Subtitle of this chapter: Come to think of it, I still have to write "Socialism"

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"How to restore the gold standard or how to replace it......"

After our Master Yuan finished saying this, he turned his head and bowed to the old man and said, "Professor John Bates Clark, it's an honor to meet you here, and I'm very grateful for the invitation from the American Economic Association. ”

The first person of the marginal school in North America today nodded in return and said politely: "Dr. Yuan, on behalf of the American Economic Association, I welcome your arrival. ”

As a result, the two economists who were later recognized as the most important of the North American marginal school shook each other's hands.

Yuan Yanqian said gratefully: "Professor Clark, if it weren't for your care, I wouldn't have been able to get this PhD." ”

"Care?" The head of the Department of Economics at Columbia raised his eyebrows and said, "Dr. Yuan, how can it be said that conferring a doctorate on you is a care?" With your Socialism, you deserve a PhD. The only pity is ......"

He also made a joke: "You're not my student. ”

Lao Tzu also felt a pity for this matter. But that can't be said of the word? This is also too bad for Professor Julian Chandler next to him.

"Professor Clark. You're my teacher, too! Master Yuan, who made a "flattered" look, said, "If I hadn't seen your 'Philosophy of Wealth', I wouldn't have noticed marginalism." ”

The Philosophy of ealth: Economic Principles Nely Formulated is a book by Clark published in 1886 that reflects some of his earlier views on value and utility. This book established him as the founder of the marginal school in North America.

In his words, the book focuses on "the distinction between absolute utility and effective utility, and analyzes the role of society as an organic whole in the process of market valuation." ”。

"And if it weren't for your 'The Distribution of Wealth', I would still have doubts about capitalism, and maybe I would have become a socialist."

The Distribution of ealth: A Theory of ages, Interest and Profits, 1899, was also one of Clark's most important works.

The book "scientifically" shows that the distribution of income in capitalist society is "governed by a natural law", and that both workers and capitalists receive the products they have created, just and rationally, and without any exploitation.

In Clark's economic theory, capitalists and entrepreneurs are very different. The capitalist is the owner of the means of production, and his income is interest. An entrepreneur is the organizer and leader of a business, and his income is salary plus profit.

Therefore, the real capitalists are only a few, and those who own the means of production and personally participate in the large-scale production of society and obtain profits should be regarded as entrepreneurs with the family nature of capital. And such entrepreneurs make a great contribution to society.

"Finally, if it weren't for your 'Social Justice Without Socialism', I wouldn't have paid attention to the topic of socialism. I would like to admit that my book "Socialism" has benefited a lot from this book of yours. ”

The 1914 publication of Social Justice ithout Socialism did not even have a Chinese version in later generations, which shows its reactionary point.

Many intellectuals at the time believed that the only way to achieve social justice was socialism, such as the famous British writer and gay Oscar Wilde, who famously said: "We are all socialists now."

But Clark disagrees, arguing that capitalism can achieve social justice, not "absolute fairness" as socialists claim, but a relative fairness.

In short, he admitted that his most important task as an economist was to prove that capitalism "has the right to exist".

The reason is very simple, when you are an economist in the capitalist world, you can't pick up a bowl to eat, put down your chopsticks and curse. You have to sing the praises of capitalism. You just have to prove its rationality and advancement.

Or do you want to be a big economist? Dream on!

When Mr. Clark heard these words of our Master Yuan, he said with a look of praise and appreciation: "Dr. Yuan, you are indeed a diligent and gifted economist!" ”

He turned to the crowd and said, "Gentlemen, let us welcome one of our new members, Dr. Neo-Yuan. ”

"Bang bang bang...... Bang bang bang ......"

The room burst into applause.

When the applause subsided, Professor Clark turned his head and said, "Dr. Yuan, it's a pity that your dissertation defense meeting was not held as scheduled, and I still have some questions I would like to ask you......

"Don't dare, don't dare." Yuan Yanqian immediately waved his hand and said, "Professor Clark, I also regret that I didn't have the opportunity to get correction from you and other seniors in economics." ”

The other party naturally said, "Dr. Yuan, why don't we take this occasion to hold an informal Q and A." What do you think? ”

OUR MASTER YUAN DIDN'T NECESSARILY SHAKE HIS HEAD AND SAY NO, SO HE HAD TO NOD HIS HEAD IMMEDIATELY: "OF COURSE YOU CAN." ”

In fact, he was invited by the American Economic Association this time, on the one hand, the economics community is very curious about this economist who has come back from the dead and is also a part-time writer.

