jakiro
Author: @Web3Mario
summary
This week was really exciting. On January 18, Trump personally issued coins two days before his official position as president, and the increase was as high as 400 times in just a few days!First of all, I would like to congratulate you here on your friends who have seized this wave of wealth opportunities, and I wish you all a happy New Year in advance.There have been many discussions on the potential impact of this phenomenon-level event these days, and the author also hopes to discuss it.In general, the author believes that “Trump’s issuance of coins” marks the official return of American neoliberalism, and the survival of the fittest and the wild growth of the fittest will become the main themes of this new era.More specifically, in the context of deregulation, Web3 will shoulder the banner of financial innovation in the new cycle of the United States.
The history of the development of mainstream economic theory in American history—the continuous exploration of the relationship between government and market
In order to help friends understand the impact of this change, the author believes that it is very necessary to give a simple review of the changes and developments of mainstream economic theories in American history.In fact, the history of the development of economic theory is a history of exploring the relationship between the government and the market. With different historical stages and different internal and external contradictions in society, modern sovereign states often adopt different economic strategies to cope with internal and external pressures.Ensure social stability internally and maintain the relative competitive advantage in international geopolitical games externally.The so-called mainstream economic theory is the abstract summary made by some of the most insightful people based on specific economic phenomena, providing a theoretical basis for policy formulation of policymakers.They are not some eternal truths in Mind, but more of them belong to the category of sociology and apply to a specific area of a certain historical stage.
After clarifying the above premise, let’s take a look at the development history of mainstream economic theory in American history. In fact, it can be roughly divided into six stages:
1.The colonial era in the context of Puritans’ evacuation from Europe: the process of resistance to colonial economic exploitation of the suzerain state under mercantilism (1600-1776)
Friends who are familiar with Western history will know that unlike most nation-states, the United States is an immigrant country.The uniqueness of an immigrant country lies in the fact that its birth usually depends on certain internal irreconcilable contradictions in the immigrant home country under a specific background, which leads to the large-scale migration of vulnerable interest groups.This means that the cohesion of immigrant countries at the beginning of their establishment is usually much higher than that of nation-states for two reasons. First of all, this is a group of screened interest groups with common ideology and values.Secondly, since the initial establishment of an immigrant country, the distributable interests were still in full state, and all classes could enjoy objective distribution of interests, so they felt strong satisfaction.
The birth of the United States can be traced back to the colonial era when the British Puritans evacuated from the European continent and looked for a new “promised land”. The landmark event here is naturally the familiar “Mayflower” incident, which established the British Puritans.The first virgin colony in North America, Virginia.Here we need to talk about the background of the Puritans. We know that the medieval period of the European continent was the so-called theocracy. The era background of this stage was that the Western Roman Empire started from the perspective of interests and costs, and resisted the invasion of barbarians through foreign mercenaries, which led toThe decline of its own military power has led to the prosperity of the barbarian kingdoms on the European continent.In order to deal with this background, the rulers of the Western Roman Empire chose to use the surplus value of the empire to transform their identities and dominance models, and use the promotion of Catholicism originating from the Middle East to find legitimacy and authority for their rule to alleviate themselvesThe embarrassing situation of insufficient military strength.The result was that with the conversion of most of the “barbarian kingdoms”, the old ruling class of the Western Roman Empire changed into the Roman Catholic Church, and the ruling model also changed from forceful suppression to ideological control.
How did this be done? This is because although the barbarian kingdom has advantages in force, it is not good at cultural aspects. Therefore, regardless of the East and West, when the barbarian kingdom relies on its military government, some areas in which the barbarian kingdom are in an advantageous position due to its military government, it willAssimilated, whether from top to bottom or bottom to top, once most of the group is assimilated by a certain advantageous culture, the authoritative source of its ruling class will not be autonomous and will have to come from external forces.Intervention.Specifically, most barbarians converted to Catholicism, such as the Germans, Gauls, Celtics, Anza, etc.The legitimacy of the ruling class of its sovereign state will not depend on national consciousness, but on the crowning of the Holy See thus giving it legitimacy.This model is actually similar to the Western Zhou Dynasty’s control over the vassal states through the Zhou rituals.
