Xinhua News Agency, Beijing, Feb. 7 (Xinhua) -- Why is the Western economic model not working?
Xinhua News Agency reporter Ye Shuhong.
Recently, there have been a lot of doubts about Western economists and their models in the world. ECB President Christine Lagarde has criticized some economists as "self-contained tribes with a lack of openness to other scientific disciplines". Agence France-Presse commented that economists need to "get out of the comfort zone of electronics** and rigid models". Nobel laureate economist Esther Duflo deprecated herself that economists may have fallen to the bottom of the list of the most trusted professions, and that they are not even as popular as weather forecasters.
Western traditional economics takes the abstract and homogeneous "economic man" as the origin, and the pursuit of economic goals such as "income", "profit" and "GDP" as the behavioral orientation, and constructs a logical framework completely dominated by calculus reasoning, while at the same time excluding other factors such as historical development, humanistic values, and cultural system influences as "distractors", far away from the complexity of reality, and increasingly entering "a formulaic world composed of data models".
Because of the failure of inflation, the Bank of England even hired former Federal Reserve Chairman Ben Bernanke to "take the pulse" of his economic system, and the Bank of Canada decided to replace the old model ...... with a more forward-looking approachPeter van den Haut, chief eurozone economist at ING Bank, points out that "everyone knows that the current economic model does not make a good ** satisfactorily, and that we need to think differently, or at least expand the model by integrating other components".
For a period of time, in the context of the overall positive trend of China's economy, the reports of the West are bullish and bearish, sometimes "collapsing", sometimes "threatening", like a blind man touching an elephant. Some of them are malicious advocates of China's economic collapse, and there are also cognitive biases caused by a lack of comprehensive, objective and dialectical understanding of China's economy.
Whether it is the world economy or the Chinese economy, Western economic models are facing a serious "explanatory power deficit". In the past few decades, economic globalization and the scientific and technological industrial revolution have brought great changes to the world, and many countries have explored unique development models based on their own historical and cultural backgrounds. Hilton Ronett, a professor of public policy and political science at George Mason University in the United States, proposed that the old and new classical economics and neoliberal theories derived from linear thinking and formulas cannot explain the reshaping of the world economic system, and a new theoretical framework should be adopted to explain the construction and evolution of the political and economic system.
China's economic development has always been a typical case of inexplicable and inaccurate Western theoretical models. Historically, Western economists have had several times when China's economy collapsed, and China's economic reforms, which were incorrect in the eyes of mainstream Western theories, were great successes. Some people say that whoever can solve the "mystery of China's economic growth" will win the Nobel Prize in economics. Chinese economist Zhu Tian may offer an enlightening perspective on understanding the limitations of Western economics in explaining China's economy. Through a large number of global comparative studies, he found that under the premise of implementing market-oriented reform and opening up policies, the main differentiating factors that led to China's rapid economic growth in recent decades were not only unique institutions and wise policies, but also traditional Confucian culture, especially the culture of emphasizing savings and education. However, in the ideal modeling of Western economies, the human factor is often "abstracted" by formulas.
To understand China's economy, we need to introduce more humanistic "parameters". Only by returning the cold abstract and homogeneous "economic man" to a more concrete and heterogeneous social and cultural person can we better understand the people-oriented goal orientation and value basis of China's economic policy, understand the internal logic of China's economic operation, and figure out why it can be a "necessary good", why some high-speed railways should be built at a loss, why rural revitalization must be carried out, why the "double carbon" policy must be promoted under great pressure, why lucid waters and lush mountains are invaluable assets, and why" The Belt and Road Initiative is so popular......As the Indian-American economist Amartya Sen said, "Economics should focus on real people", and introducing more humanistic thinking into economics will go a long way in enhancing the explanatory power of mainstream economics and eliminating the philosophical poverty of mainstream economics.