The market is so wonderful, why do we often dislike it?

The following article comes from the Economic Observer, the author Liu Jin

To the enterprise, to the society, to let the management go to a step and get better results or more efficient, you must learn to use more "market thinking".

Author | Liu Jin

Source | "Economic Observer"

Liu Jin

Professor of Accounting and Finance of Changjiang Business School

Director of Investment Research Center

There is supply and demand in the market, which is a place where the buyers and sellers will never stop bargaining.

If the price is too low, buy too little and sell less, it will increase the price;

If the price is too high, buy more and buy less, it will fall.

If the price is right, it does not rise or fall, we will say that supply and demand balance.

This is the "invisible hand" regulating the supply and demand relationship of the market.

Why is the market very wonderful?

It is because it does not require external intervention, but the order that is naturally formed in the disorderly state.

Under this order, as long as the market price can be affords, the buyer can meet their own needs; the seller can rely on market price organization to organize production, while making money while making money.

Whether the buyer or the seller, it is private interest, but it is the core issue in society. From the perspective of traditional Chinese philosophy, the natural balance of the market belongs to "Taoism Nature" and "governing".

Why can the market be ruled by inaction?

The important characteristics of the market are freedom, transparency and legal system. The transparent and legal system is to maintain the fairness and justice of the market. Everyone is equal in the face of the price. Freedom guarantees that everyone's private domain information can be fully expressed.

The overall demand and total supply in the market are the concept of the collection. The demand and supply of the monomer knows only each market participant and God knows it. In order to obtain information with total supply and overall demand to reach market balance, each participant must be entered into the process of bargaining, and private domain information is expressed.

The efficiency of the market lies in the maximum use of all economic resources: we have no way to allow someone in the market to gain greater benefits on the basis of not harming the interests of others.

Different effects of market and administrative means

The method of balanced market balance is administrative management, and the general form is to directly control the supply and price.

Why control supply and price at the same time? Because demand comes from people's hearts, people's hearts are impermanent and cannot be directly controlled. Administrative management can only target supply and price.

But the problem is that everyone is different.

If each Chinese has 10 demand every day, 1.4 billion people have 14 billion people; one demand changes every day, and 1.4 billion pieces must be changed;

If each administrative official can manage 10 needs, at least 140 million officials are required. Everyone is an official, who will do production and service?

Therefore, administrative management must have the components of shooting heads and cutting -edge. If there is too much supply to a certain commodity, the price is too low and there is no profit, which will cause waste and losses.

The total social resources are limited. If there is too much product supply, there will be insufficient supply to other goods. Conversely, the price is too high, the people can't bear it, and they have to limit the price.

However, the price limit does not reduce demand, the demand is greater than the supply, and the shortage is generated. At this time, the black market responded, and corruption became popular, and the "supply coupons" representing administrative power often turned directly into hard currency and money printing machines.

It is precisely because administrative management cannot solve the information in supply and demand that waste, shortage, black markets, and corruption are the most common by -products in the administrative management market.

We use the governance of traffic congestion in the world to look at the different effects of the market and administrative means. Too many private cars have caused traffic jams to be a common problem in many big cities. There are generally three governance methods.

The first is the city like New York that depends on the market.

Many people can afford a car but can't afford it. The cost of parking is extremely high. If the decree is not sound, you can stop freely, which will naturally cause extremely serious congestion.

If the law is sound and illegal parking is facing high fines, the real use cost of the car will be much higher than the purchase cost.

On the other hand, if subway, bus, and taxis are extremely convenient, most people will choose public transportation. The key to solving the problem in the market itself lies in strict decree.

The second is active management like Singapore and Shanghai.

The government controls the total number of private cars and sells car purchase permits to car buyers by auction. In addition to high parking fees, private car users also add a car purchase license fee.

This also uses the market to induce citizens to abandon private cars and use public transportation.

Third, when you introduce car purchase licenses such as Beijing, the distribution method is a lottery.

In fact, the lottery is an administrative intervention that distributes the scarcity resources (car purchase permit) to control the price.

However, according to the experience of Singapore and Shanghai, the actual market price of the Beijing car purchase certificate is about 100,000 yuan, and the total cost of 100,000 yuan per year is 10 billion yuan.

This is equivalent to the government issued a red envelope of 10 billion yuan each year. Naturally, there are many people grabbing red envelopes, but the winning rate is less than 1%.

Is this a good way?

First, the government lost 10 billion yuan in fiscal revenue.

Secondly, less than 1%of the winning rate indicates that the probability of winning the winning is not the person who needs to buy a car, nor is it the person who can buy the car, but the luckiest person.

