The definition of economics
HATTORI nobuo
nations,
in other words, the idea is that if the mountain is high, the bottom is
also
high, and Marx placed the emphasis on distribution saying that even if
the
mountain becomes higher, the bottom will not rise. I understand that
both
of them are for the purpose of eradicating poverty. There is a theory
that
policy of raising the bottom would result in the loss of will to work,
and
the same could be said about overdone welfare. I believe that the study
of
raising the bottom by putting these together is economics.
What is social progress? I believe it is to raise the bottom.
For that purpose, it should be clearly defined that “Economics is the stu
dy
to eradicate poverty from earth”.
Jimmy
For instance... the study of home economics is to increase the quality of
life for all who dwell in the home, whereas the study of corporate economics
is how to increase your market share by cutting into others market share...
thereby attempting to annhialte competitors within the degree of declared
monopoly.
2 different aims of economics.
HATTORI nobuo <hatt...@ta2.so-net.ne.jp> wrote in message
news:hattorin-131...@p8027b7.fnbspc00.ap.so-net.ne.jp...
Mason Clark
> I believe that the study of raising the bottom by putting these together is economics.
> What is social progress? I believe it is to raise the bottom.
> For that purpose, it should be clearly defined that Economics is the study
Amen. Right on. Correct. Which reminds me to update my signature:
---------------------------------------------------
Posted on this day of the Ninety-nine Year War
---------------------------------------------------
Civilized economic theory is concerned with the
condition of the bottom ten percent. The rest can
take care of themselves.
Hyman Blumenstock
Every last problem of the 20th century, the human misery, crime,
violence, war, slaughter, depredation of the environment, can be laid
directly upon the doorstep of Doctrinaire Economics. Their self
imposed function during the Agrarian era of food scarcity was the
negative one of determining who shall NOT be permitted to share in the
then scarce food supply, via the means of marketplace, barter, and
then the fiction of money to act as a "ticket of access" to the scarce
food supply. The purpose -- to assure that those deemed most entitled
to eat would not have to worry about depleting the food supply feeding
those deemed least entitled.
When food became abundant (circa 1888) the Doctrinaire Economic
profession, upset that their function of determining who shall not eat
would become moot, immediately initiated food destruction and
subsidies not to produce food. Failing at restoring food scarcity,
they cleverly shifted our natural obesssion with food into an
unnatural obsession with the fiction of money, and since then has kept
that in as scarce supply as food had been, and thereby maintain the
Have, Have-Not dichotomy upon which the Economist thrives. His
function then of denying access to those deemed least entitled could
be maintained instead of that sick, appropriately called 'dismal
profession' becoming, as it should, moot and relegated to the history
books. Therein lies the reason for the ever escalating hostilities of
the hungry versus the now overfed.
HB
Hyman Blumenstock
Every last problem of the 20th century, the human misery, crime,
Robert Simon
> Every last problem of the 20th century, the human misery, crime, violence, war, slaughter, depredation of
> the environment, can be laid directly upon the doorstep of Doctrinaire Economics. Their self
> imposed function during the Agrarian era of food scarcity was the negative one of determining who shall
> NOT be permitted to share in the then scarce food supply, via the means of marketplace, barter, and then
> the fiction of money to act as a "ticket of access" to the scarce food supply. The purpose -- to assure
> that those deemed most entitled to eat would not have to worry about depleting the food supply feeding
> those deemed least entitled.
>
> When food became abundant (circa 1888) the Doctrinaire Economic profession, upset that their function of
> determining who shall not eat would become moot, immediately initiated food destruction and subsidies not
> to produce food. Failing at restoring food scarcity, they cleverly shifted our natural obesssion with food
> into an unnatural obsession with the fiction of money, and since then has kept
> that in as scarce supply as food had been, and thereby maintain the Have, Have-Not dichotomy upon which
> the Economist thrives. His function then of denying access to those deemed least entitled could be
> maintained instead of that sick, appropriately called 'dismal profession' becoming, as it should, moot and
> relegated to the history books. Therein lies the reason for the ever escalating hostilities of the hungry
> versus the now overfed.
its a travesty that Mr. Blumenstock didn't get this years Nobel Prize for Economics. He has practically
solehandedly invented the field of Conspiratorial Economics. But why was he not recognized?
Could it be that the world has not yet achieved the necessary technical proficiency to digest his advanced
theorizing.
Or is it possible that his utter lack of historical evidence undercuts the legitimacy of his theories.
OR...can it be that the "Doctrainaire Economics" cabal recognizes the threat Mr. Blumenstock poses to their
orthodoxy.....and is thus doing their utmost to delegitimize his views.
Galilieo too was mocked in his own time but now is known as a brilliant theorist. Ah the torture of being a
true intellectual pioneer.
PS I am impressed by Dick Eastman's paranoid rantings too.
ROB
Day Brown
> For that purpose, it should be clearly defined that Economics is the stu
> dy to eradicate poverty from earth.
Noble sentiment.
Under Communism, the government owns all the business, and the guy
who runs the factory rides home in a limo to a trophy wife.
Under Capitalism, the business owns all the government, and the guy
who runs the factory rides home in a limo to a trophy wife.
When have we seen it otherwise? It has been a while. The Minoans,
the Cucuteni, the Sarmatians, the Tocharians, and a few others. What
they all had in common was that the entire power structure was run
by women. All the words relating to authority or resources which we
have in Proto-Indo-European are feminine forms.
They did not have kings, so they did not build monuments or palaces
for them. Even the palace at Knossus is not a palace, but an administrative
center with many small apartments. whether the graveyard is at Urumchi
or Varna, what we see are people who show no evidence of deprivation
or abuse, and the grave goods are relatively egalitarian, no lavish tombs
for kings.
Whereas the patriarchic cultures all show palaces surrounded by the huts of
the poor, the Minoan city of Thera is like the Cucuteni tels, large communal
houses with no evidence of slums at all, much less a caste system.
It is the difference between the Bonobo and the Chimpanzee.
Hyman Blumenstock
> Hyman Blumenstock wrote:
>
> > Every last problem of the 20th century, the human misery, crime, violence, war, slaughter, depredation of
> > the environment, can be laid directly upon the doorstep of Doctrinaire Economics. Their self
> > imposed function during the Agrarian era of food scarcity was the negative one of determining who shall
> > NOT be permitted to share in the then scarce food supply, via the means of marketplace, barter, and then
> > the fiction of money to act as a "ticket of access" to the scarce food supply. The purpose -- to assure
> > that those deemed most entitled to eat would not have to worry about depleting the food supply feeding
> > those deemed least entitled.
> >
> > When food became abundant (circa 1888) the Doctrinaire Economic profession, upset that their function of
> > determining who shall not eat would become moot, immediately initiated food destruction and subsidies not
> > to produce food. Failing at restoring food scarcity, they cleverly shifted our natural obesssion with food
> > into an unnatural obsession with the fiction of money, and since then has kept
> > that in as scarce supply as food had been, and thereby maintain the Have, Have-Not dichotomy upon which
> > the Economist thrives. His function then of denying access to those deemed least entitled could be
> > maintained instead of that sick, appropriately called 'dismal profession' becoming, as it should, moot and
> > relegated to the history books. Therein lies the reason for the ever escalating hostilities of the hungry
> > versus the now overfed.
>
> its a travesty that Mr. Blumenstock didn't get this years Nobel Prize for Economics. He has practically
> solehandedly invented the field of Conspiratorial Economics. But why was he not recognized?
You are impressed by the Nobel Prize? A committee of Economists
awarding each other the honor?
>
> Could it be that the world has not yet achieved the necessary technical proficiency to digest his advanced
> theorizing.
My "advanced theorizing" is no more than a new born baby knows about
economics, and that's all there is pragmatically. "Feel a hunger
pang, do something about it, and being fed, know peace and contentment
insofar as one's Security is concerned." Self Esteem is a totally
different subject, that the Economic profession touches not at all,
but it is also a part and parcel of Motivation that moves people to do
things. Without full Security deliberately curtailed and without Self
Esteem involved, what is done are usually antisocial things.
>
> Or is it possible that his utter lack of historical evidence undercuts the legitimacy of his theories.
Like the utter lack of evidence of putting a man on the moon in all of
ancient history undercuts the legitimacy of the theory of putting a
man on the moon. Pull your head out and smell the fresh air.
>
> OR...can it be that the "Doctrainaire Economics" cabal recognizes the threat Mr. Blumenstock poses to their
> orthodoxy.....and is thus doing their utmost to delegitimize his views.
Exactly. Imagine professors with PhDs failing to come up with logical
rebuttals to what they are supposed to be expert in, and instead
resorting to foul epithets attacking the messenger before running off
in dismay shouting in effect, "Don't bother me with the facts, my mind
is made up." For they have a lot to unlearn to become useful citizens
again with a legitimate goal. A blow to their prestigious positions
and ego. Of course, not one iota of living a good life need be
forfeited if they were to suddenly accept the truth.
>
> Galilieo too was mocked in his own time but now is known as a brilliant theorist. Ah the torture of being a
> true intellectual pioneer.
Could you ever become one, with your mind so overladen with Economic
BS?
>
> PS I am impressed by Dick Eastman's paranoid rantings too.
Again, attacking the messenger, proves only your dismay at being found
out to be an ignoramus instead of the scholar you imagined you were.
HB
>
> ROB
Tim Worstall
>
> > For that purpose, it should be clearly defined that Economics is the stu
> > dy to eradicate poverty from earth.
anything real like child mortality, life spans etc. So therefore
economics must be doing a pretty good job ?
There is a reasonable definition of economics which has nothing to do
with social progress, capitalism, marxism nor the patriarchal \
matriarchal divide that one writer tried to introduce.
Firstly one should realise that economics is descriptive, not
prescriptive. It doesn't attempt to tell people what to do, just
describes what they already do do. In mushc the same way that a
primate anthropologist might distinguish between chimpanzees and
bonobos.
Secondly, it is a science, a social science to be sure, but a science
all the same.
Thirdly, think about what it is that it is trying to describe....how
human beings react to a certain set of stimuli.
So the real definition of economics can be boiled down to ' we have
noticed that humans do these things under these circumstances.'
There, that wasn't very tough, was it ?
As for the idea that money and trade are a method of restricting
access to food during the Agrarian times.....have you ever actually
though about what you are saying ?
Hunter Gatherer societies don't have trade or money.....everyone is
too busy getting today's food. Only with the introduction of
agriculture, and the concomitant food SURPLUS is it possible for
people to do anything except hunt and \ or gather. So only after
agriculture can you have specialisation, and thus trade and a market.
So I think you've got your observation precisely 180 degrees the wrong
way round. Trade, money and markets came about as a result of
allocating the food surplus between the various specialists that that
surplus allowed to exist. And this happened some thousands of years
before 1880, like 7,000 or 8,000 BC.
Matriarchal or patriarchal societies ? Fine, doesn't bother either me
or economics. The economist is only trying to describe what happens,
not what should happen.
Tim Worstall
Hyman Blumenstock
Well, go on, go on. Drop the other shoe. what is your stand on this
matter? What do you propose we do ro resolve the apparently never
resolvable social problems? Or is it your position that there are no
social problems? That the ever increasing violence of the Have-Nots
versus the Haves is inevitable, and as pictured in
<http://www.dieoff.com>, we are destined to return to the Agrarian era
with the new weaponry developed during the 20th century instead of
sixshooters.
HB
Robert Simon
>
> > its a travesty that Mr. Blumenstock didn't get this years Nobel Prize for Economics. He has practically
> > solehandedly invented the field of Conspiratorial Economics. But why was he not recognized?
> >
> > Could it be that the world has not yet achieved the necessary technical proficiency to digest his advanced
> > theorizing.
> >
> > Or is it possible that his utter lack of historical evidence undercuts the legitimacy of his theories.
> >
> > OR...can it be that the "Doctrainaire Economics" cabal recognizes the threat Mr. Blumenstock poses to their
> > orthodoxy.....and is thus doing their utmost to delegitimize his views.
> >
> > Galilieo too was mocked in his own time but now is known as a brilliant theorist. Ah the torture of being a
> > true intellectual pioneer.
> >
> > PS I am impressed by Dick Eastman's paranoid rantings too.
> >
> > ROB
>
> Well, go on, go on. Drop the other shoe. what is your stand on this matter? What do you propose we do ro
> resolve the apparently never resolvable social problems? Or is it your position that there are no social
> problems?
so lets see...I criticize Mr. Blumenstock's view of the history of economic theory on the basis that he can not
provide a single shred of evidence to back up his views and that is interpreted to mean that I believe there are
no social problems in the world? Whether or not I have solutions to all of the worlds social ills (which I do
not) has absolutely nothing to do with the history of economic thought. HBs statement which he has often repeated
is that "Doctrinaire Economics" was developed during the "Agrarian Era" solely to deal with food. Since the end
of the "Agrarian Era" - cited by HB as approximately 1888 - "Doctrinaire Economics" has sought to make itself
useful by changing its focus but is ultimately irrelevent..
while I don't claim to be an expert on the history of economic thought here is a "brief history" touching on the
major works through about 1888.
modern economic thought is traced back to the writings of the mercantilists whose work generally dealt with
optimal trade policy, monetary theory, and regulation - NOT food. Mercantilism was in its primacy from the 1500s
through the mid 1700s. Some of the major names were Von Hornick, Malynes, Misselden, Mirabeau, John Locke, and
most importantly Hume (quantity theory of money).
Petty - mid 1600s -seperated positive theory from normative theory, and furthered the quantity theory of money by
adding the concept of velocity. He also worked on developing a labor theory of value by comparing the
productivity of land versus labor (yes he talked about food indirectly) although he failed to explain relative
prices. (This is the closest that I can find to HBs theory of the world).
Cantillion - early 1700s - built on Petty but rejected his labor theory of value. His work predicts much of Smith
making distinctions between market price and intrinsic value (hmm someone figured this out in 1734!) discussed how
prices adjust to international trade, looked at flows between different sectors of the economy, and showed the
relation between velocity and money stock.
the Physiocrats of the early to mid 1700s viewed the world as having a natural order with the goal being
production of surplus value. They further hypothesized that only agriculture produced true surplus value (note
this includes both food goods and non food goods such as cotton). Their view is NOT that only food has value
because we can't live without it - as hypothesized by HB - but rather that manufacturing ould only change the form
of already produced goods and was thus incapable of producing additional surplus value over cost. Quesnay 1750s
is the best known of this school.
I assume that between 1750 and 1776 the so named "Agrarian Period" had not yet ended.
In 1776 Adam Smith published "Inquiry Into the Nature and Causes of the Wealth of Nations". His work kicked off
the classical period of economic theory which lasted until the late 1800s. Smith developed the ideas of division
of labor, price and allocation, and the nature of economic growth. His "invisible hand" is the basis of the
utility maximizing individual and the profit maximizing firm. He explicitly recognized the difference between
"value in use" and "value in exchange" and how price in a market system is governed by the latter according to the
laws of supply and demand (which he apparently did not fully understand). Smith recognized the labor theory of
value but also the theoretical problems with the LTV. He understood that wages were determined by the same forces
as prices in other markets. He also posited the wages fund theory which said that growth required a fund of built
up wages (this was not quite correct). He did recognize that capital accumulation is a key to growth. Food does
NOT appear prominantly in his work. This is widely considered to be the most important work in the history of
economic thought.
Bentham - late 1700s early 1800s - converted Smiths idea of the self interested individual into a theory of
utility. Food was not central to his theory although certainly sustinance is a source of utility.
Malthus - early 1800s - created a commotion when he hypothesized that population grew geometrically but food
supply grew linearly therefore predicting future catastrophy. His work has been proven false on both theoretical
and empirical grounds as population does not necessarally grow exponentially (it seems to grow slower in more
developed countries- see Germany and Japan) whereas agricultural production can grow faster than linearly (see
the US post WWII).
the classical school which ran from about the time of Malthus to Mill posited a Malthusian population principle,
diminishing returns to agriculture, and the wages-fund doctrine and led to an undesireable stationary state. Its
most well known expositor was David Ricardo.
Ricardo - early 1800s - is best known for the labor theory of value. The LTV would play an important part in
economic theory in that it spawned Marx's theory of value and was considered important at the time BUT what HB
calls "Doctrinaire Economics" explicitely rejects the LTV. The great contribution of the LTV is that the
criticisms of it helped develop "Doctrinaire Economic" theory. Ricardo did contribute the theory of comparative
advantage which undergirds "Doctrinaire" international trade theory.
John Stuart Mill - mid 1800s - unlike Ricardo recognized the factors of growth to be of technological growth,
population growth, and capital accumulation (shades of Solow!) however Mill believed in diminishing returns to
scale and declining returns to investment. He recognized that supply and demand should be represented as
functions of prices and hypothesized that price was determined at the intersection of the two and that shifting
of the curves led to price changes (although not in so many words). He combined Ricardo's view of comparative
advantage with his own laws of supply and demand to give us international trade theory. Mill's understanding of
general equilibrium predicts the ideas of Walras. Finally Mill rejected the wage-fund theory although on
questionable grounds. Mill understood many of the laws of economics as we now understand them but also discussed
situations in which the invisible hand did not lead to socially optimal outcomes. BTW Mill discussed exchange of
all sorts of goods not just food.
I have of course ignored a number of 19th century theorists including Saint Simon, the Utopians, and Marx on the
grounds that what HB refers to as "Doctrinaire Economics" springs from a different branch of the tree.
The late 1800s saw an explosion of micro theory. Gossen in the mid 1850s had applied mathematical analysis to
utility maximization. Menger extended this theory to the the interaction of utility with supply and demand
although without the math. Cournot mathematized the theory of the firm and essentially created the theories of
monopoly, duopoly, and stability. In the context of profit functions he discovered what would be the next major
breakthrough "marginal analysis". Dupuit was the first to analyze public goods leading to the development of
welfare economics. Weiser created input-outut analysis using fixed proportion production functions. Bohm-Bawerk
integrated time into production giving birth to capital theory and the theory of interest. Jevons put this all
together constructing a theory of utility which led to a theory of exchange and labor supply. Jevons was the
great proponenet of "marginalism" understanding that consumers will maxmize utility u(x,y) over goods x and y by
equating du/dx to du/dy.
we are right about at Marshall and Walras but we are also at the end of the "Agrarian Era" as defined by HB.
Almost all of the major ideas of microeconomic theory are in place and they are not built on a foundation of
food. The beginnings of trade theory are in place and they are not based on food. Macroeconomics was not so well
developed yet (but not based on food). The quantity theory is pretty well in place (not food) and capital theory
is starting out (also not food) but it would still be a few years before Fisher seperated interest rates into the
real and the nominal and before Keynes/Hicks/Hansen/Samuelson et al would tackle the questions of full
employment. Solow's theory of growth, game theory, and portfolio theory would have to wait another 70 years.
Any corrections to the above would be gladly accepted.
ROB
Robert Simon
>
oops I lost a bit of text on Jevons. That should read
> Jevons put this all together constructing a theory of utility which led to a theory of exchange and labor supply.
> Jevons was the great proponenet of "marginalism" understanding that consumers will maximize utility u(x,y) over
a budget constraint p(x)*x+p(y)*y=m by equating (du/dx)/p(x)=(du/dy)/p(y)
Sorry about that
Chasna1
>so lets see...I criticize Mr. Blumenstock's view of the history of economic
>theory on the basis that he can not
>provide a single shred of evidence to back up his views<
You have completely failed to understand the utter charm of professor
Blumenstock's methodology. Blumenstock is absolutely excellent and without
equal in the poverty of his research.
Hyman Blumenstock
> Hyman Blumenstock wrote:
>
> >
> > > its a travesty that Mr. Blumenstock didn't get this years Nobel Prize for Economics. He has practically
> > > solehandedly invented the field of Conspiratorial Economics. But why was he not recognized?
Who is it that determines who shall get the Nobel Prize in Economics?
No one but other economists. Like the Mafia determining who shall get
the Nobel Prize in proficiency in robbing the public.
> > >
> > > Could it be that the world has not yet achieved the necessary technical proficiency to digest his advanced
> > > theorizing.
The problem is the total lack of objectivity of people like Rob here,
who have had their minds filled from birth on with the equivalent of
that the moon is made of green cheese. Try an approach, if possible,
as if you are an alien intelligence just discovering the human race
and its practices. Question everything. Accept nothing unless it
makes pure sense.
> > >
> > > Or is it possible that his utter lack of historical evidence undercuts the legitimacy of his theories.
In the remarkably successfull Real Sciences, there is no historical
evidence whatsoever required for any successful high tech development.
Like what is the past evidence of going to the moon, when we finally
did go to the moon. All the past shows is the development of enough
knowledge. Which of that primitive knowledge is useful in resolving
any modern problem? Like would Tom Edison's development of the light
bulb having any value towards resolving an electrical problem in a
modern microchip.
> > >
> > > OR...can it be that the "Doctrainaire Economics" cabal recognizes the threat Mr. Blumenstock poses to their
> > > orthodoxy.....and is thus doing their utmost to delegitimize his views.
> > >
> > > Galilieo too was mocked in his own time but now is known as a brilliant theorist. Ah the torture of being a
> > > true intellectual pioneer.
> > >
> > > PS I am impressed by Dick Eastman's paranoid rantings too.
> > >
> > > ROB
> >
> > Well, go on, go on. Drop the other shoe. what is your stand on this matter? What do you propose we do ro
> > resolve the apparently never resolvable social problems? Or is it your position that there are no social
> > problems?
>
> so lets see...I criticize Mr. Blumenstock's view of the history of economic theory on the basis that he can not
> provide a single shred of evidence to back up his views and that is interpreted to mean that I believe there are
> no social problems in the world? Whether or not I have solutions to all of the worlds social ills (which I do
> not) has absolutely nothing to do with the history of economic thought. HBs statement which he has often repeated
> is that "Doctrinaire Economics" was developed during the "Agrarian Era" solely to deal with food. Since the end
> of the "Agrarian Era" - cited by HB as approximately 1888 - "Doctrinaire Economics" has sought to make itself
> useful by changing its focus but is ultimately irrelevent..
