Fictitious economy is a new word that has appeared in recent years, with various definitions, which generally fall into three categories. One refers to the virtual economy); Virtual capital such as securities, futures and options; Second, it refers to the virtual economy with information technology as a tool, which some people call digital economy or information economy; The third refers to the visual economy of computer simulation. There is a certain relationship between these three categories, and this paper mainly discusses the first category.

The concept of virtual capital was first put forward by Marx. He made a detailed analysis of virtual capital in Chapter V of Volume III of Das Kapital and Chapter 25 of Credit and Virtual Capital. He believes that virtual capital is generated on the basis of loan capital (interest-bearing capital) and bank credit system, including stocks, bonds and real estate mortgages. Virtual capital itself has no value, which is the difference between it and actual capital, but it can generate profits (some form of surplus value) through circular movement, which is the similarity between it and actual capital. Although there are many new things (such as futures, options and various financial derivatives) and new situations (such as the departure of currency from the gold standard and economic globalization). With the development of the world economy, it has been more than one hundred years, and Marx's analysis of virtual capital still has important guiding significance in the current study of virtual economy.

According to the author's personal understanding, the so-called virtual economy refers to the economic activities related to the virtual capital circulation movement mainly relying on the financial system, which is simply based on Qian Shengqian. Its earliest origin can be traced back to private commercial lending. For example, A urgently needs to buy some raw materials or commodities, but he doesn't have enough money, and B just has some money to spare, so A borrows some money from B and promises to repay the principal and interest within a certain period of time. Through this activity, Party A has obtained the right to use the money, which can be used as a means of payment and profit through actual economic activities, while Party A and Party B retain the ownership of the money with IOUs as evidence and have the right to ask Party A to repay the principal and interest when due. At this point, the IOU in the hand of B is the embryonic form of virtual capital, and the value is obtained through the cycle of borrowing and returning. At this point, A B did not engage in actual economic activities, but made money through A's fictitious economic activities.

It can be seen that the first stage of the development of virtual economy is the capitalization of idle currency, that is, the idle currency in people's hands has become capital that can generate interest. The second stage is the socialization of interest-bearing capital, that is, banks borrow idle money from people as intermediaries and then lend it out to earn interest. People can also use their spare money to buy various securities to earn interest. At this time, certificates of deposit and securities in people's hands are also virtual capital. The socialization of interest-bearing capital can guide the transfer of funds from those who cannot be used for actual economic activities such as production and circulation to those who can be used for actual economic activities, and can concentrate the funds scattered in everyone's hands for large-scale economic activities, thus improving the efficiency of the use of funds.

The third stage of the development of virtual economy is the marketization of securities, that is, securities can be bought and sold freely according to their expected returns, thus creating financial markets (such as stock market and bond market) for virtual capital transactions. The marketization of securities can guide the flow of funds to industries with better expected returns, thus further improving the efficiency of the use of funds. 1898 also saw the trading mode of agricultural products futures, and later it gradually extended to industrial raw materials such as nonferrous metals and petroleum, which is a new form of virtual capital.

The fourth stage of the development of virtual economy is the internationalization of financial markets, that is, virtual capital can be traded across borders. Although this process can be traced back to the middle of19th century, debtor countries and railway companies issued bonds with fixed interest rates in the financial markets of Britain, France and Germany, and there was a relatively large-scale transnational securities investment from the 1920s. It was not until after the Second World War that a huge international financial market was gradually formed under the impetus of the Bretton Woods Agreement and the General Agreement on Tariffs and Trade. Internationalization of financial markets can guide capital to industries with good returns in the international scope, greatly improve the efficiency of capital utilization, and at the same time form a new financial market-foreign exchange market. Futures trading is becoming more and more virtual, that is, buying futures as a means of speculation. Since the 1960s, futures trading has appeared in the trading of financial commodities such as stocks, bonds and foreign exchange, and options trading has also appeared in 1973.

The fifth stage of the development of virtual economy is international financial integration, that is, the domestic financial market and the international financial market are more closely linked and their mutual influence is increasing. With the formation of floating exchange rate system, the enhancement of financial innovation, the rapid progress of information technology, the improvement of financial liberalization and the development of economic globalization, the flow of virtual capital in financial markets is getting faster and faster, and the flow is getting bigger and bigger, which makes the scale of virtual economy increase continuously.