On the other hand, some people are inevitably a little prejudiced against the yellow race, while others who have read the tome "Socialism" feel that such a mature economic work is unlikely to have been written by an immature young economist. John Bates Clark is also one of the latter.

However, everyone was going to die, so for humanitarian reasons, Professor Clark had no choice but to forget it. Now that people are alive again, they naturally have to find an opportunity to find out.

You must know that the first person in North America to be marginalism is the chairman of Dr. Yuan's doctoral dissertation defense meeting, and if Dr. Yuan's level is embarrassed in the future, it will be a disgrace to his people.

Yuan Yanqian himself also understands this truth, so he doesn't dare not agree.

He looked at the room, walked over to the bar, and asked the waiter inside for a drink.

Then our Master Yuan turned to everyone and smiled slightly, "Gentlemen, Please......"

What exactly is Socialism? In fact, a hundred years later, Douban, Dangdang, and Excellence can still be seen and bought.

But except for professionals and non-professionals who are full of panic, who will go to see it?

The first volume of the book is divided into three parts: "The Superiority of the Capitalist Mode of Production", "The Utilitarian Argument for Democracy", and "The Political Economy of the Family".

In the second volume, Mises ...... That Yuan Yanqian turned to socialism itself.

First, he elaborated on the profound implications of the economic reality of Socialism.

Under this system, managers need to decide the "distribution" of all factors of production, which means that they decide not only how to use each piece of land, but also how to allocate "human resources".

That is, the individual must obey the will of the central planner, and it is clear that socialism will never be a "free" system.

"Professor Davenport, Socialism is a huge authoritarian conglomerate that issues and executes orders. This is what the so-called 'planned economy' and 'anarchism that abolishes production' means. The internal structure of such a society can be better understood by imagining the internal structure of the military. ”

Not only is there a problem with the supply of labor, but also the supply of capital. Where is the impetus to save in such a country?

Obviously, he didn't know...... It should be said that I forgot how much the Seris are a people who like to save.

Second, there is another mortal enemy of Socialism: moral hazard.

The Socialism-based system makes it possible for decision-makers in subordinate units to be irresponsible, and through the socialization of individual behavior, Socialism induces moral hazard at every level of society.

"Sir, in a society with a strict system of private property rights, everyone is more likely to act recklessly under socialism. Because under private ownership, no one can share the risk for him except the actor himself. ”

I have to say that history proves that this is really true.

Finally, the aforementioned "weakness and compromise of John Stuart Mueller", that is, the issue of wages. (See Volume I, Chapter 20, "The Momentum")

"This gentleman, how to give full play to the enthusiasm of the laborers, this is indeed a problem."

After analyzing the society of Socialism, our Master Yuan turns his attention to the theory of Socialism itself in the third volume.

First, he denied the class struggle.

Because the class struggle cannot explain the emergence and development of human beings. It is true that violence has played an important role in the evolution of society, but it is a question of whether violent conflict is constructive.

"Sir, it seems to me that it is the cooperative relationship between human beings that drives the development of society."

Second, he rejects the monopoly theory.

He believes that "concentration" in industry is beneficial, reducing the unit cost of production as never before. Economic concentration is even necessary to meet the needs of a growing population.

"This gentleman, like the medieval church, wields the power to bestow grace on the faithful...... Excommunication and cessation of clergy are as horrible as dying of thirst and suffocation. In a socialist society, the state, as an organized society, will form a monopoly in which all economic goods will be concentrated in its hands, so that it will be able to compel citizens to carry out its orders, and in fact it will make individuals choose between obedience and starvation. ”。

Final summary, Socialism = Destructionism.

"Gentlemen, in fact, Socialism is not what it claims to be. It is not a pioneer of a better and more wonderful world, but a destroyer of everything that human civilization has created for thousands of years. It doesn't build, because destruction is its essence. ”

"Socialism does not produce anything, it simply enjoys what is created by the social order based on private ownership of the means of production. Since the socialist social order can survive only in fragments of the economic order based on private property rights, every step towards socialism inevitably destroys what already exists, and thus leads to its own demise. ”

"Like I said, human society is a spiritual phenomenon......"

It is the concept that makes history, not the "material productive forces", not the mystic schemas of historical materialism that make people feel like they are in the clouds. As long as we can overcome the concept of Socialism, as long as we can make mankind realize the social inevitability of private ownership of the means of production, Socialism will definitely be launched on the stage. ”

"Gentlemen, and this is the historical mission of economic workers like me!"