>
> while I don't claim to be an expert on the history of economic thought here is a "brief history" touching on the
> major works through about 1888.
>
> modern economic thought is traced back to the writings of the mercantilists whose work generally dealt with
> optimal trade policy, monetary theory, and regulation - NOT food. Mercantilism was in its primacy from the 1500s
> through the mid 1700s. Some of the major names were Von Hornick, Malynes, Misselden, Mirabeau, John Locke, and
> most importantly Hume (quantity theory of money).
As an _objective_ observer, I would note that every living creature
spends its waking hours with only one thing on its mind -- where is my
next meal to come from, the intensity of urging is dependent upon how
close to death from starvation that creature happens to be. That is
ALL living creatures until around 1888 when some living creatures,
some of the human race, managed to create an abundance of food. That
event was marked by the sudden advent of deliberate food destruction,
and subsidies to farmers NOT to produce food. For what other reason
were these practices initiated? However, most of the existing human
race, still have food as number one in their thoughts as virtually an
emergency pursuit.
What can possibly be the source of the commonly used word of "income?"
It implies something that has to "come in" somewhere. As virtually
the only possession of the entire animal kingdom is only the
individual's body, that is equipped with an orifice, the mouth,
wherein something can be put in, it is most likely that the word
"income" can mean only what "comes in" to that orifice. Even the
modern extension of "income" to mean money received, as money is meant
only to _buy food_ (and food derived GDP) it has lost its precision of
meaning, but means ultimately that food can be acquired to provide the
original concept of "income," and also for those GDP producers, the
very same meaning. It is also called "earning a living," wherein if
food is not ingested, that "living" will be replaced by "death."
>
> Petty - mid 1600s -seperated positive theory from normative theory, and furthered the quantity theory of money by
> adding the concept of velocity. He also worked on developing a labor theory of value by comparing the
> productivity of land versus labor (yes he talked about food indirectly) although he failed to explain relative
> prices. (This is the closest that I can find to HBs theory of the world).
This fellow deserves a B for his recognition of food as the essence of
life, though apparently accepting the universal feeling that food will
never be abundant enough, how to distribute it to a hungry population.
"Prices" set up a barrier wherein anyone without the "price" will not
be able to access the food supply, it being then scarce.
>
> Cantillion - early 1700s - built on Petty but rejected his labor theory of value. His work predicts much of Smith
> making distinctions between market price and intrinsic value (hmm someone figured this out in 1734!) discussed how
> prices adjust to international trade, looked at flows between different sectors of the economy, and showed the
> relation between velocity and money stock.
This fellow deserves a D for straying so much from the essence of
life, food to dwell only upon "money stock," which by itself does
nothing to keep anyone alive, except if food is substituted for it.
Further, he fails to recognize that "value" is determined by life,
that is supported by food. Therefore "value" as a concern can only be
attached to food, insofar as it was scarce then. Arms and legs and
other parts of the body also have "value" but who needs to think about
that except if threatened with their loss (scarcity)?
>
> the Physiocrats of the early to mid 1700s viewed the world as having a natural order with the goal being
> production of surplus value. They further hypothesized that only agriculture produced true surplus value (note
> this includes both food goods and non food goods such as cotton). Their view is NOT that only food has value
> because we can't live without it - as hypothesized by HB - but rather that manufacturing ould only change the form
> of already produced goods and was thus incapable of producing additional surplus value over cost. Quesnay 1750s
> is the best known of this school.
Again, all effort, including producing cotton, is dependent upon
feeding that labor, or they could not produce anything.
>
> I assume that between 1750 and 1776 the so named "Agrarian Period" had not yet ended.
>
> In 1776 Adam Smith published "Inquiry Into the Nature and Causes of the Wealth of Nations". His work kicked off
> the classical period of economic theory which lasted until the late 1800s. Smith developed the ideas of division
> of labor, price and allocation, and the nature of economic growth. His "invisible hand" is the basis of the
> utility maximizing individual and the profit maximizing firm. He explicitly recognized the difference between
> "value in use" and "value in exchange" and how price in a market system is governed by the latter according to the
> laws of supply and demand (which he apparently did not fully understand). Smith recognized the labor theory of
> value but also the theoretical problems with the LTV. He understood that wages were determined by the same forces
> as prices in other markets. He also posited the wages fund theory which said that growth required a fund of built
> up wages (this was not quite correct). He did recognize that capital accumulation is a key to growth. Food does
> NOT appear prominantly in his work. This is widely considered to be the most important work in the history of
> economic thought.
Appropriately put. Here, you thoroughly criticize his ignorance even
of modern economic thought, and yet you call it the "most important
work in the history of economic thought." Is there any scholastic
award less than D?
>
> Bentham - late 1700s early 1800s - converted Smiths idea of the self interested individual into a theory of
> utility. Food was not central to his theory although certainly sustinance is a source of utility.
Then he deserves a D. Without sustenance, who would remain to create
any "utility" except fertilizing the soil with his dead body?
>
> Malthus - early 1800s - created a commotion when he hypothesized that population grew geometrically but food
> supply grew linearly therefore predicting future catastrophy. His work has been proven false on both theoretical
> and empirical grounds as population does not necessarally grow exponentially (it seems to grow slower in more
> developed countries- see Germany and Japan) whereas agricultural production can grow faster than linearly (see
> the US post WWII).
The very fact that food became abundant here, releasing labor that
eventually created the Industrial Revolution, and with further
efficiency, indicated by ever increasing unemployment, yet created the
high tech developments of the 20th century, indicates that Malthus was
radically wrong. All we need do today to eliminate the world's
classic problems, all stemming from food scarcity, is to teach the
rest of the world, how to produce an adequacy of food for themselves.
>
> the classical school which ran from about the time of Malthus to Mill posited a Malthusian population principle,
> diminishing returns to agriculture, and the wages-fund doctrine and led to an undesireable stationary state. Its
> most well known expositor was David Ricardo.
Another D. As "return" is classically meant to be FOOD, with which
one's "living" is assured as he ingests it, the concept of "return" to
agriculture makes no sense whatsoever, as agriculture is the _source_
of food.
>
> Ricardo - early 1800s - is best known for the labor theory of value. The LTV would play an important part in
> economic theory in that it spawned Marx's theory of value and was considered important at the time BUT what HB
> calls "Doctrinaire Economics" explicitely rejects the LTV. The great contribution of the LTV is that the
> criticisms of it helped develop "Doctrinaire Economic" theory. Ricardo did contribute the theory of comparative
> advantage which undergirds "Doctrinaire" international trade theory.
"Trade" of what specifically? Primitive mumbo jumbo.
>
> John Stuart Mill - mid 1800s - unlike Ricardo recognized the factors of growth to be of technological growth,
> population growth, and capital accumulation (shades of Solow!) however Mill believed in diminishing returns to
> scale and declining returns to investment. He recognized that supply and demand should be represented as
> functions of prices and hypothesized that price was determined at the intersection of the two and that shifting
> of the curves led to price changes (although not in so many words). He combined Ricardo's view of comparative
> advantage with his own laws of supply and demand to give us international trade theory. Mill's understanding of
> general equilibrium predicts the ideas of Walras. Finally Mill rejected the wage-fund theory although on
> questionable grounds. Mill understood many of the laws of economics as we now understand them but also discussed
> situations in which the invisible hand did not lead to socially optimal outcomes. BTW Mill discussed exchange of
> all sorts of goods not just food.
What "goods" can come into existence without the producer thereof
enjoying a sufficency of breakfast, lunch and dinner?
>
> I have of course ignored a number of 19th century theorists including Saint Simon, the Utopians, and Marx on the
> grounds that what HB refers to as "Doctrinaire Economics" springs from a different branch of the tree.
Whatever it springs from, Doctrinaire Economics is a total disaster.
>
> The late 1800s saw an explosion of micro theory. Gossen in the mid 1850s had applied mathematical analysis to
> utility maximization. Menger extended this theory to the the interaction of utility with supply and demand
> although without the math. Cournot mathematized the theory of the firm and essentially created the theories of
> monopoly, duopoly, and stability. In the context of profit functions he discovered what would be the next major
> breakthrough "marginal analysis". Dupuit was the first to analyze public goods leading to the development of
> welfare economics. Weiser created input-outut analysis using fixed proportion production functions. Bohm-Bawerk
> integrated time into production giving birth to capital theory and the theory of interest. Jevons put this all
> together constructing a theory of utility which led to a theory of exchange and labor supply. Jevons was the
> great proponenet of "marginalism" understanding that consumers will maxmize utility u(x,y) over goods x and y by
> equating du/dx to du/dy.
>
> we are right about at Marshall and Walras but we are also at the end of the "Agrarian Era" as defined by HB.
> Almost all of the major ideas of microeconomic theory are in place and they are not built on a foundation of
> food. The beginnings of trade theory are in place and they are not based on food. Macroeconomics was not so well
> developed yet (but not based on food). The quantity theory is pretty well in place (not food) and capital theory
> is starting out (also not food) but it would still be a few years before Fisher seperated interest rates into the
> real and the nominal and before Keynes/Hicks/Hansen/Samuelson et al would tackle the questions of full
> employment. Solow's theory of growth, game theory, and portfolio theory would have to wait another 70 years.
>
> Any corrections to the above would be gladly accepted.
Once formally established, and the original impetus to alleviate the
ancient problems, all sourced in food scarcity, the achievement of
food abundance would have terminated the need for an already
established profession. To avoid this, the rules of the game were
drastically changed, and the profession is maintained with the effect
of a deadly tumor upon the body politic that will destroy that body,
as promised in <http://www.dieoff.com>, unless it is excised, or at
least its major assult upon the body politic is countered directly.
That is the deliberate maintenance of a scarcity of funding, intended
to emulate the ancient scarcity of food, that caused its development
in the first place.
The simplest and easiest cure for now is to make sure that funding is
adequate, as measured by the requirments of a good life for every
individual at today's prices. It can be done by creating enough work
in the public service area, traditionally requiring funding instead of
"making money" in the production area.
>
> ROB
Robert Simon <si...@netacc.net> wrote in message news:<3BD3BAE0...@netacc.net>...
> Robert Simon wrote:
>
> >
>
> oops I lost a bit of text on Jevons. That should read
>
> > Jevons put this all together constructing a theory of utility which led to a theory of exchange and labor supply.
> > Jevons was the great proponenet of "marginalism" understanding that consumers will maximize utility u(x,y) over
>
> a budget constraint p(x)*x+p(y)*y=m by equating (du/dx)/p(x)=(du/dy)/p(y)
>
> Sorry about that
All these erudite people referred to, with the complexity of their
theories, and still not one success in resolving economic problems,
while the Real Sciences can't specify even one ancient Real Science
scholar as pertinent to today's Real Science problems. The ultimate
test of validity of any theory is Success or Failure in its
application. How come not here?
Further, all that theorizing by all those ancient and modern scholars
seem to be totally lopsided. All concerned about INCOME into the human
body. Not one reference to any thoughts about theorizing about the
OUTGO of the human body, an essential result and follow up of all that
INCOME. What a wealth of written reference material could be
developed about that essential aspect, warranting doubling the current
Economic departments of all our universities from just concern about
Income, but also Outgo. Why do we leave that aspect of Economics only
to the plumbing profession?
What it all boils down to, from the unbiased mind, is here, on the one
hand, is a population of people, all, without exception, having a
stomach needing to be periodically filled, and here, on the other
hand, a stockpile of food that can be maintained in sufficient supply
for the entire population. It requires no more erudition, no more
complexity to basic Economics, that a new born baby is born being
aware of, than to make that stockpile freely available to everyone who
desires to fill his stomach periodically. There is no need for
marketplace, exchange, money, pricing, cost, debt, financing, not one
bit of anything presented in any economics text, and the world would
be magnitudes better off and not, as now, speeding helter skelter for
the horrors depicted in <http://www.dieoff.com>.
And as is the Real Science experience, there is nothing in the past to
refer to at all in order to successfully manage modern affairs.
HB
Ron Peterson
> Any corrections to the above would be gladly accepted.
That's good, but do you have it on a web page with better formatting?
Ron
Hyman Blumenstock
> > >What is social progress? I believe it is to raise the bottom.
> Economics and social progress are not the same thing at all.
"Economics" from the very origin of the word, means "Management of the
House," or during food scarce times, how to distribute scarce food to
those deemed most entitled and to prevent those deemed least entitled
from any access. This is supposed to be an improvement over the
naturally bloody battles of the entire animal kingdom over who shall
have and eat whatever scrap of food is found available. Social
progess therefore must be the attainment of ever increasing supplies
of food, until the entire human race is satiated with food, as we have
always been satiated with Air and Water. Air and Water relate to Food
as the only items that insure unconditional death in their absence for
a long enough period. A few moments for Air, a few days for Water,
and no more than two months for Food.
>
> > > For that purpose, it should be clearly defined that Economics is the stu
> > > dy to eradicate poverty from earth.
> The bottom has risen over the last couple of centuries....measured by
> anything real like child mortality, life spans etc. So therefore
> economics must be doing a pretty good job ?
On the contrary, it is the Real Science approach of increasing
technology and efficiency of production that has done that. The
Economic profession deplores any such thing happening because as it
happens, the usefullness of the economic profession in allocating
essential resources to only the most entitled and nothing to the least
entitled, would become moot, and its practitioners to have to forget
all they've studied as useless, and seek new goals to conquer. A
frightening concept given the (unjustified) full faith and credit from
an ignorant population they now enjoy, and all its perks.
>
> There is a reasonable definition of economics which has nothing to do
> with social progress, capitalism, marxism nor the patriarchal \
> matriarchal divide that one writer tried to introduce.
> Firstly one should realise that economics is descriptive, not
> prescriptive. It doesn't attempt to tell people what to do, just
> describes what they already do do. In mushc the same way that a
> primate anthropologist might distinguish between chimpanzees and
> bonobos.
On the contrary. Their established marketplace has as its function
who shall participate and who shall not. Only those who have
something to offer, shall benefit from any return. All others, "Get
lost." This is all accomplished by the concept of "exchange," that
includes the barter and later the money (as a ticket of access to
anything) system. Those without anything to offer, or no money, again
"Get lost."
> Secondly, it is a science, a social science to be sure, but a science
> all the same.
The phrase "Social Science" is an oxymoron, as "science" refers to
practical knowledge. The simple test of any discipline is whether it
fails continually, or has as its norm, success. What Social or
Economic problems have ever been resolved?
> Thirdly, think about what it is that it is trying to describe....how
> human beings react to a certain set of stimuli.
A new born baby responds immediately to the stimulus of hunger, by
doing something about it, (for him to cry, and for the more mature to
forage, cultivate, and for any society wherein Food, through
technological development and maintenance becomes abundant enough for
all, to freely distribute as Air and Water are freely distributed, or
should be. That is the stimulus for Security, that should be freely
available so that one's thoughts can be applied only to the ignored
stimulus of Self Esteem. "How can one demonstrate his usefullness and
personal value to society?"
>
> So the real definition of economics can be boiled down to ' we have
> noticed that humans do these things under these circumstances.'
For any discipline to just "notice," fine. But to deliberately
curtail elimination of problems is outrageous, and is the cause of
every bit of unpleasantness that marred the entire 20th century, and
includes the September 11th events. It can only get worse, as the
Have-Not category that is maintained only through the machinations of
the Economic profession get ever wiser and stronger.
>
> There, that wasn't very tough, was it ?
Think again. Only this time with a mind unbiased by all the economic
BS we all have forcefully inserted into our minds by rote from birth
on.
>
> As for the idea that money and trade are a method of restricting
> access to food during the Agrarian times.....have you ever actually
> though about what you are saying ?
Absolutely. For what other purpose is the essentially hostile concept
of quid pro quo. But to gain an advantage over the other party, even
to cheating him if possible. Only a too rare form of morality will
make any transaction less hostile. Whatever is in scarce supply has
restrictions to its free use, including absolute denial to anyone who
would compromise that use to others deemed more entitled. Look at
roadways, for example, given that it is impractical for everyone to
have his own private system of roadways. But anything that is abundant
-- that should be freely available to everyone, so long as there is no
undue damage to anyone else's access.
> Hunter Gatherer societies don't have trade or money.....everyone is
> too busy getting today's food. Only with the introduction of
> agriculture, and the concomitant food SURPLUS is it possible for
> people to do anything except hunt and \ or gather. So only after
> agriculture can you have specialisation, and thus trade and a market.
> So I think you've got your observation precisely 180 degrees the wrong
> way round. Trade, money and markets came about as a result of
> allocating the food surplus between the various specialists that that
> surplus allowed to exist. And this happened some thousands of years
> before 1880, like 7,000 or 8,000 BC.
Look at the people of Uganda, or now much more visible Afghanistan,
and tell me again about food surplus among those people. There are
some horrifying photographs in <http://www.dieoff.com> of people who
somehow seem to be beyond the pale of food abundance. This is today.
How come your "food surplus" that happened "some thousands of years
before 1800" seem to evade us today?
> Matriarchal or patriarchal societies ? Fine, doesn't bother either me
> or economics. The economist is only trying to describe what happens,
> not what should happen.
What does curtailment of funds do to whatever we think we ought to do?
What does "budget" mean but to curtail access to anything because it
is in scarce supply? Why should money be in scarce supply,
particularly because it is totally imaginary? If we have imagination
enough to create stories like "Alice in Wonderland," why not
imagination enough to create enough money?
>
>
> Tim Worstall
> >
> > Noble sentiment.
> > Under Communism, the government owns all the business, and the guy
> > who runs the factory rides home in a limo to a trophy wife.
Communism was never practiced in real life, except, for one, within
the four walls of any well managed corporation, wherein community,
cooperation and teamwork produces all the high tech production I'm
sure you enjoy. What was really practiced by those failed efforts you
refer to was a form of Capitalism, wherein under scarcity, the strong
takes all and the weak get nothing. The intent of "communism" was
thwarted and the result of "capitalism" was called "communism."
> >
> > Under Capitalism, the business owns all the government, and the guy
> > who runs the factory rides home in a limo to a trophy wife.
No business owns anything, as a business is comprised of people, just
like the rest of us. Their position in business, under "capitalism"
just makes their efforts to gain all their concept of wealth, money,
all too easy. If money is to be our obsession, replacing food, then
there should be as much money available as food is available. So
everyone can then enjoy a limo if he wishes and a "trophy wife,"
whatever that means.
> >
> > When have we seen it otherwise? It has been a while. The Minoans,
> > the Cucuteni, the Sarmatians, the Tocharians, and a few others. What
> > they all had in common was that the entire power structure was run
> > by women. All the words relating to authority or resources which we
> > have in Proto-Indo-European are feminine forms.
Why not? A joke now current is to threaten the Taliban people that
unless they surrendered, we would see that all their women gain
college educations.
> >
> > They did not have kings, so they did not build monuments or palaces
> > for them. Even the palace at Knossus is not a palace, but an administrative
> > center with many small apartments. whether the graveyard is at Urumchi
> > or Varna, what we see are people who show no evidence of deprivation
> > or abuse, and the grave goods are relatively egalitarian, no lavish tombs
> > for kings.
There was a great deal of common sense then, apparently. However, we
have completely gone insane over Doctrinaire Economics, as far from
common sense as we can get.
Tom Thress
>The phrase "Social Science" is an oxymoron, as "science" refers to
>practical knowledge.
This just scratches the surface of your idiocy, but do you even know what
"oxymoron" means?
David Lloyd-Jones
"Tom Thress" <tomt...@aol.com> wrote
No, he doesn't. He's one of those idiots who thinks it means
"contradiction."
The easy way to keep is straight is to remember oxymoron is to contradiction
as synthesis is to antithesis.
-dlj.
Hyman Blumenstock
\-'mor-e, -'mor-\ [LGk oxymoron, fr. neut. of oxymoros pointedly
foolish, fr. Gk oxys sharp, keen + moros foolish] (1657) : a
combination of contradictory or incongruous words (as cruel kindness )
_ oxymoronic \-me-'rae-nik, -mo-\ adj _ oxymoronically \-ni-k(e-)le\
adv
You apparently think Webster is "one of those idiots." Just name all
the social problems resolved by the social sciences, to prove your
point that you are not an idiot.
HB
Robert Simon
> > > Well, go on, go on. Drop the other shoe. what is your stand on this matter? What do you propose we do ro
> > > resolve the apparently never resolvable social problems? Or is it your position that there are no social
> > > problems?
> >
> > so lets see...I criticize Mr. Blumenstock's view of the history of economic theory on the basis that he can not
> > provide a single shred of evidence to back up his views and that is interpreted to mean that I believe there are
> > no social problems in the world? Whether or not I have solutions to all of the worlds social ills (which I do
> > not) has absolutely nothing to do with the history of economic thought. HBs statement which he has often repeated
> > is that "Doctrinaire Economics" was developed during the "Agrarian Era" solely to deal with food. Since the end
> > of the "Agrarian Era" - cited by HB as approximately 1888 - "Doctrinaire Economics" has sought to make itself
> > useful by changing its focus but is ultimately irrelevent..
> >
> > while I don't claim to be an expert on the history of economic thought here is a "brief history" touching on the
> > major works through about 1888.
