When talking about globalization, we often notice a seemingly neutral view, that is, although globalization will bring polarization, it can make the world economy grow, so as long as we pay attention to a fairer distribution of wealth, globalization will bring benefits to everyone. However, in my opinion, globalization will not only cause global polarization, but also make the world economy decline. In this paper, I will try to explain how globalization with the liberalization of trade, investment and capital flow as the core leads to the shrinking demand in the world market, which in turn leads to the overall recession of the world economy. This paper further demonstrates that the next decade will be the decade of the Great Depression of the world economy, and its intensity will surpass that of the 1931s. Marked by the collapse of Nasdaq index in April 2111, the Great Depression has arrived. The viewpoint of this paper is based on a new understanding of the relationship between competition and crisis.

1. Fierce competition leads to economic crisis

In western economic dictionaries, there is no better word than competition. A perfectly competitive market is the most efficient market, which can achieve Pareto optimality and meet people's economic needs to the greatest extent. In this view, supply automatically generates demand, or supply and demand are automatically balanced, and the economy works well like a sophisticated machine, and there will be no economic crisis.

however, in fact, competition is precisely the source of the crisis. Every time in history, the brewing, outbreak and solution of economic crisis are caused by over-investment and intensified competition in leading industries, resulting in rising raw material costs, falling product prices, shrinking profits, and a large number of enterprises going bankrupt, leading to crisis. With the bankruptcy of a large number of enterprises, the emergence of new leading industries, or the development of new markets, the market is in short supply again, and the competition in the same industry is eased, so that the economic crisis can be solved. Feidi is good, Feidi is good

The core of competition is to pursue individuals or enterprises that maximize their personal interests and compete for the same resources. In the economics initiated by Adam Smith, pursuing the maximization of personal interests will automatically lead to the maximization of social interests. However, in the competition for the same resources such as target market, profits to be distributed, raw materials, etc., the maximization of one party's interests is the minimization of the other party's interests, and the dramatic language is "life and death". Therefore, competition can also be regarded as the daily life of war. We know that the fiercest time of the war is when the casualties and weapons losses on both sides are the greatest. Similarly, the fiercest time of competition is when the profits of all parties shrink greatly and a large number of enterprises go bankrupt. Then the survival of the fittest, after a lot of resources are wasted, the remaining resources will be allocated to the most competitive enterprises or individuals who are best at using competitive strategies, and the industry will form a relative monopoly pattern. Due to relative monopoly, the profit rate of enterprises has increased, the production scale has been further expanded, the number of recruits has increased, and new competitors have been attracted to grab monopoly profits. This industry will once again have overproduction, the competition will be intensified again, and the industry will once again fall into crisis. In this way, every time the crisis ends, the degree of monopoly will rise and the scope of monopoly will expand. In fact, as a result of more than 211 years of economic competition, Fortune 511 has monopolized major industries such as coal, petroleum, steel, automobiles, airplanes, ships, chemicals, machine tools, power generation equipment, semiconductors, computers, software, telecommunications, and media all over the world. In the last decade or so, there has been a wave of large-scale mergers and acquisitions in developed countries, with the case of American online merger and acquisition of time warner Inc. worth $351 billion as its peak. 985e.com

It is worth noting that an industry in crisis does not mean a global economic crisis. Conversely, a global economic crisis does not mean that any industry is in crisis. However, once the leading industries of economic growth, such as textiles in the early 19th century, railways in the middle and late 19th century, automobiles and chemicals in the early 21th century, semiconductors, computers and telecommunications in the late 21th century, fall into crisis, it often means an overall economic crisis. Those non-dominant industries are in crisis in a certain local area, such as hotels in new york or restaurants in a certain district of Tokyo. Even during the economic boom, they may be in crisis due to over-investment and intensified competition. During the economic crisis, some new industries may be growing quietly. For example, during the global economic crisis caused by the American railway crisis in the 1971s, the oil industry was profitable because Rockefeller completed the trust.

from this, it is not difficult for us to draw a conclusion that the relaxation of competition leads to economic prosperity, while the intensification of competition leads to economic crisis. Due to the existence and development of the financial industry, prosperity will be prolonged and crisis will be aggravated. During the period of relaxed competition, the financial industry issued a large number of loans to foster new competitors to enter lucrative industries, which led to the development of related equipment and raw materials industries, employment growth and vigorous consumption, thus expanding the market for lucrative downstream industries and forming a virtuous circle. Subsequently, because demand growth could not keep up with investment expansion, the virtuous circle ended at a certain point, but the vicious circle began. Enterprises fought price wars one after another, reducing costs and wages, thus narrowing the market. In order to compete for the narrowed market, they had to further fight price wars, further reduce costs and cut wages until a large number of enterprises went bankrupt and fell into a global economic crisis.

