Reading books is an important activity in the university, when there is time, Zhao Hong will also revisit "The Ordinary World", "Muslim's Funeral", "New Star", "Jane Eyre", "Gone with the Wind" and other famous works, it feels different from the previous life, inspirational is a bit like a fairy tale, and the real sense of bone has let Zhao Hong know what the ceiling is. Don't have high expectations for the future. On the contrary, many critical foreign reality novels touched Zhao Hong deeply.

Zhao Hong has begun to learn some knowledge of economics from the needs of the future.

However, many of the current economics textbooks are outdated, and they still talk about the planned economy. Zhao Hong went to find many books that were a little out of date, but still relatively famous and practical.

For example, "Capital" is a good book, and then he found some books that describe the economic history of the United States, and Zhao Hong still found some very interesting descriptions. I also made some reflections and summaries.

The stages of the history of the development of capitalism are very interesting.

The embryonic state period, a bit like the end of the seventies, everything is secretive, quietly developing, and if you are not careful, you will be hit, so at this stage, it is okay to do things to make money, but safety first.

The initial stage of development of capitalism, with its constant struggle against feudal forces, was capricious, which may be right today, and may be severely cracked down on tomorrow, as it was from the early eighties to before '92. At this time, we must bow our heads and do things, don't be public, develop quietly, and accumulate silently.

After that, there was the period of the initial establishment of capitalism, the stage of the great development of the freedom of capital, the conditions were difficult, the level needed to be constantly raised, the scale gradually expanded, and it became the mainstream of society and occupied a major position.

This is the current environment of the times in which we live in 93 years.

Zhao Hong knows that this stage has been developed until 2007, which is an era of industrial capital. The development of the factory to the extreme, the scale of production continues to expand, and the profit will continue to increase.

But with the beginning of free competition, and then as the profits of enterprises are zero, or even losses, a number of small backward ones are eliminated, and mergers are gradually eliminated until there is a monopoly position of industry giants.

The process is very cruel, as the price of products falls, the economy shrinks, workers lose their jobs, there are no suitable jobs, wages fall, because every business wants to survive!

The golden age of the factory is over. In capitalism this phenomenon is called an economic crisis!

Like the economic crisis that began in the United States in 1929. Take a look at its description.

"In the twenties of the twentieth century, there was a period of relatively stable development, but with the large-scale renewal of fixed capital and the "industrial rationalization" movement in various countries, production expanded rapidly, while the demand of the working people to pay was relatively reduced, and this basic contradiction to capitalist society became increasingly acute.

From 1929 onwards, the capitalist world was plunged into one of the deepest and most protracted economic crises in its history. The crisis first broke out in the United States, the most powerful capitalist country, and then quickly spread to the entire capitalist world.

On Thursday, October 24, 1929, the collapse of the stock market in New York, the United States, became the trigger for the crisis.

The crisis lasted nearly five years, during which industrial production in the capitalist countries fell sharply, enterprises went bankrupt in large numbers, and the number of unemployed people soared, with the unemployment rate reaching more than 30 per cent. The capitalist agricultural crisis and the industrial crisis are intertwined and agitated, the prices of agricultural and sideline products have fallen sharply, and agricultural production has suffered a serious decline.

At the same time, international trade has shrunk severely, and deep monetary and credit crises have occurred in various countries one after another, currencies have depreciated one after another, the gold standard has been abolished one after another, and capitalist international finance has fallen into chaos. As commodities are seriously unsalable, market problems have become extremely acute, and the struggle for markets in the major capitalist countries has become increasingly fierce.

It was only in 1933 that the crisis gradually ended. This was followed by a continuous depression in the capitalist world for another five years or so. ”

As a matter of fact, as long as you replace all "capitalism" with "market economy," you will find how accurate and effective these principles and laws have proved to be. We can also basically live, work, and choose in accordance with the laws of historical and economic development. If the general direction is right, you will get twice the result with half the effort if you work harder.

When the economic crisis broke out, first of all, internal competition and elimination (the struggle for various strengths, the competition for various resources), the people were poor and had no purchasing power (cash was king, the cruel squeezing of channels), and then there was the competition between countries.

At most, if you have time and health, you can follow the direction of the country's development, do a small business, drink a little soup, and earn a little money to support your family.

Don't think about the rest, go home and wash and sleep.

Zhao Hong concluded that he must end his rapid development before the economy tells the end of development. The scale of development and the status of the industry determine whether it can survive in the future. Whether you can guarantee yourself a safe and prosperous life and enjoy a happy life?

After all, poetry and distance are everyone's favorite, but that requires a fairly good economic strength as a foundation.