> >
> > modern economic thought is traced back to the writings of the mercantilists
snip
HB replies
> As an _objective_ observer, I would note that every living creature spends its waking hours with only one thing on its
> mind
this is the section where HB reiterates his previous statement about how we all need to eat to live, a point which no one
has ever disputed. However he also convieniently gets away from the point of my post. Let us review. In the past he
has made the following statements:
"Who is it that dictates the terms of all those references but Economists with a mission to
continue a profession based during the Agrarian era solely on the scarcity of food then? And with the sudden advent of
food abundance, marked at that time, circa 1888, with a startling headline considering
the prior preciousness of food, "Excess Grain Dumped Into Lake Michigan."
and he stated
"However, the only product that Doctrinaire Economics referred to during the Agrarian era (note the origin and meaning of
Agrarian), was FOOD,"
When asked to produce some examples of prominant writings in "Doctrinaire Economics" produced during the "Agrarian Era"
that deal only with food he has provided such great answers as (and I paraphrase here)
1. would you expect the mafia to write down their plans
2. that I am an idiot
3. and finally restating his theories again
none of which addresses the question. So in order to help him I have provided a brief history of pre 1888 economic
thought which led to the development of "Doctrinaire Economics". I believe that I have clearly shown that in none of
these cases was food the only product that they discussed and in fact in many of these cases food was not even considered
to have any unique properties. Now we will see how HB answers this.
> > Petty - mid 1600s
snip...HB replies
> This fellow deserves a B for his recognition of food as the essence of life, though apparently accepting the universal
> feeling that food will never be abundant enough, how to distribute it to a hungry population. "Prices" set up a
> barrier wherein anyone without the "price" will not be able to access the food supply, it being then scarce.
ok more of his theories here which don't address the question
> > Cantillion - early 1700s
snip...HB replies
> This fellow deserves a D for straying so much from the essence of life, food to dwell only upon "money stock," which by
> itself does nothing to keep anyone alive, except if food is substituted for it.
there is more here that I have cut but again HB is critiquing the writer based on HBs theory however he is not addressing
the question
> > the Physiocrats of the early to mid 1700s
snip..HB replies
> Again, all effort, including producing cotton, is dependent upon feeding that labor, or they could not produce
> anything.
ok here he again critiques but still the question is out there. I am giving you the history of economic thought and it
does NOT deal solely with food.
> > In 1776 Adam Smith
snip...HB replies
> Appropriately put. Here, you thoroughly criticize his ignorance even of modern economic thought, and yet you call it
> the "most important work in the history of economic thought." Is there any scholastic award less than D?
I find his full critique of Smith amusing so I included it in full. But Smith is certainly the most important writer in
economics pre 1888 and he does not discuss food. Could HB be wrong?
> > Bentham - late 1700s early 1800s
again...ok lets stop here because what we are getting is a critique of each individuals theories. But that has nothing
to do with my point. I am not claiming that these writers are correct or not, I AM claiming that economic thought prior
to 1888 was NOT solely concerned with food. HB is wrong, wrong, wrong. Here is HBs final statement dealing with my
original post (not the Jevons correction post)
> Once formally established, and the original impetus to alleviate the ancient problems, all sourced in food scarcity,
> the achievement of food abundance would have terminated the need for an already
> established profession. To avoid this, the rules of the game were drastically changed, and the profession is
> maintained with the effect of a deadly tumor upon the body politic that will destroy that body,
but that is clearly not what happened. Economic theory pre 1888 was NOT based solely on food. Malthus focused mainly on
food and there were a few early authors who gave a primary role to agriculture but not food specifically, but the pre
1888 works to which "Doctrinaire Economics" owes its greatest debts do not focus on food at all (Smith, Ricardo, Mill,
Bawerk, Jevons).
here HB responds to my follow up correction on Jevons
> All these erudite people referred to, with the complexity of their theories, and still not one success in resolving
> economic problems, while the Real Sciences can't specify even one ancient Real Science
> scholar as pertinent to today's Real Science problems. The ultimate test of validity of any theory is Success or
> Failure in its application. How come not here?
this has zippo to do with HBs assertion that "Doctrinaire Economics" of the "Agrarian Era" was based solely on food.
he then goes on to restate his theory again.
ROB
PS I should expect to recieve my $6000 for the infinitely Bran Flakes soon...yes?
Robert Vienneau
> while I don't claim to be an expert on the history of economic thought
> here is a "brief history" touching on the
> major works through about 1888.
> modern economic thought is traced back to the writings of the
> mercantilists whose work generally dealt with
> through the mid 1700s. Some of the major names were Von Hornick, Malynes,
> Misselden, Mirabeau, John Locke, and
> most importantly Hume (quantity theory of money).
I would classify Mirabeau as a Physiocrat, not a Merchantilist. I'm
not sure about Locke, but doubtful that Hume isn't more of a Classical.
> Petty - mid 1600s -seperated positive theory from normative theory, and
> furthered the quantity theory of money by
> adding the concept of velocity. He also worked on developing a labor
> theory of value by comparing the
> productivity of land versus labor...
> although he failed to explain relative
> prices...
The literature I read treats Petty as one of the founders of the
Classical (surplus-based) economics. Why not say he worked on a
land theory of value? Wouldn't it be just as accurate?
> Cantillion - early 1700s - built on Petty but rejected his labor theory
> of value. His work predicts much of Smith
> making distinctions between market price and intrinsic value (hmm someone
> figured this out in 1734!) discussed how
> prices adjust to international trade, looked at flows between different
> sectors of the economy, and showed the
> relation between velocity and money stock.
I don't know Cantillion except from secondary literature. Something to
do with a fire set by a murderer covering his tracks, if I recall
correctly.
> the Physiocrats of the early to mid 1700s viewed the world as having a
> natural order with the goal being
> production of surplus value. They further hypothesized that only
> agriculture produced true surplus value (note
> this includes both food goods and non food goods such as cotton).
> Their view is NOT that only food has value
> because we can't live without it - as hypothesized by HB - but rather
> that manufacturing ould only change the form
> of already produced goods and was thus incapable of producing additional
> surplus value over cost. Quesnay 1750s
> is the best known of this school...
> In 1776 Adam Smith published "Inquiry Into the Nature and Causes of the
> Wealth of Nations". His work kicked off
> the classical period of economic theory which lasted until the late
> 1800s. Smith developed the ideas of division
> of labor, price and allocation, and the nature of economic growth.
I think it a mistake to think that Smith was about the allocation of
scarce resources.
> His
> "invisible hand" is the basis of the
> utility maximizing individual and the profit maximizing firm.
Whatever later economists may have said, I doubt that.
> He
> explicitly recognized the difference between
> "value in use" and "value in exchange" and how price in a market system
> is governed by the latter according to the
> laws of supply and demand (which he apparently did not fully understand).
Natural prices are not governed by supply and demand, according to Smith.
His point of effectual demand does not recognize a stable and predictable
demand function elsewhere.
> Smith recognized the labor theory of
> value
Nope.
> but also the theoretical problems with the LTV.
Nope.
> He understood that
> wages were determined by the same forces
> as prices in other markets.
If those forces include social norms and opposing classes, sure.
> He also posited the wages fund theory
Nope.
> which
> said that growth required a fund of built
> up wages (this was not quite correct). He did recognize that capital
> accumulation is a key to growth...This is widely considered to be the
> most important work in the history of
> economic thought.
it is a work in the history of economic thought in that it
treated mechantilism and physiocrats.
> Bentham - late 1700s early 1800s - converted Smiths idea of the self
> interested individual into a theory of
> utility...
Not sure.
> Malthus - early 1800s - created a commotion when he hypothesized that
> population grew geometrically but food
> supply grew linearly therefore predicting future catastrophy. His work
> has been proven false on both theoretical
> and empirical grounds as population does not necessarally grow
> exponentially (it seems to grow slower in more
> developed countries- see Germany and Japan) whereas agricultural
> production can grow faster than linearly (see
> the US post WWII).
> the classical school which ran from about the time of Malthus to Mill
More like from Petty to shortly after Ricardo
> posited a Malthusian population principle,
Nope. Much more flexible than Malthus. Though Malthus backed off too.
> diminishing returns to agriculture, and the wages-fund doctrine
Doubtful.
> and led
> to an undesireable stationary state. Its
> most well known expositor was David Ricardo.
I'm not sure Ricardo thought a stationary state would occur anytime
soon if the Corn Laws were repealed.
> Ricardo - early 1800s - is best known for the labor theory of value.
What Ricardo is best known for and what he did don't need to agree.
> The
> LTV would play an important part in
> economic theory in that it spawned Marx's theory of value and was
> considered important at the time... The great
> contribution of the LTV is that the
> criticisms of it helped develop [neoclassical] theory.
More like misunderstandings of its not-all-that-central role in Classical
economics as anything but a tool helped lead to Near-Enough-to-Obfuscate
(NEO) classical economics.
> Ricardo
> did contribute the theory of comparative
> advantage which undergirds [neoclassical] international trade theory.
> John Stuart Mill - mid 1800s - unlike Ricardo recognized the factors of
> growth to be of technological growth,
> population growth, and capital accumulation (shades of Solow!)
"Unlike Ricardo" is wrong.
> however
> Mill believed in diminishing returns to
> scale and declining returns to investment. He recognized that supply and
> demand should be represented as
> functions of prices and hypothesized that price was determined at the
> intersection of the two and that shifting
> of the curves led to price changes (although not in so many words). He
> combined Ricardo's view of comparative
> advantage with his own laws of supply and demand to give us international
> trade theory. Mill's understanding of
> general equilibrium predicts the ideas of Walras. Finally Mill rejected
> the wage-fund theory although on
> questionable grounds. Mill understood many of the laws of economics as
> we now understand them but also discussed
> situations in which the invisible hand did not lead to socially optimal
> outcomes.
I'm not sure about Mill. But given that Mr. Simon's comments on
almost everything I do have an opinion on seem too rigid and Whiggish,
I doubt the above.
> I have of course ignored a number of 19th century theorists including
> Saint Simon, the Utopians, and Marx on the
> grounds that [neoclassical economics] springs from a
> different branch of the tree.
> The late 1800s saw an explosion of micro theory. Gossen in the mid 1850s
> had applied mathematical analysis to
> utility maximization. Menger extended this theory to the the interaction
> of utility with supply and demand
> although without the math. Cournot mathematized the theory of the firm
> and essentially created the theories of
> monopoly, duopoly, and stability. In the context of profit functions he
> discovered what would be the next major
> breakthrough "marginal analysis". Dupuit was the first to analyze public
> goods leading to the development of
> welfare economics. Weiser created input-outut analysis using fixed
> proportion production functions.
Not Quesnay's Tableau? Not marx in volume 2 of Capital?
Not Walras in early editions of his Elements?
> Bohm-Bawerk
> integrated time into production giving birth to capital theory
Actually capital theory predates Bohm-Bawerk by centuries, as he
makes clear in his history.
> and the
> theory of interest. Jevons put this all
> together constructing a theory of utility which led to a theory of
> exchange and labor supply. Jevons was the
> great proponenet of "marginalism" understanding that consumers will
> maxmize utility u(x,y) over goods x and y by
> equating du/dx to du/dy.
I find interesting this elevation of Jevons above Menger and Walras.
"It is terrific to contemplate the abysmal gulf of incomprehension
that has opened between us and the classical economists. Only one
century separates us from them. (I say a century; but even 1/2
century after, in 1870, they did not understand it. And during the
preceding century an obscure process of 'disunderstanding' has
been going on.) How can we imagine to understand the Greeks and
the Romans? (Or rather, the extraordinary thing is that we DO
understand, since we find them perfect, Roman law and Greek
philosophy.) The classical economists said things which were
perfectly true, even according to our standards of truth: they
expressed them very clearly, in terse and unambiguous language,
as is proved by the fact that they perfectly understood each
other. We don't understand a word of what they said: has their
language been lost? Obviously not, as the English of Adam Smith
is what people talk today in this country. What has happened then?"
--Piero Sraffa
--
Try http://csf.colorado.edu/pkt/pktauthors/Vienneau.Robert/Bukharin.html
r c .../Keynes.html
v s a Whether strength of body or of mind, or wisdom, or
i m p virtue, are found in proportion to the power or wealth
e a e of a man is a question fit perhaps to be discussed by
n e . slaves in the hearing of their masters, but highly
@ r c m unbecoming to reasonable and free men in search of
d o the truth. -- Rousseau
Tim Worstall
> adv
>
> You apparently think Webster is "one of those idiots." Just name all
> the social problems resolved by the social sciences, to prove your
> point that you are not an idiot.
>
> HB
science that attempts to describe the behaviour of humans under
certain stimuli.
As physics can be used to describe their reactions to gravity,
chemistry their reaction to acids, pharmacology their reaction to
drugs, economics describes their reaction to the attempt to satisfy
unlimited wants from scarce resources.
Problems that economics has solved ?
1)How not to have famines. Amyarta Sen pointed out, and got the Nobel
Prize for it, that there are three requirements for not having
famines. A free market, a free press and a democracy.
2)What is the most productive arrangement of an economy ? The free
market.
3) What is the greatest driver of technological advance ? Property
rights over inventions, ie patents.
4) Should we have autarchic economies or trading ones ? Look up
Ricardo on comparative advantage....we should have trading ones.
I can go on and on with problems that economics has solved. .....and
yes it is a science, because it uses the scientific method. We have
noticed this set of data....what is a reasonable theory to explain
that....let's look for another place or set of data where that theory
will help us explain the observations....it does ? Great, lets keep
looking for more. It doesn't ? Ooops, change the theory.
So, to recapitulate....economics attempts to describe how humans deal
with getting all the things they want out of scarce resources. We know
a number of things from it....how to get rich, how to organise the
economy so that we all have food, air, water, physical goods, long
life spans and low infant mortality rates.
It's called capitalism.....we billion or so in the first world got
stinking rich because of it, and the 5 billion that aren't rich aren't
because they do not use this scientifically proven method of
organising their economy.
Tim Worstall
Mason Clark
>I can go on and on with problems that economics has solved. .....and
>yes it is a science, because it uses the scientific method.
It pretends to. Real sciences deal with the real world. Economics
too often makes up its own worlds.
>looking for more. It doesn't ? Ooops, change the theory.
Never. New economists may have new theories -- and never get
tenure. Add to it more equations or more theories, but *never* admit
error -- too embarrassing. How often does the author of a
disproven economics theory admit the error?
>
>So, to recapitulate....economics attempts to describe how humans deal
>with getting all the things they want out of scarce resources. We know
>a number of things from it....how to get rich, how to organise the
>economy so that we all have food, air, water, physical goods, long
>life spans and low infant mortality rates.
>It's called capitalism
which was invented a few centuries before economics existed.
The economists have been trying ever since to explain it, with little
success. Give them a few more generations. (or tell me that
Galileo was an economist)
> this scientifically proven method of organising their economy.
Oh, man, "scientifically proven"? The wonders of modern
education in economics. Proven, yes, but "scientifically"?
Well -- ok -- trial and error *is* scientific. My cat does it all the
time and when he errs he admits it.
Mason
---------------------------------------------------
Posted on this 41st day of the Ninety-nine Year War
Robert Vienneau
t...@2xtreme.net (Tim Worstall) wrote:
> Should we have autarchic economies or trading ones ? Look up
> Ricardo on comparative advantage....we should have trading ones.
I did. And following theories too.
1.0 INTRODUCTION
Why are tariffs, protectionism, etc., bad ideas? A widespread
answer draws on the theory of comparative advantage. This long
post demonstrates this argument is logically invalid when
applied to an economy with produced capital goods and a positive
interest rate. This demonstration is made by means of a numerical
example illustrating the model in Metcalfe and Steedman (1974).
That is, it has been known for over a quarter of a century
that the theory of comparative advantage does not justify a lack
of tariffs. It has been known - but ignored.
2.0 DATA ON TECHNOLOGY
Consider a very simple economy that produces two goods, corn and
ale, from inputs of labor, land, and produced corn and ale. Corn
and ale are both consumption and capital goods. All production
processes in this example require a year to complete. Likewise,
all production processes exhibit constant returns to scale. One
process is known for producing ale, and two processes are known
for producing corn. These processes are shown in Table 1.
TABLE 1: INPUTS REQUIRED PER (GROSS) UNIT OUTPUT
ALE INDUSTRY CORN INDUSTRY
INPUTS PROCESS A PROCESS B
Ale 0 Barrels 1 Barrel 1/2 Barrel
Corn 1/8 Bushel 0 Bushels 0 Bushels
Labor 1 Person-Year 4 Person-Years 7 Person-Years
Land 9/8 Acre 5/6 Acre 1 Acre
--------------------------------------------------------
OUTPUT 1 Barrel 1 Bushel 1 Bushel
Assume that endowments of labor and land are given. In particular,
this economy has access to 320 person-years of labor and 140 acres
of (homogeneous) land.
In short, this economy uses two primary factors, labor and land,
to produce a net output of two consumption goods, corn and ale. This
example differs from misleading introductory textbook models of
comparative advantage in that the use of produced capital goods is
shown explicitly.
3.0 PRODUCTION POSSIBILITIES FRONTIER
The argument is based on an analysis of long run equilibria, as
is the case with usual misleading and invalid textbook expositions.
Since the endowments of primary inputs are fixed, long run equilibria
are stationary equilibria. The ale-producing process and at least
one of the corn-producing processes will be used in a long run
equilibrium. A technique is defined to consist of the ale-producing
process and one of the corn-producing processes. Call the technique
utilizing the first corn-producing process alpha. Call the other
technique beta.
Figure 1 shows possible efficient long run equilibria for this
numeric example. The alpha technique is used along the frontier
between the corn axis and point a. Labor is a binding contraint on
output up to point a. Less land is employed here than exists; hence
land services will be free for this portion of the production
possibilities frontier. Both land and labor are binding constraints
at point a, and the alpha technique is used. If the alpha technique
were used to produce a net output of more than 20 barrels ale, land
would be a binding contraint and labor services would be free.
However, more corn can be produced between a and b, for a given
net output of ale, by using a linear combination of the two
techniques between points a and b. The beta technique is exclusively
used at point b, and both land and labor are binding constraints.
Land is a binding constraint, and labor is free, for the remaining
portion of the frontier.
/|\
|
56 +
| .
50 + a
| .
| .
| .
Net | .
Output | .
Corn | .
(Bushels) | .
| .
20 + b
| .
| .
| .
| .
| .
+-----+-----------------+-------+--->
20 80 105
Net Output Ale (Barrels)
FIGURE 1: PRODUCTION POSSIBILITIES FRONTIER
The portion of the frontier between points a and b, inclusive,
is the focus of the remainder of this post. The relative combinations
of ale and corn, produced net, are different along this segment
because of differences in the amount of ale and corn produced by
the two techniques. Notice the slope of this segment is 1/2 bushels
per barrel. The slope reflects the rate of transformation possible
in comparing two autarkic equilibria. An autarkic economy can
(eventually) produce one more bushel of corn for every two barrels
less ale produced.
4.0 PRICES
The location on the PPF depends on prices, which the firms in
this economy take as given. Assuming wages and rent are paid at
the end of the production period, prices must satisfy Equation 1:
(1/8) ( 1 + r ) + w + (9/8) W = p (1)
and the Inequalities 2 and 3:
p ( 1 + r ) + 4 w + (5/6) W >= 1 (2)
(1/2) p ( 1 + r ) + 7 w + W >= 1 (3)
where p is the price of a barrel ale, w is the wage for a year,
W is the rent for a year for an acre of land, and a bushel corn
is the numeraire.
If Inequality 2 is satisfied as a strict equality, firms will
adopt the alpha technique. If Inequality 3 is satisfied as a
strict equality, firms maximizing economic profit will adopt the
beta technique. At least one of these inequalities must be
satisfied as a strict equality. A set of price variables that
satisfy both inequalities as strict equalities is known as a
switch point. The interior of the line segment from point a to
point b is a switch point.
4.1 CASE 1: A INTEREST RATE OF ZERO
The next step in the argument is to illustrate that the
traditional theory holds for an interest rate of 0%. The price
of ale at the switch point is 1/2 bushels per barrel. Note that
this switching price is the same as the slope of the PPF
between a and b.
4.1.1 CASE 1 AUTARKY
Suppose this economy is an autarky, and the price of ale is
5/8 bushels per barrel. This economy will produce 80 barrels
ale and 20 bushels corn in a long run equilibrium.
4.1.2 CASE 1 TRADE
Now suppose this economy suddenly faces a price of ale on the
international market of 2/5 bushels per barrel. Ignore transitions
between equilibria. The alpha technique will be adopted in the new
long run equilibrium with this price. Thus, this economy will
produce domestically 20 barrels of ale and 50 bushels corn.
By trading on the international market, a bushel of corn can
be transformed into 2 1/2 barrels of ale. This is more than the 2
barrels into which a bushel corn can be transformed by following
the PPF in the autarkic economy. The domestic production could be
transformed into 80 barrels of ale and 26 bushels of corn by
specializing in producing relatively more corn with sole use of
the alpha technique and then trading on the international market.
Gains from specialization in this example of international trade
are unambiguously positive when the interest rate is zero.
4.2 CASE 2: A 2% INTEREST RATE
The other case examined here is at a positive rate of interest,
namely 2%. The price of ale at a switch point is approximately
0.493 bushels per barrel. Note that this switching price is LESS
THAN the (negative inverse of the) slope of the PPF between a and
b. Metcalfe and Steedman note that
"a positive rate of interest generates a divergence between
the switching price ratio and the domestic marginal rate of
transformation akin to that generated by a factor market
distortion."
4.2.1 CASE 2 AUTARKY
Suppose this economy is an autarky, and the price of ale is
563/1506 bushels per barrel. This economy will produce 20 barrels
ale and 50 bushels corn in a long run equilibrium.
4.2.2 CASE 2 TRADE
Suppose this economy (with a 2% interest rate) faces a price of
a barrel ale on the international market of 0.495 bushels. Once
again, ignore the transition to equilibrium. Only one price for
ale can prevail in equilibrium, and, by assumption, that price will
be the international price. Firms in this economy maximizing
economic profit will adopt the beta technique. Thus, the domestic
production of this economy will be 80 barrels ale and 20 bushels
corn.
The international market allows this economy to trade this
output to obtain 20 barrels ale and 49 7/10 bushels corn. Thus,
this economy has lost 3/10 bushels corn from specialization in
response to trade. (My calculations are exact; this is not a
round-off error.)
