Nền Kinh Tế Tăng Trưởng Và Sụp đổ Như Thế Nào? (2011) - Plot & Excerpts
This is a fun and very accessible allegory to explain the fundamentals of economics. It starts off depicting an island society (Usonia) consisting of three people who live at barely above subsistence level, who through the course of risk taking and sacrificial saving, begin to innovate. As people from outside the island begin to emigrate there, specialization of tasks allows society to become more advanced and the standard of living to go up, all while free market fundamentals remain.Meanwhile, the islanders of Usonia decide to form a limited government founded on laws of individual freedom and property rights, and happily set aside a small portion of their earnings to fund it. They enjoy greater prosperity for as long the government enforces these founding principles, but eventually, corruption sets in as new generations, ignorant of the original intent of limited government, allow opportunistic career politicians to become involved in controlling the money supply and re-allocating resources to unproductive ends. The free market in Usonia has essentially been abolished. Meanwhile, other countries like Sinopia begin to pick up the slack in production that Usonia has left behind, but rather than allowing their own currencies to appreciate, they buy trillions worth of Usonia's currency (called "dollars") in the form of government bonds, and sell their manufactured goods to Usonian customers while their own people barely have enough to survive. But this can't go on forever, and eventually the Sinopians decide to quit propping up the Usonians and to allow their own people to consume what they manufacture. With Sinopians out of the Usonian bond market, Usonia's own central bank has to print off trillions of dollars to keep interest rates low to prop up their economy, causing hyperinflation. With no purchasing power left, the Usonian economy crashes and the Usonians are forced back to subsistence level. In a way this story is quite frightening, as it exposes who fragile the U.S. economy is. It's weird to think that our standard of living is entirely based on what is essentially fraud. But it's good to have books like this that can help the average person realize the danger we are in, and therefore take steps to protect himself before the crash happens. I would recommend this book for any basic economics class. I think kids as young as the 7th grade could understand the basic premises of the book and therefore be able to avoid falling for the Keynesian propaganda of the mainstream media and leftist higher-ed as they get older. Inflation is an increase in the supply of money. High prices are not strictly inflation, only a symptom of inflation, because an increased amount of printed money necessarily devalues the money in existence. In times past, governments were limited in the amount of fiat currency that they could print because the currency was redeemable for precious metals like gold and silver. Today, in the USA, the Federal Reserve does not have to exchange printed fiat currency (dollars) for any standard natural resource, gold or otherwise. They can print as much money as they want, causing inflation, and resulting in higher prices.This is a problem for individual citizens because it means that saving money is futile, since interest earned on savings in dollars cannot keep pace with the devaluation of the fiat currency as the supply is increased with no backing. As strange as precious metals might seem as a medium of exchange, there is a finite supply of this natural resource, and savings in things like gold are able to purchase just as much or more as they would have been able to 100 years ago, when the value of 1 troy ounce of gold was worth about $20. Today, the U.S. Mint still creates gold bullion coins with a face value of $50. These American Eagle gold bullion coins also contain 1 troy ounce of gold, for which the actual value today is quite a bit more than $1,000 dollars. If anyone ever tries to pay you back for a $50 debt (public or private) using this legal tender, you should go for it.But why does the government continue to increase the money supply if this just causes the value of denominations of that money to plummet? This is done to allow the government to spend more money than it collects in taxes. This spending often takes the form of economic activity that would not be supported by a free market (that is to say, you wouldn't spend YOUR money on this stuff if you had the choice). The underlying assumption is that people are too stupid or evil to decide what is best for themselves individually, and coercive tactics of centralized wealth collection (buttressed by printing more fiat currency) under threat of imprisonment are the only way to make sure that society runs properly.In addition, when a free market is disrupted by a centralized power structure like government that enforces regulations and provides entitlements, that market is hobbled in competition against other unregulated markets. Again, these regulations and entitlements presuppose that someone else knows what is better for you than you do. Ultimately, any argument about what you should or should not do in a free market is a personal choice, and market forces will let you know if you made the right choice.If a business is offensive to a consumer for whatever reason, that consumer always has the right to cut ties with that business. Citizens, unfortunately, do not have the same freedom from governments that resort to coercion and fiat. This book offers many hard truths, chief among them the assertion that any external control of the marketplace, no matter how well-intentioned, will ultimately cause more harm than good.
What do You think about Nền Kinh Tế Tăng Trưởng Và Sụp đổ Như Thế Nào? (2011)?
This is a very readable allegory of the history capitalism--starting with two guys fishing on an island and progressing all the way to an advanced economy with a fiat monetary system, lots of inflation, and global debt that precipitates a meltdown. In other words, the first half conveys the development of capitalism in general, and the second half symbolizes the last 100 years of American economic history (and potentially her future). It's a fantastic layman-friendly introduction to the principles of capitalism and free markets.
—LittleTortoise
This book is good up to a certain point. You can only take an analogy so far. When it starts explaining more complicated issues with the idea of fish as currency it will leave you more confused. You are far better off in the long run reading Adam Smith's Wealth of Nations and other similar books of its caliber even though it will take more effort.If you want to be smarter don't expect to grow by reading "easy" books.
—HaileyMarkotan
A bit simplistic. The theories on why economies grow and fade as told through allegories.
—bonnlaurena
this was fun. read it. don't take it too seriously, but definitely read it.
—Lorelei
Quite fine.Approaching to several problems from an original aspect.
—Elbinorhino13
