The world's funniest economics stories

Chapter 13 "News 30 Minutes" to take the pulse and analyze hot economic issues (3)
According to the specific purpose of dumping, commodity dumping can be divided into three forms: accidental dumping, intermittent dumping and continuous dumping.

Accidental dumping usually refers to the backlog of inventory that is difficult to sell in the domestic market because the peak sales season in the domestic market has passed, or the company has changed its business to other businesses, and is sold at a lower price in the foreign market.Due to the short duration and small quantity of such dumping, there is no particularly large adverse effect on similar industries in the importing country, and consumers in the importing country benefit instead and obtain cheap goods. Therefore, the importing country generally does not take anti-dumping measures against such occasional dumping. measure.

Intermittent dumping refers to selling in foreign markets at a price lower than the domestic price or lower than the cost to achieve the purpose of beating competitors and forming a monopoly.After defeating all or most of the competitors, use monopoly power to raise prices to obtain high monopoly profits.This kind of dumping violates the principle of fair competition and disrupts the international economic and trade order, so it is restricted by the anti-dumping laws of various countries.

Continuous dumping refers to the indefinite and continuous sale of goods in foreign markets at prices lower than those in domestic markets.

At present, whether in news reports or on the Internet, we often hear about many Chinese foreign trade companies being accused of dumping goods by some countries and anti-dumping investigations against them.The anti-dumping disputes one after another have made China the country that has suffered the most anti-dumping.

Tariff barriers refer to measures to impose high tariffs on certain foreign goods to prevent the import of them.Through the collection of various high import taxes, it will form an obstacle to the entry of foreign goods into the domestic market, which can increase the cost of imported goods and weaken their competitiveness, thereby protecting domestic production and the domestic market.It is also an important means of forcing the other party to compromise and make concessions in trade negotiations.The World Trade Organization galvanized opposition to tariff barriers and negotiated their sharp reductions.

Common tariff barriers have the following forms: tariff peaks, tariff escalation, tariff quotas, conscientious tariffs, and ad valorem tariffs.

7. It is all caused by reselling approval documents--rent-seeking theory
Once upon a time, millions of sheep lived in a natural pasture.God ordained that the pastures be shared by the flock of sheep.After a while, a public servant named Wei Guo said to God that the sheep can't manage themselves, a lot of grass is wasted, and the sheep don't eat well.He asked God to let him manage the pasture so that the sheep would have a better life.God agreed.

When Wei Guo first started to manage the ranch, although the sheep lived a little bit reluctantly, they could still maintain a basic life.But not long after, Wei Guo announced that in order to adapt to modernization, God decided to allocate funds to build a well-off sheep village.After the notification of the news, Wei Guo vowed to the sheep that he would redecorate the pasture so that all the sheep could live a well-off life.

In order to fulfill his oath, Wei Guo specially invited someone to run the ranch with him.Under this person's planning, a part of the ranch was developed into a "well-off sheep pen".The sheep looked very happy, but when they decided to move into the new sheepfold, they were told by the person who developed the new sheepfold that if they wanted to live there, they had to pay first.The sheep asked in puzzlement, didn't God allocate funds to build it?The person who developed the sheepfold said that the construction of the sheepfold was all paid for by himself, and he also gave a lot of money to the ranch manager Wei Guo.

The sheep ran to Wei Guo to confirm the developer's statement. Wei Guo said that after asking others to build a new sheepfold, it was only after the real investment that the budget and the actual expenditure were very different. It was not enough to use up all the funds allocated by God, so The new sheepfold was built by the developer himself, so of course he will ask you for money.

The sheep were confused by Wei Guo?Have all the billions given by God been used up?It seems that this well-off sheepfold is indeed expensive.So the sheep took out their only savings one after another.At this time, the developer has another heart to say.He said that this part of the ranch has been approved by Wei Guo for modernization, so not only the sheepfold is his, but even the land is his.If you want to move in, you have to add several times more money on the original basis.

In the end, the helpless sheep were shunted.Some sheep that got rich first took out all their savings and competed to live in the new sheepfold.And those sheep who have no financial ability, when they protested to Wei Guo, told them that there is another place to live outside of this pasture, but the conditions are relatively poor.After hearing Wei Guo's words, the sheep accepted Wei Guo's arrangement gratefully, thinking that they could have a shelter.

Unfortunately, after 5 years, all the pastures have achieved moderate prosperity.With his fat belly sticking out, Wei Guo drank and mingled with the builders of the new sheepfold.But the sheep are heavily in debt for housing.And in order to repay the loan, they have to work for the developer...

The idea of ​​rent-seeking theory first sprouted in a paper in 1967 by Tullock, known as the "father of rent-seeking theory", "On the Welfare Costs of Taxes, Monopoly and Stealing".His point is that the theory of perfect competition underestimates the social welfare caused by deviation from competition, and in fact the social welfare losses caused by taxes, tariffs and monopolies far exceed the usual estimates.The reason is that people will compete for income through various dredging activities, that is, rent-seeking.Under the condition of competitive rent-seeking, everyone thinks it is worthwhile to spend a fee similar to the expected benefit.

The condition for rent-seeking is the existence of institutions or policies that restrict market entry or market competition.It is often associated with the prerogative of government intervention.Under the conditions of government intervention, profit-seeking entrepreneurs find it difficult to seek profits, and turn to rent-seeking activities to obtain additional income.

