Quantitative expansion brings about qualitative changes.
What is important are quality, quantity, and density.
During the growth phase, the market expands and develops.
When the market matures, it becomes saturated.
When the market becomes oversaturated, it stagnates and eventually shrinks.
There are industries that are newly born, industries that are developing, markets that are rapidly expanding and growing, mature markets, and markets that are in decline. These changes also occur in individual companies.
Moreover, the market is influenced not only by the growth stage but also by the characteristics and practices of the products. For example, industries such as fresh produce, where prices are affected by freshness and are strongly influenced by seasons and weather.
In an oversaturated market, competition becomes a struggle. As industries mature, they shift from quantity to quality, and added value becomes an issue. Density is required. If this transition does not go well, the market falls into price competition, and profits are compressed. It is necessary to promote the transition from quantitative competition to qualitative competition. In other words, a shift from mass production and mass consumption to small-lot production of various products.
The problem with the modern economy is that it assumes growth as a premise and believes that competition is everything. Competition tends to focus on price. Qualitative competition is neglected.
Policies should be taken according to the development stage and situation of the market.
Growth and development have various patterns and forms, and cannot be generalized. There is not just one growth curve. Moreover, deregulation is not a panacea, and competition is not a principle. Policies are not determined unilaterally. They are also influenced by the characteristics of the industry. Initial investment and working capital also vary depending on the nature of the industry. There are industries such as electricity and oil that require huge capital investments.
The method of cost accounting also differs depending on the characteristics and structure of the industry. Many economists have probably studied cost accounting. Such scholars advocate competition as a principle and a panacea like deregulation.
There are products like oil that have no product differentiation and can be stored. They are affected by durability, seasonality, and trends. They require large capital investments. Oil is a process industry, and especially, oil is a joint product, so yield is important. There are industries like agriculture and fisheries that are affected by weather. The beer industry is affected by summer heat. Agriculture must also be careful of disasters. Oil is also affected by accidents and geopolitical influences. There are industries where raw material costs are high, and industries like the service industry and IT industry where labor costs and development costs are high. Depending on the form, logistics costs may be high. There are also differences in work systems. Subscription models also affect pricing structures. This also appears as a difference in accounts receivable.
Thus, the state of the market cannot be uniformly described. Not all industries develop simultaneously in the same way. Markets at various stages of development coexist. It is reckless to ignore market diversity and say that regulation is bad or that everything should be regulated.
The market does not only expand and grow; the mature and stagnant phases are longer. Economic policies based solely on growth will inevitably fail. What is important is the premise on which they are based, and it should be based on accurate data and information. Growth is not good and stagnation or shrinkage is not bad. Measures should be taken after clarifying the situation.
Domestic balance and foreign balance are not separate matters; they deeply influence each other, and one part cannot maintain a good state independently.
What kind of policies should be taken for mature and stagnant markets?
Another important point is the war economy. When war occurs, the economy improves. For example, World War II was the most effective in getting the United States out of the Great Depression. No one says this, but the Korean War was a turning point for Japan’s recovery. Japan’s high economic growth was partly due to the scorched earth. This is an unhealthy economy.
In other words, the cause of war is recession, and the economy recovers through war. Unless we break away from this system, wars will not end. This is hidden behind Keynesianism. Conversely, when the market matures, it falls into recession and is resolved through war.
It is important to calmly analyze the causal relationship between the New Deal policy, the Korean War boom, Japan’s economy after World War I, and Germany’s hyperinflation. This will reveal the causes of current global events. The real cause of war is economic.
The means to avoid relying on war is a structural approach. However, for that, global awareness must change. Unfortunately, examples of economic recovery without relying on war are rare. The Edo period can be said to be a long period of stagnation. As a result, all the domains in Japan went bankrupt. The Meiji Restoration resolved this, and the domains that succeeded in fiscal reconstruction were able to play an active role in the Meiji Restoration, but even then, if peace had continued for another fifty years, all the domains, including the shogunate, would have gone bankrupt. This cannot be denied as a factor that supported the policies of the Meiji government.
In short, it is about the circulation of money. Previously, it was gold and silver coins, but this could not secure the absolute number of money. Therefore, it was switched to paper money, which is credit money. However, various institutional biases and distortions, and theories that deviate from reality, cause problems. The function is not understood.
Quantitative expansion brings about qualitative changes. During the growth phase, the market expands and develops. When the market matures, it becomes saturated. When the market becomes oversaturated, it stagnates and eventually shrinks. There are industries that are newly born, industries that are developing, markets that are rapidly expanding and growing, mature markets, and markets that are in decline. These changes also occur in individual companies.
