The world's funniest economics stories

Chapter 5 Thinking like an economist gives you the magic power to see through the world (1)
1. When the miser is the most generous--commodity
Ximen Qing is the protagonist in the classic literary masterpiece "Jin Ping Mei". This person can be said to have committed all kinds of evil. In addition to being very despicable in behavior and dissolute in life, he is also a complete miser.But this miser is not always stingy, he is also very generous sometimes, especially after he climbed up to the treacherous minister Cai Jing at that time, he did not hesitate to spend a lot of money to invite Cai Jing to be his backer.

Ximenqing gave Cai Jing birthday gifts twice, which all reflected his shrewd character.

The first time was in Chapter 20 of No.[-], when Yu Laibao and Wu Dian'en escorted them to give presents, which were "four one-foot-tall silver men with four suns holding birthdays, two golden longevity pots, two pairs of jade and peach cups, two sets of Python clothes woven in Hangzhou. There are also silks and satins from Nanjing, and lamb wine."Cai Jing's impression is: "but seeing the yellow golden pot and jade cup, the white swaying reduces the immortal; good craftsmanship takes a lot of time, and skillful craftsmen are rare. Splendid python clothes, colorful; Nanjing satin, golden and green; Tangyang wine, Stick the cover all the time; different fruits are new, and the boxes are stacked high."

Cai Jing was very happy, and filled out three official edicts on the spot: one appointed Ximen Qing as "Jinwu Weiyi Zuo Deputy Qianhu, Shandong and other places to punish the criminals", and one appointed Wu Dian'en, who was escorting the gift, to be the postman of Qinghe County , an appointment of Laibao as the school lieutenant of Shandong Yunwangfu.This is a blatant "power-for-money transaction", where the money is paid and the goods are delivered. Fortunately, it is cashed on the spot and there is no default.

The second birthday gift was delivered on the fifth occasion, and Ximen Qing personally escorted it, with a total of 20 loads of gifts.There is a gift list that clearly states: a set of big red python robes, a set of official green dragon robes; 20 pieces of Han brocade, 20 pieces of Shu brocade, 20 pieces of Huohuan cloth, 20 pieces of Western cloth, and 40 pieces of other floral ruler heads; A circle of jade belts, a circle of gold inlaid Qinanxiang belts; 10 pairs of jade cups and rhinoceros cups each, 8 red gold Zanhuajue cups; 10 bright pearls.Another 200 taels of gold.

This gift list may be exaggerated, but the novelist wrote this to emphasize: Ximen Qing is different from the old-fashioned businessman, he did not get rich by blindly thrift.In the tide of the rise of the commodity economy in the Ming Dynasty, only businessmen who dared to make "political investments" could have a bright future.Cai Taishi was very happy to celebrate his birthday this time. On his birthday, he specially left Ximen Qing to drink alone. This was a very high honor, and it also confirmed the status of Ximen Qing, a businessman from other provinces, in Cai Taishi's eyes.

This story allows us to understand what is called "commodity".

A commodity is a product of labor produced for exchange [or for exchange] that is useful to others or to society.The basic attributes of commodities are value and use value.Value is the essential attribute of commodities, and use value is the natural attribute of commodities.Commodities in the narrow sense only refer to tangible products that meet the definition; commodities in the broad sense can be intangible services in addition to tangible products.For example, "insurance products", "financial products" and so on.

Generally speaking, for an item to become a commodity, it must meet the following three conditions:
1. As a commodity, it must first be a product of labor.In other words, nothing can be a commodity if it is not a product of labor.

2. As a commodity, it must also be used for exchange.If an item is not exchanged, it cannot be said to be a commodity even though it is a product of labor.

3. Useful to others or society.An item, if it is useless, will not be exchanged, only useful things can be exchanged.

Ximen Qing was very shrewd, he knew that these birthday gifts he gave were not just to repay favors, they were commodities.Under the circumstances at the time, by doing so, he could get more benefits than what he paid, which was considered a deal.

The value of a commodity is the undifferentiated human labor condensed in the commodity.The value of commodities is the unique essential attribute of commodities.

The use value of a commodity is the usefulness of the commodity that can meet people's needs. Different commodities have different use values, which are determined by the natural attributes of the commodity itself; the same commodity has multiple natural attributes, so it has Useful in many ways.

Exchange value refers to the value that can be exchanged for other products when a product is exchanged.

Tangible products, also known as physical products or formal products, are the specific forms of products presented in the market, and also meet a certain demand and specific form of consumers, and are the forms in which core products are realized.It is generally reflected in different aspects, such as: quality level, product features, product styles, and product packaging and branding.The basic utility of the product must be realized through some specific forms.

2. There is also bargaining in the "gentlemen's country" - economic man

In the Chinese classical literary work "Flowers in the Mirror", the author imagines a country known for its etiquette, "Gentlemen's Country". "The cultivator gives way to the fields, and the walker gives way. The common people, rich or poor, behave and talk politely." Everyone here is impartial and selfless.In market transactions, they abide by the principle of "sellers strive to pay high-quality goods and sell low prices, buyers strive to get inferior goods and pay high prices".Below is a specific scenario.

Buyer: I have very little money for you to buy goods, but you think it is too much, which is against your will.

Seller: My goods are neither fresh nor ordinary. Generally speaking, they are not as good as others. It is too much for me to ask you for half the price. How can I charge you the full price?

Buyer: I can tell the good from the bad. It's too unfair to charge half price for such goods.

Seller: If you really want to buy it, you can pay half of the original price, which is fair. If you say the price is too low, then go to another store to see if there is anything more expensive than mine.

In the end, there was no other way, and with the persuasion of the neighbors, the buyer had no choice but to take half of the high-grade goods and half of the low-grade goods and leave angrily.