In this context, since there is no option to intimidate force, in order to ensure the stability of rule, the Holy See must design complicated religious rituals to achieve absolute control over people’s thoughts and completely eliminate these “barbarism” with force in order to ensure the stability of rule.”The idea of resistance.”So we will find that in the medieval context, there was basically no bottom-up resistance similar to that in Eastern civilizations on the European continent, because the ideas of the lower classes were firmly controlled by Catholicism.
However, as a metaphysical discipline, religion will naturally have different views on different life backgrounds. Once another opposing idea is formed, it will inevitably have a fatal impact on the authority of the old mainstream ideas., and this opposition is irreconcilable. Therefore, throughout the Middle Ages, the so-called “chaos” was not a chaos in the internal order of society, but a long-term meaningless thing between the alliances of states with different religious views because of metaphysical values.Bloody war.
As the brutal war brought great impact on society, some progressive people have given rise to reflection on this situation, which has also given birth to the “Enlightenment” and “Renaissance”, with liberalism and rationalism as the coreThe cultural change began to impact the Catholic system in all aspects.The so-called Puritans are the product in this context, which refers to a group of religious radicals in the UK. Their radical ideas focus on the ownership of the right to interpret the Bible. They believe that the Bible is the only authoritative one.Sexual, everyone can interpret the Bible, while not traditional can only be interpreted by the official church designated by the Holy See.This was naturally suppressed by the Catholic group, which led to the removal of these radical religious figures from their religion and was therefore called Puritans. At that time, it happened to be the Age of Discovery, and Europe’s navigation technology developed rapidly. These suppressed people had the opposite effect.Authoritative and freedom-seeking interest groups chose to come to the distant North American colonies to rebuild their “promised land.”This is the beginning of the story, and it also laid the foundation for the anti-authority, self-consciousness, and pursuit of freedom.
Only after introducing this background can we understand why Americans seem to have some kind of paranoidness towards liberalism.Back to the topic, although it had an environment of religious freedom, economically, the North American colonies at that time were still under the colonial economic system of their suzerain state.At this time, Britain was promoting mercantilism. The core idea of mercantilism was that the state should use policies and force to use gold and silver as the measurement standards to make exports more than imports, thereby realizing national powerImprovement.Under such a theoretical basis, Britain usually requires the colonies to mainly focus on raw material industries such as agriculture and mining, and curb the development of their manufacturing industries. In this way, by importing raw materials and exporting industrial products with higher added value, we can achieve the colonial economy.Plunder and control, this is the so-called colonial economy, such as the passage of the Navigation Act to restrict freedom of trade in colonies.Therefore, at this time, a landlord class dominated by agriculture gradually formed in North American colonies, and a group of progressive people who advocated the development of industry to get rid of the economic control of the suzerain state.A large number of landmark events at this stage revolve around the conflict between progressives and the suzerain state, such as the Boston Tea Pour incident.Finally, after a series of struggles and pulls, coupled with France’s strong intervention in North American practices and other influences, the United States was officially born, marked by the United States’ winning the War of Independence.
2.The early days of the founding of the main national integration: the dispute between the focus on agriculture and heavy industrialism (late 18th century to mid-19th century)
After having independent sovereignty, the United States was actually very weak at this time and had to rely on its alliance with France to gain a certain sense of security. At this time, two mainstream economic theories gradually flourished in the United States. In the above article, we have alreadyThe formation of the two classes of progressive people and traditional landlords was discussed, so the two economic theories were supported by these two groups of people respectively.
Among them, due to its superior agricultural development advantages in the southeastern United States, its economic system is mainly slave agriculture and planting. Naturally, the landlord class power has obvious advantages among the social classes in its region.And this time coincided with the honeymoon period of the United States and France. At this time, France was at a disadvantage in the colonial competition with Britain, so it changed its mercantilist view and proposed agriculturalism.There is a big difference between agriculturalism and mercantilism. First of all, agriculturalism believes that only agriculture is the only industry that generates value, because the raw materials of agriculture are natural and free, such as sunshine, rainwater, land, etc., while agricultureThe output is valuable, which is a process from scratch, and industry only processes raw materials, but only changes its form, and does not generate value in this process.Therefore, the measurement of national strength should be based on the assessment of its agricultural output, which is very different from the mercantilist idea that the accumulation of precious metals represents national strength.Secondly, in terms of attitude towards the market, agriculturalism believes that although industrial products do not produce value, they are lubricants for economic operation and affect the efficiency of value circulation. A relatively free market system is beneficial to enhancing turnover efficiency.This is also very different from the practice of exports and curbing imports encouraged by mercantilism.Of course, from the perspective of post-theory, we can also see that agriculturalism is more suitable for the best choice compared to the UK when it was relatively backward in industrial technology but had a demographic dividend.It is conceivable that the American southern landlord class would naturally support this theory.