The individuals in this economy might react to this difference
in prices by consuming a different proportion of commodities. I
leave it to the interested reader, if any, to demonstrate that
utility functions can be constructed for some economies in which
the gain in utils from this exchange effect does not overcome the
loss from specialization. Metcalfe and Steedman suggest postulating
"a homothetic utility function that is the same for all income
recipients who, in addition, express their preference between
present and future consumption through a universal and positive
rate of time preference."
4.3 CONCLUSIONS
So much for comparative advantage as a justification for
neoliberal trade (non)policy.
REFERENCE
J. S. Metcalfe and Ian Steedman, "A Note On the Gain from Trade,"
_Economic Record_, 1974.
APPENDIX
This appendix contains some supplementary tables and calculations for
anybody who wants to check my work.
A.1 QUANTITY FLOWS
TABLE A-1: QUANTITY FLOWS FOR THE ALPHA TECHNIQUE
PRODUCING ONLY CORN
INPUTS ALE INDUSTRY CORN INDUSTRY
Labor 64 Person-Years 256 Person-Years
Land 72 Acres 53 1/3 Acres
Ale 0 Barrels 64 Barrels
Corn 8 Bushels 0 Bushels
OUTPUTS 64 Barrels 64 Bushels
Net Output = 56 Bushels
TABLE A-2: QUANTITY FLOWS FOR THE ALPHA TECHNIQUE
PRODUCING ALE AND CORN
INPUTS ALE INDUSTRY CORN INDUSTRY
Labor 80 Person-Years 240 Person-Years
Land 90 Acres 50 Acres
Ale 0 Barrels 60 Barrels
Corn 10 Bushels 0 Bushels
OUTPUTS 80 Barrels 60 Bushels
Net Output = (20 Barrels, 50 Bushels)
TABLE A-3: QUANTITY FLOWS FOR THE BETA TECHNIQUE
PRODUCING ALE AND CORN
INPUTS ALE INDUSTRY CORN INDUSTRY
Labor 96 Person-Years 224 Person-Years
Land 108 Acres 32 Acres
Ale 0 Barrels 16 Barrels
Corn 12 Bushels 0 Bushels
OUTPUTS 96 Barrels 32 Bushels
Net Output = (80 Barrels, 20 Bushels)
TABLE A-4: QUANTITY FLOWS FOR THE BETA TECHNIQUE
PRODUCING ONLY ALE
INPUTS ALE INDUSTRY CORN INDUSTRY
Labor 112 Person-Years 98 Person-Years
Land 126 Acres 14 Acres
Ale 0 Barrels 7 Barrels
Corn 14 Bushels 0 Bushels
OUTPUTS 112 Barrels 14 Bushels
Net Output = 105 Barrels
A.2 PRICE EQUATIONS
A.2.1 ALPHA PRICES
The Alpha price system is:
(1/8) ( 1 + r ) + w + (9/8) W = p (A-1)
p ( 1 + r ) + 4 w + (5/6) W = 1 (A-2)
The solution is:
w = [ 21 - ( 47 + 27 r ) W - 6 r - 3 r^2 ]/[ 24 ( 5 + r ) ] (A-3)
p = [ 3 ( 3 + r ) + 22 W ]/[ 6 ( 5 + r ) ] (A-4)
A.2.2 BETA PRICES
The Beta price system is:
(1/8) ( 1 + r ) + w + (9/8) W = p (A-5)
(1/2) p ( 1 + r ) + 7 w + W = 1 (A-6)
The solution is:
w = [ 15 - ( 25 + 9 r ) W - 2 r - r^2 ]/[ 8 ( 15 + r ) ] (A-7)
p = [ 15 + 7 r + 55 W ]/[ 4 ( 15 + r ) ] (A-8)
A.2.3 SOME SOLUTIONS
r = 0, w = 3/44, W = 3/11, p = 1/2, both techniques optimal
r = 0, w = 107/880, W = 3/22, p = 2/5, alpha optimal
r = 0, w = 7/88, W = 9/22, p = 5/8, beta optimal
r = 1/50 = 2%, w = 10,537/152,200, W = 2007/7610,
p = 751/1522 = 0.49343, both techniques optimal
r = 1/50, w = 5,039/37,650, W = 1/10, p = 563/1506 = 0.3738,
alpha optimal
r = 1/50, w = 75,759/1,100,000, W = 36,499/137,500,
p = 99/200 = 0.495, beta optimal
Mike Coburn
This is very interesting and it should be exposed more than it is. Where
can I find the Cliff Notes or something that is reasonably unbiased and
brief in the discussion of this particular view of economic order?
> > In 1776 Adam Smith published "Inquiry Into the Nature and Causes of the
> > Wealth of Nations". His work kicked off
> > the classical period of economic theory which lasted until the late
> > 1800s. Smith developed the ideas of division
> > of labor, price and allocation, and the nature of economic growth.
>
> I think it a mistake to think that Smith was about the allocation of
> scarce resources.
Smith did a pretty good job of just about all of it. I think he is
afflicted with the same (mostly small until recently) problem of
having to make a living in the real world and thus coloring his
analysis in favor of the hand that feeds. But with Smith it isn't
grossly overplayed and acrimonious. We just have to remember that
the land owners ruled the roost and that to have treated them with
any less respect would have been to go hungry.
> > His
> > "invisible hand" is the basis of the
> > utility maximizing individual and the profit maximizing firm.
>
> Whatever later economists may have said, I doubt that.
>
> > He
> > explicitly recognized the difference between
> > "value in use" and "value in exchange" and how price in a market system
> > is governed by the latter according to the
> > laws of supply and demand (which he apparently did not fully understand).
>
> Natural prices are not governed by supply and demand, according to Smith.
> His point of effectual demand does not recognize a stable and predictable
> demand function elsewhere.
Please amplify.......
> > Smith recognized the labor theory of
> > value
>
> Nope.
>
> > but also the theoretical problems with the LTV.
>
> Nope.
>
> > He understood that
> > wages were determined by the same forces
> > as prices in other markets.
>
> If those forces include social norms and opposing classes, sure.
>
> > He also posited the wages fund theory
>
> Nope.
>
> > which
> > said that growth required a fund of built
> > up wages (this was not quite correct). He did recognize that capital
> > accumulation is a key to growth...This is widely considered to be the
> > most important work in the history of
> > economic thought.
>
> it is a work in the history of economic thought in that it
> treated mechantilism and physiocrats.
In that his work recognized economic value in each and corrected the
physiocrats?
> > Bentham - late 1700s early 1800s - converted Smiths idea of the self
> > interested individual into a theory of
> > utility...
>
> Not sure.
>
> > Malthus - early 1800s - created a commotion when he hypothesized that
> > population grew geometrically but food
> > supply grew linearly therefore predicting future catastrophy. His work
> > has been proven false on both theoretical
> > and empirical grounds as population does not necessarally grow
> > exponentially (it seems to grow slower in more
> > developed countries- see Germany and Japan) whereas agricultural
> > production can grow faster than linearly (see
> > the US post WWII).
As far as what is presented here on this subject of Malthus I am OK, fine,
in agreement, etc. HOWEVER! Population growth produces scarcity if
the limits of the environment are reached OR if technology and _real_
capital development do not improve productivity in support of the
additional population. Far too much is invested in the debunking of
Malthus as a support for the idea that populations can just grow
unabated without increasing misery and poverty.
> > the classical school which ran from about the time of Malthus to Mill
>
> More like from Petty to shortly after Ricardo
>
> > posited a Malthusian population principle,
>
> Nope. Much more flexible than Malthus. Though Malthus backed off too.
>
> > diminishing returns to agriculture, and the wages-fund doctrine
>
> Doubtful.
>
> > and led
> > to an undesireable stationary state. Its
> > most well known expositor was David Ricardo.
>
> I'm not sure Ricardo thought a stationary state would occur anytime
> soon if the Corn Laws were repealed.
>
> > Ricardo - early 1800s - is best known for the labor theory of value.
>
> What Ricardo is best known for and what he did don't need to agree.
>
> > The
> > LTV would play an important part in
> > economic theory in that it spawned Marx's theory of value and was
> > considered important at the time... The great
> > contribution of the LTV is that the
> > criticisms of it helped develop [neoclassical] theory.
>
> More like misunderstandings of its not-all-that-central role in Classical
> economics as anything but a tool helped lead to Near-Enough-to-Obfuscate
> (NEO) classical economics.
Bingo!!!
> > Ricardo
> > did contribute the theory of comparative
> > advantage which undergirds [neoclassical] international trade theory.
>
> > John Stuart Mill - mid 1800s - unlike Ricardo recognized the factors of
> > growth to be of technological growth,
> > population growth, and capital accumulation (shades of Solow!)
>
This would seem to be an intelligent man, this Mill.....
All good stuff..... I am much appreciative!
--
Mike Coburn
"It's the tax system, stupid. No, it's the ludicrous
banking system. Well, actually, its both." -- Mike Coburn
"Rentier: A person who has a fixed income from land,
bonds, etc." -- Webster's dictionary.
Robert Simon
show that the major writers who contributed to the development of "Doctrinaire
Economics" prior to 188 did not only deal with food. On a few of RVs critiques I
agree with him. On most I differ.
Robert Vienneau wrote:
> I would classify Mirabeau as a Physiocrat, not a Merchantilist. I'm not sure
> about Locke, but doubtful that Hume isn't more of a Classical.
we seem to have difference of opinion on what constitutes the Classical school.
As you say below you put it from Petty through about Ricardo while I set it from
Smith through Mill, although certainly some of the ideas that were central to the
Classical School were developed in part prior to Smith, Hume's quantity theory for
example. I would say that the Classical school is characterized by (1) maximizing
self interest (2) Malthusian population theory (3) quantity theory of money.
Perhaps RV would tell us what are the theories that he believes characterize the
Classical school (obviously every Classical writer did not have to subscribe to
every one)
> The literature I read treats Petty as one of the founders of the Classical
> (surplus-based) economics. Why not say he worked on a land theory of value?
> Wouldn't it be just as accurate?
I have no argument there
> > Smith developed the ideas of division of labor, price and allocation, and the
> nature of economic > growth.
>
> I think it a mistake to think that Smith was about the allocation of scarce
> resources.
why would you say that? I cite his passage about the invisible hand as explicitely
about allocation of resources. Agree or not it is a laissez faire view of welfare
maximization. Also see Theory of Moral Sentiments pgs 380-381 for critique of
central planning.
> > His "invisible hand" is the basis of the utility maximizing individual and the
> profit maximizing firm.
>
> Whatever later economists may have said, I doubt that.
Bentham and the Utilitarians, who attempted to quantify utility, cited Smith. I'll
take them at their word.
> > He explicitly recognized the difference between
> > "value in use" and "value in exchange" and how price in a market system
> > is governed by the latter according to the
> > laws of supply and demand (which he apparently did not fully understand).
>
> Natural prices are not governed by supply and demand, according to Smith. His
> point of effectual demand does not recognize a stable and predictable demand
> function elsewhere.
Smith does set up the natural versus market price dichotomy with the former being
determined by cost of production and the latter being determined by market forces.
See WON pg 56. As I pointed out he did not fully understand the laws of supply and
demand but he was on the right track.
> > Smith recognized the labor theory of value
>
> Nope.
I cite WON pg. 30 in which he discusses how the value of a commodity in exchange is
equal to amount of labour "which it enables him to purchase or command". Isn't
that what the LTV says? That the value of a good is its value in terms of the
labor that it took to produce it?
> > but also the theoretical problems with the LTV.
>
> Nope.
I cite WON pg 31 in which Smith specifically discusses that adding up hours of
labor may not make sense due to the different skill levels and distastefulness of
the jobs.
> > He understood that wages were determined by the same forces
> > as prices in other markets.
>
> If those forces include social norms and opposing classes, sure.
he certainly mentions social norms and opposing classes. In fact his view of the
natural state of the world seems to be monopsony. However on WON pg 68 "the
scarcity of hands occasions a competition among masters, who bid against one
another, in order to get workmen, and thus voluntarily break through the
combination of masters to agree not to raise wages....." it is pretty clear from
this passage and the following passages that Smith is applying supply demand
analysis to labour.
> > He also posited the wages fund theory
>
> Nope.
What do you mean "Nope"? WON pg 65 he sets it out explicitely. How much more
clear could he be on that point?
> > the classical school which ran from about the time of Malthus to Mill
>
> More like from Petty to shortly after Ricardo
we have a disagreement on definition of Classical
> > posited a Malthusian population principle,
>
> Nope. Much more flexible than Malthus. Though Malthus backed off too.
yup. Not everyone agreed exactly but that was the basis of the argument.
> > Ricardo - early 1800s - is best known for the labor theory of value.
>
> What Ricardo is best known for and what he did don't need to agree.
I certainly agree with that statement.
> John Stuart Mill - mid 1800s - unlike Ricardo recognized the factors of growth to
be of technological > growth, population growth, and capital accumulation
(shades of Solow!)
> "Unlike Ricardo" is wrong.
Ricardo certainly understood population growth and had the idea of capital
accumulation but he missed technological growth. If he understood technological
growth then why doesn't it increase the wage rate in the long run and break the
stagnation result?
> > Weiser created input-outut analysis using fixed proportion production
> functions.
>
> Not Quesnay's Tableau? Not marx in volume 2 of Capital?
> Not Walras in early editions of his Elements?
You are right about Quesnay. I thought Weiser was pre Walras but checking the
dates they were pretty contemporaneous. It also looks like Weiser went over my
1888 limit so I will retract him as an example.
> > Bohm-Bawerk
> > integrated time into production giving birth to capital theory
>
> Actually capital theory predates Bohm-Bawerk by centuries, as he makes clear in
> his history.
other people talked about capital but Bawerk put it together into what we would
call capital theory. ie capital as a stock variable which when combined with labor
produces output which is split into consumption and investment, capital
accumulation based on time preference. He layed out much of what Solow would do
later.
> find interesting this elevation of Jevons above Menger and Walras.
I did not mean to slight Walras. I would certainly put Walras in a class with the
others and above many of them (I think I mentioned that) but some of his major
works were past the 1888 cutoff that I had set so I didn't know if it would be fair
to count him as pre 1888. But sure I would love to count Walras..and Marshall.
Neither of them dealt solely with food.
ROB
Hyman Blumenstock
Totally inane. Would any sincere believer in the Flat Earth theory,
who had a host of writings all asserting that the earth was flat as
his positive proof, possibly change one iota the fact that the earth
is really round?
As for his $6000 Bran Flakes -- how about the market price established
by his beloved Doctrinaire Economics also being too much, as with food
abundance, all food should be as free as air is.
HB
HB
Robert Simon
> Totally inane. Would any sincere believer in the Flat Earth theory, who had a host of writings all asserting that the earth
> was flat as his positive proof, possibly change one iota the fact that the earth
> is really round?
what is this in reference to?
> As for his $6000 Bran Flakes -- how about the market price established by his beloved Doctrinaire Economics also being too
> much, as with food abundance, all food should be as free as air is.
HB said that food is infinitely valuable. When I offered him 6 candy bars for $1000 a piece he mde some lame excuse about the
nutritional content. So I changed the offer to Bran Flakes which are chock full of nutrition. Now he has reverted back to the
market price. So I guess food is not infinitely valuable.
BTW waaay back in 1755 Cantillion recognized the difference between value in use and value in exchange. He also recognized
that in the real world we price good by the latter not the former.
ROB
David Lloyd-Jones
> 4.3 CONCLUSIONS
> So much for comparative advantage as a justification for
> neoliberal trade (non)policy.
Robert,
It seems to me that your argument hangs on there being a "world price" which
is immutable, and specifically is not affected by the entry of these new ale
and corn folks onto their turf.
Well, OK, you win your point by positing a rigid outside world and a
malleable victim, doncha think?
Best,
-dlj.
Hyman Blumenstock
"Robert Simon" <si...@netacc.net> wrote in message news:3BD62EE3...@netacc.net...
> Hyman Blumenstock wrote:
>
> > Totally inane. Would any sincere believer in the Flat Earth theory, who had a host of writings all asserting that the earth
> > was flat as his positive proof, possibly change one iota the fact that the earth
> > is really round?
>
> what is this in reference to?
It proves that writings and truth don't necessarily have even the
remotest relationship. That's why writings have very little to do
with the successes of the Real Sciences, and the reliance upon ancient
writings by the Social Sciences is the reason for complete failure
ever to resolve a Social problem. It builds a wall in our minds that
prevents any original thought and guarantees the demise of a once
promising civilization.
>
> > As for his $6000 Bran Flakes -- how about the market price established by his beloved Doctrinaire Economics also being too
> > much, as with food abundance, all food should be as free as air is.
>
> HB said that food is infinitely valuable. When I offered him 6 candy bars for $1000 a piece he mde some lame excuse about the
> nutritional content. So I changed the offer to Bran Flakes which are chock full of nutrition. Now he has reverted back to the
> market price. So I guess food is not infinitely valuable.
But what is true "value?" The money one is forced to pay for anything
in today's marketplace? The test of true "value," is what would you
give up if your life depended upon attaining that article. What would
Rob pay for that box of Bran Flakes if that was all the food he could
possibly attain. That proves infinite value, as undoubtedly the value
he places on continuing to live. What else of "value" would he trade
for that box of Bran Flakes if he is certain to die for lack of it.
Meanwhile, as food is a drug on the market, it's price would be zero
without the machinations of Alan Greenspan in his price fixing mission
for Doctrinaire Economics. But the true intrinsic value of anything is
measured on how much it would affect your life if you were forbidden
access to it. Test it that way, and determine the relative value of
the most "precious" things, like money, we normally think of today
versus the economically "worthless" things, such as Air, Water and
Food, if we had to make a choice.
>
> BTW waaay back in 1755 Cantillion recognized the difference between value in use and value in exchange. He also recognized
> that in the real world we price good by the latter not the former.
In Cantillion's time, there was precious little else produced but
food, and the primitive weaponry with which to wrest fertile lands
from other people. The thought that food would become abundant
sometime in the future probably never entered anyone's mind.
HB
>
> ROB
>
Robert Vienneau
Lloyd-Jones" <dav...@sympatico.ca> wrote:
> "Robert Vienneau" <rv...@see.sig.com> wrote
>
> > 4.3 CONCLUSIONS
> > So much for comparative advantage as a justification for
> > neoliberal trade (non)policy.
> It seems to me that your argument hangs on there being a "world price"
> which
> is immutable, and specifically is not affected by the entry of these new
> ale
> and corn folks onto their turf.
It is a standard assumption in the theory of international trade for
a small and mid-sized country.
> Well, OK, you win your point by positing a rigid outside world and a
> malleable victim, doncha think?
I win my point by knowing the theory of which I am presenting an
internal critique (as did the authors on which I draw).
Tom Thress
>as food is a drug on the market, it's price would be zero
>without the machinations of Alan Greenspan in his price fixing mission
Your weird use of the English language is starting to annoy me. What
definition are you using for the terms "drug" and "market" that would lead you
to believe that drugs have a price of zero on the market?
I think that most people (at least in the U.S.; I can't speak for countries
with more liberal drug policies and/or more socialized medicine) would argue
that "drugs", as the word is commonly defined, are too expensive (and most
people wouldn't blame this on Alan Greenspan, either).
Regards,
Tom
ro...@telus.net
<michael....@gte.net> wrote:
>Robert Vienneau wrote:
>>
>> In article <3BD3B24E...@netacc.net>, Robert Simon
>> <si...@netacc.net> wrote:
>>
>> > In 1776 Adam Smith published "Inquiry Into the Nature and Causes of the
>> > Wealth of Nations". His work kicked off
>> > the classical period of economic theory which lasted until the late
>> > 1800s. Smith developed the ideas of division
>> > of labor, price and allocation, and the nature of economic growth.
>>
>> I think it a mistake to think that Smith was about the allocation of
>> scarce resources.
>
>Smith did a pretty good job of just about all of it. I think he is
>afflicted with the same (mostly small until recently) problem of
>having to make a living in the real world and thus coloring his
>analysis in favor of the hand that feeds.
Ricardo was freer of this influence, as he was very rich. OTOH,
that's another source of influence...
What economist _doesn't_ have a motive to defend the interests of the
rich over truth?
>But with Smith it isn't
>grossly overplayed and acrimonious. We just have to remember that
>the land owners ruled the roost and that to have treated them with
>any less respect would have been to go hungry.
Or to jail...
>Population growth produces scarcity if
>the limits of the environment are reached OR if technology and _real_
>capital development do not improve productivity in support of the
>additional population. Far too much is invested in the debunking of
>Malthus as a support for the idea that populations can just grow
>unabated without increasing misery and poverty.
We all know population cannot increase indefinitely, as eventually
there is no more raw material to convert into people. The question
is, what is the limit? I have never seen a persuasive argument that
we are within an order of magnitude of it.
>> > John Stuart Mill - mid 1800s - unlike Ricardo recognized the factors of
>> > growth to be of technological growth,
>> > population growth, and capital accumulation (shades of Solow!)
>
>This would seem to be an intelligent man, this Mill.....
Yes. Based on what is known of his childhood academic attainments,
Mill's IQ would have been one of the highest ever.
-- Roy L
Mike Coburn
>
> I cite WON pg. 30 in which he discusses how the value of a commodity in exchange is
> equal to amount of labour "which it enables him to purchase or command". Isn't
> that what the LTV says? That the value of a good is its value in terms of the
> labor that it took to produce it?
I have never seen a reproduction of The LTV. However, it must be a real
piece of cheese if it says what you imply. Smith says: As I look at
that new car I am thinking about the value in terms of my own labor. How
many of my labor certificates (how much of my earned dollars which are
certificates attesting to my past contribution to the economy), or how
much of my future labor will I exchange for the car. The amount of labor
embodied in the car is irrelevant. If the car maker has found a secret
way to build cars with less labor in them then he will make a big profit.
