Is Economic Development Driven Only by Self-Interest?

• Article
• 2024-04-17
• 10 Comments

The importance of managing market expectations is widely recognized, emphasizing the extreme importance of expectations in a market economy.

Any pessimistic expectations triggered by any reason will certainly lead to a recession in the real economy.

Therefore, in a market economy, managing expectations, shaping expectations, and leading expectations are actually more important than providing material incentives.

Having sought in the stock market for decades, I have come to understand that the essence of the stock market is the economy of expectations.

A significant part of stock prices is based on expectations, and the actual net assets account for less than 50% of the stock price.

When expectations are pessimistic, stock prices will fall, valuations will decrease, and the falling valuations will affect the real economy.

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Similarly, in the real economy, pessimistic expectations will lead to reduced consumption, causing insufficient demand, decreased corporate income, and lower wage levels, which in turn will negatively affect consumer spending power, creating a more depressed state.

Thus, whether expectations are optimistic or pessimistic is actually the most important factor in modern market economies, making the management of expectations extremely important.

China is not very adept at managing expectations, especially in the stock market, where expectations are made so difficult, and this is indeed in need of improvement.

Mr. Li Lu's proposal on the important role of expectations in a market economy is something I agree with.

Morality is a need for self-realization.

Regarding other views, I have some personal thoughts.

For instance, Mr. Li Lu said that human nature is inherently selfish, including morality, which is a description of a broader, long-term self-interest, or a form of maintenance.

My personal understanding is that human nature does include selfishness, but it is certainly not the only aspect of human nature.

Human nature is complex, encompassing love, kindness, profit, evil, and selfishness.

Moreover, the structure of human nature varies among individuals, with some having more kindness, others more evil, and still others more tolerance, etc.

Therefore, I do not agree with the simplistic view that human nature is fundamentally selfish, including the idea that the purpose of morality is to maintain selfishness.

I believe morality is an independent need for people.

For many, why do they pursue and practice morality?

Because morality brings them happiness.

They see morality as an independent need.

If they are moral, they feel valuable, meaningful, and accomplished, unrelated to self-interest.

I can provide many examples of this.

Before giving examples, let me explain that if morality is subordinate to self-interest, and people practice morality to maintain a more long-term private interest, then it diminishes the height of human civilization.

If you practice morality in the process of interacting with someone for a more long-term private interest, then morality is attached to self-interest.

In this case, morality is fragile, and it is tied up as a means and tool to achieve self-interest.

I personally believe it is not the case.

Morality is an independent need, and many people pursue morality at the expense of their own self-interest, sacrificing themselves for others.

The person who risks his life to save others loses his life, which is his greatest self-interest, but he still chooses to jump into the water to save others.

There have been many such cases this summer.

In these cases, those who risk their lives to save others and are ultimately recognized as morally noble, what are they seeking with their moral actions?

Are they seeking their self-interest?

No, they have lost all their self-interest.

These cases prove that morality is an independent pursuit and need for people.

To be a moral person, one needs to cultivate an independent personality.

Personality is an independent need for people, and it includes morality.

Moral personality is ultimately a sign of what makes a person human, not just the possession of property and interests.

True human beings must have property and interests, as the saying goes, "When the granary is full, one knows etiquette."

If one is starving, they will certainly not care about morality and personality; eating is the most important thing.

So in this situation, you will ultimately have interests.

But as a person, after gaining interests, is your pursuit still interests?

Maslow's hierarchy of needs actually answers this question.

People have various needs, such as the need for safety, survival, warmth, and material interests.

Subsequently, Maslow proposed that people have spiritual needs, the need for recognition, and the need for self-actualization.

What is the need for self-actualization?

It is the need for morality.

It is said that there was a mayor in the United States, supposedly the mayor of New York, who was a billionaire.

He ran for mayor to serve the public and set his salary at one dollar.

He only earned one dollar and served the public after becoming mayor.

This is a form of self-actualization, a pursuit of serving the public and promoting the interests of others.