"Bang bang bang...... Bang Bang Bang ...... Bang bang bang ......"

In the thunderous applause, Yuan Yanqian took a sip of the drink and frowned secretly, because the cup was not the juice that the master should drink.

"Gentlemen, are there any questions?"

"Dr. Yuan, I have a question." I saw the half-bald doctor stand up and say.

"Well, Dr. Holland, excuse me."

"Dr. Yuan, how would you restore the gold standard or how would you replace it......

"Oh, about the gold standard......"

Our Master Yuan said in his heart, Lao Tzu is too special to know!

The course of history from 2017 to 1921 flashed through his mind like a marquee, and finally a shiny gold coin appeared.

He took a deep breath, because he was the only one in the world who knew that the future of history would be moved for GOLD......

It was after next year's Geneva conference that central banks decided to establish a fatally flawed hybrid gold standard, a "modern gold standard" of gold, non-convertible banknotes, and central banks, rather than the "classical gold standard" that existed before the First World War.

By the way, the Bretton Woods system can be called the "postmodern gold standard".

The United States became the only country in the world to implement the "gold coin standard", and the US dollar officially became the anchor currency of all countries, that is, the basic reserve foreign currency.

Britain and France practiced the "gold bar standard", also known as the "gold bar standard". Under this system, gold bullion is stored by the state as a reserve; The exchange of various currencies in circulation with gold is restricted and is no longer freely convertible, but when necessary, it can be exchanged for gold bullion in paper money in the prescribed limited quantities to the central bank of the country.

Attention, attention, attention, the central banks of the three surplus countries at the center of the gold standard after the war had a strong incentive to accumulate gold. The central bank's shift from foreign exchange reserves to gold reserves reduces the world's money supply, which increases the monetary tightening propensity of the gold standard.

Other countries implement the "gold exchange standard". Under this system, only bank bills are circulated in these countries, and bank bills cannot be exchanged for gold, but only for the currencies of countries that practice the gold bar or gold standard. Countries with a gold exchange standard maintain a fixed ratio of their currencies to the currencies of another country with a bullion or coin standard, and maintain the stability of their currencies by buying and selling foreign currencies without restrictions.

Well, having said that. So why did this hybrid "modern gold standard" lead to the Great Depression getting out of hand?

Because everyone knows about Black Tuesday in 1929, but not everyone knows that Black Tuesday is not terrible, what is terrible is the response of Britain and the United States at that time.

At this time, the Hoover administration and the Federal Reserve did a big "stupid thing", not only did they not lower the lending rate and release the currency to rebuild the confidence of the market at all levels, but raised the interest rate in the hope of preventing foreign capital from fleeing, thus causing serious deflation. In this way, even if someone wants to save the market, they will not be able to borrow money.

Well, they didn't do it because they were really stupid, but because the most important reason was to prevent the loss of US gold reserves. This is also the biggest problem with the gold standard.

For the United Kingdom, the world's second economy at the time, this was actually a godsend. Since their cousin accidentally caused deflation, then they, as a cousin, should have an inflation.

Of course, printing money will depreciate the pound, but it will boost exports and discourage imports, thereby boosting the country's economic performance. Second, it can also lend money to cash-strapped European banks, giving a shot in the arm to the world's financial community, at least not as quickly as the original timeline collapsed.

However, at the insistence of British economists like John Maynard Keynes, as it did before many crises in history, the British government chose to do nothing in a panic.

So the real Great Depression roared towards all countries, and finally filled the world with a sea of corpses and blood.

Eighty years later, during the subprime mortgage crisis, the Fed was chaired by Dr. Ben Bernanke, an "economic prodigy," who wrote a book, Essays on the Great Depression, in which he pointed out that the re-establishment of the mixed gold standard after World War I was an important factor in triggering the Great Depression of 1929-1933.

Given his vigilance against deflation, it is no wonder that the Federal Reserve under his leadership has been steadfast in implementing Greenspan's loose monetary policy, ignoring the criticism of domestic liberals and the discontent of emerging market countries.

The currency of an "emerging market country" did not depreciate in 97 for the sake of "international view", and this time it doesn't matter what people think.

So in the future subprime mortgage crisis, the future world's first and second economies have learned to be smart, everyone together with quantitative easing, you do the first year of the first month of QE four times, then I will do 15 or 4 trillion.

Got it, don't think that economics is a pseudoscience like "historiography of the mind...... At least not all economists are godsends.

They have been learning from the experience of the previous time and then dealing with the next crisis.