The Study For The Post-industrial Economy And The Fictitious Economy Research

Since the World Warâ…¡, the American's economy has undergone significant changes. Among those changes, a typical one is that the traditional manufacturing industry declines in the economy relatively, while the tertiary-industry with the service sector as its main content becomes the social's leading industry, both in employment and in outputs. The process is often considered as de-industrialization. In the early-1970s, along with the collapse of the Bretton Woods System, the fixed exchange relation between the US dollar and the gold was broken, and the currency had been separated from any actual commodity in the human history for the first time. The currency became a complete value symbol. The virtualization of currency opened the door of that of economy. De-industrilization and the economy's virtualization are two main important changes of the economic structure in developed countries in recent decades, and America's change is the most prominent.The post-industrial economy is a new economy form developed to a certain stage, along with the emergence of a series of special conditions. At the beginning of the past century, there were more than two-thirds employees engaged in the commodity producing, and at the end of the past century, the figure was 21.8%, and the employees in agriculture sector dropped from 38.3% to a negligible level (1.6%), the figure in service sector increased from 33.2% to nearly 80%. The similar phenomenon also appeared in other developed countries. Generally speaking, the industrialization in developed countries is caused by three factors. First, the rise of income induces the demand's diversification. After meeting the basic life needs, people's demand for non-physical products will increase. Secondly, the technical progress increases the productivity greatly, and it provides the possibility for the massive employee transfer from the actual commodity production to service sectors. Thirdly, the new international trade pattern changes the international division system. Though the manufacturing industry in developed countries is declining gradually, some developing countries are still in the process of industrialization and the product they provide replaces the commodity production's decline in developed countries. Along with the deepening of de-industrialization, a lot of industries in U.S move to overseas, which hollows the domestic industries. In the long run, manufacturing industry is the basic support for a country's technology progress, and thus de-industrialization will inevitably undermine a country's international competitiveness.The economy's virtualization is another important premise for the development of deindustrialization in American. Though the industrialization phenomenon may be earlier than.the economy's virtualization, there is a close relationship between them since the 1970s. The virtualization of American economy induces the twin deficit characteristics, which are the enormous trade deficits as well as the financial ones. In essence, the deficit is a kind of debt. The virtualization of the U.S dollar removes the restraint of the currency release, and plays the role of sustaining the operation of the American debt economy. Since the 1990s, massive financial innovation and derivative product's appearance has deepened the virtualization of American economy, and profits created by the fictitious economy sector has expanded its share in GDP. As a result, the American economy development relies more and more on the fictitious economic sectors and it further intensifies the tendency of de-industrialization. So de-industrialization and virtualization of American economy have formed a mechanism in which they are mutually strengthened.De-industrialization and virtualization of the economy has changed the way the entire economy operates. On one hand, it alters the traditional the way of economic growth, and on the other hand, it changes the way of the traditional wealth accumulation which emphasizes material products. The activity of fictitious economy has increasingly become the source for wealth creation. Fictitious wealth which mainly includes financial assets and real assets has become the primary wealth-holding style for the family. There are two prominent characteristics for the fictitious wealth. First, the value of fictitious wealth is increasingly separated from the actual commodity production, and depends more and more on people's psychological anticipation. Secondly, there is a strong pro-cyclical effect for fictitious wealth, which means that its value will increase rapidly during the economic boom, and depreciate during the recession likewise. And it will expand the volatility of the economy. Generally speaking, the U.S dollar without any actual value is the foundation of the expanding of fictitious economy, but the excessive deficit and debt will certainly corrode U.S dollar's foundation--the U.S government's credit. It can be said the current financial crisis is one kind of compulsory adjustment for the excessive virtualization of the American economy.According to the national income calculation equation, in the long run, deposit and investment should be roughly equal in order to maintain the economic balance. Insufficient deposit and excessive consumption are two characteristics of American economy for a long time. As a result, the financial gap must be bridged by capital import, the influx of foreign capital has stimulated further expansion of the fictitious economy in U.S, and the economy operation deviates further from the actual commodity production. In the process of the fictitious economy's development, it has formed a unique mechanism for value creation, value discovery as well as value transfer. However, the real economy is always the foundation of the entire economy, and if the real economy has problems, the pyramid of the fictitious wealth will be clasped rapidly. In fact, the fictitious economy can be seen as the derivation of the real economy. Unless the real economy itself is in good condition, the fictitious ones will be unstable. With the deepening of de-industrialization process, the manufacturing industry is shifted from America, and the competitive strength of the real economy declines continuously. Compared to the real economy, the fictitious economy is expanding rapidly. Therefore, it can be said that the foundation of the fictitious economy becomes more and more unstable. Consequently, the expansion of the fictitious economy in America can not be sustained.