In the writing of the author Li Ruzhen, there is no fraud, no selfish desires, and a harmonious gentleman country like a paradise shows the most simple nostalgia and the kindest humanity.It is true that such a gentleman's world is what each of us yearns for.In this process, the author uses the pen to describe the ideal to explore human nature.

The ancient sage Mencius said that "at the beginning of human beings, nature is good", while Xunzi made another statement, advocating that "nature is evil", and Li Zongwu went so far as to attribute all the words and deeds of people in the world to "thick" and "black". .For thousands of years, people have never stopped arguing about the origin of human nature.But no matter what the argument on human nature is, the beautiful legend of the "gentlemen's country" is like a mirage, and disappears without a trace after a short stay.When it comes to the market and the economy, in the world of economics, the assumption of human nature is rational economic man.

Rational economic man, also known as "economic man hypothesis", economics studies the problem of maximizing benefits when resources are given under the assumption of rational economic man.For individuals, it is the maximization of income and utility; for enterprises, it is the maximization of profits and the value of corporate assets; for the country, it is the maximization of GDP and social welfare.In other words, economics believes that everyone is a rational economic person, and the goal of all behaviors is only to maximize personal interests.

Rational economic man assumes that people's thinking and behavior are goal-rational, and the only economic benefit they try to obtain is the maximization of material compensation.It can be seen from this that the "gentlemen's country" in the novel will not appear.

In Adam Smith's "The Wealth of Nations", there is a passage that explains rational economic man more clearly: "The food and drink we need every day do not come from the favor of the butcher, the brewer and the baker, but from their own. We don’t say things that arouse their altruism, but we say things that arouse their self-interest; we don’t say what we need, but what is good for them.” This argument shows that there is an exchange between people Relationships, access to food, because everyone wants to get their own best interests.

In economic activities, when a person is faced with several different choices, he always tends to choose the opportunity that can bring him greater economic benefits, that is, he always pursues the greatest benefit.However, self-interest here is not exactly equal to selfishness.In life, the phenomenon of pursuing self-interest but not being selfish also exists.For example, believers who pray devoutly in religion are full of the desire to do good deeds, and when others are happy, they themselves feel very happy.

Preschoolers chase and hide their favorite toys first, and let others choose from the rest.At this point, we can also find the shadow of rational thinking of Homo Econ.Just like children know how to pay attention to their favorite toys, everyone knows their own interests in business activities, and will use the best way to realize their own interests.Although people's "rationality" is limited, because people are not all-knowing and omnipotent, and are often affected by various factors in their behavior, such as the amount of information they possess and other external complex and changeable conditions, everyone will try their best to do what is most beneficial. Make your own decisions, seek advantages and avoid disadvantages.Therefore, people hope to buy "good quality and low price" goods, and will never choose "low quality and high price" goods like people in the "gentlemen's country".

In economics, all people are assumed to be rational economic persons, and this assumption has become the foundation of economics.Without this assumption, people will have no way to understand economic laws, let alone formulate feasible economic policies.But the development of things always has two sides.From another perspective, we should also see that rational economic man is just a human assumption. In real life, it is impossible for people to observe the world from the perspective of economic man everywhere.The assumption of rational economic man is just to admit that rational economic man is an unchangeable human nature. Its existence is only an understanding and guidance of human nature to seek profit. It is admitted that in real economic activities, it is impossible for us to maximize our own interests. Unscrupulous, we must follow the laws of the market economy and the constraints of the legal system, and do not praise self-interest.

Moral man, Adam Smith expounded three other aspects of human nature different from economic man in "The Theory of Moral Sentiments": sympathy, sense of justice, and altruistic tendency of behavior.These are the manifestations of human morality, and this ethical thought was later developed into the theory of "moral man".

Social person, as opposed to "natural person".In sociology, it refers to a person in a complete sense with dual attributes of nature and society.Through socialization, in the process of adapting to the social environment, participating in social life, learning social norms, and fulfilling social roles, natural persons gradually understand themselves, gain social recognition, and obtain the qualifications of social members.

The "social man hypothesis" was put forward by Mayo and others based on the results of the Hawthorne experiment.This hypothesis holds that people pay the most attention to getting along with people around them at work, and material benefits are relatively secondary factors.Mayo said: "Man is a unique social animal, and only by fully devoting himself to the collective can he realize complete 'freedom'."

3. Why do bad money drive out good money--lemon market
Throughout the history of currency development, metal currencies have occupied the market for a long time.With the gradual evolution of human civilization, the currency used by human beings is also in the process of continuous development and increasingly accurate.

Historically, in order to be more convenient to use, people made metal into "money" that is easy to carry, trade and calculate, so this artificially minted currency has a "face value".The emergence of "face value" also makes it possible for a certain metal content in the coin to be different from the face value.For example, the actual content of a gram of gold coin may not be one gram. People can add some other low-value metals to mix and mint it, but it still flows into the market as a gram of gold.

Same face value, different real value.Over time, in buying and selling, currency transactions will naturally become unbalanced. In the 16th century, Britain had a history of "expelling" good money.

In the 16th century, British commercial trade was quite developed. In the trade circulation, some currencies with insufficient value minted during the reign of Queen Mary had the same face value but different actual values.Under such circumstances, people will generally hoard money worth enough, or melt it down or circulate it abroad.In this way, it was the "bad money" of insufficient value that finally flowed back to Britain to pay for trade and circulation, and Britain suffered huge economic losses as a result.Therefore, Queen Elizabeth accepted Gresham's suggestion to restore sufficient fineness to the British coinage, lest full-value coins be "expelled" abroad by under-value coins in trade.

(End of this chapter)