Otherwise, reality will educate us and let go of our unrealistic dreams, because we still have responsibilities and obligations.

Zhao Hong spent nearly a month of free time studying the books on the history of the capitalist economy that he could find (there were very few books), and through reading through and repeatedly, he slowly summarized some of his findings, and then thought about determining the general direction.

No matter how detailed it is, you need to continue to learn. In fact, looking at the economic development process of our neighbor RB, there are also many gains.

"For almost 20 years, from 1955 to 1973, the average annual growth rate of RB remained above 10 percent, although the growth rate varied from year to year. (Like which stage in the country?)

In 1973, the "endpoint" year of the period of rapid economic growth, RB's real GNP was 11 times that of 1946 and 7.7 times the pre-war level (1934-1936). RB's per capita GNP has grown from less than 1/10 of the United States in the 50s to 60% of the United States. Such a rate of growth is unprecedented in the history of RB and rare in the history of the world. (Like the situation in what year in China?)

If economic growth in the period of economic revival was led by exports ("external demand", especially the "special needs" of the Korean War), then economic growth during the period of rapid growth was led by investment, that is, the capital investment of rapidly growing private enterprises became the main driving force of rapid economic growth. For example, in 1969, the private investment rate in fixed assets (the ratio of equipment investment by private enterprises to GDP) was as high as 27.3 percent, and the investment rate, including government investment, was as high as 35.3 percent. (Like the domestic stage?)

At that time, RB used the United States as a model in both production and consumption, and the technology needed for this purpose did not need to be developed from scratch, as long as advanced technology was introduced, and through imitation, digestion and improvement, it could be quickly industrialized and productized. The race to introduce technology has led to a rapid increase in capital investment, and there has been a boom in the so-called "investment calling for investment". Through the boom in equipment investment, a large number of new technologies and products developed by developed countries during the war flowed into RB, so that the original industrial equipment was renewed in one fell swoop, and a large number of new industries such as steel, synthetic fibers, petrochemicals, and electronics industries emerged. From the perspective of industrial structure, the process of rapid economic growth is also the process of heavy industrialization and chemical industrialization after the war. (Like that year's government report?)

The National Income Doubling Plan, proposed by the Ikeda Cabinet in 1960, became a symbol of RB's rapid economic growth, encouraging a wide range of private companies, and its low interest rate policy stimulated the growth of private investment. Rapidly growing investment has led to the increasing sophistication and large-scale production equipment: in the steel industry, the maximum blast furnace capacity has expanded from less than 1,000 cubic meters in 1953 to more than 3,000 cubic meters in 1964 and more than 4,600 cubic meters in 1973, so that RB accounted for four of the world's five largest blast furnaces in the 70s, and the most advanced steelmaking technologies such as oxygen top-blowing converters were rapidly introduced, and in the petrochemical industry, the largest ethylene plant expanded from 20,000 tons per year in 1958 to 1966 With an annual output of 200,000 tons and 300,000 tons in 1973, a petrochemical production system dominated by large conglomerates was built, and in the power industry, the maximum thermal power generation capacity was expanded from 175,000 kilowatts in the second half of the 50s to 600,000 kilowatts in 1967, and then upgraded to 1 million kilowatts. (What year?)

Mutually reinforcing with "mass production" is "mass consumption", especially "household appliance fever" has become a major feature of national consumption in the era of rapid growth. In the 50s, black-and-white televisions, washing machines, and refrigerators, known as the "three artifacts", became popular, and the rapid popularity of black-and-white televisions was in the second half of the 50s, when the price per unit was equivalent to a month's salary. In the 60s, color TVs, air conditioners, and cars (also known as "3C" because the first letter of the English word for these three items are "C") became the new center of national consumer demand. Among them, the penetration rate of cars increased from 1.7 per 1,000 population in 1955 to 22.0 in 1965 and 133.6 in 1973. (What year?)

As a result of the increase in productivity due to the introduction of technology and innovation, and the low fixed exchange rate of the yen against the US dollar set in 1949 (1 US dollar equals 360 yen), the international competitiveness of RB's export industry increased rapidly, and exports increased at twice the rate of GNP growth, with the result that in the second half of the 60s, a black balance of trade (exports were greater than imports) began to form.

As its economic strength grew, RB joined the Organisation for Economic Co-operation and Development (OECD) in 1964 and entered the ranks of developed countries. In US dollar terms, RB's GDP surpassed that of Britain and France in 1967 and of West Germany in 1968, making it the second largest economy in the West after the United States in terms of economic size. RB's per capita national income also rose from $378 in 1960 to $1,515 in 1970, close to the level of Western Europe (20th in the world).