According to reports, since the 1980s, the average annual growth rate of the world economy and international trade has been around 3% and 5% respectively, but the international capital flow has increased by 25%, and the total global stock price has increased by 250%. 1997 The global virtual economy has reached 140 trillion US dollars, which is about four times the total GDP of all countries in the world (28.2 trillion US dollars). The daily average flow of global virtual capital has reached more than10.5 trillion US dollars, which is about 50 times of the global average daily actual trade volume. It can be predicted that with the development of e-commerce and e-money, the scale of virtual economy will expand.

Characteristics of Virtual Economic System

According to the viewpoint of system science, virtual economy can be regarded as a system, so that the characteristics of this system can be investigated from the internal structure of the system and the interaction between the system and the environment, thus revealing the law of system evolution. The author believes that the virtual economic system has the following main characteristics.

1. Complexity:

Complex systems are generally characterized by large scale, high coupling, low transparency, dynamics and openness, but their most essential feature is that their components have some intelligence, that is, they have the ability to understand their environment, predict their changes and take actions according to predetermined goals. This is the internal cause of biological evolution, technological innovation, economic development and social progress. Virtual economic system is a complex system, and its main components are natural persons and legal persons (investors, transferees and financial intermediaries), who conduct virtual economic activities in the financial market according to certain rules. Although everyone has the freedom to make decisions independently according to their own understanding of the environment and its development prospects, as well as their own predetermined goals, everyone's decisions cannot but be influenced by others' decisions. Although chaos is easy to appear in the system due to the nonlinear interaction between components, it can show certain order and stability because of the self-organization of the system.

2. Metastability:

The so-called metastable system refers to a system that is far from equilibrium, but can remain relatively stable through the exchange of matter and energy with the outside world. In system science, it is called a system with dissipative structure. Although this system can achieve stability through self-organization, its stability is easily destroyed by small external disturbances. After the stability of the system is destroyed, it may move in a certain range and alternately enter the steady state and the dynamic state. From a macro point of view, it can be considered that the system is stable in a certain range, that is, it has regional stability. However, sometimes the instability of the system may lead to drastic changes and even the collapse of the system. After the collapse of the system, it is possible to restore metastability through deep structural adjustment, or it may die. Generally speaking, the greater the inertia of the system, the less likely it is to collapse.

Fictitious economic system is a metastable system, which can only be kept relatively stable by exchanging funds with the outside world. There are many reasons for its metastability, but the most fundamental reason is the inherent instability of virtual capital.

The inherent instability of virtual capital comes from its own virtuality. For example, securities themselves do not have real value, but represent the right to income. They are a kind of ownership certificate, which gives its holder the legal right to claim the residual value due from the capital paid when buying securities. When securities can be bought and sold in the securities market, because they have no value, their prices are determined not according to the objective law of value, but according to people's subjective prediction of their future prices, and at the same time affected by the relationship between supply and demand, which makes their prices more divorced from the income of actual economic activities. When the price of virtual capital is far from its reasonable expectation, it will form an "economic bubble", which depends on the continuous injection of funds from outside to maintain its stability, but this is only a false and easily shattered stability.

The instability of virtual capital also comes from the virtualization of money, that is, money is not really valuable. Since the currency was decoupled from the gold standard and the gold exchange standard, although it still has the use value as a means of payment, it no longer has the value that can really be measured by something. At this time, the value of money can only be measured by its purchasing power, and the purchasing power of money is affected by factors such as currency circulation, interest rate, exchange rate and people's consumption behavior, so the virtualization of money will enhance the instability of virtual economy.

The instability of virtual capital also comes from the positive feedback in the virtual economic system. For example, the more people buy a stock, the more people buy it. This interaction between people is positive feedback, which will cause amplification effect and make the price of virtual capital fluctuate greatly.

3. High risk:

The so-called risk in economic activities refers to the difference between people's expected income and actual income, which comes from both the uncertainty of the objective world and the limited cognitive ability of people to the objective world. Virtual economy has high risks, but it also has the possibility of bringing high returns.

