What are the economic theories created by China people themselves?

Economic Vector Synthesis and Effective Allocation of Resources

Wang Liyingbo

According to traditional economic theory, economic variables appear in scalar form. This paper points out that the economic variable is essentially a vector. But it is different from the vector in physics and has its own synthesis law. The effective allocation of resources is actually a form of economic vector synthesis. This paper illustrates the law of economic vector synthesis with some examples, and further expounds the guiding significance of this theory in economic activities. (Content Introduction: A New Theory of Economics)

4 tons of concrete and 1 ton of plate steel constitute 5 tons of concrete members; An automobile consists of a cylinder engine, a chassis and a body. Picture tube, complex circuit and shell make up a beautiful TV set; A beautician's half-hour service combined with the use of various beauty salons and cosmetics has created a fashionable hairstyle; A surgeon's four-hour operation, the cooperation of four colleagues, the use of medical equipment and various drugs to complete a heart operation ... these are all examples of economic vector synthesis.

4 tons of concrete and 1 ton of coil steel are two different economic variables, such as economic variables with both size and certain flow direction, which we define as economic vectors. 4 tons of concrete and 1 ton steel plate structure constitute a 5-ton concrete member, which can be regarded as the synthesis of two economic vectors. The proportion between them is certain, which is determined by the use of the ingredients. This proportion will change with the development of production (of course, it will be relatively stable for a period of time). If there are 5 tons of concrete and 1 ton of coiled steel now, only 5 tons of concrete members can be formed, and the extra 1 ton of concrete is useless in this combination. This is the law of composition of economic vectors. This law is different for different economic vectors. This synthesis of economic vectors can be carried out in multiple economic vectors. For example, one engine, two bodies and two chassis can only form a car, and one body and one chassis are redundant. The above examples have shown that the concept of economic vector exists objectively, and that economic vector is synthesized according to certain laws, resulting in comprehensive social benefits. This law is relatively stable in a certain period of time, which depends on the quality requirements of synthetic goods and services and the production level at that time.

The effective allocation of resources that we usually see in economics textbooks can actually be regarded as an example of economic vector synthesis, and the significance of effectiveness lies in not repeating production. Of course, whether a commodity or service is effective depends on the price and the surrounding environment. For example, a Mercedes-Benz car can be said to be an effective resource allocation in terms of its engine, chassis, body and all other supporting facilities, but its price of 6,543,800 US dollars cannot be said to be completely effective compared with ordinary citizens. For the middle class, it is also an effective configuration. Or as far as the environment is concerned, in the economically developed United States and western Europe, it may be the effective allocation of resources (of course, it cannot exceed a certain amount). In those economically developed or even backward areas, it cannot be regarded as an effective allocation of resources.

All over the world, any country, whether developed or developing, is facing the effective development and allocation of resources. Different degrees of ineffective development and resource allocation will cause a lot of waste of effective resources, serious environmental pollution and even economic crisis.

In the past 20 years, socialist countries are facing the transition from planned economy to market economy. Essentially, it is to develop and allocate resources more effectively. At present, the laid-off and re-employment project in China is essentially the effective allocation of various resources throughout the country. The so-called new economic growth point means that some regions, some enterprises and some products have basically realized the effective allocation of some resources. We believe that when the coverage rate of this effective allocation reaches 50%, due to the inertia of economic activities, the national economy will improve in an all-round way and show strong vitality. As far as a region is concerned, it will be ideal for the whole economic activity to reach 80% efficiency, while the efficiency of 100% does not exist. Even in developed countries, the United States has at least 20% inefficient production, which needs adjustment or even bankruptcy to achieve efficiency.

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