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Please, China's Economic Managers — Learn Chinese Medicine First

2007/12/10 21:16:19

In October, this ID wrote a post titled "China's Economy Now Needs Rectification"—frankly, by the time I got around to writing it, it was already late out of sheer laziness, but for some people even that was too ahead of its time. Now, two months later, all of this has gradually become reality.

Of course, in October everyone was busy solving political problems, and nobody had time to deal with economic issues. Being able to respond by December is actually quite efficient. It's like going to the hospital—if you're unfortunate enough to have to queue for registration with no back-door connections, then queuing at the front entrance and surviving long enough to be seen is just your luck. At Beijing's most famous hospitals, the chances of finding a so-called renowned doctor through normal registration when you have an emergency are even smaller than the Chinese national team winning the World Cup.

Speaking of doctors, I can't help but mention Traditional Chinese Medicine. Nowadays, plenty of fools start spewing nonsense without even understanding what TCM is, how it diagnoses, or what the underlying mechanisms are—these people aren't even fit to be used as filling for meat buns.

Everything in the world is the result of combined forces, and human illness is no different. The stock market is a simple system with only three possible outcomes: up, flat, or down. But everything else is far more complex—for example, the human body's ailments. Starting from any given point, the subsequent possible states are never limited to just three. You cannot describe the state of the human body using just "up, flat, down"—that's far too crude, with zero research or operational value.

TCM actually has similarities to this ID's stock theory, though this ID has numerous corrections to make to traditional TCM, which we'll discuss when there's time. If one takes a unified perspective to study stocks and the human body, then the stock market is a system with three possible states after combined forces, while the human body is a system with more than three possible states after combined forces.

The economy is similar to the human body. Without the perspective of TCM, you can't even understand human ailments—so how could you understand the ailments of a nation or its economy? Treating illness and governing a nation share the same principles.

In this ID's stock theory: the first-type buy/sell point is "treating before illness manifests"; the second-type buy/sell point is "treating when illness is imminent"; the third-type buy/sell point is "treating after illness has struck"—this too is in harmony with TCM.

This principle of "before illness—imminent illness—manifest illness" applies equally to the economy. By this standard, whether a nation's economic managers qualify as superior practitioners, inferior practitioners, or outright incompetents can be objectively measured. This standard cannot be faked through anyone's boasting—it stands objectively right there, visible to 1.3 billion pairs of eyes.

Of course, as long as there's "treatment," there's the question of methods. The so-called "governance through non-action" is utter nonsense. Economic systems are not naturally perfect. The premise of "governance through non-action" assumes an innately perfect system that can naturally regulate and coordinate itself—even the extreme libertarian economic fundamentalists who peddle this rubbish probably dare not claim nowadays that economic systems possess such divine powers.

For systems more complex than stocks, like the human body and the economy, you cannot simplify combined forces into a single directional force. In those complex systems, the combined forces are also systemic, with multi-dimensional nonlinear force vectors. Therefore, the corresponding treatment must necessarily also be multi-dimensional and nonlinear.

This ID is deeply skeptical that someone who can't even operate or manipulate stocks properly could serve as a nation's economic manager. Because stocks represent a single-dimensional linear system—just two forces, buying and selling—a billion times simpler than the economy or the human body. Can't even figure out stocks, yet you want to manage the economy? Laughable.