On May 9, 2024, an article titled “Financial Crisis Looming” published on Dajiyuan website on March 29 has garnered significant attention. Within the first week, it received nearly 60,000 views, surpassing 100,000 views by April 6, and reaching 107,056 views by May 7, indicating a widespread concern about the information conveyed in the article. The sudden surge in interest might reflect the deep concern people have about the looming financial crisis, reminiscent of the monumental 2008 financial crisis.
It is well-known that the financial crisis was triggered by subprime mortgages and toxic assets in the financial sector. The toxic nature of financial products is akin to unethical products, both falling under the category of commodities, with one being intangible and the other tangible, yet both classified as “defective goods.” Reflecting on the term “goods,” which signifies “good” in English, it is disheartening to see these products causing harm instead of serving their intended purpose. It underscores how human actions in trading and selling these goods have led to moral decay, deception, and eventual loss of trust unless there is a moral uplift and restoration of integrity.
The complexity of tangible unethical products is understandable, but the enigma surrounding intangible (toxic) financial products requires further analysis. The debate on whether finance should be treated as a commodity poses a fundamental question. This complexity brings to mind the late academic, Jiang Shuo Jie, who dedicated his life to defending the essence of currency, emphasizing the need for central banks to control the money supply. The distortion of the essence of money, particularly turning “credit” as a medium of exchange void of its intrinsic value, has led to the proliferation of “derivative financial products,” fueling financial speculation and market manipulation under the guise of the leverage principle, ultimately resulting in financial bubbles and subsequent repercussions. In essence, the root cause lies in excessive money supply and a misunderstanding of money’s role.
Examining the historical context of monetary manipulation, it becomes evident that political forces have played a significant role in distorting the monetary supply. The manipulation of fiscal deficits, financial deficits, and international asset balances by governments and financial institutions underline the need for stringent oversight to prevent inflationary pressures and economic instability. While the ideal scenario would be to foster a balance in money supply to ensure market stability and sustainable growth, the recurring theme of political interference and misguided policies has hindered the proper functioning of economies.
Friedrich Hayek’s insightful discourse on money portrays it as a mystical and powerful force, attracting scholars and economists to delve into its complexities throughout history. His comparison of money to “sex,” representing an enigmatic and irresistible aspect of human society, accentuates the dual nature of money as a liberating tool and a corrupting influence. The evolution of monetary systems, heavily influenced by governmental policies and interventions, continues to pose challenges in understanding the true essence and functionality of money.
As Hayek aptly discussed the intricate relationship between money and human society, the significance of money in facilitating trade, fostering prosperity, and inciting struggles and conflicts underscores the need for a nuanced approach in monetary management. Reflecting on historical perspectives on money, illustrated in “The History of Money,” from ancient civilizations to modern electronic currency systems, exposes the multifaceted dynamics between money and humanity, raising questions about progress, revelation, and societal developments.
The timeless wisdom shared by Zhang Shuo in his treatise on money resonates with contemporary challenges in how individuals perceive and utilize money in their daily lives. His elucidation on money as a medicinal herb, emphasizing moderation, ethical conduct, and societal responsibility, draws parallels between the virtues of money and the virtues of human morality, emphasizing the importance of balance, integrity, and prudence in monetary affairs.
In the ever-evolving landscape of global finance, the wisdom of ancient scholars like Zhang Shuo serves as a guiding light, reminding humanity of the ethical imperatives and moral values inherent in monetary interactions. As societies navigate the complexities of modern financial systems, the fundamental principles of moderation, integrity, and wisdom in managing money remain indispensable in ensuring prosperity and sustainability for future generations.