Zhao Yi plans to take advantage of this opportunity to increase mutual trust between the two parties. Only by trusting each other can we face the next problems together and work together to get things done.
“We have just come into contact with the market economy, so we have opened a few special economic zones in the hope of summing up experience.
Under the planned economy environment, the value of some talents cannot be fully reflected. Of course, the situation you mentioned may indeed exist. "The old man took over the conversation and said.
Hearing the old man's words, Zhao Yi smiled and did not answer immediately. Instead, he picked up the tea cup and took a small sip to moisten his throat.
He understands what the old man means. Under the planned economy environment, the value of talents cannot be well reflected, but it is indeed an exaggeration to say that it can reach the current value.
A good measure is that they have not achieved the results they have achieved in their original unit, and they are even far behind. This is true for both the person in charge and the ordinary employees.
Therefore, it is more the companies under Zhao Yi that have made these employees successful. It is the current company that allows them to display their abilities to a greater extent and allows them to obtain the latest management methods and advanced technologies.
Of course, Zhao Yi was not prepared to refute the old man's words, because there was no need. So what if the argument came out with a result
Putting aside this topic, Zhao Yi continued: "In the past, Eagle Sauce also focused on industrial production and despised the domestic market, so most of the industrial products produced by Eagle Sauce were sold to Europe.
This is not a problem in the early stages of industrialization. After all, productivity is not high enough and the external market is not yet saturated, which provides the soil for this development method to survive.
At that time, with the improvement of the technical level of hawk sauce and the development of industrialization, the external market demand did not expand, and the products produced would be backlogged on a large scale.
Then there is the price reduction. If it still doesn't sell, it will be sold at a small profit. If it still doesn't sell, it will be destroyed.
So we can see that during the Great Depression of 1929, dairy farmers chose to dump their milk because they could not sell it. This was also one of the reasons for the birth of the Global Great Depression in 1929.
Then came Roosevelt's New Deal, which through large-scale infrastructure construction allowed people who had lost their jobs to get a job and be able to support their families.
It allows products that were originally unsold to regain a sales outlet, avoiding factory closures and bank bankruptcy.
As a result, the pool of economic water, because of the mixer of infrastructure, forms a cycle that will continue to operate until all economic operations are back on track.
However, in this process, huge economic losses have been caused and huge development time was wasted. At the same time, large-scale infrastructure construction only treats the symptoms but not the root cause. The same economic crisis will form next time due to the continued development of productivity.
After the Great Depression, various countries in Europe and the United States began to pay attention to Ford's measures to increase wages for employees. In 1914, Ford proposed to its employees a salary of $5 per day for working 8 hours a day.
This was considered a bold move at the time, because at that time, most factories in Eagle Sauce were like us, with labor intensity far exceeding 8 hours, and wages at the same time were relatively low.
This creates a phenomenon where employees don’t have much money and cannot afford to consume the products produced in their own factories. They are also invisible people in the product market.
Don’t they need automobile products? I don’t think so, it’s just that they don’t have money. When this principle is extended, it forms a huge paradox, that is, who is consuming the products they work hard to produce.
If the products produced cannot be sold, there is no need to produce at all costs, and the factory can operate less or not at all, thus exacerbating the shrinkage of the market and forming a vicious cycle.
Therefore, Ford's behavior of significantly increasing employee wages was of historical significance. However, it did not gain the recognition of many people at the time, and it was unable to change the general environment. The economic crisis still came as expected.
Of course, shortening employees' working hours will, firstly, allow employees to have more rest time and maintain good physical and mental health. Only when employees feel comfortable can work efficiency be improved.
Second, it allows employees to have more time to recharge themselves and improve their work skills.
Third, it allows employees to have more consumption time, go shopping with their families and buy some goods, which invisibly expands the market size.
The above is the basic logic of expanding domestic demand. However, if the profits of most enterprises are not high, or even operate at a breakeven or at a loss, then it will be impossible to achieve this goal, and it may even be counterproductive.
Fortunately, the profits of my company are not bad. Even if I increase the wages of employees several times, I can still ensure the normal operation of the company, and the loss will only be my part of the income.
But the role it plays cannot be ignored. Since the number of employees in my company has increased, this high salary and 8-hour work system have formed a new business ecosystem around my company.