The high risk of virtual economic system comes from its own complexity and metastability. First of all, the inherent instability of virtual capital leads to its price fluctuation, and the increase in the scale and variety of financial market transactions makes it more complicated. Secondly, people's ability to predict market and environmental changes is insufficient, and they have not found a good method to predict expected returns so far, which is more likely to lead to decision-making mistakes; Thirdly, many people have limited ability to take risks, and they will be at a loss when facing huge risks, and even amplify the risks due to positive feedback; Finally, many people are willing to take high risks because of the pursuit of high returns, thus promoting various financial innovations with high risks and high returns, such as interest rate futures, stock index futures, price index futures, options and so on.

4. Parasitism:

There is a close relationship between virtual economic system and real economic system. Virtual economic system is generated from and attached to the real economic system. The realistic economic system includes the production of material materials and related economic activities such as distribution, exchange and consumption, which can be regarded as the circular movement of capital. For example, capitalists in the production field will purchase equipment, raw materials and labor as capital after obtaining funds from the financial market, and then sell their products as capital, thus forming a capital cycle. Capitalists use this part of the funds and the surplus value obtained through this process to repay the principal and interest according to the contract, thus completing the cycle of virtual capital.

Because the two economic systems, virtual and entity, are closely linked, risks in the real economic system, such as product backlog and enterprise bankruptcy, will be transmitted to the virtual economic system, leading to its instability. Risks in the virtual economy system, such as the sharp drop of stock index, real estate price, sharp increase of bank bad debts and sharp depreciation of currency, will also have a serious impact on the real economy. Today, finance has become the core of the economy, and the operation of the real economy cannot be separated from the virtual economic system. Therefore, if the real economic system is regarded as the hardware in the economic system, then the virtual economic system can be regarded as the software in the economic system.

5. On a regular basis:

The evolution of virtual economic system generally has cyclical characteristics, which generally includes the accelerated growth of real economy, the formation of economic bubble, the gradual expansion of money and credit, the general rise of various asset prices, the flood of optimism, the rise of stock prices and real estate prices, the bursting of economic bubble caused by external disturbances, the sharp decline of various financial indicators, the dumping of real assets and financial assets one after another, and the slowdown or negative growth of real economy. But this periodicity is not a simple cycle, but a spiral.

Financial Crisis —— The Collapse of Virtual Economic System

Financial crisis refers to the sudden and sharp deterioration of all or most financial indicators such as interest rate, exchange rate and stock price. At this time, people have sold their real assets and realized their virtual capital, which led to economic and social unrest. For example, the Latin American financial crisis of 1982, the Mexican financial crisis of 1995 and the East Asian financial crisis. Although the causes and scales of these crises are different, they have caused great harm to the countries concerned. There are three main theories about the causes of the East Asian financial crisis in international academic circles.

Economic basic theory: this theory is mainly put forward by G. Corseti, P. Krugman, P. Pesenti and N. Roubuni. They believe that the "East Asian economic miracle" is actually full of problems. Behind these economic miracles are the unstable economic foundation of East Asian countries and regions, the uncoordinated development of basic economic factors and the mistakes of macroeconomic policies of various countries. Because the basic economic factors of these countries in East Asia have gone wrong, the economic crisis is inevitable, and the financial crisis is only a reflection of the economic crisis. They attributed the formation of the East Asian financial crisis to six factors: currency overvaluation, excessive current account deficit, excessive investment, excessive support for banks, short-term loans to support long-term investment, and lack of an appropriate financial supervision system.

Financial panic theory: this theory is mainly put forward by J. Sachs, S. Radelet and others. They pointed out that the problems existing in the basic economic factors of East Asian countries and regions are not enough to constitute a financial crisis, which is mainly caused by external factors. It is the impact of international capital flows that makes people expect excessively pessimistic about the financial market and economic prospects in East Asia, and regard the problems of individual countries in East Asia as the common problems of the whole East Asia, thus causing the sudden withdrawal of foreign capital and leading to the crisis. They attributed the formation of the East Asian financial crisis to five factors: blind optimism of investors, instability of financial markets, mistaken liquidity crisis for liquidity crisis, deterioration of international market conditions and liberalization of domestic financial markets.