However, as an important North American trade transit center in the UK, the northern United States is naturally greatly influenced by the British economic concept, so the northern part of this country naturally formed an industrial structure dominated by trade and primary manufacturing.And because they are deeply affected by the harm of the colonial economic system, progressives in the northern United States have obvious preferences for industry. Therefore, after gaining independent economic status, they naturally vigorously developed industry to get rid of the shadow of the colonial economy, and in this respect, mercantilism andUnder the dual influence of colonial economy, the economic theory of heavy industry was formed in the northern United States. It believed that industry is the embodiment of national strength, and the added value difference brought by industrial products and raw materials is the only way to increase national strength, so the country should formulatePolicies such as protective tariffs, encourage the development of local industries as much as possible.
As time goes by, two cultural groups with great differences gradually formed in the north and south of the United States, and the north was the Yankee. The term originally meant the descendants of residents of the northern New England region of the United States; later its folk meaning extended to the United States.All residents of the Northeast (New England, Mid-Atlantic states, Upper Great Lakes, etc.), as well as American Northerners during and after the American Civil War.The South calls itself Dixie, referring to the southern states and people in the region.Cultural differences eventually led to a complete division, and eventually the Civil War broke out in the United States, and ended with the Yankee cultural group who advocated the theory of heavy industry in the north achieving absolute victory. At this point, the mainstream economic theory in the United States was mainly heavy industryism.The landmark event was the Manufacturing Report (1791) by US President Hamilton, which proposed protectionist tariffs and federal banks to lay the foundation for US industrial policy.Of course, it also includes the Tariff Act of 1816, which protects domestic manufacturing from the impact of cheap imported goods.
3.The age of expansion of destiny and the roaring 20s: Laifaction and Classical Economics (mid-19th century-early 20th century)
As the United States relies on the rich supply of raw materials in the North American continent and industrialization rapidly unfolded, the United States’ national strength has achieved great development. At that time, a huge sense of superiority and the inherent sense of mission of Christianity, the American people were born at this time.After the general imperialist sentiment, the United States has also come to the era of western expansion with a clear destiny. At that time, the central and western parts of North America were controlled by indigenous tribes, and most of these indigenous tribes had long-term dealings with Western colonists, especially in Spain., France and the United Kingdom are represented.The United States has adopted policies such as the Homestead Act to encourage citizens to independently advance westward to seize the land of natives. Under this vigorous westward movement, the US territory set off from the Mississippi River and guided the Taiping Sheep to stop its expansion and span the entireNorth American continent.
At this time, the rise of classical economics in the European continent also deeply influenced American society.The so-called classical economics is an economic ideological system formed in the late 18th century to the 19th century, and it is also the foundational theory of modern economics.It emphasizes spontaneous market regulation, free competition and economic freedom, laying the theoretical foundation of the capitalist economic system.This school mainly discusses core economic issues such as production, distribution and growth.
In fact, the birth of classical economics is not accidental. It is not difficult to find out based on the experiences of its representative characters. Taking Adam Smith as an example, he was born in Scotland and was naturally deeply influenced by mercantilism. However, under mercantilism, the country isDuring the French exchanges, Adam Smith was also deeply inspired by French agro-orientedism, which absorbed the core ideas of agro-orientedism, such as the meaning of free markets., the government’s attitude towards the intervention of the market, the analysis logic of commodity value, the government’s analysis of economic conditions through mathematical models, etc., of course, there are also differences. For example, in classical economics, it is believed that agriculture is not the only industry that generates value, and the real source of value of commodities islabor.
