Zhang Wuchang: Why Can I Accurately Infer The Chinese Economic Road?

Section 1 of system cost: limitation and behavior

(Wuchang press: here in November 30th, I would like to ask my classmates' opinions. Should we deal with the complicated topic of paction cost in two volumes or write it at once? Let the parts overlap in the next volume.

The students unanimously chose to write once, and would rather repeat it again.

Well, I'll take their choice.

The generalized cost of paction is

Let me briefly say it again.

It is the basic assumption or axiom of economics that individuals strive for maximization of interests.

This struggle is constrained by constraint.

There are many kinds of constraints, which can be categorized, and the division between classes and classes is not easy to define.

These confusion is not difficult to handle, but can also be tolerated.

To avoid it, we should not repeat the limited imports because of confusion.

Section 1: limitation pformation and behavior explanation

There is only one basic economic method for explaining behavior or explaining phenomena caused by human behavior.

That is to deduce the change of behavior from the limitation, and the connection between the two must be based on simple theory.

The emphasis here is "change".

The invariable behavior does not change, and the invariable behavior is incapable of inferring or explaining.

It is a change to infer a person walking east or west, eating or sleeping.

It is important to note that any change in limitation or behavior is "marginal" and the "occasion" can be very small.

Calculus is said to be small.

In fact, from the change of the universe, small can be seen as big, big can be seen as small.

Knowing how to look at problems from a marginal perspective is the most important technology.

Math and technology are two different things. Don't make a mistake.

Analytical technology is important because it is the power of logical reasoning.

This is not enough, mathematics or assistance, although the equation is full of paper, but the content is empty.

To interpret behavior or phenomenon with limited change, this change needs to be observed and measured.

Simplify the admissible, but must be roughly consistent with the limitations of the real world.

The limited change or phenomenon that can not be observed is a topic outside the positivist science. The theory involves only describing some credible stories, but without observing them, it is impossible to verify whether it is right or wrong.

It is logical to see actions or intentions that cannot be seen by game, blackmail, opportunism, and so on.

It can't be.

Two categories of limitations

All factors restricting human behavior are limited.

There are many limitations. There are two ways to categorization.

One is to look at it at a price or price, and the change in price or price must be relative (see Chapter fifth of Science) sixth.

Here, the theory of inference is the law of demand.

All other limitations and their pformation, such as income, resources and property rights, belong to the second category.

These second kinds of limitations are usually handled by the axiom of maximizing personal interests.

From the point of view of interpretation behavior, this axiom is not very useful because of its lack of binding force.

For example, there is a income expansion path in the textbook analysis of economics textbook. It is said that the income of an individual increases when the income of a person increases, but which one will increase more or less, or even the choice of certain articles will be reduced.

Affirmative constraints are not many, and interpretation is not easy to have the verification meaning that can be overturned by actions.

This leads me to what I would like to say: other limitations beyond price or price, which will more or less lead to a relative change in price or price.

This is also to say that the limited changes beyond the price or cost may not necessarily bring about relative changes, but careful examination usually happens.

As long as we can launch the latter pformation, the law of demand is needed again.

That is to say, no matter what limitations change, we should try to find the price or price changes, and then put the law of demand in front.

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I say "price or price" because the former usually refers to the price of the market.

Countless acts do not go through the market.

Friendship, reputation and other non money goods generally have no market. Robinson's one person world has no market, and China in the people's commune era seldom talks about the market.

Without market, the law of demand is still available, but it should replace market price or price with cost.

Basically, the principle of dealing with any change in limits is to try to turn the pformation into a cost change and then come up with the law of demand.

With market and market price changes, the application of demand law is more convenient.

The second method of classifying limitations is also used by me. There are social and social differences.

This means that some limitations do not exist in society, while others do not exist.

Society means more than one person's world.

Once said, only because Robinson's world is more than one person, the difficulty of economic analysis has risen more than a hundred times.

Competition is limited, property rights are limited, market prices are limited, politics is limited, contracts are limited, customs and religions are also limitations, and these limitations do not exist in one person world.

The law of demand in a person's world, because it can be seen from the cost, is no doubt important; there is a market in the society, the market price, the law of demand.

However, in the society, other limitations beyond the market price are complex and changeable.

Economics has been systematically developed for more than 200 years, and the truly explanatory theory is still surrounded by the law of demand.

Personal experience is that this law is enough.

The problem is that people who use this law do not know how to handle limited changes.

Interaction derivation processing difficulties

Because of the limitations of social existence, paction costs are the most difficult to deal with.

Broadly speaking, these should be called the limitations of institutional costs, not as middlemen's commission.

Reading the third section of this chapter, students may feel dizzy.

From the interaction between people, selfish interests can lead to the reduction or increase of these costs.

No function curve can be drawn.

In the late 70s of last century, game theory was used to deal with stories.

Transaction or institutional costs are not easy to handle, but not impossible to deal with.

In 1981, I correctly deduced that China would take the road of market economy, based on the fact that the change of paction or system cost observed at that time would be stable.

I have made many inferences which are far from small paction costs, but they are accurate, but like any empirical scientific inference, the change based on the specified limitations will continue to be stable.

All empirical science has the "stability" requirement for the verification conditions (test conditions, generally known as the limitations of Economics).

There is no doubt that we need to know more about the real world by changing the limitations of trading or institutional costs, and we need to know more about the real points.

This is the requirement for positivist science to operate in laboratories.

In 1998, I published the paction cost category in English, one of which was widely recognized by friends in the field.

I wrote: "paction costs are not a young assistant professor who needs to win lifelong employment contracts.

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(one of the costs of the system is unfinished)