Capital flow theory: this theory was mainly put forward by P. Alba and others of the World Bank. They pointed out that in order to understand the causes of the East Asian financial crisis, we should carefully analyze the situation of international capital flows. The international capital flow in East Asia is characterized by the increasing proportion of private capital inflows, and the shift from industrial investment to financial securities investment. Because many East Asian countries and regions adopt fixed exchange rate system and neutral fiscal policy, the domestic fiscal deficit is stable, which creates the illusion of domestic economic stability, thus greatly facilitating the inflow of foreign capital. A large amount of capital flows into fragile economies, which may trigger a crisis. They attributed the formation of the East Asian financial crisis to four factors: imperfect financial mechanism, excessive concentration of enterprises, excessive encouragement of foreign lending, and fragile macro-economy.

The difference between the above three main viewpoints mainly lies in the difference of emphasis, and some problems pointed out are generally similar.

The author believes that from the perspective of system theory, it can be considered that the causes of financial crisis are mainly based on the internal characteristics of virtual economic system and external disturbances. Figuratively speaking, the financial crisis is like an avalanche. The rocks under the snow-capped mountains can be regarded as real economy, the snow layer covering them can be regarded as virtual economy, and the avalanche can be regarded as the collapse of virtual economy. This statement is mainly based on the metastable nature of the virtual economic system, and the dissipative structure inside the system suddenly collapses under the trigger of external factors, thus producing the snowball effect.

By investigating the structure and evolution of the virtual economic system, the causes of the financial crisis can be divided into the following five categories.

1. The real economy system is out of order:

Its main performance is the imbalance between the speed, structure and benefit of economic development. The usual problem is to focus on the pursuit of high-speed development while ignoring the benefits and the rationalization of the structure. For example, from 1990 to 1997, before the East Asian financial crisis, except LG Group, the other four major groups in Korea all relied on bank loans for large-scale diversified expansion. In this way, each group has 30 to 80 affiliated enterprises involving dozens to dozens of industries, but the asset-liability ratio is generally as high as 300-500%. Moreover, in recent years, the operating yield (profit/operating income) of Korean large enterprise groups has been declining. 1996, the profit rate of operating income of Korean large enterprises (13) which entered the top 500 in the world was only 0.77%, and it was further reduced to 0.33% in197 (12). For another example, in the past two decades, Malaysia has been pursuing the policy of actively intervening in the economy and leading the market, pursuing the "catch-up strategy", taking high investment as the primary goal of economic development, relying mainly on export-oriented export-oriented economy to promote the overall economic development, making extensive use of international capital, especially short-term capital, to support domestic credit, ignoring the adjustment and optimization of economic structure, and electronic products account for a considerable proportion in its export products. When the international market demand decreased, it failed to adjust in time, resulting in a sharp decline in exports. However, many large-scale construction projects that are not commensurate with the national strength are still under construction, which consumes a lot of foreign exchange and keeps the current account deficit high. These conditions will weaken the real economy as the foundation of the virtual economy. However, the rapid economic growth will easily lead people to be too optimistic about the future, which will lead to blind investment and blind inflow of foreign funds, thus covering up serious problems.

In addition, the problems in the operation of the real economy, such as mutual default, overcapacity, backlog of raw materials and finished products, loss-making and bankruptcy of enterprises, and a large number of idle real estate, as well as the losses caused by enterprises' failure to engage in financial speculation, will eventually impact the virtual economy system in the form of bank bad debts, making it more difficult to maintain stability.

2. Macro management error:

It is well known that macro-management mistakes have a great impact on the operation of the real economy, but the serious impact on the operation of the virtual economy is often ignored. For example, before the financial crisis, most countries and regions in East Asia adopted a fixed exchange rate system, mainly pegged to the US dollar. When the dollar appreciates, the local currency will be overvalued. In addition, the implementation of high interest rates (for example, from 19 1 to 1996, the difference between Thailand's money market interest rate and the US federal funds market interest rate exceeds 3. 15%) encourages banks to borrow from abroad, resulting in a large number of foreign investors. Some countries try their best to spread optimism and mislead investors out of the need of governance.