The luckiest person gets this asset, and it may not be used by themselves (the cost of maintenance in Beijing is also very high), but to try to make the assets realize and use the gray method to rent the car purchase certificate to the person who needs the car or the most capable person who has the most capable capabilities. Essence Therefore, illegal lease contracts and fake marriage have become chaos in the market, and these people are also accused of not adopting rules. Do you not know that the culprit does not use the basic laws of the market.

Some people say that the lottery is for fairness and justice. If you auction, wouldn't you only have a rich person to drive?

But if you think about it carefully, in the international metropolis, cheap and convenient public transportation is people's livelihood, and private cars are luxury. The government can invest the revenue from the auction into services to increase public transportation.

Those who need driving most can buy the car legally;

The most capable person can pay for the improvement of public transport while getting convenient;

Citizens who do not drive and increase urban congestion can get better public transportation services. Isn't it the United States? The lottery is damaged by the three parties.

To further promote market thinking, the government can also acquire car places from the owners through bidding.

The repurchase number may be auctioned at a higher price, so that the private car stock will not be increased, but also the government's fiscal revenue will be increased;

Or can it be destroyed directly to the quota that can be bought at a low price, while reducing the stock of private cars while reducing the congestion of transportation.

Two resistance

Since the market is so mysterious, why do people often unwilling to use market means?

There are two reasons behind.

The first is cognitive issues.

For example, the planned economy after the founding of the People's Republic of China is an attempt to drive, not from practical experience. As a result, economic stagnation and poverty of the people.

The "reform" in reform and opening up mainly uses market mechanisms to replace administrative instructions. As a result, China enters the ranks of high -income from the poorest country in the world.

Why do you have to make mistakes and make mistakes to the roundabout process? This is a cognitive issue.

Obviously, at the beginning of the founding of the People's Republic of China, we did not understand the market mechanism and functions, but the theoretical inference of superstition plan economy. To break this cognitive limitations, it is necessary to fully liberate ideas.

Without the discussion of truth standards in the early days of reform and opening up, and no "practice is the only criterion for testing truth", it would be difficult for us to return to reality, break the old thinking, and embark on the correct path of the market economy.

It is not easy to really get "market thinking". Because the logic of administrative control is clear and the effect is immediate. Those who have not trained through market thinking can easily embark on the road of administrative control.

Those who have worked in strict institutions for a long time are basically relying on administrative control. Hold the hammer with your hand, seeing all the problems like a nail.

At the same time, due to the fatal disadvantages of administrative control, it is often "dying as soon as possible, and it will be chaotic when it is released." Prices are because administrative control cannot solve complicated information. As soon as it is released, it is because "letting" is equivalent to "no matter". At the same time, it has not introduced the market mechanism to re -establish the order.

Even entrepreneurs who have been in the market for many years often cannot completely grasp market thinking.

Enterprises from childhood to large to strong, inseparable from entrepreneurial dedication. Many successful entrepreneurs are the so -called "workaholic", and there is no detail in managing enterprises.

Do n’t you know that a person ’s time is limited, and the enterprise can do things in the same time; if the enterprise grows up, it must be“ pressing the gourd to float and the scoop ”.

To cross this bottleneck, entrepreneurs need to divide the management, empower the opponent, enhance the transparency of management, use the incentive mechanism to replace administrative instructions, and allow the organization's ability to replace personal abilities.

This kind of inaction is in line with market thinking, and the core is to avoid the pathological dependence of direct control. If entrepreneurs cannot have such a change in their cognition, the company will grow up to a certain degree of growth, and entrepreneurs will not find a way to solve the problem.

The second reason for people to be keen to weaken market methods is the solidification of interests.

Any premise of any administrative regulation is that "officials" are in charge. If the method is market rules, officials lose power.

The core of market rules is freedom, transparency, and legal system. The role of officials can only be the core characteristics of maintaining the market and cannot achieve their "personal value".

This is like a football game. The player is a market participant and the referee is an official. The referee can only maintain the fairness and fairness of the game, but it cannot affect the victory and defeat of the game.

If the officials themselves are "ideal", they hope to directly affect the results of the game, and naturally they must abandon the market method and adopt administrative means.

However, as mentioned earlier, managing the market with administrative means will inevitably bring waste or shortage and the black market and corruption that is generated.

From an economic point of view, rent -seeking and corruption are the realization of administrative power. The black market is a market, and the conditions for the production of the black market are often administrative control.

Therefore, if we compare administrative control and market mechanism, there are many people who know the former, and few people know the latter.

Social or enterprises must allow management to go to a step and get better results or higher efficiency, and we must learn to use less administrative management and use more market mechanisms.

The picture in the article comes from Tuwu's creativity, and the reprint needs to be authorized.

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