Chapter 1233
Zhou Xin: "What's the story?"
Li Linfei: "The story says that Holland was a maritime coachman, doing trade to bring a shipload of grain from Königsberg to sell to Portugal, but it couldn't just sail back empty, could it? So it goes back with wine and it can also be loaded with other products, and from that Adam Smith thinks the trade is automatically balanced."
"Is it really balanced? A very simple question, so let me ask Ms Zhou, do you think that this shipload of grain and a shipload of wine, would they be of equal value?"
Zhou Xin: "Of course not, a shipload of wine is definitely more expensive than a shipload of grain, it's like shipping a shipload of PHC 2.0 to the old US to sell it might be worth tens of billions of dollars, and coming back to load a shipload of soybeans might be tens of millions, this is a problem that ordinary people know."
Li Linfei: "So the conclusion goes without saying, so a few more examples, what was it that Britain fought the yapian war for? This is something that can be answered with an economic question."
"Because the British loved the Chinese tea, Britain continued to have a trade deficit, and couldn't balance it even after fighting, and ended up having to grow tea in the north-east of the San, and to ship it out also had to use visible hands to build railways, and it took about 170 years before and after to balance the trade."
"Another example the old US has been fighting a continuous trade deficit for how many years from 1971 to now? Has it been balanced? Not really."
"So tucking into textbook bookism and reading a few books on Western economics and thinking the market can automatically balance trade, no, it can't!"
......
"And Western economists themselves don't understand what the source of the error is, and when they do they go even further, then they pretend to mislead the world, but I don't think they do."
"So have we contributed? I think there is, and that is the reconceptualisation of Adam Smith's theory and the formulation of Smith's theorem in general."
"Meaning that the division of labour, whether it is limited by the size of the market, should actually be limited by three things, first by natural resources."
"Our country's natural resources have many limitations just know that it is impossible to expand that much, oil resources, natural gas and so on natural resource limitations, second is the size of the market, but third this is the contribution of our Chinese people."
"If you have a very big rise and fall in this market, very much upheaval, then your division of labour is bound to go from complexity to simplicity, so complexity and stability is a contradiction."
"Then you understand the crisis of Western society today, which is the development of too much complexity, so it's actually very fragile and inevitably brings an increase in costs of maintenance."
"Let's say it was easy to recover from the old American bombing of a few dozen cows in a Viet Nam village, was it much trouble to crash two buildings on September 11? Would it be easy or difficult to recover? Is it costly to maintain?"
"So relatively speaking if the old US were to be hit by the world today, its vulnerability is actually far higher than ours in China, if we lose a thousand, then the old US might lose three thousand, and the reasoning is simple, right?"
"Because of this so we understand that if there is competition on scale there is no equal exchange, the old US now claims that the GDP of the developed world is high, but that does not mean that its real productivity is high."
Rather it shows that it controls the international division of labour in terms of discourse, technology, military, financial hegemony."
"So of course it can and has the ability to monopolise pricing, which is why we had the bitterness of trading 800 million shirts for a Boeing plane back in the day, so you see how it can be equivocal?"
"What's kind of funny is that the old U.S. brought up the idea of not wanting free trade, having equal, reciprocal trade, and this is really funny because the most equal people enjoy the most resources in the world, pay the least amount of labour, control the world market, and it says it's losing out? There is not much difference in the combined intelligence level of everyone, is there?"
Zhou Xin: "So Mr Li, what kind of economic situation do you think we are facing today? What exactly is the future world like to be a better world?"
Li Linfei: "The situation? ...... Suppose a field an industry or a company, he has no competitors now, if a mathematical model is built, it should be an S-shaped curve with increasing returns to scale and a short period of constant turning points."
"But if it faces a new competitor entering, an old industry faces a new competitor and it quickly declines, electrical products were originally in the era of screens, now holographic screenless displays this new competitor enters, is it now (screened displays) on the wane?"
"The so-called metabolism theory is like this, the law of economic movement or the law of industrial movement, it is actually the same as the law of life movement, there is a life cycle."
"A life has a process of infancy, youth, adulthood and finally ageing and dying, but the concept of a cycle is indeterminate, if the coastline had not been born, right?"
"There are screen ages that might not start decaying now, so it's indeterminate, and it's not possible for a person to die and then emerge from their mother's womb for the next cycle, so metabolism."
"Then in mathematical terms the concept is called a small wave, one wave after another, one after another so the wave after the Yangtze pushes the wave before it, and one segment adds up to what we see as the macro economy, which again has growth and fluctuations."
"So not only do we Chinese have our own theory, but we are the ones who have built a whole system of mathematical methods that can accurately describe the smallest of life phenomena, the micro-finance of economics, the macro-history."
"We can develop a grand unified theory which cannot be compared to Einstein, but can be parallel to him, Einstein's theory of unification is a theory of particles built in matter."
"What we are unifying is the life and economic and social phenomena that have metabolism, I won't go into the theory here, you can go to FDU and find the right person and interview Professor Chen, he is certainly more expert than me."
"Then there is a corollary to metabolic growth, and it becomes possible to really discuss what modern marketisation means at the moment."
"It's that you can look at any industry as four stages, and the first developmental stage is like basic scientific research, does that make money? The answer is not sure, I don't know."
"So scientists and research institutes can't make money, they either rely on government grants, or non-profit funds or whatever to fund their research and development, or they rely on capital or big business to support them."
"Just look at the R&D investment of many of the world's tech giants."
(Just one more chapter of bullshit!!!)