The 1969 Economic White Paper described the economic strength of RB at the time as "2nd and 20th", and concluded that the "imbalance" between RB's second GNP and 20th per capita GNP was the low productivity of agriculture, services, and small and medium-sized manufacturing firms. However, in the context of rapid economic growth, the demand for labor, mainly young labor, has been expanding, leading to a shortage of labor, resulting in a rapid increase in wages in low-productivity sectors, and an increase in the cost of production factors such as labor, which in turn has accelerated the rise in consumer prices.

In general, the "energy" of the RB people has been brought into play as a result of the rapid growth, and the people have been able to shake off the poverty of material life through their own efforts, and have basically achieved full employment, and have made achievements in eliminating the "dual structure" of the economy (such as the gap between large companies and small and medium-sized enterprises), and the vast number of enterprises have strengthened their international competitiveness through technological innovation. At the same time, however, it has also led to the rise in prices, the backwardness of the living environment, and the aggravation of public pollution.

In the early 70s, the high growth of the RB economy came to an end, and the process of deceleration had actually begun. In FY1970, the real growth rate was 7.6%, but in FY71 the growth rate fell to 5.0% due to the impact of the "appreciation of the yen," and in FY1972 the growth rate rebounded to 9.2%. However, the oil crisis in 1973 led to a decline in real growth to -0.4 per cent in 1974, the first negative growth in the post-war period. It can be said that it was the oil crisis that had a decisive impact on the turning point of RB's economic growth, and put an end to the rapid growth of the RB economy after the war.

4. Period of Steady Growth (1973-1986)

In 1970, the dollar-centered international monetary system was greatly shaken by the massive outflow of dollars due to the deterioration of the U.S. balance of payments. In August 1971, the United States announced the decoupling of the dollar from gold and imposed a 10% tariff on imports, which was the so-called "Nixon shock". At the end of 1971, the finance ministers of the ten countries met in the HSD and adjusted the currencies of various countries, among which the exchange rate of the yen against the US dollar was adjusted from 360 yen per US dollar to 308 yen per US dollar, but the market was still unstable, and in February 1973, it was changed to a floating exchange rate system, that is, the exchange rate of currencies of various countries was no longer fixed, but was determined by the market mechanism.

In October 1973, the Fourth Middle East War broke out, and the oil-exporting countries raised oil prices from about $2-3 per barrel to $4, $8, and $12, thus triggering the so-called "oil crisis." The sharp rise in oil prices has had a great impact on the economies of oil-consuming countries, causing problems such as inflation and deterioration of the current balance, especially the impact on the RB economy, which is very dependent on imports of Middle Eastern oil and is known as the "oil on the throne".

Under the influence of the oil crisis, domestic speculation in RB was rife, prices skyrocketed, and even housewives rushed to buy toilet paper. To this end, the government adopted a strong monetary austerity policy, and although the price rise was contained, it led to a stagnation in equipment investment, a marked deceleration in economic growth, a decrease in employment, and an increase in unemployment.

The RB government lifted the financial austerity in the spring of 1975 and adopted fiscal stimulus policies at the end of 1977, while at the same time promoting the upgrading of the industrial structure, promoting the transformation of the labor and capital-intensive industrial structure into a technology- and knowledge-intensive industrial structure. As exports continued to expand, compensating for the decline in domestic demand, the economy began to pick up steadily, while prices remained stable, unemployment tended to fall, and the rate of economic growth did not swing up and down much.

In order to overcome the oil crisis, private companies have made great efforts to rationalize production and management. Relying on the principle of the market, on the one hand, they vigorously conserve resources and energy, and implement "reduction management" to save various costs, and on the other hand, they have achieved high added value of products, especially export products, through technological innovation. By promoting the rationalization of production and operation, the quality and efficiency of enterprises have been significantly improved.

In the aftermath of the Nixon shock and the oil crisis, it was expected that the RB economy would not be able to withstand the double whammy: fears that the appreciation of the yen would lead to a decline in the international competitiveness of private companies after the introduction of a floating exchange rate system, a general increase in prices due to rising oil prices, and a deterioration of the current balance and, in short, the fear that RB would enter an era of "zero growth" economic depression.

