Necessity to reform economic mechanism not accommodating the rapidly developing technologies and productivity
The global economic mechanism is no exception. Before modern technologies and productivity began to develop rapidly, current mechanism basically met the requirement of productivity development and was able to maintain a harmonious balance of various sectors of the society. However, we have stepped up from the age of machinery industry to the "new era" in which high electronic technologies promote the rapid advancement of productivity, entailing corresponding change of the global economic mechanism, otherwise excessive oversupply will occur, leading to serious waste of resources to the extent of extreme shortage. Market law governs the development of any economy; the violation of this law is also an important factor leading to global economic crisis.
Subprime mortgage crisis is the product of outdated, unrestricted and unregulated free competition. Speculation not based on demand results in false and inflated market price which violates the market laws. The economic crisis as we suffer today arises because the governments do not take necessary regulatory measures to maintain substantive conformity to the market laws of supply and demand and do not supervise the returns on mortgage of financial institutions, etc. The same problem happened in Japan in the 1990s, but it is a lesson not learned and now things have gotten even worse. Therefore, I think improvements and reforms need to be made in the present economic theories and economic mechanisms.
The ongoing global economic crisis reflects our knowledge about economic development is inadequate and fallen behind the requirements of this "new era", and that is why wrong economic predictions and policies were made. We also misjudge the true level of current high technologies, and we do not duly respond to the conditions of natural environment and social needs and prioritize the development of new and high technologies and productivity in order to effectively and extensively promote economic and social advancement. From the perspective of macroeconomic development, we definitely need a updated "comprehensive knowledge" and system which enable us to take related factors such as natural environment, energy supply, social movements, etc. into consideration when making global economic planning.
Modern hi-tech-based productivity requires us to propose "a theory of comprehensive planning of global economy and relevant factors", which is able to make in-depth analysis of economic and natural environment developments and provide a guide for the future directions of technologies, productivity and economy. It is also necessary to set up a "global macro economy planning mechanism". Such a mechanism not only provides simple economic guide like in the past, but also makes comprehensive analysis on the ever changing levels and directions of technologies and relevant factors, the conditions of nature and resources, etc., in a bid to maintain a healthy and balanced ecosystem, invent no-pollution, limitless energies and provide an overall rational guidance for the development of technologies, productivity, market activities and global economy.
Free competition against the market law in a current condition with rapidly developing technologies and productivity will be "cut-throat" competition disregarding ethics, ecological balance and human survival. Such unregulated competition against "the principle of comprehensive balance of nature" will result in repeated economic, ecological and human survival crises.
We can say that the rapidly developing technologies and productivity have brought the humankind to a new era, an era of borderless, integrated global economy that is totally different from the age of country-based economic system.
The ongoing economic crisis is not frightful; as long as the government can guarantee the "supply of daily necessities" of people (by guaranteeing reliable supply of agricultural and related products, which is not difficult for most countries), and not blindly put the current "unsafe" economic system to operation. More importantly, we need to find scientific methods accommodating the developments of the new era and establish rational and effective mechanism to ensure the "proper" and "healthy" operation of the social and economic system.
In fact, this critical economic crisis provides an opportunity to save the human community. If the present system endangering the ecosystem of human and nature does not come to a stop, such self-destruction behavior will lead all humankind to its demise in the near future, leading the so-called "famous people" and "great achievements" to ruins. Therefore, now is a "time" for profound reflections. If we can truly learn from the crisis, follow the rule of "the comprehensive balance of universal energy system movement", commit to protect and perfect Mother Nature, and develop global economy in a unified manner, the crisis will create a significant "turning point" for us to embark on the track of healthy, sustained and rapid development.
Written by Jixing Li