Second, the relaxation of competition is the reason for the golden age after World War II

From the end of World War II to the early 1971s, there was a so-called golden age in the western world. During this period, the average annual economic growth of developed countries as a whole was as high as 4.4%, which was 2.2% in the following two decades (from the early 1971s to the early 1991s). This has caused many optimistic ideas in the economics field, such as the contradiction between labor and capital has been solved, the economic crisis has been ironed out or even disappeared, and the economy will achieve automatic and unlimited growth. This golden period has also attracted extensive attention in Marxist economics. In China, people think it is the product of the development of productive forces and the self-regulation of capitalist system.

however, from the perspective of competition and crisis, this golden age is nothing more than a manifestation of the relaxation of economic competition among western powers. As we all know, after World War II, the United States has 51% of the world's production capacity and more than 71% of its gold reserves, and its competitive strength is far above that of European countries and Japan. In 1951, the labor productivity of American manufacturing industry was three times that of Britain, four times that of Germany and more times that of Japan. The production of manufactured goods in the United States is six times that of West Germany and 31 times that of Japan. The productivity of American coal mines is 3-4 times that of Britain and Sidegard, and 7 times that of French. Therefore, at the end of the war, the American policy was to use all the advantages of American rule to gain the most favorable position for American capital, to force countries to open their markets and accept cheap and good American goods, to destroy the economies of Germany, Japan, Britain, France and Italy, and to seize the rule and influence of these countries on the colonies, so as to realize the dream of the United States dominating the western world. To achieve this goal, American aid to allies is only used for emergency, not to help allies rebuild their production systems; Aid is accompanied by an "agreement to eliminate all discriminatory treatment in international business", and in the monetary and trading system plan, the United States does not allow countries to restrict trade in order to balance payments. Most importantly, in the name of preventing Germany and Japan from invading other countries again, the United States has formulated a plan to demolish the military industries of Germany and Japan, so as to fundamentally eliminate the competitiveness of these two emerging industrial powers. If all this comes true, the United States will become a new world factory, while Europe and Japan will become the processing places of raw materials and primary products in the United States, where the economic demand will not grow, and a prosperous period of more than 21 years will not appear.

in fact, this business ambition of the United States has not been realized. With a large number of American goods imported into various countries, and with the beginning of the process of dismantling the military industries of Germany and Japan, the number of unemployed workers in Europe and Japan has increased greatly, and the power of production parties in various countries has grown rapidly, so the United States has to change its course. The American ruling elite finally found out that their number one enemy was the Soviet Union eastern bloc, not Europe and Japan, so the American foreign economic policy changed 181 degrees, changing from destroying competitors to supporting them. There are three main measures, one is the famous Marshall Plan; The second is to stop tearing down the military industries of Germany and Japan; Third, allow the yen, pound sterling, mark and other currencies to depreciate, for example, the yen depreciates to 1 US dollars to 361 yen, thus reducing the impact of American goods on the markets of various countries and enabling countries to export to the United States. Since then, due to the outbreak of the Korean War, Japan has become the front-line supplier of American arms and made a fortune in war. From the effect of these measures, it can be summed up that the United States has adopted a friendly attitude of unilateral free trade and allowing countries to protect trade. Since then, the production capacity of Europe and Japan has been rebuilt, and domestic demand has expanded, providing a larger market for American goods; The number of European and Japanese products exported to the United States is increasing, but it is still not enough to balance the imports from the United States. The import and export of the United States still maintains a large surplus, and the world economy has entered a virtuous circle.

objectively, the reason why the United States can support its competitors is that the competitiveness of American industry is much higher than that of Japan and European countries. However, due to high wage costs and low accumulation rate, the advantage of the United States is gradually losing. From 1955 to 1971, the total fixed assets of American manufacturing industry increased by 57%, the major countries in Western Europe increased by 116%, and Japan increased by about 511%. In 1961, the hourly labor cost of American manufacturing industry was about 3 times that of Western Europe and 11 times that of Japan. Such a huge cost gap has caused the US foreign trade surplus to shrink and the gold reserve to decline. By 1971, the trade deficit first appeared. The proportion of the United States in the world gross national product was 36.3% in 1955, 33.7% in 1961, 31.3% in 1965, 31.2% in 1971 and 24.5% in 1975. Marked by the collapse of the Bretton Woods system, the competitiveness of the United States has declined to the level of equality with Europe and Japan, and its declining trend is still developing further.

In other words, in order to meet the needs of the Cold War, the United States made major strategic sacrifices and cultivated its own economic competitors. However, it is during this period of competition relaxation that the world economy experienced great prosperity.

