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Don’t Put Blind Faith in Mainstream Economics, Don’t Misunderstood Entrepreneurship

Apr 12-2024   



The making of the Chinese market is a process of creation, in which the innate creativity of humankind is unleashed to the maximum and which is not a result of the optimal allocation of existing resources, said Prof. Zhang Weiying of the NSD in a media interview centered on the role of entrepreneurs.

 

Entrepreneurship, to a large extent, is the imagination and creativity of human beings, and those with entrepreneurial spirit are capable of seeing and doing what others cannot see and do, said Prof. Zhang. Though brimming with uncertainties, the future world awaits humans to create and its shape depends on humans’ choices. Uncertainties are often associated with passivity and externality, yet indeterminacy, Prof. Zhang’s favorite word, consists of endogenous changes that depend on human initiative. Entrepreneurs should not only work out how to adapt to and embrace uncertainties, but also garner an ambition to create the future.

 

For Prof. Zhang, the entirety of mainstream economics, or neo-classic economics, misses research into entrepreneurs owing to its depiction of a world in which resources, consumer preferences, and technology are all given. This is not consistent with the real world, and as a result all economic problems are thought to end up in the so-called optimal allocation. Yet in the real world, none is given and all are created, said Prof. Zhang.

 

Hence his belief that the Chinese market is created and the result of human creativity at its best, rather than the result of optimal allocation of existing resources. Western mainstream economic theories have highly misleading effects on policy making, and their economic principles have given rise to the basic theories for governmental intervention in the economy. Even many economists who have earned the Nobel Prizes are anti-market because they set their calculations to their own criteria and end up with a great deal of unreasonable things. Consequently, they insist that these unreasonable things have to be solved by the government, which for Prof. Zhang is completely wrong.

 

He is fiercely objected to the practice of distilling patterns out of the economy and using them to direct the functioning of society. For him, patterns are the averages on linear regression, but what can change society is not only dots on the line, but also those beyond the line. To illustrate the point, he expounded on the roles of heredity and mutation in biological evolution.

 

For China’s future, Prof. Zhang believed in the importance of building tight collaboration among technological experts, scientists, and entrepreneurs. Contrary to their greedy images in popular caricatures, entrepreneurs derive only marginal benefit from their creations, said Prof. Zhang. With their creativity, like coke ironmaking by Abraham Darby and electric cars by Elon Musk, entrepreneurs are also the biggest heroes in environmental protection. Prof. Zhang maintained that as long as there are entrepreneurial spirit and human creativity, mistakes will be continuously corrected and human progress will be guaranteed.

 

Entrepreneurs need a free environment to put their thoughts into practice. Prof. Zhang said that the law is needed to set out relatively simple and clear rules to define rights and ensure equal rights, as well as root out willful attacks on competitors.

 

Don’t Put Blind Faith in Mainstream Economics, Don’t Misunderstood Entrepreneurship

Apr 12-2024   



The making of the Chinese market is a process of creation, in which the innate creativity of humankind is unleashed to the maximum and which is not a result of the optimal allocation of existing resources, said Prof. Zhang Weiying of the NSD in a media interview centered on the role of entrepreneurs.

 

Entrepreneurship, to a large extent, is the imagination and creativity of human beings, and those with entrepreneurial spirit are capable of seeing and doing what others cannot see and do, said Prof. Zhang. Though brimming with uncertainties, the future world awaits humans to create and its shape depends on humans’ choices. Uncertainties are often associated with passivity and externality, yet indeterminacy, Prof. Zhang’s favorite word, consists of endogenous changes that depend on human initiative. Entrepreneurs should not only work out how to adapt to and embrace uncertainties, but also garner an ambition to create the future.

 

For Prof. Zhang, the entirety of mainstream economics, or neo-classic economics, misses research into entrepreneurs owing to its depiction of a world in which resources, consumer preferences, and technology are all given. This is not consistent with the real world, and as a result all economic problems are thought to end up in the so-called optimal allocation. Yet in the real world, none is given and all are created, said Prof. Zhang.

 

Hence his belief that the Chinese market is created and the result of human creativity at its best, rather than the result of optimal allocation of existing resources. Western mainstream economic theories have highly misleading effects on policy making, and their economic principles have given rise to the basic theories for governmental intervention in the economy. Even many economists who have earned the Nobel Prizes are anti-market because they set their calculations to their own criteria and end up with a great deal of unreasonable things. Consequently, they insist that these unreasonable things have to be solved by the government, which for Prof. Zhang is completely wrong.

 

He is fiercely objected to the practice of distilling patterns out of the economy and using them to direct the functioning of society. For him, patterns are the averages on linear regression, but what can change society is not only dots on the line, but also those beyond the line. To illustrate the point, he expounded on the roles of heredity and mutation in biological evolution.

 

For China’s future, Prof. Zhang believed in the importance of building tight collaboration among technological experts, scientists, and entrepreneurs. Contrary to their greedy images in popular caricatures, entrepreneurs derive only marginal benefit from their creations, said Prof. Zhang. With their creativity, like coke ironmaking by Abraham Darby and electric cars by Elon Musk, entrepreneurs are also the biggest heroes in environmental protection. Prof. Zhang maintained that as long as there are entrepreneurial spirit and human creativity, mistakes will be continuously corrected and human progress will be guaranteed.

 

Entrepreneurs need a free environment to put their thoughts into practice. Prof. Zhang said that the law is needed to set out relatively simple and clear rules to define rights and ensure equal rights, as well as root out willful attacks on competitors.