At this time, his behavior is clearly a moral act.

What is the driving force of this moral behavior?

It is not to achieve self-interest.

The American mayor earns one dollar, which is not even enough to buy a loaf of bread, but he takes on great responsibility and works hard.

Why?

At this time, this behavior is his own need and to some extent is also a moral act.

People have a pursuit beyond material interests.

Maslow's need theory divides human needs into two parts: the lower level is the needs for interests, and the upper level is the needs for spirit.

Morality is an aspect of spiritual needs, and this spiritual need is an independent need because humans have this need.

Being a moral person, feeling confident and happy, and feeling meaningful.

Therefore, regarding morality as a description of broad, long-term self-interest is actually to some extent a kind of hypocrisy.

Hypocrites are like this.

They adhere to morality to gain more benefits and use morality as a means to achieve interests.

Many people's motives are not related to interests, nor do they want to gain honor or wealth, and they are not related to material interests.

It is a need for the moral self itself.

In this case, I think of Mencius's "Four Beginnings" - the heart of compassion is the beginning of benevolence; the heart of shame is the beginning of righteousness; the heart of modesty is the beginning of propriety; the heart of right and wrong is the beginning of wisdom.

People have a spiritual need beyond material things.

Regarding the point that "institutional design and policies must stimulate people's self-interest, otherwise they cannot be sustained," I first believe that to some extent it is correct.

We carried out reform and opening up, and the original "big pot" did not distribute according to work, and there was no scientific protection and satisfaction of private interests, so society could not progress.

In 1978, the land was divided into households, and the land was given to you, and you distributed it yourself.

The more you worked, the more you got, which immediately activated productivity, and this is also correct.

Including why was Genghis Khan's army so strong?

He had a system, for example, if a city was captured, whoever first broke through and occupied the city, the city would belong to you.

This policy of using an incentive mechanism for policies has a good practical effect.

Including the Nationalist Government's Northern Expedition Army, which attached great importance to material rewards.

If they won a battle, Chiang Kai-shek's troops attached importance to rewards, 100,000 silver dollars, this is true.

However, to say that the design of institutions and policies is entirely to stimulate self-interest, to let everyone work hard for self-interest, and then to promote social progress, I think it is not quite right.

For example, entrepreneurs like Ren Zhengfei, who work hard every day and bear huge work challenges, are they pursuing private interests?

I think this question is not difficult.

If Ren Zhengfei created Huawei for the pursuit of private interests, he would not have distributed almost all of his shares to other employees of the company, because shares are his greatest private interest.

Ren Zhengfei now holds less than 1% of Huawei's shares, and 99% of the shares have been distributed to everyone.

Ren Zhengfei is the founder, and this company was created by Ren Zhengfei.

It is too natural for Ren Zhengfei to hold 30-50% of the shares, but Ren Zhengfei has distributed them, so he has given all his interests to others.

Therefore, it proves that Ren Zhengfei is not working for money and private interests.

This kind of entrepreneur is actually the most powerful driving force for social development and progress.

The driving force of such entrepreneurs on society is far greater than that of those business operators who pursue private interests completely, such as Evergrande's belt brother.

After Evergrande's belt brother finally poked the crisis and formed a serious financial debt, he was still transferring assets abroad, which is that in his view, assets are important, and money is the most important to him.

He tried every means to control the money.

Comparing Xu Jiayin's approach with Ren Zhengfei's approach, you can see that Xu Jiayin is maximizing his own interests and always maintains his own interests, but his final corporate situation and contribution to society are negative.

Ren Zhengfei has no private interests in the enterprise at all, and he has completely devoted himself to social practice, promoting social progress.

In the end, his actual contribution to society far exceeds almost all other people, so the emergence of entrepreneurs like Ren Zhengfei is the key to market economy and economic development.

Moreover, due to the emergence of a large number of entrepreneurs like Ren Zhengfei, the progress of the market economy is a truly benign progress, because in this process of progress, scientific creation and invention realize the property that is distributed to everyone, distributed to Huawei's employees, and shared with society and the upstream and downstream.