Stores that did not exist before are now open, and services that did not exist before are now available one after another. At the same time, our employees have money to buy goods produced by other companies, and the sales revenue of other companies has also increased.
As the income of other companies increases, the profits they obtain will also increase, and they will be able to pay higher salaries to their employees. Therefore, the employees of those companies will have money to consume the products produced by my company.
This is a good economic operation model and an effective way to expand the internal market.
Before I started my business, China was basically all state-owned enterprises. You should know better than me about the operating conditions of state-owned enterprises, so the entire environment at that time was a stagnant water.
All consumer needs basically revolve around meeting the basic needs of daily life.
My company plays the role of a mixer, and the power source of the mixer is obtained in the international market by virtue of its technical and product advantages.
This kind of external supplementation of internal functions is not about making a dollar from the outside, but just creating a demand for one dollar internally. Its role is far more than that. Its effectiveness and influence can even drive domestic demand to increase to 10 dollars. ,even more.
Therefore, the kinetic energy introduced from the outside has a powerful effect until the pool of stagnant water forms an internal centrifugal force, which in turn drives the mixer to rotate, and even outputs kinetic energy in the opposite direction.
Once this situation is formed, then we can say that our internal demand has been established, a virtuous cycle has been formed, and it will even have a positive influence on the international economy, and the interests of countries around the world will be closer to ours.
When this situation is formed, that is, when we gain momentum, no matter what Yingjiang does, other countries will consider their own interests and will not follow Yingjiang's baton.
If the benefits obtained from us are greater than the eagle sauce, it will even be used by me. "
After hearing Zhao give a real example and a simple metaphor, the old man explained the laws of economic development and the process of expanding domestic demand.
At the same time, it was combined with the "fusion of interests" mentioned earlier, which was so vivid that he could understand it as soon as he heard it.
Just when the old man thought that was all, Zhao Yi continued: "The above only describes the internal driving force of the enterprise. This method of expanding domestic demand actually takes a long time and cannot achieve immediate results.
The mixer is also required to continuously stir, and the time required depends on the power of the mixer. "
When the old man heard this, he immediately looked very interested. After all, the above method had brought him huge gains. How could he not be interested when he heard that Zhao Yi had a more effective method at this time.
Zhao Yi did not let him wait long and continued: "The other method is to use financial methods. Our country's financial development is relatively lagging behind. It is just simple savings finance. Investment finance is only done by the government. Other financial means are even more important. Good things can be said.
Of course, this is also related to our previous planned economy, where financial instruments had little room to play a role.
Now that we are reforming and opening up, we need to learn some financial knowledge and use some financial tools, with the purpose of accelerating economic development.
You should know that I now have advanced technology and strong capital, but the industries I have entered can be counted. The reason is that I cannot enter all industries. I am just an economic entity. rather than the national government.
If we blindly enter all industries, the management difficulty will increase exponentially. The final result will definitely not be better than the previous planned economy, or even worse. After all, my control is definitely not as good as that of the country and the government.
Even if a planned economy develops under the control of the state and government, we must already know the effectiveness of it. The reason for this is that the complexity of the economy cannot be effectively arranged through detailed planning.
Under artificial arrangements, just like artificially planted forests, the species diversity and ecological stability are definitely not as good as naturally formed forests. As long as a species without natural enemies enters an artificially planted forest, it will face ecological collapse.
The reason is that we humans are humans after all and have not reached the level of God. It is inevitable to be close to each other, but the consequences may be quite serious.
The market economy is equivalent to a naturally formed forest. It is a collection of economic entities that are connected through various economic ties. It is not single. Its complexity and diversity far exceed the level that humans can point their fingers at.
This is why since the birth of economics and its development for so long, no economist dares to say that they know the most about economics and have a clear understanding of all the details and principles.
The stability and diversity of the market economy are what we need, because it means that it can accommodate a larger economic scale, and all interested individuals living in it can obtain the soil for their own survival.
But the complexity makes us at a loss. We can only stand on the outside and observe, but cannot enter to understand every detail, so we will form a natural fear.
Because human fear always comes from the unknown, and market economy is such an unknown matter in our country, so applying the laws of market economy well is a topic we need to study. "(End of chapter)