In such economic theory, it is obviously more suitable for the civilized West that has completed the Enlightenment in the new era.Moreover, with the acceleration of the human rights movement, the resentment of government intervention has gradually formed a social consensus. During this stage, most Western countries have
Adopt as little government intervention as possible, a more open international trade policy, and rely on the power of the market to allow the economy to develop freely.This policy is also called laissez-faire.This also gave rise to the rapid rise of the capital class.Influenced by Ricardo’s theory of comparative advantage, countries also support their respective advantageous industries based on their own industrial advantages.At this stage, like most Western countries, the United States has developed comprehensively and is showing a thriving trend.However, the contradiction between the working class and business owners brought about by industrial development has gradually increased, and a red cloud shrouded over the European continent.
The proposal of Marx’s economics is an inheritance and dialectical criticism of classical economics, and its core idea continues the theory of labor value in classical economics.And use materialism to explore production relations and develop the theory of surplus value to reveal the capitalist exploitation mechanism.Its essence is a change in the political system.In order to deal with the criticism of some phenomena in classical economics pointed out by Marx’s economics, classical economics has also evolved, and some shortcomings in classical economics were improved by introducing “marginal theory”, such as the analysis of commodity value.Labor value theory, transition to marginal value theory, how the market regulates prices, etc.This has also been called neoclassical economics.But in fact, both ideas have entered the stage of independent development. Marks economics has found a soil for dissemination in the East, while neoclassical economics has run through the development of the West.
4.The Great Depression Age: Great Government and Keynesianism (1929-1980)
With the rapid development of industry, the pace of financial innovation has not stopped. Among them, the booming development of the US stock market is the most representative. Due to the free market concept emphasized by classical economics, government intervention can be minimized, which makes capital development appear.Out of control.
Time entered the 1920s, also known as the “Roaring Twenties”, and the U.S. economy experienced rapid growth and the stock market was highly prosperous, but much growth was built on speculation and excessive credit expansion.Moreover, with the rapid development of industry, most industries have shown a certain oversupply situation, but residents’ income growth lags behind and insufficient purchasing power.With the support of these two situations, the US stock market has entered a stage of irrational prosperity, with the value of most corporate stocks far higher than their actual value, and the proportion of speculation is extremely high.
This capital feast eventually ended in the Great Depression. The so-called Great Depression refers to a global economic crisis that occurred in the 1930s. Its centered on the United States, but it caused a global economy and society.Has a profound impact.This period was characterized by economic depression, surge in unemployment and widespread social unrest.On October 24, 1929 (“Black Thursday”), the stock market began to collapse and a large number of investors went bankrupt.The accelerated decline on October 29 (“Black Tuesday”) marked the beginning of the Great Depression.Until 1933, the unemployment rate in the United States was as high as 25%, and industrial production fell by nearly 50%.Thousands of banks went bankrupt, depositors lost their deposits, and the credit market was frozen.Many families are unable to pay for mortgages and basic living expenses, and a large number of homeless people are emerging.
The crisis has also had a profound impact on the global scale, with the economies of European, Latin America and Asian countries also suffering severe blows.International trade is on the verge of collapse, and the total global trade volume has dropped by about two-thirds.It can be said that the fuse of World War II is attributed to this.
Keynesian Economics was born to cope with this crisis, one of the most influential economic theories of the 20th century, and was born in 1936 by British economist John Maynard KeynesIt was proposed in the General Theory of Employment, Interest and Money published in 2019.This theory mainly focuses on how to achieve full employment and economic growth through government intervention, and is a criticism and correction of the “market self-regulation” of classical economics.
Since the fuse of this crisis is insufficient demand and excessive speculation, the core theory of Keynesianism mainly revolves around these two aspects. One is the effective demand theory. Keynes believes that the fundamental reason for the economic recession isInsufficient effective demand, not a problem of production capacity.Effective demand consists of four aspects: Total consumption (C) + Total investment (I) + Government expenditure (G) + Net export (NX). Therefore, when private behaviors such as consumption, investment, and net exports appear weak, the economy will be caused.When signs of recession appear, the government can help boost effective social needs through intervention and government pointing out.The second is that the government should provide strong monitoring of capital expansion to avoid excessive speculation in the financial market, which will cause systemic risks.