Encouraged and supported by investors' blind optimism, it will inevitably lead to the continuous expansion of the virtual economy and the increase of the economic bubble. The inflow of a large amount of foreign capital not only covers up the inefficiency of the real economy, but also provides energy for maintaining the dissipative structure of the virtual economy system. Due to the promising economic prospects, strong demand for local currency, and vigorous development of the stock market and real estate industry, it seems that it is not a problem to borrow new debts to repay old debts, which makes banks dare to borrow and dare to lend, which leads to excessive expansion of the virtual economy and aggravates its inherent instability.

3. The financial system is immature and fragile:

The financial system construction in many East Asian countries has failed to keep up with the rapid economic development, and the financial system is neither mature nor perfect, and it is fragile in the face of external shocks and great risks. Due to the underdeveloped capital market, some East Asian countries and regions take banks as the main financing intermediary and support long-term investment with short-term loans. Due to the lack of other financing means, constantly borrowing new debts to repay old debts has become a remedial measure for banks to make up for the low and lagging investment income, and once new debts are not borrowed, it will cause serious problems. However, due to excessive support for banks, banks have emerged a so-called moral crisis that only pays attention to profits and does not take risks. In addition, the relationship between banks and enterprises is too close, which easily leads to excessive lending behavior. The imperfection of financial institutions and the lack of proper supervision mechanism further aggravate this moral crisis.

Some East Asian countries rashly implemented financial liberalization, weakened or relaxed financial supervision, allowed a large number of domestic and foreign capital to enter and leave freely, and even allowed international speculative capital to make waves in the financial market, which became the cause of the financial crisis. For example, in 1988, there were only 74 banking institutions in Indonesia, which increased to 206 six years later (1994). Although financial institutions are expanding rapidly, management and supervision can't keep up, which leads to out of control. In this case, a large amount of foreign debts accumulated in a short period of time will inevitably lead to a crisis if they enter such a fragile financial system. Although some countries supervise financial institutions, due to the collusion between employees and financial institutions, this supervision became a mere formality until serious problems appeared. For example, during the period of 1998, several employees in major Japanese provinces were arrested for taking bribes, and 25 former financial inspectors held directors or above positions in 23 local banks. It is hard to believe that they will impose strict supervision on banks.

4. The confidence of investors has been shaken:

In every country's financial market, there are thousands of domestic and foreign investors engaged in virtual economic activities. It can be considered that every investor follows a rational behavior, that is, according to his own judgment on the market situation, he decides whether to continue investing or withdraw funds. Due to the sustained and rapid economic growth in East Asia, many East Asian countries and regions have taken various measures to actively attract foreign investment. Investors are blindly optimistic about the economic development in East Asia, expecting higher returns, and quickly invest a lot of money before calmly evaluating borrowers' repayment ability. However, once there is a problem, the market will generally panic excessively because of the disillusionment of investors' optimism and the asymmetry of information, and withdraw funds in a hurry and quickly, leading to the reverse flow of funds. It stands to reason that borrowers who have repayment ability but lack liquidity should be able to borrow cash in the capital market to repay their debts. They can't borrow money because every lender assumes that other lenders won't lend to these borrowers. At this time, the dissipative structure of virtual economic system is difficult to maintain stability without new capital injection.

5. Speculative capital makes waves:

At the same time of financial innovation and international financial integration, a number of international speculative capitals, mainly various hedge funds, have emerged. At present, there are at least 4,200 hedge funds in the United States with a total capital of over $300 billion. Its capital leverage ratio is as high as 1: 300. These financial speculators are always spying on the direction, making waves and chasing high profits. Their sense of smell is very sensitive. Once there is an arbitrage opportunity, they will get wind of it, and when it is unprofitable, they will leave quickly. The East Asian financial crisis was triggered by the impact of international speculative capital on Thailand's financial market, but this external disturbance can only play a role through the dissipative structure within the virtual economic system.

Virtual economy is the inevitable result of the highly developed market economy and science and technology, and economic virtualization is the only way to further economic development. Virtual economy is a double-edged sword, which can not only promote the development of the real economy, but also bring harm to the real economy. Its greatest harm is that it will lead to financial crisis, and may lead to economic and political crisis, leading to social unrest. Today, with the development of world multipolarization and economic globalization, we can't turn a blind eye to or completely deny the rapid development of virtual economy, but should seriously study its movement and development law in order to prevent and eliminate its negative effects as much as possible.