Third, the intensification of competition has caused the world economy to spiral down

When the dollar is decoupled from gold, the dollar depreciates. Since then, the ratio between the US dollar and the Japanese yen has dropped from 1: 361 curve to around 1: 121, and the ratio with major currencies such as the British pound and the German mark has also dropped all the way. On the one hand, the depreciation of the US dollar reduces the purchasing power of the US dollar reserves in the hands of all countries in the world, and reduces the American goods that can be purchased. On the other hand, it enhances the export competitiveness of American goods, weakens the protection of countries on their own markets, and increases the difficulty of exporting to the United States. At the same time, American enterprises move their production bases overseas on a larger scale and at a faster speed, reducing the proportion of wages in costs, thus reducing the cost disadvantage of the United States to Europe and Japan. Third, the United States forces countries to open their markets to a greater extent, but at the same time, it uses Special Section 311 to strengthen the protection of its own markets and implements super-trade protectionism.

these three measures are actually the root causes of economic stagnation and expansion in various countries in the 1971s. Due to the adoption of the floating exchange rate system, the depreciation of the US dollar triggered an exchange rate war, and the yen, the mark and the pound rushed to depreciate, resulting in uncontrollable inflation. At the same time, because the United States implements super trade protectionism, countries' exports to the United States decrease, while imports increase, and economic growth naturally slows down; The situation in the United States has improved slightly, and the growth of the trade deficit has slowed down. Third, not only the United States, but also Japan and European countries are competing to transfer their production bases to third world countries, resulting in shrinking domestic and international demand, which is the most destructive. When the United States transferred the automobile production line to Mexico, the country lost a $31,111 job, while Mexico added a $3,111 job. $27,111 will become the profit of the automobile company, which will be used to reduce the car price, increase the salary of senior employees and increase the profit of the enterprise. Since wages are the source of consumer demand and profits are the source of investment, worldwide, demand has decreased, investment has increased, and competition has become more intense. As far as Mexico is concerned, it seems to be a good thing to get a job opportunity of $3,111. However, the technology and brand of American General Motors plus Mexico's salary can bankrupt Mexico's domestic automobile industry and make Mexico's demand shrink instead of increase.

Theoretically, if there is no new industrial revolution, with the increasingly fierce competition in the three major economic regions of the United States, Japan and Europe, stagflation will continue until a large number of enterprises in various countries go bankrupt and turn into the Great Depression of the world economy. However, there is one way to delay the arrival of the Great Depression, and that is to spend more than one's income. Copyright 985e.com

Since Reagan came to power, the United States has reduced taxes to improve the international competitiveness of enterprises, and expanded its armaments to enhance domestic demand. The fiscal deficit caused by this increase and decrease was compensated by issuing treasury bonds with high interest rates, which led to a large-scale increase in US treasury bonds during Reagan's term and formed a "deficit boom" in the 1981s. President Bush followed suit and continued deficit finance. By 1994, the US government debt was as high as $4.6 trillion, and it would cost $311 billion to pay debt interest alone every year. This is just a narrow sense of debt. If the generalized debt guaranteed by the federal government is included, the amount of debt is even more alarming. While the government debt is high, the amount of corporate debt and personal credit consumption is also expanding. In 1981, the total debt of industrial and commercial enterprises in the United States was only 1.4 trillion US dollars, and by March of 1991, it had reached 3.5 trillion US dollars. In the same period, the total national debt rose from 1.4 trillion US dollars to 4.1 trillion US dollars. Since the 1991s, the debts of the United States have continued to rise. By the first quarter of 2111, the total debts of the American government, enterprises and residents had reached 31.6 trillion US dollars, three times the gross national product, including 7.18 trillion government debts, 15.18 trillion enterprise debts and 7.23 trillion household debts. Not only the United States, but also Japan and European countries are heavily in debt. Japan's national debt has reached 1.31% of the gross national product, and the debts of enterprises and residents are also staggering, especially those of banks and other financial institutions, which have reached the point where Japan's financial system has completely collapsed. The government debt of European countries is less than that of the United States and Japan, because the Maastricht Treaty stipulates that the total debt of each country should not exceed 61%, at the cost of high unemployment rate and slow economic growth in Europe. But the debts of European enterprises and residents are not low. For example, during the telecom investment boom in the late 1991s, banks issued hundreds of billions of dollars in loans to telecom enterprises, and according to the Financial Times, only 1% of these loans could be recovered.

While the debts of developed countries are staggering, the debts of developing countries continue to rise. Since the Mexican financial crisis in 1982, large-scale financial and economic crises have broken out in developing countries many times. Mexico, Brazil, East Asia, Russia, Turkey and Argentina, which are regarded as model students of economic liberalization by western countries, collapsed in the financial crisis and were forced to accept the structural adjustment plan of the International Monetary Fund, sell sovereign assets with monopoly profits such as land, minerals, telecommunications and railways, and tighten fiscal expenditure and cut back.