The Roosevelt New Deal marked the official entry of Keynesianism into the mainstream economic theory in the United States. President Roosevelt took large-scale intervention measures through the “New Deal”.For example, many public infrastructure investments have stimulated domestic demand, and have rebuilt the financial credit system, promoted the reform of the financial system, established a new regulatory framework (such as the Securities and Exchange Commission), and strengthened control over the financial market.This is the familiar SEC.
With the introduction of Roosevelt’s new policy, the United States quickly got rid of the dilemma of the Great Depression, and with the help of two world wars, it formed one of the two poles in the world.Keynesianism also established its historical status.
5.The era of stagflation under the Cold War of the Pole: Neoliberalism and the Supply School
Time continues to develop. After World War II, the world entered the stage of the two polar Cold War under the Iron Curtain. At this time, the main theme of world politics and economy is the struggle between the left and right, the confrontation between the socialist camp and the capitalist camp.Although there is no direct conflict between the United States and the Soviet Union, agent wars occur frequently. After each experiencing the rapid development brought about by post-war reconstruction, the United States was the first to encounter a bottleneck period with the 1970s.This is the advantageous stage of the socialist camp. After suffering the defeat of the Vietnam War, the United States entered the strategic contraction and defense stage, and there were two fuses at this time, the first was the collapse of the Bretton Woods system (1971).As the United States abandons the US dollar and gold peg (Nixon shock), the fixed exchange rate system collapses, resulting in the instability of the international economic system of the capitalist camp.The second is the oil crisis caused by the Middle East War, which caused oil prices to soar and further raised inflation.
Against this backdrop, the United States has suffered severe stagflation, economic growth has stopped, and inflation and unemployment have continued to rise.In order to deal with this difficult dilemma that Keynesianism cannot solve, the economics community has proposed another solution.A group of economists represented by the Chicago School and the Austrian School proposed the so-called neoliberalism, of which the former is mainly committed to the construction of economic theory, while the latter focuses on criticism of the political system.Since the core idea of neoliberalism believes that the reason for stagflation is the excessive intervention of the government, which seriously affects the vitality of corporate innovation, thus leading to the increase in production costs of enterprises on the supply side and the market has not entered a state of full competition.Therefore, it advocates returning to the small government, avoiding excessive supervision, advocates reducing corporate taxes, and controlling government spending and other means to restore vitality to the supply side, so it is also called the supply school.Of course, at the theoretical level, the biggest difference between neoliberalism and Keynesianism is that it advocates the realization of economic regulation through monetary policy rather than fiscal intervention.
With the 1979-1980, the inflation rate in the United States was close to 14%, far higher than the historical average.The unemployment rate rose to 7.8% in 1980 and reached 10.8% in 1982, the highest level since the Great Depression.Republican candidate President Reagan won the U.S. election and chose to use neoliberalism as the basis of his governance, vigorously promoted “Reagan economics” and matched with Federal Reserve Chairman Walker’s monetary austerity policy.It finally made the United States difficult to get rid of the dilemma of stagflation and eventually won the Cold War.Let me add a little more here that Trump’s policies have been generally compared with Reagan’s policies.
6.The era of big money-free flows in the post-subprime mortgage crisis: quantitative easing and post-Keynesianism
This history is more familiar to everyone. With loose monetary policies and relaxed regulatory policies, the US economy driven by financial and technological innovation has entered a stage of rapid globalization, and financial institutions have innovative products (Such as asset-backed securities, spreading risks around the world, and the global financial system is highly interconnected.Meanwhile, the U.S. real estate market experienced sustained price increases in the early 2000s, considered a safe investment field and attracted a lot of capital.
Under this double resonance, the United States has created a huge subprime loan represented by high-risk housing mortgages, combined with the design of many financial derivatives to form a huge asset bubble.However, we have already understood the ending of the story. With the surge in subprime loan default rates and the decline in collateral value, the value of a large number of asset-backed securities has shrunk.Dominoes began to collapse, and eventually Lehman Brothers, the fourth largest investment bank in the United States, filed for bankruptcy protection, marking the climax of the crisis and triggering turmoil in the global financial market.