And even if he has not, it would take me a lot longer to build the car
than to pay someone else to do so. Both parties benefit from the exchange
due to the division and specialization of labor. The labor that I command
with my bucks might be in a car, a huge vacation, or tons of wine, but those
bucks represent MY credits for labor. I may have gained these credits
using my ability to screw other people out of their labor, or such
certificates may be gambling winnings, or whatever, but these certificates
allow me to command the labor of others as though they were awarded to
me in appreciation of my contribution in labor to the big economic pie.
Hyman Blumenstock
> Hyman Blumenstock wrote:
>
> >as food is a drug on the market, it's price would be zero
> >without the machinations of Alan Greenspan in his price fixing mission
>
> Your weird use of the English language is starting to annoy me. What
> definition are you using for the terms "drug" and "market" that would lead you
> to believe that drugs have a price of zero on the market?
The problem is not my "weird use of the English language" but rather
your lack of sufficient education.
From Webster's Dictionary --
drug
1 drug \'dreg\ n [ME drogge ] (14c)
1
a
2 : a commodity that is not salable or for which there is no demand _
used in the phrase drug on the market
>
> I think that most people (at least in the U.S.; I can't speak for countries
> with more liberal drug policies and/or more socialized medicine) would argue
> that "drugs", as the word is commonly defined, are too expensive (and most
> people wouldn't blame this on Alan Greenspan, either).
Firstly, drugs should never have been made illegal. Just like
prohibition made a fortune for the Mafia, illegal drugs make a fortune
for the drug kings. I think that illegality was purposely instituted
to make money for the criminal element. If not illegal, drugs do
nothing but reduce awareness of one's misery, and that's the only
reason it would be taken.
Other drugs, like the poison strychnine, are far more harmful than the
illegal drugs, deadly in fact, yet no one thinks of making them
illegal. No more than running into a telephone pole is illegal. Our
economic system maintains human misery as a function of the
Doctrinaire Economic profession for no good reason but its own self
aggrandizement, Alan Greenspan included. And that misery promotes the
illegal drug business, that would wither away as did the illegal
alcohol business before Repeal was enacted.
HB
>
> Regards,
>
> Tom
Robert Vienneau
<si...@netacc.net> wrote:
> as I said I don't claim to be an expert on economic history...
The subject under discussion is the history of economics. I draw upon
the contemporary literature on the subject, which is very contentious.
I don't understand this disavowal of expertise. The only question
is whether one can back up one's opinions and has addressed
relevant opinions from others. Mr. Simon certainly
cites primary texts below.
> ...On a few of RVs critiques I
> agree with him. On most I differ.
> we seem to have difference of opinion on what constitutes the Classical
> school.
> As you say below you put it from Petty through about Ricardo while I set
> it from
> Smith through Mill, although certainly some of the ideas that were
> central to the
> Classical School were developed in part prior to Smith, Hume's quantity
> theory for
> example. I would say that the Classical school is characterized by (1)
> maximizing
> self interest (2) Malthusian population theory (3) quantity theory of
> money.
> Perhaps RV would tell us what are the theories that he believes
> characterize the
> Classical school (obviously every Classical writer did not have to
> subscribe to
> every one)
Neoclassical economics postulates an asocial individual with given
preferences. Classical economics does not. Individuals are grouped
in classes, and those classes have systematic differences in
what they consume. Think of the landlords expenditures on luxuries,
the tendency of capitalists to save and invest a greater proportion
of their income, and the expenses of the workers on necessaries
and conveniences. Maximizing self-interest has little to do with
it; consumption is more to be explained with something like
sociology. Ricardo's analysis of machinery, though, was about
cost-minimizing.
It's certainly important to note that population is endogeneous to
classical economics, not a separate (non-economic) subject. Malthus,
though, is much more problematic. This all goes to debates about
wage theory, too.
There was variety on monetary theory among Anglo-Saxon economists of
the period. Specifically, some thought of the money supply as adjusting
endogneously to support the level of output. Not all supported Say's
law (taken over by James Mill). I take an endogeneous supply of money
and a rejection of Say's law to constitute a rejection of the
quantity theory. To see this diversity, look, for example, at monetary
theory of James Steuart, notice where Smith did not draw on Hume's
monetary theory, and the arguments between the Bullionists and
the anti-Bullionists and between the Banking and Currency schools.
There's also the matter of how an analysis of the cost of production
of gold fits in with the quantity theory.
What constitutes Classical economics? In my opinion, an emphasis on
a surplus generated in production. There is the necessary consumption
of the workers and avances for capital goods. The standard model is
of an annual cycle of production in which the goods needed for
production on the same scale are reproduced. The output also typically
includes a surplus, which is distributed among various classes.
The control and allocation of this surplus has a lot to do with
the growth of the wealth of nations.
> > > Smith developed the ideas of division of labor, price and allocation,
> > > nature of economic growth.
> > I think it a mistake to think that Smith was about the allocation of
> > scarce
> > resources.
> why would you say that?
Well, Ricardo thought he was developing Smith's ideas. (He's not
always correct on that.) Ricardo explictly says his theory does
not apply to commodities "the value of which is determined by
their scarcity alone." He further says:
"Those commodities, however, form a very small part of the mass
of commodities daily exchanged in the market. By far the greatest
part of those goods which are the objects of desire, are procured
by labour; and they may be multiplied, not in one country alone,
but in many, almost without any assignable limit, if we are
disposed to bestow the labour necessary to obtain them."
> I cite his passage about the invisible hand as
> explicitely
> about allocation of resources. Agree or not it is a laissez faire view
> of welfare
> maximization. Also see Theory of Moral Sentiments pgs 380-381
I only know TMS through secondary literature.
> for critique of central planning.
Laissez faire versus central planning is beside the point. "Welfare
maximization" is modern jargon that may mislead you on Smith. No
contemporary historian who has absorbed the rejection of Whigish
history would accept that Pareto optimization is a formalization of
Smith's ideas.
"None of this need conflict with his continuing to see the public
world of economic affairs as being capable of being moulded by
just laws, and the pursuit of long-term enlightened self-interest
properly restrained by prudence, into what he regarded as the
desirable state, and which is approvingly referred to as the
system of natural liberty.
This in no way licences the vulgarizers of Smith, who try to
interpret his system of natural liberty as a free-for-all of
unbridled greed and swindling - a paradise for projectors,
inside traders, take-over artists and barrow boys. Nor does it
condone squandering the surplus - always the unforgivable sin
for the classics. Happily, however, reinterpretations of Smith
which do justice to the subtlety and depth of his moral
distinctions are appearing today with increasing frequency."
-- Vivian Walsh
> > > His "invisible hand" is the basis of the utility maximizing
> > > individual and the profit maximizing firm.
> > Whatever later economists may have said, I doubt that.
> Bentham and the Utilitarians, who attempted to quantify utility, cited
> Smith. I'll take them at their word.
Use value in Smith or Ricardo, for example, is not quantitative. See
above on consumption in the Classicals.
> > > He explicitly recognized the difference between
> > > "value in use" and "value in exchange" and how price in a market
> > > system
> > > is governed by the latter according to the
> > > laws of supply and demand (which he apparently did not fully
> > > understand).
> > Natural prices are not governed by supply and demand, according to
> > Smith. His
> > point of effectual demand does not recognize a stable and predictable
> > demand
> > function elsewhere.
> Smith does set up the natural versus market price dichotomy with the
> former being
> determined by cost of production and the latter being determined by
> market forces.
Another false dichotomy. Historians, following Sraffa's 1960 work,
know to question "cost of production" as applied to the Classical
economics. My main point, though, is natural or normal prices are
determined by market forces in Classical economics. They are centers
of attraction for market prices, so to speak. Smith uses a metaphor
of gravitational attraction (WON, Bk. I, Ch. VII). These "costs of
production" are not non-market forces.
> See WON pg 56. As I pointed out he did not fully understand the laws of
> supply and
> demand but he was on the right track.
I'm not interested here in whether Smith understood later theories. I'm
interested in his theories, as he understood them. It's a matter of
whether you understand and accept the norms of historians.
> > > Smith recognized the labor theory of value
> > Nope.
> I cite WON pg. 30 in which he discusses how the value of a commodity in
> exchange is
> equal to amount of labour "which it enables him to purchase or command".
> Isn't
> that what the LTV says? That the value of a good is its value in terms
> of the
> labor that it took to produce it?
Nope. There's a distinction between labor embodied and labor commanded.
Smith's focus is on labor commanded; the LTV focus is on labor
embodied. If you read Smith as arguing for the LTV, he exhibits an
amazing confusion between labor commanded and embodied. If you
read these passages as about measures of welfare, not price theory,
they make much more sense.
> > > but also the theoretical problems with the LTV.
> > Nope.
> I cite WON pg 31 in which Smith specifically discusses that adding up
> hours of
> labor may not make sense due to the different skill levels and
> distastefulness of
> the jobs.
No. Later LTV partisans would say that says hours of labor must be
weighted in calculating labor-embodied measures. Smith can be read
as saying the weights are stable. Ricardo and Marx
argued this. No problem. The central problem discussion about the
LTV has focused on is the transformation problem.
<http://csf.colorado.edu/pkt/pktauthors/Vienneau.Robert/LTV-FAQ.html>
> > > He understood that wages were determined by the same forces
> > > as prices in other markets.
> > If those forces include social norms and opposing classes, sure.
> he certainly mentions social norms and opposing classes. In fact his
> view of the
> natural state of the world seems to be monopsony. However on WON pg 68
> "the
> scarcity of hands occasions a competition among masters, who bid against
> one
> another, in order to get workmen, and thus voluntarily break through the
> combination of masters to agree not to raise wages....." it is pretty
> clear from
> this passage and the following passages that Smith is applying supply
> demand
> analysis to labour.
It is very difficult to find ways to read into Smith any indications of
any recognition of regular and stable supply and demand FUNCTIONS for
any goods.
I think wages is one area where there is lots of debate about Smith.
Some see all sorts of conflicting and incoherent theories of wages.
Each of these theories may have later been developed by others,
but many see Smith as being without any one coherent wage theory.
> > > He also posited the wages fund theory
> > Nope.
> What do you mean "Nope"? WON pg 65 he sets it out explicitely. How much
> more
> clear could he be on that point?
Paginations different. I use the Cannan edition, not the more recent
bicentenial edition.
"The demand for those who live by wages, it is evident, cannot
increase but in proportion to the increase of the funds which are
destined for the payment of wages."
-- A. Smith
"Skinner, in line with others, interprets Smith's theory of wages
as being based on the wage-fund theory, whereby in a given period
wages are determined by the relation between a wage fund, defined
in real terms, and the labour supply (i.e. the labouring population),
which would thus be fully employed. According to Skinner,
subsistence is the long-run supply price of labour, at which the
population just reproduces itself, without increase or decrease.
The natural (i.e. equilibrium) wage coincides with the subsistence
wage. In light of this Skiner then interprets Smith's three 'cases',
the stationary, declining, or growing economy. The stationary state,
he argues, is the equilibrium position at which wages are at
subsistence level, and neither the population nor the wage fund
change over time...The above passages from the Wealth of Nations
must immediately suggest difficulties in Skinner's interpretation.
For the stationary economy...is characterized by a 'constant
scarcity of employment', and this is why wages tend to be fixed at
subsistence level. By contrast, according to the wage-fund theory
unemployment can only be a transitory condition of disequilibrium
in which wages continue to decrease until full employment is
reached. Similarly, the case of the declining economy appears to
conflict with the wage-fund approach to wage determination. Also
in this case we have large-scale unemployment and underemployment.
But despite this, and in contrast with Skinner's interpretation,
wages do not fall below subsistence, and the impossibility of
finding work, rather than reduced wages, is cited as the cause of
a fall in population ('many would be unable to find employment
even upon these hard terms, but would...starve').
It might be suggested that unemployment in stationary and declining
economies is due to rigidity or to stickiness of the real wage
rate... Yet Smith did not envisage potential equilibrating
mechanisms based on inverse relation between employment level and
real wage rate. He never argued that if wages were flexible
higher levels of employment might be reached. This suggestion,
therefore, appears to reflec the influence of modern ways of
thinking on the interpretation of past economists.
In describing the conditions of the labour market in economies
characterized by stagnation, decline or growth, Smith always
compares the supply of labour with the demand, both understood
as given quantities. Terms like 'the number wanted' or 'the
number employed' are used interchangeably with the term 'demand
for labour'. This is given in each period, and its variations
over time depend on the progress of accumulation: the demand
for those who live by wages therefore, naturally increases with
the increase of national wealth, and cannot possibly increase
without it. (Smith, 1776, I., viii. 21...) This, together with
the admission of unemployment and underemployment, works against
the temptation to represent Smith's analysis in terms of the
wage-fund theory, and hence in terms of the inverse relation
between wages and employment which characterize that theory
(like the modern marginalist theory, though on different grounds)."
-- Antonella Stirati, _The Theory of Wages in Classical
Economics_, 1994,
> > John Stuart Mill - mid 1800s - unlike Ricardo recognized the factors of
> > growth to be of technological growth, population growth, and capital
> > accumulation (shades of Solow!)
> > "Unlike Ricardo" is wrong.
> Ricardo certainly understood population growth and had the idea of
> capital
> accumulation but he missed technological growth. If he understood
> technological
> growth then why doesn't it increase the wage rate in the long run and
> break the
> stagnation result?
"But if our progress should become more slow; if we should attain
the stationary state, FROM WHICH I TRUST WE ARE YET FAR DISTANT,
then will the pernicious nature of these [Poor] laws become more
manifest and alarming..."
-- David Ricardo, Works, I., p. 109. (emphasis added)
Chapter 31 of the third edition, "On Machinery", is about technological
growth.
> > > Bohm-Bawerk
> > > integrated time into production giving birth to capital theory
> > Actually capital theory predates Bohm-Bawerk by centuries, as he makes
> > clear in his history.
> other people talked about capital but Bawerk put it together into what we
> would
> call capital theory. ie capital as a stock variable which when combined
> with labor
> produces output which is split into consumption and investment, capital
> accumulation based on time preference. He layed out much of what Solow
> would do later.
The above is confused. Bohm-Bawerk certainly layed out ONE capital
theory that was very influential. So did J. B. Clark, Fisher, Knight,
etc. later. So did classical economists like Smith and Ricardo.
And capital theory has been a battleground for over two centuries.
Who you think is currently winning - not Bohm-Bawerk and Solow
in my opinion - should not prevent a good historian from acknowledging
that others had capital theorieS.
> > find interesting this elevation of Jevons above Menger and Walras.
> I did not mean to slight Walras. I would certainly put Walras in a class
> with the
> others and above many of them (I think I mentioned that) but some of his
> major
> works were past the 1888 cutoff that I had set so I didn't know if it
> would be fair
> to count him as pre 1888. But sure I would love to count Walras..and
> Marshall.
Jevons', Menger's, and Walras' work setting forth neoclassical economics
all date from the 1870s. Scholars debate whether neoclassical economics
was a revolution or evolution from what came before, whether grouping
these three together disguises differences more important than
similarities, and what makes neoclassical economics distinct from
other approaches to economics.
Tom Thress
>tomt...@aol.com (Tom Thress) wrote in message
>news:<20011024113516...@mb-mv.aol.com>...
>> Hyman Blumenstock wrote:
>>
>> >as food is a drug on the market, it's price would be zero
>> >without the machinations of Alan Greenspan in his price fixing mission
>>
>> Your weird use of the English language is starting to annoy me. What
>> definition are you using for the terms "drug" and "market" that would lead
>you
>> to believe that drugs have a price of zero on the market?
>
>The problem is not my "weird use of the English language" but rather
>your lack of sufficient education.
>
[he then quotes a definition from Webster's which seems to generally match his
use of the term "drug" here.]
I stand corrected in this regard. However, I do have difficulty understanding
what you're talking about oftentimes, so that it isn't clear to me if you have
something meaningful or interesting to say or not.
I wonder if you could help me out in this regard. Could you define the
following terms as you use them -- I don't intend to challenge your
definitions; I just want to see if your theory is any more logical using your
definitions than it is using my definitions:
want (both noun and verb forms)
need (both noun and verb forms)
wealth
GDP
food
economics
Doctrinaire Economics (also, what was the approximate date in which this field
came into being?)
Agrarian Era (what were the approximate dates of this era?)
money
currency
trade
barter
price
inflation
income
supply
demand
I think that's all, although perhaps more words will arise through our
conversation.
Given the definitions above, could you state your basic theory? I'm
particularly interested in going beyond the simple statement that people need
food to live. Frankly, I've never been quite able to figure out what your
point was beyond that.
Regards,
Tom
Robert Simon
> I don't understand this disavowal of expertise. The only question
> is whether one can back up one's opinions and has addressed
> relevant opinions from others.
you are certainly correct in that.
> Neoclassical economics postulates an asocial individual with given preferences.
> Classical economics does not. Individuals are grouped in classes, and those
> classes have systematic differences in
> what they consume.
Bentham explicitely talks in terms of preferences. So Bentham is not a classical
economist? As I said not every Classicist agrees on all points. Smith speaks
about the difference between "value in use" and "value in exchange" pg 28 WON even
using the word "utility". And read the passage about the invisible hand. He
specifically talks about each person working in his own self interest. I am not
claiming that he had a developed understanding of utility theory or marginal
utility but this is certainly more than ignoring preferences and grouping people by
classes.
> There was variety on monetary theory among Anglo-Saxon economists of the period.
yes I agree there. As I said not everyone agreed on every point but as a general
characterization I think the quantity theory was pretty well accepted, especially
toward the end of the Classical period (which I know we differ on)
> What constitutes Classical economics? In my opinion, an emphasis on a surplus
> generated in production.
yes the wage fund I agree.
> > > I think it a mistake to think that Smith was about the allocation of scarce
> resources.
>
> > why would you say that?
>
> Well, Ricardo thought he was developing Smith's ideas. (He's not always correct
> on that.) Ricardo explictly says his theory does not apply to commodities "the
> value of which is determined by
> their scarcity alone."
are you saying Ricardo said "Smith's theory does not apply to commodities"? Well
Smith disagrees with him WON pg 56 over and over again he uses the exact word
"commodity" when talking about exchange. And the invisible hand passage is saying
the whole society is best off if everyone acts in their own self interest through
the market mechanism. That is a very rudimentary statement about Pareto optimal
allocation - pre Pareto. I'm not taking a position on if these various theories
are right or wrong just stating what the major points were
> He further says:
>
> "Those commodities, however, form a very small part of the mass of commodities
> daily exchanged in the market. By far the greatest part of those goods which are
> the objects of desire, are procured
> by labour; and they may be multiplied, not in one country alone, but in many,
> almost without any assignable limit, if we are disposed to bestow the labour
> necessary to obtain them."
this is Ricardo yes?
> Laissez faire versus central planning is beside the point. "Welfare maximization"
> is modern jargon that may mislead you on Smith. No contemporary historian who has
> absorbed the rejection of Whigish
> history would accept that Pareto optimization is a formalization of Smith's
> ideas.
I'm not interested in what Vivian Walsh has to say. The important question is what
did Smith say. How can you explain the invisible hand passage as anything but a
statement about optimal allocation?
> > > His "invisible hand" is the basis of the utility maximizing individual and
> the profit maximizing firm.
>
> > > Whatever later economists may have said, I doubt that.
>
> > Bentham and the Utilitarians, who attempted to quantify utility, cited Smith.
> I'll take them at their word.
>
> Use value in Smith or Ricardo, for example, is not quantitative.
I didn't say it was. I said "the basis for". Bentham says it was and Bentham was
the one who quantified utility. Therefore I say "the basis for".
> > Smith does set up the natural versus market price dichotomy with the former
> being
> > determined by cost of production and the latter being determined by market
> forces.
>
> Another false dichotomy.
please read pg 56 WON he is saying exactly that. See below for more on this.
> My main point, though, is natural or normal prices are determined by market
> forces in Classical economics.
read pg 56 WON. It is very clear what he is saying here. He defines the "natural
price of a commodity" in terms of the costs to produce it and the "market price" of
a commodity as determined by the both buyers and sellers. Now it is true that he
specifies the demanders as "those who are willing to pay the natural prices of the
commodity" but that still says that the price is determined by both supply and
demand, just subject to the constraint that price not fall below cost.
> I'm not interested here in whether Smith understood later theories.
yes I am in complete agreement. What is important is what he said.
> Nope. There's a distinction between labor embodied and labor commanded. Smith's
> focus is on labor commanded; the LTV focus is on labor embodied. If you read
> Smith as arguing for the LTV, he exhibits an amazing confusion between labor
> commanded and embodied. If you read these passages as about measures of welfare,
> not price theory, they make much more sense.
yeah I'm seeing on pg 52 that he says that all three of "wages, profit, and rent"
are the sources of exchangeable value. I will accept I am wrong on attributing LTV
to him, however he specifically criticizes the adding up of hours to value a
product and that would be odd without first positing this as a possible theory.
> > > > but also the theoretical problems with the LTV.
>
> > > Nope.
>
> > I cite WON pg 31 in which Smith specifically discusses that adding up
> > hours of
> > labor may not make sense due to the different skill levels and
> > distastefulness of
> > the jobs.
>
> No. Later LTV partisans would say that says hours of labor must be weighted in
> calculating labor-embodied measures. Smith can be read as saying the weights are
> stable.
ok would you agree with this statement? "Smith says there is a problem with adding
up hours" We can disagree as to whether this is a fatal defect of the LTV. I am
saying what Smith said.
> It is very difficult to find ways to read into Smith any indications of any
> recognition of regular and stable supply and demand FUNCTIONS for any goods.
I agree. I had previously said that he didn't fully understand supply demand
relations. Although you criticized me for saying so as my own editorialization
which is irrelevent to what Smith thought. But I'm glad we agree on this point.