Ren Zhengfei is no longer working for private interests, so in this case, like big entrepreneurs like Ren Zhengfei, he is not entirely motivated by private interests.

In this case, we can actually say that people in human society are roughly divided into two categories: the first category is motivated by interests, and there are many such people, definitely more than half, and they are for interests.

He works overtime, and you also have to protect his interests.

After all, he has done a lot of work when creating interests.

The second category is what Mr. Li Lu mentioned in the preface to Charlie's Treasure, "There is gold in books," which is the spirit of the scholar and the talent of the businessman.

That is to say, as a business operator, he is a businessman and must have the talent of a businessman, which is to be good at marketing, management, and technological invention.

However, the ultimate purpose of these business talents must have "scholar," the spirit of the scholar, which is to take the world as one's own responsibility, which is to cultivate oneself, to govern the family, to govern the country, and to pacify the world, which is the sentiment of the scholar.

Ren Zhengfei is a typical example.

He definitely has business talents, otherwise, it is impossible to operate such a large company, but Ren Zhengfei has a behavioral support, taking the world as his own responsibility.

The spirit of the scholar and the talent of the businessman actually originated in Japan.

After the Meiji Restoration, when industry and commerce rose, many people turned into capitalists, entrepreneurs, and industrialists.

After they achieved the business economy and enterprise organization, the spirit of the scholar and the talent of the businessman was proposed by Japanese entrepreneurs.

That is to say, the purpose of running a business is to practice the ideal of Confucian scholars in industry, and to achieve the responsibility of taking the world as one's own through the operation of industry.

Samsung, as the pillar of the Korean economy, started its business with the idea of how to develop Korea.

He has a view that enterprises should continue to grow and achieve the revival of Korea.

This is why Samsung Group has been committed to chip development and electronic technology innovation for a period of time.I have studied the Jin merchants, many of whom were from prominent families led by individuals who were originally scholars, Confucian readers, and some even participated in the imperial examinations.

However, due to various reasons, they eventually could not continue with the examinations because their family businesses had grown too large.

Taking care of their family's business became more important than holding an official position.

But in the process of conducting commerce, the Jin merchants fully practiced Confucian classics.

The reason why the Jin merchants could be passed down for 500 years is that they adhered to Confucian ethics in handling business activities involving interest relationships and insisted on taking on the responsibility for the world.

Human society does have phenomena that transcend self-interest, and the existence of transcendence over self-interest cannot be denied.

During the Battle of Taierzhuang, at the most difficult time, the Chinese garrison in Taierzhuang had suffered 90% casualties, leaving only clerks, cooks, and some marginal figures.

At this moment, the overall commander in Taierzhuang Town, Sun Lianzhong, was extremely anxious.

He called Li Zongren and said, "Commander Li, it's really not possible anymore.

Ninety percent of my brothers have been injured.

Can you send some troops or let us retreat and regroup first?"

Li Zongren replied, "Do you think I don't know you're at your limit?

I do, but if you suddenly withdraw, all the fighting of the past half month will be in vain.

Hold on!

Chinese reinforcements are coming immediately, and reinforcements from all sides are rushing over.

And Li Zongren said, I have no more troops in my hands, and I can't send them out.

There's no way.

Li Zongren said, as long as you can hold on, I will reward you with 100,000 silver dollars."

In the end, when Taierzhuang was victorious, Li Zongren fulfilled his promise and gave money to the surviving soldiers, although the soldiers did not take it.

Among them, the captain of the Taierzhuang battle's suicide squad, Wu Dehou, died in the 2000s at the age of over 90 in Shaanxi.

Wu Dehou never wanted any rewards for life.

He said that we went in with 40 people and 37 of us died.

The three of us living is the greatest reward.

We can't take any more rewards.

If we take any more rewards, it would be disrespectful to those 37 brothers who died.

What does this have to do with private interest?