general contractor A. The second round of general contractor A Bridge to put money down number one, and then locate the construction contractor B. B third round of construction contracting again poured money labor leaders find subcontractors C. The fourth round of labor subcontractors C again poured money leaders find common workers D. In this way layers of down, this 5000W step by step into the market. When the first round of money just to enter the market, the impact of inflation being nothing. To the second round, the action started a little inflation. When the third round of inflation has already begun for some time, it has some effect on the C. By the time the final round of ordinary workers D, the effect of inflation has been fully revealed.
On the surface it effortlessly built a bridge, not only to improve the infrastructure, but also increased employment, a lot of advantages. In fact inflation is the government open theft of the people. Although the Government has not received a penny of tax, but inflation itself is a tax, and is the most vicious kind. Why do they say, because the impact of this tax on the extent of different people are different. People closer to the centers of power more cost-effective, the less susceptible to the effects of inflation, such as the first round began when A crowd. D and those people toiling masses away from the center of power of the impact of inflation largest and most miserable group of people are subject to. Conclude that the rich pay little or no tax inflation, while most of the poor to pay the inflation tax.
In addition, inflation has also deceive the public role. For our ordinary working people, the former monthly salary inflation we have 1W, salary inflation becomes a 1.5W, on the surface you in a good mood thought he was better off a little bit, and so you go shopping in the market when it it found that the purchasing power of only 1.5W before the 9000's. Examples may be exaggerated, but in fact, there are even more exaggerated the real case. After World War I Germany in order to pay war reparations, reparations for the super-currency financing through a lot, took place in the history of the most dramatic hyperinflation. Every newspaper prices rose from 0.3 marks in January 1921 to May 1922 of one mark, in October 1922 of eight marks, in February 1923 of 100 marks until September 1923 1000 marks. In the fall of 1923, the price actually fly up: newspaper price October 1 2000 marks, October 15 120,000 marks, October 29 into one million marks, November 9 5 million marks until November 17 Japan 70 million marks.
Inflation discourages all prudence and thrift, but to encourage a variety of squandering, gambling, reckless waste and various, often making speculation more profitable than production, torn stable relations of production, until the state and the people pulled into the bottomless abyss.
to sum up
From the beginning, everyone needs to learn some economics. "Economics in One Lesson" has taught us that when we are faced with an economic policy and economic phenomena, we not only have to observe the immediate short-term impact, but also pay attention to those long-term macro impact, to understand those who see, but also to try to see the deeper impact of those original invisible. Wisdom of economics give us a pair of bright glasses, let us look at this complex social farther, go more stable. Then talk about the broken window fallacy and economics behind the various phenomena, the core is to get the highest place of production and the Human Resources productivity. Courier jobs are drones to destroy the most fundamental reason is that the job productivity should be improved. Machine brings technology innovation, improve productivity, and ultimately enhance the productivity of the entire industry, it will bring more jobs. Human progress is to use the same manpower to get more production, not the goal of full employment, full production is the ultimate goal. Foreign trade in favor of the fact that we import, use cheaper prices to buy cheap foreign goods this is the core purpose of foreign trade and export purpose is to make money to meet the demand for imports. In-depth understanding of the link between price, supply and demand and the value of the three can better help us understand the value system works. Good intentions may do bad things, it is a good description of government regulation and rent minimum wage laws. Finally he talked about how inflation is the next step by step stole our money.
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