> I think wages is one area where there is lots of debate about Smith. Some see all
> sorts of conflicting and incoherent theories of wages. Each of these theories
> may have later been developed by others,
> but many see Smith as being without any one coherent wage theory.
I think a better way to put this is he posed a number of theories on wages which
makes it difficult to state his theory succinctly. But that does not detract from
the fact that he explicitely lays out the wage fund theory, and at a different
point he makes the demand supply argument for wages, and at many points he speaks
about class struggle (or collusion).
> Paginations different. I use the Cannan edition, not the more recent bicentenial
> edition.
ok its the passage that starts "It seldom happens that the person who tills the
ground has wherewithal to maintain himself till he reaps his harvest".
> "Skinner, in line with others, interprets Smith's theory of wages as being
> based on the wage-fund theory,
as you said no secondary sources. What did Smith say?
> "But if our progress should become more slow; if we should attain the
> stationary state, FROM WHICH I TRUST WE ARE YET FAR DISTANT, then will the
> pernicious nature of these [Poor] laws become more manifest and alarming..."
> -- David Ricardo, Works, I., p. 109. (emphasis added)
>
> Chapter 31 of the third edition, "On Machinery", is about technological
> growth.
ok I will have to go look at Ricardo on that
> Who you think is currently winning - not Bohm-Bawerk and Solow in my opinion -
> should not prevent a good historian from acknowledging that others had capital
> theories.
ok let me restate that. What the vast majority of the economics profession (95%+),
including the "Doctrinaire Economics" profession that HB criticizes, calls Capital
Theory derives from Bawerk.
> Jevons', Menger's, and Walras' work setting forth neoclassical economics all date
> from the 1870s. Scholars debate whether neoclassical economics was a revolution
> or evolution from what came before, whether grouping these three together
> disguises differences more important than similarities, and what makes
> neoclassical economics distinct from other approaches to economics.
I am happy to include all three in my history. I left Walras, Pareto, Marshall,
and Edgeworth out because I didn't want to get into an argument about whether I was
exceeding the 1888 date. There was a lot going on right about that time. But
whether I include this group or not the point is still the same: contrary to what
HB says "Doctrinaire Economics" was NOT developed in the "Agrarian Era" (ending
approximately 1888) solely to deal with food. It just wasn't.
Thanks for the discussion.
ROB
Christopher Auld
>Neoclassical economics postulates an asocial individual with given
>preferences. Classical economics does not. Individuals are grouped
>in classes, and those classes have systematic differences in
>what they consume. Think of the landlords expenditures on luxuries,
>the tendency of capitalists to save and invest a greater proportion
>of their income, and the expenses of the workers on necessaries
>and conveniences. Maximizing self-interest has little to do with
>it; consumption is more to be explained with something like
>sociology.
Rob:
1. Do you know of any neoclassical economic theories in which
individuals are not "asocial?" Why do you think that many
theories do postulate "asocial" individuals? In what sense
is it better to make enough assumptions on individual behavior
that it's irrelevant whether or not individuals are asocial,
as in the Sraffian theories you're fond of frequently posting?
2. Do you know of any neoclassical economic theories in which
individuals are heterogeneous, even to the limited extent
that they are "grouped in claasses?" When you say "neoclassical
economics," do you mean what economists would recognize as the
body of thought based on neoclassical paradigm, or merely the
canonical models as developed circa WW2?
3. How do you know that systematic differences in consumption
patterns between rich and poor people "have little to do with
self-interest?" What do models with self-interested rational
agents predict about such patterns? What alternate theories
better explain these patterns, how do they deviate from the
simple story based on self-interest, and what empirical
evidence supports the former over the latter?
4. You oddly state that classical economics isn't concerned with
notions to be denigrated like "Pareto optimality," rather, it's
concerned with "not squandering the surplus." Do you
recognize any parallels between these two concepts? In worlds
in which the size of the "surplus" depends on individuals'
goals and desires, how do you propose defining the state "the
surplus is not squandered?"
--
Chris Auld
Department of Economics
University of Calgary
au...@ucalgary.ca
Hyman Blumenstock
> Hyman Blumenstock wrote:
>
> >tomt...@aol.com (Tom Thress) wrote in message
> >news:<20011024113516...@mb-mv.aol.com>...
> >> Hyman Blumenstock wrote:
> >>
> >> >as food is a drug on the market, it's price would be zero
> >> >without the machinations of Alan Greenspan in his price fixing mission
> >>
> >> Your weird use of the English language is starting to annoy me. What
> >> definition are you using for the terms "drug" and "market" that would lead
> you
> >> to believe that drugs have a price of zero on the market?
> >
> >The problem is not my "weird use of the English language" but rather
> >your lack of sufficient education.
> >
>
> [he then quotes a definition from Webster's which seems to generally match his
> use of the term "drug" here.]
>
> I stand corrected in this regard. However, I do have difficulty understanding
> what you're talking about oftentimes, so that it isn't clear to me if you have
> something meaningful or interesting to say or not.
>
> I wonder if you could help me out in this regard. Could you define the
> following terms as you use them -- I don't intend to challenge your
> definitions; I just want to see if your theory is any more logical using your
> definitions than it is using my definitions:
>
> want (both noun and verb forms)
There is no practical limit to "want" specified. Like a kid can
"want" a million trillion lollipops. Usually common sense limits that
requirement to practicality. However in the foundation statement of
the typical economics text, the word want (Human Wants Are Virtually
Infinite) is deliberately meant to provide a false innuendo that
Supply of essentials cannot ever meet Demand. That innuendo is even
further extended by the phrase "virtually infinite," that with a bit
of contemplation no one ever seems to apply, can mean only "finite."
The statement therefore means precisely, "Human Needs Are Finite,"
that would raise a serious question, what in hell is the rest of the
textbook following all about unless it can be shown that Supply can
never meet Demand? Therefore, by default, we require the services of
the economic profession to help in the peaceful distribution of all
things.
> need (both noun and verb forms)
The word "need" dictates a practical quantity of supply to satisfy
whatever is that need. If we were to consider the practical needs of
the entire population versus our technical capability of satisfying
that, just take one average person, and multiply that by the total
population, we would see as a practical matter, all needs can be
supplied. In fact, if the entire population were put to that task, we
probably could supply perhaps several hundred times the population of
the earth. That condition of 100% efficiency and ever increasing
since, occurred about a century ago when food was virtually all that
was considered, and we inadvertently produced too much food, to the
chagrin of the Economic fraternity. For if that were recognized, their
function on how to distribute scarce food would have become moot and
they would all have to seek new goals to conquer.
> wealth
Throughout the ages, the "wealthy" person was one who never had to be
concerned about his hunger, while everyone else did. What we consider
to be "wealth" today is all produced by people who have all had to eat
first before they could even consider doing anything besides hunt or
cultivate food. For without food, though the earth might by loaded
with whatever artifacts we now consider to be "wealth," without the
human race to contemplate it all and appreciate it, it would be
nothing -- it would not be "wealth."
> GDP
Until about a century ago, there was very little else produced but
food and whatever tools needed to produce it. Perhaps a horse and
buggy and other primitive articles. But with the end of the era of
slavery when food abundance occurred, the age of unemployment began,
around the turn of the century. Labor was first dumped off the farms
as food became a "drug on the market," its natural price dropping
towards zero. What was the price of the grain that was headlined
around 1888, "Excess Grain Dumped Into Lake Michigan?"
What that surplus labor did at first was create the Industrial
Revolution that in due course created the high tech things we enjoy
using today. But we are already saturated with that, as indicated by
increasing unemployment, and the make and waste work occupying
thoroughly useless industries, such as the financial. Yet the
ubiquitous (ubiquitous \yue-'bi-kwe-tes\ adj (1837) : existing or
being everywhere at the same time : constantly encountered :
widespread _ ubiquitously adv _ ubiquitousness n )
economist insists that GDP is scarce, and therefore "the economy must
grow" even more. I believe that they were delighted a number of years
ago with the addition of a new commodity on the market. Pollution had
gotten so bad in Tokyo that entrepreneurs had gone into business
selling canisters of breathable air. Hooray for Economic philosophy.
> food
Along with Air and Water, if you don't get enough you will die as a
foregone certainty in very short order.
> economics
From the Greek -- Management of the House (economy
1 economy \i-'kae-ne-me, e-, e-\ n, pl -mies [MF yconomie, fr. ML
oeconomia, fr. Gk oikonomia, fr. oikonomos household manager, fr.
oikos house + nemein to manage _ more at vicinity, nimble ] (ca.
1485)
1 archaic : the management of household or private affairs and esp.
expenses
2
a : thrifty and efficient use of material resources : frugality in
expenditures; also : an instance or a means of economizing : saving
b : efficient and concise use of nonmaterial resources (as effort,
language, or motion)
3 : the arrangement or mode of operation of something : organization
4 : the structure of economic life in a country, area, or period;
specif : an economic system
2 economy adj (ca. 1906) : designed to save money <~ cars> )
> Doctrinaire Economics (also, what was the approximate date in which this field
> came into being?)
It just grew during the food scarce Agrarian era, probably meant to
demonstrate a less bloody competition for survival that the rest of
the animal kingdom still pursues. As soon as food became abundant, a
century or so ago, it should have closed up shop completely, its
members seeking new goals to conquer.
> Agrarian Era (what were the approximate dates of this era?)
Probably since time began until at least a portion of the human race
gained enough technological know how to produce an adequacy of food.
The latter happened around 1888 with the newspaper headline, "Excess
Grain Dumped Into Lake Michigan." Our current over 50% obesity rate
confirms that in spades.
> money
During food scarce times, money, a pure figment of the imagination,
was invented as a "ticket of access" to the then scarce food supply,
wherein everyone could not partake of it, and those who were not
supposed to, were not given any money with which to exchange for it.
Today, we need money, the entire financial industy, like we need a
hole in the head.
> currency
I suppose another reference to money, evidenced by paper or metallic
titles to money. However, like titles to real or personal property, if
there is no property that is described in the title, it is considered
criminal. Titles to money should be considered to be criminal, as
there just ain't any such thing as money.
> trade
Exchange, wherein there is a really hostile exchange of one item for
another, ultimately the procurement of food, each party trying to make
out better than the other.
> barter
A direct exchange without the use of money, the ultimate purpose is to
get enough food to live.
> price
An arbitrary specification of the exchange process, based upon the
feeding requirements of everyone who had anything to do with the
produce priced. In fact every government expenditure ultimately lands
into someone's hands with which to buy food, except for whatever money
is waylaid by political shenaningans. If everyone were just fed as
freely as he now gets Air and Water, then everything you can imagine
everyone doing of any magnitude, is already paid for in advance.
> inflation
Happens only in a free market (no price fixing) wherein food is in
scarce supply, and the money supply is raised. That does nothing to
increase the food supply -- only prices. Here, were it not for Alan
Greenspan, all prices would have long dropped to zero, but his
function is to arbitrarily fix prices and vary them by diddling with
interest rates, and mouth the word "inflation" as an indication that a
wise man has spoken.
> income
Literally, what "comes in" to the human body, via the orifice called
the mouth, the purpose of which is to provide nourishment to the body.
To apply "income" to mean money in hand, loses sight of the fact that
that money "income" has to be converted to food, and then brought into
the body, or the recipient will die as a certainty.
> supply
Things we think we need to live a comfortable life.
> demand
Things we think we need to live a comfortable life.
>
> I think that's all, although perhaps more words will arise through our
> conversation.
>
> Given the definitions above, could you state your basic theory? I'm
> particularly interested in going beyond the simple statement that people need
> food to live. Frankly, I've never been quite able to figure out what your
> point was beyond that.
My point is very simple. Resolve all social problems as we have all
the means to do so. Following is a paper delineating it all.
>
> Regards,
>
> Tom
An Economic and Political Alternative
Submitted to the Lelio Basso Foundation of Rome
Abstract
There are at least two historical situations wherein some misconceived
philosophy had to cut off short because its progress could go nowhere,
that had to be replaced with a completely new philosophy. These were
Alchemy with its mistaken four chemical elements of Fire, Earth, Air
and Water, that was replaced in toto by Mendeleyev's completely new
approach to Chemistry, with its currently 80 some odd, more practical
chemical elements. The other was the Flat Earth Theory that had to be
completely replaced by the Round Earth Theory. This paper concerns
Economics, the Science of Scarcity (of Food) that had outlived its
usefulness a century ago, when Food inadvertently became abundant. A
completely new textbook is called for, titled, Economics 2, the
Science of Abundance.
Historically, as is evident in the Bible, a history of mankind,
man’s prime preoccupation since time began has been Food. The
word eat is mentioned some 655 times throughout the 500 odd verses of
the Bible, the most thorough history of mankind one can find. The
modern discipline of Economics concerns itself ultimately, no matter
how far afield is the immediate subject of Money, so popular today,
with the required life giving function of eating. Every aspect and
nuance of the typical 800 page economic textbook ultimately reflects
the living of any human being assured of an adequate Food supply.
However, the over complicated thought that comprises modern Economics,
the Science of Scarcity (literally only of Food), can be reduced to
what a new born infant naturally is born knowing about the essence of
Economics. That is that a hunger pang shall signal an action, such as
crying, and with more sophistication, foraging and tilling the soil,
or misery, crime, violence and war, and the end result, satiation of a
filled belly with peace and contentment. This happy condition was
ripe for the happening just a century ago, after countless millennia
of insufficiency and misery, compounded by violence and wars. Once
understood and realized, the transition from Scarcity to Abundance,
the practical advent of a new, modern version of the Garden of Eden
can be simple and easy.
Detailed Analysis
The human race has suffered a consistent problem since time began.
That problem has been the insufficiency or misallocation of Food for
the living requirements of every one of the inhabitants of the earth.
Too many people find they must live a life wherein starvation is
always a threat.
Perhaps it is wishful, simplistic thinking, but many people are
persuaded that mankind originated in the Garden of Eden, wherein a
model of an ideally desired life is presented. The entire population
of the earth, Adam, Eve and progeny, have everything essential to a
comfortable life. They knew Security that the immediate future does
not hold any unacceptable threat to their welfare.
What else does any human being need but a sufficiency of Air, Water
and Food? Without Air, one will die in a matter of moments. Without
Water, one will die in a matter of days. Without Food, one will die
in a matter of two months, a time frame proved not too long ago by the
demise of healthy young men rebelling during the Irish rebellion by
hunger strike. But with a sufficiency of these three essential
elements of life, all concerns about Air, Water and Food, and the
fiction of Money, that had been invented to act as a surrogate for
Food, can be put into the background of one's mind.
Allegory or not is irrelevant, but the legend of the Garden of Eden,
particularly the thought of an uncomplicated existence without fear of
want, is one that people think about wishfully. Whether or not the
Garden of Eden is a historical fact, it serves as an excellent
allegorical model for the goal of the human race; the entire human
race restored to a modern Garden of Eden.
Why was the entire human race (of that time) ejected from the Garden
of Eden? It is popularly thought that man had sinned somehow, and the
travail of life outside the Garden of Eden is a well-deserved
punishment. A better thought that seems a great deal more logical, is
that being fully satiated with the fundamental elements of life; Air,
Water and Food -- would not serve to impel man to gain an education,
to achieve a well-earned feeling of Self Esteem.
Man has a mind endowed with a self-awareness that demands a feeling of
Self Esteem, a Worthiness stemming from one's performance. It is
manifest in the modern slogan, Man does not live by Food alone.
Doctrinaire Economic Philosophy has the mistaken impression that only
the Security aspect of man's Motivation, (that naturally includes also
the drive for Self Esteem), is all there is, and that the deadly
threat of earn a living; and unvoiced, or a death, is the only form of
Motivation to consider. This is the rationale behind slavery,
unpleasant work, drudgery, while the pure pleasure of accomplishment
is far between and for the very few.
What better way to initiate a program of learning than to compromise
that Security just enough to impel man to use the power of thought by
the time honored method of presenting him with a problem to solve?
Having only those three elements supporting man's existence, Air,
Water and Food, what better way than to deprive man of easy access to
one of these, and have him try to reason a way to overcome that
deprivation. That is the rationale for school learning present
problems that require original thought to resolve.
To deny man sufficiency of either Air or Water, in view of the
exceedingly short time span before death would occur, makes the third
essence of life, Food, the best of the three life giving elements to
maintain naturally in scarce supply. Within the two months before
death would occur by starvation, (a time frame recently determined by
Irish rebels on a hunger strike) man, with his powers of original
thought, could figure out a method of acquiring enough to eat.
Sure enough, since the beginning of the Agrarian era, sometime in
antiquity, man apparently learned enough by foraging, and by tilling
the soil, to produce enough of a modicum of Food to preserve him until
at least the next day. For here we are today, the original population
of the earth grown into some 5 billion people or so.
However, during that time of Food scarcity, named by modern
Economists, the Agrarian era, man does not necessarily possess an
altruistic nature, and most people would compete and fight with each
other in competition for whatever insufficient supply of Food was
available, as is the practice of the rest of the animal kingdom. The
history of that era is replete with stories of greed, conquest, and
slavery; all the result of Food scarcity. Lands were, and still are
conquered, because land is the primary vehicle for Food production.
Even at this relatively late date, Hitler's expressed rationale for
his aggression was that Germany needed lebensraum. That to cruelly
and directly eliminate countless mouths to feed -- stomachs to fill --
would be an advantage for his group, the Nazis. That would indicate
that once Food became abundant enough again, when Man's course of
education, learning how to take care of himself was completed, then,
no matter how populous the human race had become, the ancient Garden
of Eden marked by a sufficiency of readily available Food would become
reality once again.
Meanwhile, as man's capability at Food production advanced slowly over
the ages of the Agrarian era, a discipline called Economics, the
Science of Scarcity was developed, comprised of scholars whose honest
attempt was to resolve the economic problem of Food scarcity. After
eons of time of Food scarcity, very few scholars contemplated that the
human race would ever see such a plenitude of Food wherein no one need
be deprived of enough to compromise his own individual satisfaction.
Economic Philosophy of Scarcity created means of distribution of
scarce Food that recognized that empirically, there had to be people
who would not be able to eat for the simple reason that there just was
not enough. A prematurely false conclusion was drawn that Human
beings are too complicated to ever understand. Maslow's primitive
five level hierarchy of human wants was left lying fallow without
further thought and development, while the erroneous economic concept
that the threat to Security of earn a living or die and that was all
there is to human Motivation, became firmly entrenched.
How to distribute enough scarce Food to those deemed most entitled or
most powerful? Simply deny access to the Food supply to those deemed
least entitled to eat. The Barter system established the concept of
Marketplace wherein it was required of anyone seeking to acquire his
living, (an "income" meaning what "comes in" to the human body) could
do so by offering in return for Food, something of value in exchange,
Quid Pro Quo. That word "income" has been compromised to mean today,
receiving Money, period, rather than the Food for which Money is
intended to be exchanged. Obviously, ingesting money, a phantom, or
whatever physical symbols thereof might exist, will not support life.
In due course, as technological advances in Food production occurred
and life became more complicated, Barter was determined to be a rather
cumbersome procedure. Man's mental ingenuity invented Money, a
mythical concept of no physical substance, to replace barter. Then
though Food has always been the paramount goal in the pursuit of a
living, Money, as a surrogate for the Food supply, served as the means
to continue to again deny access to the still scarce Food supply to
those deemed least entitled, by the simple expedient of denying those
unfortunate people access to Money, a required "ticket of access" to
the food supply.
During the latter days of the Agrarian era, (middle 1800's) as the
Food supply, in contrast to the still larger demand, became ever more
abundant, an Economist, Karl Marx advocated that perhaps it might be a
good idea for those with the power and prestige to satiate themselves
with Food, the elite, to share some of that Food with those people at
the bottom of the list. But by then, the habits of acquisition,
particularly of the convenient, imaginary artifact, Money, obviated
any concurrence with Marx's thoughts, and he was roundly ostracized,
to the present day. Despite lip service to his philosophy, his
theories were never followed, except within family and corporate
groups, but rather the continuing practice of the strong taking it
all, that is the embodiment of today's version of Economics, called
capitalism. In his time, Marx was quoted as declaring in reference to
those practices alluding to his name, "If that's Marxism, then I am
not a Marxist."
The Economic profession, the role of which is purportedly to resolve
Economic problems, problems that always had been sourced in Food
Scarcity, had become firmly established during the Agrarian era, had
been accorded a high prestige, with professional economists sought
after as advisors to Presidents and Kings. Under their aegis, Food
distribution could be most efficiently managed via that surrogate for
Food, the fantasy that is Money. Banking systems were created to
manage the Money supply, in theory, Money, ideally representing the
Food supply on a one to one basis. If too much Money was declared to
be in existence, while the Food supply remained scarce, Inflation
would occur, with resulting chaos to the distribution of Food. The
marketplace became firmly entrenched and with it a Money and Price
system still extant today, and the mechanism for preserving an
obsolete Status Quo, and following directly, the impending destruction
of a once promising civilization.
Without advance warning, a potential disaster for the egos of a firmly
entrenched Economic philosophy, which believes that Scarcity must
exist forever, came about. Food production technology had finally
advanced enough to create such an abundant Food supply that Supply of
Food finally exceeded Demand for Food. Market prices plummeted to
potential zero, Deflation, as the market became glutted with Food.
From the standpoint of the Doctrinaire Economist of Scarcity, abundant
Food would mean the final resolution of Economic Problems, and the
demise of that highly prestigious Economic profession, with their sole
raison d'etre a fait accompli, and the function of the Doctrinaire
Economist no longer required. An emergency measure was instituted as
reported by newspaper headlines in the late 1880's, "Excess Grain
Dumped Into Lake Michigan." Once precious Food was deliberately
destroyed. This practice continues to the modern day whenever market
prices drop. Further, farmers were promised subsidies if they were to
plow under their crops and let their land lie fallow. These actions
are still being carried out in this modern day. But those emergency
actions were not successful in restoring the Food scarcity upon which
the prestigious profession of "Economics, the Science of Scarcity"
rests.