Chapter 1234
"When I say that a scientific career needs to be underwritten by capital, it actually makes sense, otherwise you don't even have money to build your lab, and expensive equipment, there is a big difference between a scientist and an entrepreneur."
"The second stage is the growth period, the initial application stage, this is when external venture capital comes in, the market economy does play a big role in this stage, back in the day when the former old Maoists did not emphasise market competition in the take-off stage, the efficiency fell off immediately afterwards."
"But is there a role for the government at this stage? Because this stage is very prone to bubbles and the stock market is pushed up to the point where it is even scary to look at it yourself."
"Typical example, isn't that how the bubble came about with the rise of the internet as a new industry from the nineties to the beginning of the new century and blew up?"
"So governments play a big role whether they have a role or not, whether they set standards or not, Apple almost getting killed by Microsoft back then is a classic example of backward technology almost starving advanced technology, so it doesn't mean that what exists must be right."
"What caused it? The government gave up setting standards and let the backward companies that monopolised the market set the standards, so that's why it's unreasonable."
"So you talk to me in the West about marketisation and legalisation in an empty way, do you let monopolies set them? Or do you let people who are self-appointed top-designers and don't know anything set them?"
"Have you ever been a business? Have you been in that industry? Do you understand the reality of the situation? Have you done any data analysis? Right?"
"The third stage of maturity, which seems to be the watchword of the neoclassical economy, seems to be able to let go of the invisible hand."
"Actually, it may not be, because the third stage of maturity is best typified by the fact that neoclassical economics cannot explain why giant firms and small firms can co-exist, so even in maturity, there is a role for the government to play, what role?"
"To set up anti-trust laws to prevent large firms that are already backward technology from using their inherent market dominance, patent barriers, etc. to curb the entry of new firms."
"So Mr Edward Lazear was talking earlier about protecting intellectual property, I would ask him whose intellectual property are you protecting? Are you protecting the sunset industries or the new industries? Unfortunately, what I see is that the old US is protecting the sunset industries, and that's with data, and I for one prefer to speak with data."
"For example, the more recent typical example, Elon Musk, known as the 'Iron Man of Silicon Valley', I've met him quite a few times, and Coastline has a commercial partnership with Tesla, which may deepen in the future."
"Then let's say Musk, the inventor of this new industry, he was really angry back then before Tesla was pulled to China to build a factory, this is the new industry was forced to go overseas, so North America is shouting to return to manufacturing, priority, you first solve this first ...... future technology is a special case, we future Technology is actually also the source of technology."
"Far from the word, like Tesla company, even if you look at the whole of China many sources of technology are the old U.S. side of the research and development, and then China first development, experimental success and then return to the old U.S. market competition, beat the original competitors, is equivalent to our great man said the rural encirclement of the city."
"Also equivalent to complex science, as Professor Chen said, in your Harvard, Chicago there I do not have the soil to survive, then I go elsewhere to first make it big before reversing over to the rural encirclement of the city, plus an edge to challenge the core."
"That's the strategy we followed in the early days of the Future Technology Group, when the company was starting out we didn't have the ability to challenge and change the old pattern of the domestic market, the giants."
"We do have advanced emerging technologies but a head-on fight may not win, because they dominate the market, you have empty technology without capital, without contacts commercialisation can not be carried out how do you take off? Then the end result may be that the advanced technology is starved alive or swallowed by the rival."
"What about the fourth stage of senescence? The government role is coming."
"Businesses are decaying, and you say that now that the old US economy is in recession and ours is going down, the government is coming out to bail it out."
"We have the usual nerds tucked away in bookishness still shouting in the abstract all day long about 'the country going in and the people going out'."
"And what is 'the country is advancing and the people are retreating'? Do you want young people to help an old man who can't walk anymore? Or even if he dies, do you want to take care of his afterlife?"
"You just leave him there when he dies and don't care? So people who say this are without a basic concept of economics, so do you want to shelter your child when he grows up?"
"Do you want a hand when the old man can't walk when he's 80 or 90? So using a bookish abstraction to talk about 'the country going in and out' actually the biggest mistake you can make when you go to economic theory is the Nobel Prize winning Arlo de Brugh model, which has an infinitely long life for all the products in it."
"I say even if you sell vegetables in the market that has a cycle right? When time passes the freshness period the vegetables rot and you have to throw away the rotten ones for good and then find a way to put fresh ones into baskets to sell, same reasoning."
"As soon as you put in that every product has its life cycle and every firm has its life cycle, then all neoclassical economic theory is finished, and there is an additional clause that if there is competition on scale, general equilibrium does not exist."
Zhou Xin: "Mr. Li is really amazing, you still say you are not an economist?"
Li Linfei: "Haha, to be honest I'm really not, I didn't graduate from university, and I never got any economics degree."
Zhou Xin: "But your expertise is more professional than those economists with PhDs, I think you have no name but a real one."
Li Linfei: "I'm flattered, let's pinch this part, you have to pinch it, or I won't accept you next time you want to interview me."
Zhou Xin: "Ha~~ Okay, so there is one last big question, Mr. Li can you use this perspective of the metabolic theory of economic growth to talk about the rise and fall of businesses, the rise and fall of industries, and even the rise and fall of civilizations and our Chinese program?"
Li Linfei: "It is definitely too late to talk about the specific theory of metabolic theory in a paragraph interview, and to talk about the specific metabolic theory Professor Chen is definitely more right than me, so I will briefly mention my own views on what is different between the Chinese programme and the West, in fact what I said is definitely not complete."
Zhou Xin: "I would like to hear more about it."