Tullock says, "Suppose an innovative entrepreneur who, instead of inventing a new good, service, or process of production, finds a way to convince the government that he should be granted a monopoly and that the government will Empower this by shutting out all potential entrants." No value is created in the process.Indeed, monopoly involves a pure loss of value.Earned rents reflect the shift of value from the average consumer to favored rent-seekers, and the sheer loss of value in the process.Wei Guo, a ranch manager, took money from the developer, embezzled public funds, and then indirectly squeezed money from sheep.As an intermediary between the developer and the sheep, he expanded his pockets by reselling the approval documents, but he suffered a lot from the sheep on the pasture.This story tells us the harm caused by reselling approval documents to consumers.

The essence of rent-seeking behavior is the transaction of power and money.This behavior itself does not create any wealth, but will cause a great waste of social resources.The reselling of approvals will cause commodity prices to rise, and the naive market economy will be seriously injured.

For Wei Guo, he used his privilege as a manager to sell the construction rights approved by God to the builders at a high price, so that he not only received the funds allocated by God, but also used his privileges to resell the sheep's land development rights to developers , earn a fortune from it again.

The developer, on the other hand, used the sheep's resources to renovate the original sheep's land and sell it to the sheep at a price higher than that paid to Wei Guo, making huge profits from it.The privileges owned by the State of Wei refer to the right to operate some rare commodities given by the government, or a kind of monopoly operation allowed by the policy.

This kind of privilege undermines the fairness of the market, making it necessary to pay higher prices when purchasing rare commodities, and it also potentially affects the interests of producers, because they can produce high-quality products at a lower cost. cheap goods, but not allowed.

Three levels of rent-seeking: There are three levels of rent-seeking, one is rent-seeking for additional income generated by government activities;In this regard, Tullock gave an example: such as limiting the number of rental cars, that is, only issuing a certain number of licenses.

8. The quarrel between Bush Jr. and Sarkozy--Government bailout
Adam Smith, the originator of economics, expounded the idea that the market is omnipotent in his book "The Wealth of Nations".He compared the market to an invisible hand. When supply and demand are not equal, the market can always rebalance supply and demand through price changes.Since then, people have come to believe that the government should not interfere with the market, and that a free market is the engine of economic progress.In this process, the government only plays an extremely simple and passive guardianship role.However, under the influence of the market economic mechanism, the government should not be allowed to do things that rely on the market to achieve higher efficiency.State institutions only perform some essential and important tasks, such as protecting private property from encroachment, but never directly intervene in the operation of the economy.

However, the Great Depression in the 20s changed all of this. People watched banks collapse one after another, companies closed down one after another, and workers were laid off one by one, while the market itself was unable to make timely and effective adjustments.So Roosevelt's New Deal opened up a precedent for government interventionism, and Keynes' theory of government intervention was recognized by most people.However, the question of whether the government should bail out the city has been arguing for hundreds of years without any result. This debate has not stopped. Let's look at the debate between Bush Jr., who believes in liberalism, and Sarkozy, who believes in government interventionism.

On November 2008, 11, Bush Jr. said at the beginning of his tenure: "In the process of dealing with this once-in-a-century financial crisis, the free market principle of capitalism should not be abandoned, because it can guarantee our economic growth."

In response to this problem, Sarkozy later said: "Currently encountering this kind of crisis is the time for our government to do a lot, and we must ensure that the government plays an important role in the crisis."

Although the two sides have been arguing endlessly and have different ways to solve the problem, after Bush Jr. retired from politics, the U.S. government began to do its best to rescue enterprises, support banks, and stimulate the market under the leadership of Obama, so as to maintain people's confidence in the economy and help the U.S. economy to go out of business. trough.Governments of various countries have also introduced policies to save their economies.As for whether the government should bail out the market, there is still no conclusion, and the academic circles will continue to debate.

Rescuing the city is like putting out a fire.If the fire in the forest is not rescued, it will naturally go out when it burns out, and new grass and trees will slowly grow up after the cold and heat; if it is rescued properly, the trunk will not fall, and the next spring will be restored to its original state and flourish.

Government bailout refers to the behavior of the government intervening in the market through fiscal taxation and regulatory powers to maintain normal economic order and stimulate economic development when the economic performance deteriorates, demand shrinks, and business operations are difficult.

When a country's economy is in depression, the government should use the "visible hand" to build public facilities through government investment and regulation, so as to stimulate the economy and get the economy out of the depression.In this regard, the famous British economist Keynes once pointed out that the government's necessary intervention in the national economy in a certain period of time plays a very important role in the restoration of the entire market order.He believes that wherever government regulation can provide better services than the market, and where individuals cannot compete on an equal footing, government intervention should be used to solve the problem.

In the modern market development, government rescue has a very positive side.Therefore, according to the performance of different market economies, in order to overcome the occurrence of "market failure" and "government failure", we should hope for the tacit cooperation of "two hands".

Keynes' law, the American economist Keynes proposed that demand can create its own supply, so the government should take measures to stimulate demand to stabilize the economy.

Keynes believed that it is impossible to guarantee stable economic growth and achieve full employment only by free mechanisms, and state intervention must be strengthened.Based on this, he proposed that when there is insufficient demand, the government should take measures to stimulate demand, and the increase in total demand can increase income and consumption as investment increases, and the economy can grow steadily and achieve full employment. Production increased.This round point is regarded as a law by the followers of Keynes, so it is called Keynes' law.

(End of this chapter)