However, in the second half of the '70s, it became apparent that the RB economy, which had been hit the hardest in the West, had recovered the fastest despite rising oil prices, and that private firms had been able to regain their vitality despite the fluctuating exchange rate. The entire RB economy has strengthened its resistance to external shocks due to the upgrading of the industrial structure and the enhancement of the quality of enterprises. Thus, despite the second oil crisis of 1978-1979 (oil prices soared from $13 per barrel in mid-1978 to $40 per barrel in 1980-1981) and the world economic crisis of 1981-1983, the RB economy was minimally affected. In short, the RB economy has embarked on a path of steady growth, and its economic performance is among the best among developed countries.

As the economic and technological level of RB is catching up with that of Europe and the United States, the RB government increasingly feels that it is necessary to strengthen independent technological research and development, and "move from the era of imitation of foreign technology to the era of originality." To this end, in 1980, the government formally established the "Techno-Nation" policy, established important research and development programs such as the "Creation of Science and Technology Promotion System" (Science and Technology Agency) and the "Next-Generation Industrial Basic Technology Research and Development System" (MITI), and adopted various policies and measures to promote scientific and technological cooperation and exchanges between industry, government, and academia ("industry" refers to private enterprises, "government" refers to government research institutes, and "gaku" refers to universities).

However, RB's good economic performance and rapid technological progress relative to other Western countries have brought about significant changes in RB's foreign economic relations. Due to the enhancement of international competitiveness, RB's exports of industrial products continued to expand, and the current balance deficit from 1974 to 1975 turned black in 1976, and then the surplus widened rapidly. In particular, between Japan and the United States, the trade imbalance between Japan and the United States has been increasingly aggravated by the high exchange rate policy implemented by the United States since 1982, and the trade frictions between Japan and the United States have continued one after another and become increasingly intensified. After the 1985 meeting of the five finance ministers, the yen appreciated dramatically, from 230 yen per dollar to 121 yen per dollar in a little more than three years from September 1985 to November 1988.

5. The Expansion and Bursting of the Bubble Economy (1986—)

The "Black Monday" of October 1987 (the collapse of the New York stock market) accelerated the yen's appreciation, reaching 122 yen per dollar in 1988. In order to prevent further appreciation of the yen, in February 1987 RB Bank adjusted the rediscount rate to an unprecedentedly low level of 2.5%. As a result, a large amount of capital flowed to the land and stock markets, causing land prices and stock prices to rise, and under the psychological effect of speculating that the prices of land and stocks would continue to rise, people rushed to buy them in order to obtain value-added benefits, and as a result, the prices of land and stocks were speculated higher and higher, greatly detached from the real value, and on December 29, 1989, the Nikkei Stock Average (RB's most commonly used stock price index, which is based on the representative 225 listed on the first section of the Tokyo Stock Exchange The average price of the stock was calculated) reached a record 38,915.87 yen. (What year?hehe)

The soaring prices of assets such as land prices and stock prices have led to the "asset effect" of the industry: first, it has stimulated the expansion of consumption, because the assets in the hands of people who own land and stocks have increased significantly, so that they feel that they have suddenly become "wide", so they spend a lot of money, and high-priced commodities such as precious metals, precious stones, paintings, and brand-name cars have become hot goods; Third, against the backdrop of a booming stock market, enterprises are actively carrying out fund-raising activities accompanied by stock issuance for equipment investment and the construction of welfare facilities for employees.

In order to prevent prices from rising, the Bank of RB raised the rediscount rate to 3.25% in May 1989 to prevent prices from rising, and the stock price continued to rise for a period of time, until it peaked and turned into a decline in December 1989. After the stock price first began to fall, the rate of increase in land prices also peaked in mid-1990 and then slowed down until 1992.

The decline in land prices and stock prices led to the deflation of assets, and at the same time, the decline in the rate of wage growth, and the purchase of too many durable consumer goods during the expansion of the bubble economy caused "excess inventory" in the household income, and the people's consumption consciousness turned from hot to cold, and personal consumption tended to be sluggish, which led to an increase in commodity inventories and forced enterprises to reduce production. On the other hand, companies have been forced to suppress lending due to rising interest rates and the problem of excess equipment caused by over-investment during the bubble inflation, and corporate profitability has tended to decline. However, it is the financial institutions that suffer the most from the collapse of the bubble economy. As a result of the decline in the price of the real estate secured and the decline in the price of the shares held, it is clear that some of the loans are no longer recoverable, and the large amount of money lent through the so-called "non-banks" has become bad debts. (Like it?)

Looking at the development path of RB, Zhao Hong can predict the next step of domestic development and vigorously develop processing trade with exports as the goal, so before that, the currency must first be devalued abroad and promote the development of export-oriented economy.

How to participate in it, this is Zhao Hong's next step is to think about the development opportunities he is looking for, and how to grasp them after finding them.