Market Logic that Everyone Can Understand
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In 1984， at the beginning of domestic reforms， Zhang Weiying， at his twenties， published The Center of the Overall Economic Reform is the Reform of Price System. This thesis was the first document that put forward the “double-track price system”， which provided solid theoretical foundation for the subsequent 30-year economic reform in China. In the thesis， Zhang Weiying realized that the market price cannot be suppressed； even if at the strictest environment， the market price will still “appear spontaneously”. After the suppression of planned economy for decades， resulting in poverty and shortage， the market price still existed， and a lot of black markets secretly appeared. Therefore， the reform of price system should comply with the tendency and turn the illegal “price at the black market” into legal “market price”； the reform may simply rectify the nature of market behavior， instead of applying big changes to transform the foundation. “The reform of price system is actually in progress， and to a great degree， it is a spontaneous behavior.”， “… if we actively utilize the current multi-prices in the market， the bad thing will turn to good thing.”
The reform of double-track system gradually introduced market price into planned economy considering peripheral conditions. Consequently， one commodity had two different prices： “planned price” and “market price”； through this way， people who gained vested interest could be protected and severe social and political unrest could be avoided. Under this condition， market price system with effective allocation of economic resources could be gradually established. Through the enlarged scope of free market， the market force could lead a compulsory and comprehensive reform to the old price system. Finally， a brand-new price system of free market could be established.And the subsequent facts proved the validity of “double-track system”； this system quieted down unnecessary disputes， enhanced economic freedom and promoted social progress.
After that， Zhang Weiying’s academic interests turned into the research of enterprises and entrepreneur theory. Just as all the top scholars who stand at the leading edge of economic theory， Zhang Weiying also paid much attention to the dynamic concept -- entrepreneurial ability. He did not addict to general equilibrium， a static and imaginary world， and play some unhelpful math games. He subtly studied both Joseph Schumpeter’s and Frank Hyneman Knight’s theories. Joseph Schumpeter believes that equilibrium describes an economic process that is static， circulatory and repetitive； entrepreneur’s innovative behavior is to break the old equilibrium and create a new equilibrium status. Innovation means to change one production function， which creatively destroys the old production process. In Schumpeter’s theory， entrepreneurs have quite important position in the economic system， with the description as： “entrepreneurship is the soul of capitalism； if anyone talks about economic growth without involving entrepreneurs， it is just like the Hamlet without prince.” While Knight pointed out that the entrepreneur’s behaviors will confront the uncertainty in the future， so that both benefits and loss exist. First-class entrepreneurs can always predict a more precise future compared with others， so that they can satisfy the desire and make profit.
On the basis of those two economists’ theories， Zhang Weiying also valued the importance of entrepreneurs and emphasized the social significance of entrepreneurs’ profit. He argued in favor of the entrepreneur and advocated the reform of property rights of state-owned enterprises； he also believed that the further step of reform was to cultivate a new generation of entrepreneurs and release entrepreneur’s ability， for promoting the development of economy. However， some shallow-brained people thought that Zhang Weiying’s point of view was merely flattering the rich and speaking in defense of the officials. Thanks to the common resentment psychology to the rich in China， Zhang Weiying was regarded as an “employed economist” by the masses. His comments and opinions were always deliberately misinterpreted by some people. Therefore， Zhang Weiying became one of the most controversial economists in the economic academic circle of China.
Fundamentally speaking， the economists are value-free， and they do not make any value judgment. If he says “the Labor Law cannot protect the workers but bring damages to them”， he does not speak in favor of anyone and do not represent the benefit of any party. He just objectively explains that： “Labor Law” cannot effectively achieve the goal of improving workers’ welfare.
Nevertheless， most of common people are ignorant， who obey blindly and will be easily instigated by others. They are always willing to listen to the saying that corresponds to their moral bias， instead of accepting sound economic reasoning chains. Consequently， in our society， the stars who cater to the masses will always obtain support rather than those scholars who insist certain principles.
Zhang Weiying is alone in academic point of view presently because those former academic companions will become his opponents. When other scholars turned to follow Keynes’s theory of interventionism that insists "the market is generally good that just sometimes needs government management"， only Zhang Weiying persisted in his market belief. During the financial tsunami in 2008， only Zhang Weiying in Chinese economic academic circle independently appealed to the government not to save the market and appealed for a sound monetary system.
And his new book Market logic comprehensively expressed his economic ideas. Few tables， figures and mathematics were included in the book， and most parts were explained plainly in a certain sequence. Just as Professor Zhang said that he wished he could use the simplest language to make common people understand his book and persuade them. I believe Professor Zhang has achieved his goal in term of the straightforward language. Meanwhile， the book revealed his thorough understanding about economic theory， so that he can make difficult concepts easy to be understood with plain language.