A clever ruse was instituted to preserve a status quo that is held
precious by the Economic fraternity. Money, the imaginary device
meant to represent Food on a one to one basis in the marketplace,
previously and always logically subservient to life giving Food, shall
be officially declared to be more important than Food. Food, like Air
and Water had been, shall be relegated to virtual oblivion in any
economic context. Money, a pure fantasy shall become all. A
universal psychosis was created, that fantasy is reality. A simple
test of the validity of that notion is whether or not anyone
possessing some highly priced possession would freely and quickly give
it up in exchange for a few cubic feet of "worthless" unmarketable,
polluted air, that would be withheld from his breathing function for a
short period of time.
So it has come to pass this last century of the Post-Agrarian era.
The pursuit of "profit" in terms of Food, wherein satiation will
naturally occur inasmuch as the human belly, individual or aggregate,
has merely a finite capacity to accept Food, will henceforth be
supplanted by the pursuit of Money "profit," a fantasy evidenced only
by ledger entries, and that has no point of satiation.
Henceforth, before anyone may access the Food supply, he must present
evidence of Money as a "ticket of access" before being permitted to
eat. Status Quo is preserved, and with it, of course, the ongoing
existence of a highly prestigious profession. Documents alleging to
the existence of Money, currency, bonds, debt paper, is the modern
economic practice. While other such instruments, such as a title to
personalty, or a deed to realty are worthless if no real personalty or
realty can be shown to exist as described in those papers, the paper
alleging the existence of Money has nothing of substance to represent
it, a consummate fraud inflicted upon us all, the human race.
Whatever it takes to acquire as much Money as possible, including the
severe compromise of Quality and Service, though the world's limited
resources be completely destroyed in the process, shall be the order
of the day. The food required for life itself, shall be relegated to
becoming just one of the artifacts of Gross Domestic Product (GDP),
and may be acquired only by the offer of Money in exchange. To
preserve Status Quo, Money shall be kept in as scarce supply as Food
once had been.
Blackmail, that "Inflation" shall be a natural threat, that as Food
had been the product of the individual Food Grower and logically
subject to taxation, Money shall falsely be deemed also the product of
the modern "taxpayer," so that the status quo of Social Problems shall
continue unabated, and with it a rationale for maintenance of
"Economics, the Science of Scarcity," and a cushy, prestigious
position for the Economic fraternity maintained.
To add insult to injury, the ostensible "taxpayer" shall not be
permitted, under very strict sanction against counterfeiting, to
create any artifact called "money" as during the Agrarian era he
created Food. That task shall be left entirely to a newly formed
private corporation, mostly foreign owned, called the Federal Reserve.
At the same time, the Internal Revenue Service shall be formed to
interface with the citizen and demand of him some of the monies he may
receive as it circulates through his hands, as income tax. The
illogic of it all, to forego a logical interfacing directly with the
legal source of Money, the IRS with the Federal Reserve, indicates a
venal attempt at intimidation of the individual, tantamount to highway
robbery.
To further compound this felony of intimidation and fraud against the
public, a fictitious "National Debt" shall be created, wherein the
Debtor and the Creditor are virtually and empirically one and the
same. The debt shall be created by the mechanism of permitting the
Federal Reserve to purchase currency from the Government Printing
Office at the still current rate of $23 per thousand bills of any
denomination (to cover cost of paper, ink and labor), and then to
issue that currency at Face Value, with a collateral debt to be owed
by the people, also at Face Value, a profit of some tens of thousands
of percent.
These documents attesting to that debt are then sold to the public as
Creditors, at face value, the very same public that largely is also
the Debtors of that very same debt. Even the Law does not contemplate
any such a Debtor - Creditor relationship, the simplest one being of A
owing B and B owing A, wherein a setoff is made of the difference
between the two debts. That We the People shall be both A and B is an
atrocity of logic and a crime against us all.
Further, to ensure that there will be no danger that this discipline
of Doctrinaire Economics shall not continue to flourish, let all
students during their most impressionable years, generation after
generation, be taught by rote its philosophy until it is as thoroughly
ingrained in one's mind as is life itself. Let them forego any
original thought, but depend upon an incestuous reinforcement of what
they have been taught, solely by referring to each other's writings,
past and present, as support for whatever illogic of economic
philosophy they may wish to prove. In contrast, if the Real Sciences
acted likewise, we would all still be roaming a worldwide jungle,
having no time to do anything else but hunting for something to eat.
There is therefore developed a mysterious, complicated
pseudo-scientific economic rhetoric, a monstrous Rube Goldberg
machine, a machine that busily grinds away with a great deal of fuss
and bother, impressing everyone with its busyness ("business"), but
that really accomplishes absolutely nothing of value. It misapplies
more complex mathematics than one finds useful in the real and useful
science of Physics, and is obviously meant to be incomprehensible to
everyone. It has deliberately been divorced from the origin of all
Economic Philosophy, a previously inadequate Food supply, now
abundant, but with a new mythical, fantasy foundation, an imaginary
Money supply, deliberately kept in as scarce supply as Food had been,
to replace Food as man's prime obsession. Food, once touted as "the
staff of life" is now relegated to be a very minor element of Gross
Domestic Product, no more thought about seriously than is Air and
Water. Food, the very foundation of Economic Philosophy of Scarcity,
is now totally discarded within the framework of Doctrinaire
Economics, to be replaced only by Money considerations.
There is a foundation statement in every economic textbook that
deliberately persuades a false innuendo, that scarcity is forever to
be a way of life, even though the literal phrasing indicates that the
reverse is true. That foundation statement is worded, "Human Wants
Are Virtually Infinite," or "Virtually Insatiable." The rest of the
textbook devotes itself totally upon the notion that "Infinite" and
"Insatiable" are de facto truths, though the literal meaning of these
foundation statements, with an otherwise normal economy of words, is
"Human Wants Are Finite," or "Satiable."
That latter condition ought to be evident by just noting that the
human belly is of finite size, as is the time and place constraints in
using anything. However, there are no limits to one's bank account,
potential wealth, when converted to Real Wealth that would overwhelm
anyone in a mountain of unusable garbage and junk, if it were all to
be "spent" or "used up." Then, why use the word "wants" instead of
the more practical "needs?" In its more practical form, that
statement "Human Wants Are Virtually Infinite" with the false innuendo
of Supply never meeting Demand, it reduces to the practical statement,
"Human Needs Are Finite." Without that false innuendo, one's
immediate thought would then be, "Why not?" What would it take to
satisfy human "needs?" The rest of the typical economics text of some
800 pages would all become moot as will all our current economic
practices and the entire financial industry of totally useless "make
and waste work."
Reference to this web page, <http://dieoff.org/page5.htm> will reveal
a horror story of what we are to face within the next three decades if
this atrocity of logic is permitted to continue.
Resolution Of The Problem
There are many advantaged people who would object violently to
anything that would compromise their current position of wealth and
prestige. Yet, a transition into a happier, more harmonious world can
be done quite easily with no threat whatsoever to anyone's current
position of advantage. No one need give up one iota of anything, and
a completely new world can be begun as soon as the next working day
arrives.
It should be evident that the proposed solution of Doctrinaire
Economists revolves about the fallacy that human wants are indeed
Insatiable. Economists refuse to recognize what ought to be obvious
to any clear headed scholar, that the prevalent condition of the
Agrarian era was Slavery, forced labor despite lack of sufficient
"income" (Food, as well as Air and Water, into the body). That the
prevalent condition of the Post-Agrarian era is the opposite of
Slavery is Unemployment, wherein one is forced NOT to work, though he
may wish to do so.
The Industrial Revolution, the creator of all the artifacts of the
modern era we call GDP (Gross Domestic Product), was possible only
because much of the labor force that had heretofore labored to create
an ever greater Food supply, could, with the advent of Food abundance,
be transferred to other pursuits. However, even the volume of GDP
beyond mere Food production, has already reached a point of
saturation, as is evident by the very existence of an Advertising
industry, and overflowing shelves of products no one really needs nor
wants, at least among the advantaged areas of the world.
Therefore, it behooves the human race to create new areas of
employment beyond the production of Food and GDP, beyond the
marketplace that was meant only for the necessaries needed to sustain
life, of which we are now saturated, beyond the domain of the private
sector that is focused only upon Money profit. The continuation of
Doctrinaire Economics, this last century, has threatened the depletion
of the earth's resources wastefully, in order to maximize a Money
profit that compromises Quality and Service. As for our squandered
natural resources, they are still around, but lying unused and
unappreciated in all our junkyards and garbage dumps, waiting to be
retrieved and recycled, for which the "funding" mechanism of
Doctrinaire Economics is never available.
There is much essential work begging to be done that traditionally
lies outside the normal interests of the so-called private sector, the
money profit seekers, work that now requires money expenditure. A
first emergency effort, would be for any government to commission the
private sector, cost plus, to embark upon a program of Restoring the
Environment, Replanting the Forests, Restoring the Oceans, Repairing
everything needing repairing. Teams of experts to travel about the
world teaching the third world nations how to achieve their own
prosperity as we've achieved outs. Research into and prevention of
asteroid strikes, Space Programs, Pursuit of Knowledge, Pursuit of the
Arts, Anything, until there is not one person unassigned to some job
for which he has a natural bent and for which he is fully trained.
While still under the spell of that pure fantasy, Money, let all that
work be paid for by Deficit Spending. The only real criterion is the
availability of sufficient Food for everyone of the population, an
easily achieved condition anywhere in the world were appropriate
skilled effort applied to produce it, or ship it until local
production can be made sufficient with modern technology. Let the
money mongers continue their childish games of who has the most money,
(pure fantasy wealth) so long as no one is deprived of any of our Real
Wealth (Land, Labor and Production). In due course all the detritus
and dross that Economic Philosophy has created to justify its totally
unwarranted prestigious position, will slough off of its own accord.
Let it be understood that such concepts as taxation, debt and cost,
have been obsolete ever since Food became a "drug" on the market, a
century ago, and are maintained only as a ploy to intimidate us all
into accepting and complying with the fraud that Economic Philosophy
has become. Let those scholars who are now firmly committed to that
outrageous discipline, including the entire Financial Industry, be
encouraged to switch their talents to the Real Sciences, and leave the
distribution of an adequate Food supply to the existing machinery
controlled and managed by accountants and inventory managers, none of
whom will need the educational level calling for a doctorate in
economic philosophy.
Conceptions and Misconceptions
Economics: From the Greek oikos, home, and nemein, to manage. With
Food abundance, all needed are skilled managers of Food production and
distribution of the highest possible quality. All that management and
computerized machinery, along with conveniently placed distribution
outlets already exist and are functioning. Let professional
economists continue otherwise until they feel ready to choose to
abandon their dead-end philosophy, as did the Alchemists and Flat
Earthers, their false beliefs. Their erudition will be welcomed, but
refocused upon the Real Sciences.
Human Wants:
1, Security - The feeling we would all have if there were no apparent
threat in the near future to our welfare.
2, Self Esteem - The feeling that we all would have if we are
persuaded that we are a worthy individual enjoying a pride in the
perceived purpose of his very existence.
At that level of abstraction, there is nothing else. Why continue
that false charade of "human beings are too complicated to ever
understand?"
Taxation: During the Agrarian era, wherein virtually everyone was
required to procure his own food, or grow it, it made some sense for
some of that Food to be taxed in order for the personnel who governed,
and who had not the time to grow their own, to be able also to eat.
During the Post-Agrarian era, when Food has been produced most
efficiently by the least amount of labor with more than enough for
everyone, and Money is declared to be an essential ticket of access,
the Food is already placed in distribution outlets accessible to
everyone, regardless of their function or status. To demand Money for
that Food is not too demanding a charade for the time being, so long
as there is sufficient Money for everyone to equal at least his Food
requirements, including those from whom he would purchase other
artifacts of GDP.
However, to pretend that the citizen is also a Money producer, as he
had once produced Food, is an outrage of logic, perhaps even of
venality. The latter may well be the case, because though the citizen
is forced into being a taxpayer of money, he is specifically forbidden
by extremely stringent laws NOT to create Money as once he created
Food.
Most logically, as the Federal Reserve (or any other similar source of
legal Money) is the only legal source of Money, then any revenue
collector, such as the IRS, most logically should interface directly
with that source for all the revenue it thinks is needed. To seek
Money from the taxpayer is just as idiotic as if in seeking fresh,
abundant water, one would seek it in some muddy trickle downstream of
a natural abundant reservoir, instead of at the reservoir itself. Let
the ostensible taxpayer be finally and permanently relieved of that
odious task of paying taxes. A mountain of forms will be eliminated,
a major in restoration of the forests.
Inflation and Deflation: During Agrarian times, with Food scarcity,
the Money supply had to represent on a one on one basis, the quantity
of Food to maintain price stability. Increasing the Money supply
without similarly increasing the Food supply meant that more money was
seeking scarce Food, with a natural price rise; Inflation.
However, as production of Food finally approached a point of
satiation, wherein demand for additional Food would find no takers,
then prices would tend to fall to zero, Deflation, meaning that the
purchasing power of Money would increase to Infinity, as even Zero
Money could then be used to procure any quantity of Food.
Cost: The concept of cost originated during the Agrarian era. Any
project conceived to be done had to deal with the quantity of labor
that would be needed. That labor could not perform unless they ate
well enough to be able to devote their attention to the job instead of
where their next meal was to come from. With Food scarcity, it was
not possible to embark upon any project unless there was sufficient
Food for all the labor needed. If there was not enough Food for all,
then it could be truly said, "We cannot afford the cost of whatever
project." Cost still means adequacy of Food, though the term and
concept of deliberately scarce Money is forced to intervene.
The absurdity of the cost concept in these Food abundant times is
evident when we say we cannot afford the cost of say a battleship (in
money terms). We fail to see that the function of every bit of that
money allocated to the job has as its ultimate purpose, not to become
a physical part of the projected battleship structure, but ultimately
to literally FEED every human being having anything to do with the
proposed construction of that battleship. Though the battleship
project may be canceled, ostensibly to save taxpayer's money, not one
dollar is really saved, as unless we mean that all the people who were
to have been involved were switched off like robots, or literally
starved to death, we will feed them anyhow with Welfare Programs,
Charity, and they would be fed nevertheless. Lost is the project per
se for no good reason, plus also lost is the Self Esteem of those
people, denied the opportunity to accomplish something, and further
humiliated by being forced to accept welfare programs and charity.
Debt: The function of private debt is to assure the Creditor that the
means of his own feeding, some excess he may have owned to be able to
loan it to someone who had not enough, is to assure that it will be
returned to him to assure that he might not have to go hungry. That
is moot when there is already an assurance of enough for everyone in
the first place.
The National Debt is a contrived bit of total nonsense intending to
further frighten an ignorant population, that is among the most
skillful and insidious scams ever perpetrated. No one seems to
realize that the bulk of the alleged National Debt has identical
Debtors and Creditors, which in Law is a total washout. There is no
debt, though we are continually frightened with that talk. Even if
there are foreign Creditors, what is their recourse? They can come to
us and demand we make good upon the debt paper they hold, and exchange
it for whatever of our Real Wealth (Land, Labor and Production) they
might want. We deplore that they do not do so, and call it the Trade
Deficit. Yet we evince some fear of bankruptcy or being attacked by
an army of accountants armed with ballpoint pens, who will demand that
we vacate the premises.
Budget: A budget is an allocation of Food for the support of the group
at large, but largely only in terms of Money. During Agrarian times,
a budget would demand more Food than was available. During the modern
Post-Agrarian times, it is still Food that is the criterion, but is
now over abundant. That means that we can budget anything that the
entire population can do. To limit the budget in terms of
deliberately scarce Money borders on stupidity, as the criterion is
everyone being fed that is being done anyhow via welfare programs etc.
In view of this, a totally balanced budget can be set up in Money
terms (to please those of us whose rote learning is irredeemably
fixated) by determining what it would cost to feed one average person,
and multiply that figure by the total population, and there we come up
with a total money figure that ought to eliminate all Social Problems.
If we continue to cater to those whose fetish is the collection of
inordinate quantities of Money, then add enough to the budget to
satisfy these people, so long as no one else is short changed.
Social Order and Politics: With regard to Social Order, there appears
to be two distinctly different extremes of Social relationship, at
opposite poles from each other, though on the same plane. The one
that the human race apparently started with was complete chaos, every
man for himself, at odds with and competing with every other person
for a living out of the jungle. Therein, the strong always got
stronger, while the weak always suffered privation. A popular modern
name for this condition is "capitalism."
As time progressed, it was discovered that people who formed groups,
as animal packs have done, wherein the work load towards a goal
wherein everyone benefited, could be accomplished by each individual
taking on and specializing upon small fraction of the total work.
With harmony and cooperation, together, a far greater goal than the
aggregate total of everyone working just for himself would be
achieved. That is the format of the family, the corporation, every
business entity, every success of accomplishment.
Failing to do that, and permitting any tendency for any member of the
group to care only for his own advantage rather than that of the
group, meant failure. Allowing any self-aggrandizement to enter the
group's domain would destroy the group's effectiveness. That sort of
thing is called politics, a synonym for bad management. Ironically,
the largest possible grouping among already established nations, the
government is not subject to bankruptcy, as there is no entity any
greater that can forcibly foreclose, as among lesser business groups.
Government will continue to exist, but the politics that will bankrupt
a lesser group, becomes entrenched, with self-aggrandizement the order
of the day. Misled people even begin to take politics (bad
management) as a normal condition to the extent that courses in
politics are now offered in prestigious universities instead of
eradicating politics as the evil it is.
It would appear then that groups of ever growing size would eventually
merge with each other to form ultimately One World, Inc. An
intermediate step would be perhaps USA, Inc. and Europe, Inc. etc.
Every last individual, no matter his former status, would be a welcome
member thereof, enjoying full support. His task would be, if he
chose, to demonstrate his worthiness of whatever is his specialty, for
the development of his Self Esteem as a worthy contributor.
However, there are people who oppose this sort of action and seem
eager to break up large groups into smaller groups for no rationale
reason, except that larger, well-managed groups are more powerful than
lesser groups and individuals.
Downsizing is now a popular practice, wherein individual members of
once effective groups are cast into unemployment in order to enhance
the money profits of those in power that remain. The anti-trust
movement is meant to do the same thing, break up large organizations
and turn us back towards the aboriginal jungle. However, all these
concerns are moot, as the ultimate Social form is one large group,
with everyone or every lesser group, a welcome member of the group at
large.
A more logical approach toward One World, wherein as in the smaller
groups that now exist, everyone is supported completely without
restriction by the group's competent management, so that ideally, one
need not spend even one second of time upon his required support, but
rather totally upon the job he is to perform. That is the type of
environment that would be ideal. Complete support just because one
exists, and then to allow and encourage each person to prove his worth
in achievement of whatever is his unique expertise and desire. This,
of course, is anathema to the thrust of Doctrinaire Economics, who
adhere to competition and seem to wish to drive us all back to the
jungle.
The Elective Process: Much is made of the elective process in
selecting a management staff for the government. As much as the
public knows about anyone's qualifications, selection of management is
made via popular appeal, a pleasant smile, and an appealing haircut,
promises that probably will not be kept. Can anyone imagine any
viable corporation selecting its management staff in this manner?
Corporations do have an elective body, the stockholders, comprised of
people who have neither the capacity nor understanding of what a job
requires in order to fill a vacancy, and certainly enough remoteness
from the details of good management for that particular organization.
Certainly, only the CEO (Chief Executive Officer) and other members of
management know what is best for a corporation, the least
knowledgeable being the stockholders. The elective process is meant
to be a last ditch effort to eradicate politics from an organization,
once it has crept in, never for its ordinary day-to-day business and
employee selection.
Curriculum Vitae
Engineer, Patent Attorney, Attorney At Law, commercial Pilot, now
retired. Using the successful techniques of the Real Sciences, writer
has derived an eye opening understanding of the nature of Man and how
to resolve Man's Social Problems. Writer has conducted an incisive
investigation, using the successful techniques of the Real Sciences,
into the understanding of the source of, and the resolution of Social
Problems.
Hyman Blumenstock
Robert Vienneau
(Christopher Auld) wrote:
Poor Chris Auld. His questions are all off-kilter.
Robert Vienneau
<si...@netacc.net> wrote:
> Robert Vienneau wrote:
>
> > I don't understand this disavowal of expertise. The only question
> > is whether one can back up one's opinions and has addressed
> > relevant opinions from others.
> you are certainly correct in that.
The relevant opinions include those in the secondary literature that
people point out to you. We should concentrate on secondary literature
written by those who have absorbed the norms of historians. Those
include attempting not to project contemporary ideas backwards,
not telling stories teleologically, not grading past thinkers by
current theories, etc.
> > Neoclassical economics postulates an asocial individual with given
> > preferences.
> > Classical economics does not. Individuals are grouped in classes, and
> > those
> > classes have systematic differences in
> > what they consume.
Mr. Simon does not address that generalization. And he has deleted
undiscussed my reference to specific systematic differences. After
deleting the evidence, he writes:
> Bentham explicitely talks in terms of preferences. So Bentham is not a
> classical
> economist? As I said not every Classicist agrees on all points.
The latter sentence undercuts Mr. Simon's point in the former sentence.
I've never read Bentham.
"There appears to be a general agreement that the contribution of
Bentham...to classical economics is confined to political
radicalism (O'Brien, 1975) - the typical attitude adopted by
Ricardo - and that neither his hedonistic psychology nor his
utilitarian philosophy constituted the foundation on which
the economists of his age built their theories. Halevy's
opinion that Adam Smith and Bentham shared the same utilitarian
assumptions (Halevy, [1901-4]...) has been definitively
rejected."
-- Marco E. L. Guidi, _The Elgar Companion to Classical Economics_,
1998.