The impact of this financial crisis was far-reaching. The American people were extremely dissatisfied with the Republican government’s laissez-faire attitude towards capital, which caused such a crisis. This also affected the re-adaptation of mainstream American economic theories, and the post-Keynesianism announced its return.A core argument that neoliberal economists have always criticized Keynesianism is based on the arguments of rational economic people. If monetary and fiscal policies are predictable, economic entities will adjust their behavior in advance to offset the policy effect.Therefore, it is ineffective to boost the economy through fiscal policies.
In response to these doubts, Keynesianism has also made new corrections, with Price and Wage Stickiness and the incomplete competitive market the most influential, which explains why fiscal policy has a lagging effect on the economy, and the latter clarifies the impact on equilibrium prices under incomplete competition of monopoly market types.Of course, post-Keynesianism also integrates the most important theory of neoliberalism, that is, to influence the economy through monetary policy and fiscal policy. At the same time, post-Keynesianism goes further and proposes rational expectation management to solve the lag of monetary policy compared with the economic crisis.That is, based on the neoliberal rational economic man’s argument, through the forward guidance of relevant officials, it affects the expectations of rational economic man in the market, and then has the effect of intervening in the market in advance, thereby improving the efficiency of monetary and fiscal policies.So what we are familiar with is the control of 2% inflation and the observation of forward guidance from Federal Reserve officials, etc., are all products in this context.
Of course, during this cycle, as the executor of post-Keynesianism, the Democratic government mainly resolved the impact of the financial crisis through three arrows, namely large-scale fiscal expenditure and unconventional quantitative easing policies, extremely loose monetary policies, andTightening financial regulatory measures.Helping the United States get rid of the impact of the financial crisis.The story has come to this day.
The return of American neoliberalism under Trump,Web3 will shoulder the banner of financial innovation in the new cycle of the United States
Looking at the evolutionary history of mainstream economic theory in the United States, it is not difficult to find that this is a continuous exploration process about the relationship between the government and the market. Influenced by different historical events, policies continue to swing between the government and the market.The theory that focuses on the former focuses on highlighting the effect of government intervention in economics, while the theory that focuses on the latter emphasizes that the market is more efficient in resource allocation.Considering Trump’s own life experience, the stage of his important outlook on life was formed, which coincided with the low point of Keynesianism in the 1970s. The United States helped the United States get out of the predicament with President Reagan’s implementation of neoliberalism.Therefore, Trump’s original intention of helping the United States become great again through similar strategies has become easier to understand.
In Trump’s discourse framework, the Democratic Party’s economic policy has caused three fatal problems:
l The large-scale fiscal stimulus bill and quantitative easing policies have put the United States in a debt crisis;
l The protective policies for Silicon Valley’s high-tech industries lead to mismatch of resources, excessive allocation to high-tech industries and completely abandon traditional industries, causing the US industry to decline;
l The large amount of information gap caused by the government’s active intervention has led to horizontal capital redistribution between different industries, and the widening of the gap between the rich and the poor among industries, which has aggravated the unfairness;
So in this context, the author believes that Trump’s issuance of coins two days before officially taking over as president is not just the purpose of making money, but to send a signal that is to hope to provide Web3 with its supply side to regulateIn the process of reform, becoming the core base of a new round of financial innovation has laid a foundation.And the benefits of doing this are also obvious:
1. It can bypass the constraints of complex interest groups formed in the traditional financial field that the Democratic Party has operated for many years;
2. The open, transparent and trustless nature of Web3 is consistent with neoliberalism. By clearing the intervention of all authoritative organizations, adjusting the distribution of interests entirely from the market mechanism will help promote the practice of neoliberalism.
3. Currently, most assets in the Web3 world are still priced in US dollars, so promoting related assets is also of positive significance for maintaining US dollar hegemony;
4. The anti-censorship characteristics of Web3 make capital flow more efficient, and can bypass the financial policy restrictions of other sovereign countries and give full play to the financial advantages of the United States;
Of course, the impact caused by doing so is also obvious. The most direct negative impact must be similar to that in 2008, and it will inevitably be greater and more profound than the impact of the financial crisis in 2008, with higher financial systemic risks, and between the rich and poor.The vertical wealth redistribution is inevitable.But the time period for this risk to occur must be medium and long term.To sum up, the author is very interested in the direction of financial innovation based on Web3 and traditional American industries in the next two years and will continue to pay attention to it.Interested friends are also welcome to discuss with the author.