Moreover, the market is influenced not only by the growth stage but also by the characteristics and practices of the products. For example, industries such as fresh produce, where prices are affected by freshness and are strongly influenced by seasons and weather.
In an oversaturated market, competition becomes a struggle. As industries mature, they shift from quantity to quality, and added value becomes an issue. If this transition does not go well, the market falls into price competition, and profits are compressed. It is necessary to promote the transition from quantitative competition to qualitative competition. In other words, a shift from mass production and mass consumption to small-lot production of various products.
The problem with the modern economy is that it assumes growth as a premise and believes that competition is everything. Competition tends to focus on price. Qualitative competition is neglected.
Policies should be formulated according to the development stages and conditions of the market.
Growth and development have various patterns and forms, and cannot be generalized. There is not just one growth curve. Moreover, deregulation is not a panacea, and competition is not a principle. Policies are not determined unilaterally. They are also influenced by the characteristics of the industry. Initial investment and working capital also vary depending on the nature of the industry. There are industries such as electricity and oil that require huge capital investments.
The method of cost accounting also differs depending on the characteristics and structure of the industry. Many economists have probably studied cost accounting. Such scholars advocate competition as a principle and a panacea like deregulation.
There are products like oil that have no product differentiation and can be stored. They are affected by durability, seasonality, and trends. They require large capital investments. Oil is a process industry, and especially, oil is a joint product, so yield is important. There are industries like agriculture and fisheries that are affected by weather. The beer industry is affected by summer heat. Agriculture must also be careful of disasters. Oil is also affected by accidents and geopolitical influences. There are industries where raw material costs are high, and industries like the service industry and IT industry where labor costs and development costs are high. Depending on the form, logistics costs may be high. There are also differences in work systems. Subscription models also affect pricing structures. This also appears as a difference in accounts receivable.
Thus, the state of the market cannot be uniformly described. Not all industries develop simultaneously in the same way. Markets at various stages of development coexist. It is reckless to ignore market diversity and say that regulation is bad or that everything should be regulated.
The market does not only expand and grow; the mature and stagnant phases are longer. Economic policies based solely on growth will inevitably fail. What is important is the premise on which they are based, and it should be based on accurate data and information. Growth is not good and stagnation or shrinkage is not bad. Measures should be taken after clarifying the situation.
Domestic balance and foreign balance are not separate matters; they deeply influence each other, and one part cannot maintain a good state independently.
What kind of policies should be taken for mature and stagnant markets?
Another important point is the war economy.
When war occurs, the economy improves. For example, World War II was the most effective in getting the United States out of the Great Depression. No one says this, but the Korean War was a turning point for Japan’s recovery. Japan’s high economic growth was partly due to the scorched earth. This is an unhealthy economy.
In other words, the cause of war is recession, and the economy recovers through war. Unless we break away from this system, wars will not end. This is hidden behind Keynesianism. Conversely, when the market matures, it falls into recession and is resolved through war.
It is important to calmly analyze the causal relationship between the New Deal policy, the Korean War boom, Japan’s economy after World War I, and Germany’s hyperinflation. This will reveal the causes of current global events. The real cause of war is economic.
The means to avoid relying on war is a structural approach. Unfortunately, examples of economic recovery without relying on war are rare. The Edo period can be said to be a long period of stagnation. As a result, all the domains in Japan went bankrupt. The Meiji Restoration resolved this, and the domains that succeeded in fiscal reconstruction were able to play an active role in the Meiji Restoration, but even then, if peace had continued for another fifty years, all the domains, including the shogunate, would have gone bankrupt. This cannot be denied as a factor that supported the policies of the Meiji government.
The Meiji government initially had no money. Therefore, they issued paper money and went to war.
In short, the true cause of war is the stagnation of money circulation. Previously, it was gold and silver coins, but this could not secure the absolute number of money. Therefore, it was switched to paper money, which is credit money. However, various institutional biases and distortions, and theories that deviate from reality, cause problems. The function is not understood.
Once born, nothing escapes decay. Prosperity and decline. All things are impermanent. Everything has a life cycle. Born, raised, married, aged, and eventually die. Products and industries also have life cycles. It is a mistake to think that things can remain the same forever. Even though we understand this, we believe that we can live the same way forever during prosperous times. Unlike people, not all industries decline. However, this is the result of constant effort, and God dislikes laziness. The I Ching is based on the cycle and rotation of yin and yang. The economy is also based on vibration and rotation. It does not flow linearly in one direction.