I'm quite comfortable with saying that some of Senior's notions were
non-classical and a precursor to neoclassical ideas (e.g., his
explanation of a return to capital by the abstinence of the saver).
And the idea of J. S. Mill as a transitional figure doesn't confront
me. Why should I have a problem with Bentham being at odds in his
analysis with classical economists?
> Smith speaks
> about the difference between "value in use" and "value in exchange" pg 28
> WON even
> using the word "utility".
A historian would not assume that he is using the word anyway like
those with a different theory a century later.
"Of everything which we possess there are two uses: both belong
to the thing as such, but not in the same manner, for one is the
proper and the other the improper or secondary use of it. For
example, a shoe is used for wear, and is used for exchange; both
are uses of the shoe."
-- Aristotle, _Politics_
Did Aristotle invent neoclassical utility theory?
> And read the passage about the invisible hand. He
> specifically talks about each person working in his own self interest. I
> am not
> claiming that he had a developed understanding of utility theory or
> marginal
> utility but this is certainly more than ignoring preferences and grouping
> people by classes.
Smith's use of the invisible hand metaphor in WON is more about
people trading, purchasing, etc. in pursuit of monetary gain than
about consumption. So it's not about the central use of utility
theory in neoclassical theory.
The idea of the consequences of our acts working out "behind
our backs" in an unintended way is certainly an important idea
in the social sciences.
Interestingly enough, the passage suggests that society's interests
are promoted by anti-globalization, by investors choosing to invest
locally.
> > What constitutes Classical economics? In my opinion, an emphasis on a
> > surplus
> > generated in production.
> yes the wage fund I agree.
That's a weird statement. I said no such thing. I think of the wages
fund as coming in towards the end of the period under discussion
when understanding of classical economics was already being lost.
> > > > I think it a mistake to think that Smith was about the allocation
> > > > of scarce resources.
> > > why would you say that?
> > Well, Ricardo thought he was developing Smith's ideas. (He's not always
> > correct
> > on that.) Ricardo explictly says his theory does not apply to
> > commodities "the
> > value of which is determined by
> > their scarcity alone."
> are you saying Ricardo said "Smith's theory does not apply to
> commodities"?
Huh? No, I am not. I am saying Ricardo thought of the quantities
of some commodities as given - the paintings of old masters,
wine grown from grapes that must be cultivated on certain lands
of very limited extent, etc. And then there were all the remaining
commodities.
> ...And the invisible hand passage
> is saying
> the whole society is best off if everyone acts in their own self interest
> through
> the market mechanism. That is a very rudimentary statement about Pareto
> optimal
> allocation - pre Pareto.
Nope. Smith's emphasis is not even growth theory; it's development
theory (using our contemporary terms). Humankind's proclivity for
trade, according to Smith, is behind the extending of the market in a
long historical trajectory. And the division of labor is limited by
the extent of the market. There's an indication of a story about the
invisible hand that has nothing to do with the allocation of (given)
scarce resources.
> > He further says:
> >
> > "Those commodities, however, form a very small part of the mass of
> > commodities
> > daily exchanged in the market. By far the greatest part of those goods
> > which are
> > the objects of desire, are procured
> > by labour; and they may be multiplied, not in one country alone, but in
> > many,
> > almost without any assignable limit, if we are disposed to bestow the
> > labour
> > necessary to obtain them."
> this is Ricardo yes?
Yes.
> > Laissez faire versus central planning is beside the point. "Welfare
> > maximization"
> > is modern jargon that may mislead you on Smith. No contemporary
> > historian who has
> > absorbed the rejection of Whigish
> > history would accept that Pareto optimization is a formalization of
> > Smith's
> > ideas.
> I'm not interested in what Vivian Walsh has to say.
Mr. Simon should be. The quote is from the Elgar Companion I refer to
above. Walsh has co-written a good book comparing and contrasting
current reconstructions of neoclassical and classical economics.
> The important
> question is what did Smith say.
One should want to confront one's opinions with relevant opinions from
current scholarly discussions.
> How can you explain the invisible hand passage as
> anything but a
> statement about optimal allocation?
Easy. See above.
> > > Smith does set up the natural versus market price dichotomy with the
> > > former being
> > > determined by cost of production and the latter being determined by
> > > market forces.
> > Another false dichotomy. [My reference to pg 58 WON - deleted]
> > My main point, though, is natural or normal prices are determined by
> > market
> > forces in Classical economics.
> read pg 56 WON.
I don't see where Smith says that natural prices are not determined by
market forces; that the advancing, stationary, or declining
conditions of society, and the general conditions of society, do not
play out in market forces in some societies.
> It is very clear what he is saying here. He defines the
> "natural
> price of a commodity" in terms of the costs to produce it and the "market
> price" of
> a commodity as determined by the both buyers and sellers. Now it is true
> that he
> specifies the demanders as "those who are willing to pay the natural
> prices of the
> commodity" but that still says that the price is determined by both
> supply and
> demand, just subject to the constraint that price not fall below cost.
Nope. Natural price will not rise above cost either.
Quantity is given. In Smith, cost is the sum of natural wages,
profits, and rents. Natural price is NOT determined by consumer demand
in Smith, except as the level of effectual demands (a quantity)
affects costs. It's clear that that will happen in Ricardo with
variations in the level of the effectual demand for corn. (Ricardo
rejected Smith's notion that the natural rate of wages and profits
can vary independently.) Smith is not as clear as Ricardo on these
effects on costs.
> > I'm not interested here in whether Smith understood later theories.
> yes I am in complete agreement. What is important is what he said.
I doubt Mr. Simon is in agreement with my understanding of the norms
of historians.
> however he specifically criticizes the adding up of hours to
> value a product and that would be odd without first positing
> this as a possible theory.
Nope. He explains about weights, not "criticizes". On the previous
page and elsewhere he talks about labor as the "measure of value".
Where does he say it's the cause of value?
> ok would you agree with this statement? "Smith says there is a problem
> with adding
> up hours"
No. He says there is a problem with unweighted sum of hours. He says
the proper weights are stable and represented in the marketplace,
which is helpful in calculating measures of welfare.
> > It is very difficult to find ways to read into Smith any indications of
> > any
> > recognition of regular and stable supply and demand FUNCTIONS for any
> > goods.
> I agree. I had previously said that he didn't fully understand supply
> demand
> relations. Although you criticized me for saying so as my own
> editorialization
> which is irrelevent to what Smith thought. But I'm glad we agree on this
> point.
Obviously my point was unclear. I was criticizing the reading of
(parts of) our current theories into Smith. I'm still doing so above.
> > "Skinner, in line with others, interprets Smith's theory of wages
> > as being
> > based on the wage-fund theory,
> as you said no secondary sources.
I said no such thing. Once again, Mr. Simon deletes and refuses to
confront contrasting views.
> > Who you think is currently winning - not Bohm-Bawerk and Solow in my
> > opinion -
> > should not prevent a good historian from acknowledging that others had
> > capital
> > theories.
> ok let me restate that. What the vast majority of the economics
> profession (95%+), ...
> calls Capital Theory derives from Bawerk.
I find that statement bizarre.
I think the capital theory in Solovian growth theory more closely
follows J. B. Clark than Bohm-Bawerk. There's also capital theory
following on the work of Irving Fisher. In short, neoclassical
capital theory is not all one. Bohm-Bawerk, with his lawyerly
style, would certainly insist on making distinctions. If one is
going to lump all this together like that, one would better
say neoclassical capital theory derives from Jevons. (I have
not read Jevons, I am relying on secondary literature.)
But that's all beside the point. One should be cautious in applying
currently disciplinary categories to other times. Still, to say
there was no capital theory before Bohm-Bawerk seems to me like
saying there was no physics before Newton.
As for what mainstream specialists on capital theory have to say,
here's one:
"It is important, for the record, to recognize that key
participants in the debate openly admitted their mistakes.
Samuelson's seventh edition of _Economics_ was purged of
errors. Levhari and Samuelson published a paper which
began, 'We wish to make it clear for the record that the
nonswitching theorem associated with us is definitely
false. We are grateful to Dr. Pasinetti...' Leland Yeager
and I jointly published a note acknowledging his
earlier error and attempting to resolve the conflict
between our theoretical perspectives.
However, the damage had been done, and Cambridge, UK,
'declared victory': Levhari was wrong, Samuelson was wrong,
Solow was wrong, MIT was wrong and therefore neoclassic
economics was wrong. As a result there are some groups of
economists who have abandoned neoclassical economics for
their own refinements of classical economics. In the
United States, on the other hand, mainstream economics
goes on as if the controversy had never occurred.
Macroeconomics textbooks discuss 'capital' as if it were
a well-defined concept - which it is not, except in a very
special one-capital-good world (or under other
unrealistically restrictive conditions). The problems of
heterogeneous capital goods have been ignored in the
'rational expectations revolution' and in virtually all
econometric work"
-- Edwin Burmeister (2000)
> > Jevons', Menger's, and Walras' work setting forth neoclassical
> > economics all date
> > from the 1870s. Scholars debate whether neoclassical economics was a
> > revolution
> > or evolution from what came before, whether grouping these three
> > together
> > disguises differences more important than similarities, and what makes
> > neoclassical economics distinct from other approaches to economics.
> I am happy to include all three in my history. I left Walras, Pareto,
> Marshall,
> and Edgeworth out because I didn't want to get into an argument about
> whether I was
> exceeding the 1888 date. There was a lot going on right about that time.
Neoclassical economics is traditionaly dated from the 1870s with the
publications of the three I mentioned. Pareto and Edgeworth are
later. Marshall claimed to have found Jevons theory familiar, but did
not publish anything then.
Tim Worstall
Fair enough....I was a little strident. I'm more normally over in
sci.environment where you have to use a 2 by 4 to bludgeon some
understanding of basic economics into some of the more fundamentalist
enviro kooks.
> >I can go on and on with problems that economics has solved. .....and
> >yes it is a science, because it uses the scientific method.
>
> It pretends to. Real sciences deal with the real world. Economics
> too often makes up its own worlds.
I agree that too often it makes up it's own worlds. Marx is a great
example.....describing the world as it ought to be given his political
and moral assumptions, not actually looking at what was out there and
then describing that.
I stil maintain that 'good ' economics is an attempt to describe the
world as it is, and human's reactions to the stimuli of that world. Of
course this is a circular argument, in that anything that does not do
this, I would not describe as ' good '. But as an attempt ( however
cackhanded ) to describe the real world via observation and then
theorising, and testing those theories against further observations,
yes, economics has a right to be called a science.
>
> >looking for more. It doesn't ? Ooops, change the theory.
>
> Never. New economists may have new theories -- and never get
> tenure. Add to it more equations or more theories, but *never* admit
> error -- too embarrassing. How often does the author of a
> disproven economics theory admit the error?
Not often, but it has happened. This also happens in other sciences.
Fred Hoyle was famous for refusing to admit even the possibility of
the ' Big Bang'.
> >
> >So, to recapitulate....economics attempts to describe how humans deal
> >with getting all the things they want out of scarce resources. We know
> >a number of things from it....how to get rich, how to organise the
> >economy so that we all have food, air, water, physical goods, long
> >life spans and low infant mortality rates.
>
> >It's called capitalism
> which was invented a few centuries before economics existed.
> The economists have been trying ever since to explain it, with little
> success. Give them a few more generations. (or tell me that
> Galileo was an economist)
Not that surprising. It is necessary for there to be a system for you
to observe before you can make observations and then make theories
around them.
>
> > this scientifically proven method of organising their economy.
>
> Oh, man, "scientifically proven"? The wonders of modern
> education in economics. Proven, yes, but "scientifically"?
> Well -- ok -- trial and error *is* scientific. My cat does it all the
> time and when he errs he admits it.
' Scientifically proven ' is definately overkill on my part.....check
the apology at the top again.
The education ain't that new. Mid 80'2 LSE and general reading since.
Trial and error most definately is scientific...as long as the trials
are within the context of attempting to prove or disprove a theory.
Experimental method ?
Something very difficult in economics outside thought
experiments....but possible. And this is how we have indeed come to
the solutions to the problems I mentioned earlier.
Tim Worstall
>
> Mason
susupply
"Robert Vienneau" <rv...@see.sig.com>
in a most economical example of unconditional surrender,
wrote in message news:rvien-D0753D....@news.dreamscape.com...
> Poor Chris Auld. His questions are all off-kilter.
Robin de la Motte should sit at your feet, Robert.
Ron Peterson
> I stil maintain that 'good ' economics is an attempt to describe the
> world as it is, and human's reactions to the stimuli of that world. Of
> course this is a circular argument, in that anything that does not do
> this, I would not describe as ' good '. But as an attempt ( however
> cackhanded ) to describe the real world via observation and then
> theorising, and testing those theories against further observations,
> yes, economics has a right to be called a science.
Economics assumes that people will act rationally. In which case,
economics becomes more of an engineering discipline than psychology.
It makes sense to study economics in order to make decisions on how
to structure the economy and run businesses, not act as a movie
reviewer.
Ron
Hyman Blumenstock
> >
> Fair enough....I was a little strident. I'm more normally over in
> sci.environment where you have to use a 2 by 4 to bludgeon some
> understanding of basic economics into some of the more fundamentalist
> enviro kooks.
Do you realize what is really "basic economics?" It is no more than
what a baby is born already knowing. That he is born with an empty
stomach, that gives him a feeling of hunger. That if he comes out with
his lips pursed, and if that's not immediately accomodated at the
breast, he will do something about it, like let it be known with the
loudest shriek he can muster. After a feeding though, he will feel
contentment till the next feeling of hunger. THAT is all there is to
any economics, for any person of any age, of any culture, of any
environment. What you apparently revere as "economics" is a full
blown Rube Goldberg machine of vast complexity and proportions, that
though humming away with great vigor, produces absolutely nothing of
value. Except, that is, for the self aggrandizement of a massive
corps of Doctrinaire Economists who have infested every nook and
cranny of society like cockroaches, and promise us a coming disaster
in a new Agrarian era as mathematically predicted in
<http://www.dieoff.com>. Imagine the ancient wild west, with its six
shooters, muskets and carbines, with the modern weaponry developed
during the 20th century. That is what to expect.
>
> > >I can go on and on with problems that economics has solved. .....and
> > >yes it is a science, because it uses the scientific method.
Economic science is an oxymoron, simply because you, nor anyone else
can point out a single problem that it has resolved, except for its
own self aggrandizement at the expense of our once promising
civilization.
> >
> > It pretends to. Real sciences deal with the real world. Economics
> > too often makes up its own worlds.
> I agree that too often it makes up it's own worlds. Marx is a great
> example.....describing the world as it ought to be given his political
> and moral assumptions, not actually looking at what was out there and
> then describing that.
All Marx, an economist of the mid 19th century, when food was still in
scarce supply, did, for which he was roundly ostracized to the present
day, was to suggest that those who had it too good, share with those
who did not. I see nothing wrong with that. However what was
practiced in his name, when he was asked about that, his response was:
"If that's Marxism, then I am not a Marxist."
> I stil maintain that 'good ' economics is an attempt to describe the
> world as it is, and human's reactions to the stimuli of that world. Of
> course this is a circular argument, in that anything that does not do
> this, I would not describe as ' good '. But as an attempt ( however
> cackhanded ) to describe the real world via observation and then
> theorising, and testing those theories against further observations,
The "world as it is" is a product of the evils of Doctrinaire
Economics, including all the unpleasantness of the 20th century, all
the misery, crime, violence, war, slaughter, depredation of the
environment, the September 11th events, all can be laid at the feet of
the Doctrinaire Economist.
> yes, economics has a right to be called a science.
Negative. As "science" implies enough knowledge to resolve problems
in that field, and Doctrinaire Economics has yet to resolve even one
problem, but instead are creating ever more devestating problems, is
not a "science" but a destructive act of deceit against us all.
> >
> > >looking for more. It doesn't ? Ooops, change the theory.
> >
> > Never. New economists may have new theories -- and never get
> > tenure. Add to it more equations or more theories, but *never* admit
> > error -- too embarrassing. How often does the author of a
> > disproven economics theory admit the error?
> Not often, but it has happened. This also happens in other sciences.
> Fred Hoyle was famous for refusing to admit even the possibility of
> the ' Big Bang'.
Big deal. Despite errors, the Real Sciences continue to flourish
solely because of their successes -- otherwise the Social Sciences,
would have more of an excuse to curtail funding. All the high tech
developments you enjoy today is the direct result of the Real
Sciences, against the reverse thrust of the Economist, trying to
restore the rationale for their continued existence, scarcity of food,
and failing that, scarcity of what was invented to act as a surrogate
for food, the phantom, money.
> > >
> > >So, to recapitulate....economics attempts to describe how humans deal
> > >with getting all the things they want out of scarce resources. We know
> > >a number of things from it....how to get rich, how to organise the
> > >economy so that we all have food, air, water, physical goods, long
> > >life spans and low infant mortality rates.
>
> > >It's called capitalism
> > which was invented a few centuries before economics existed.
> > The economists have been trying ever since to explain it, with little
> > success. Give them a few more generations. (or tell me that
> > Galileo was an economist)
> Not that surprising. It is necessary for there to be a system for you
> to observe before you can make observations and then make theories
> around them.
The system of "capitalism" is a modern version of the natural bloody
competition the still primitive animal kingdom has to resort to in
order just to live. It is the height of stupidity to maintain
competition, particularly as it should be evident to anyone with half
a brain that all the technical advancement is the direct result of the
opposite of competition, cooperation and teamwork. Wherein every one
assumes a small fragment of the total task and with full cooperation
with everyone else, together produce a high tech complicated goal.
> >
> > > this scientifically proven method of organising their economy.
> >
> > Oh, man, "scientifically proven"? The wonders of modern
> > education in economics. Proven, yes, but "scientifically"?
> > Well -- ok -- trial and error *is* scientific. My cat does it all the
> > time and when he errs he admits it.
> ' Scientifically proven ' is definately overkill on my part.....check
> the apology at the top again.
> The education ain't that new. Mid 80'2 LSE and general reading since.
> Trial and error most definately is scientific...as long as the trials
> are within the context of attempting to prove or disprove a theory.
Economic theory never worked. Real Science theory has mostly worked,
and even then is relegated to the history shelves as obsolete as the
very recording of it usually triggers a more advanced thought. The
Economist has built a wall around his theory prohibiting any further
original thought (note Marx again) and insists that everything there
is to know has already been written down somewhere, to be learned by
rote with an A and PhD to be awarded to the mental clunker who can
repeat the professors utterances to the letter.
> Experimental method ?
> Something very difficult in economics outside thought
> experiments....but possible. And this is how we have indeed come to
> the solutions to the problems I mentioned earlier.
Name even one "solution to the problems?"
HB
>
> Tim Worstall
> >
> > Mason
Christopher Auld
Robert Vienneau <rv...@see.sig.com> wrote:
>In article <9r9cb3$u...@acs4.acs.ucalgary.ca>, au...@acs.ucalgary.ca
>(Christopher Auld) wrote:
>
>Poor Chris Auld. His questions are all off-kilter.
My understanding of the content of "neoclassical economics" and
Rob's differ; my questions related to getting at what those
differences might be. Alas, I forgot that Rob's understanding of
economics dwarfs that of any mere economist, and I apologize for
the grave affront of even asking for clarification of his bon mots.
Mea culpa.
Robert Simon
> > Hyman Blumenstock wrote:
> >
> > > Totally inane. Would any sincere believer in the Flat Earth theory, who had a host of writings all
asserting that the earth
> > > was flat as his positive proof, possibly change one iota the fact that the earth
> > > is really round?
> >
> > what is this in reference to?
> It proves that writings and truth don't necessarily have even the remotest relationship.
> That's why writings have very little to do with the successes of the Real Sciences, and the reliance
> upon ancient writings by the Social Sciences is the reason for complete failure ever to resolve a Social >
problem. It builds a wall in our minds that prevents any original thought and guarantees the demise of > a
once promising civilization.
as I thought...HB has repeatedly stated that "Doctrinaire Economics" was developed during the "Agrarian Era"
- which ended approximately 1888 - to deal SOLELYwith foods. When asked him to provide some evidence to back
this statement up he has said (I paraphrase)
1. would you expect the mafia to write down their plans
2. that I am an idiot
3. and finally restating his theories again
I pointed out that the writers of the "Agrarian Era" that we credit with developing "Doctrinaire Economics"
Smith, Bentham, Ricardo, Mill, Menger, Walras, et al did NOT write solely about food. The fact that RV and I
disagree on the exact interpretations of these writers work is irrelevent to my critique of HB as there is no
disagreement that Smith, Bentham, Ricardo, Mill, Menger, Walras et al were the early developers of what we
now call "Doctrinaire Economics". I invite any interested parties to read their works for themselves.
Now HB is criticizing the contents of their theories and the "Doctrinaire Economics" profession in general
wth that statement:
"It proves that writings and truth don't necessarily have even the remotest relationship. That's why
writings have very little to do with the successes of the Real Sciences, and the reliance upon ancient
writings by the Social Sciences is the reason for complete failure ever to resolve a Social problem. It
builds a wall in our minds that prevents any original thought and guarantees the demise of a once promising
civilization."
but note that there is no longer any attempt to deny the fact that "Doctrinaire Economics" was NOT developed
to deal solely with food. He can repeat his theory over and over, or invoke his baby being born story, or
relate any other story or theory that has nothing to do with his earlier contention that "Doctrinaire
Economics" was developed during the "Agrarian Era" - which ended approximately 1888 - to deal SOLELY with
food....but the evidence is out and it is plain for all to see he is wrong wrong wrong.
I thank you for your indulgence - ROB
Robert Vienneau
(Christopher Auld) wrote:
> [ Silliness deleted ]
Poor Chris Auld.
Mason Clark
>> >So, to recapitulate....economics attempts to describe how humans deal
>> >with getting all the things they want out of scarce resources. We know
>> >a number of things from it....how to get rich, how to organise the
>> >economy so that we all have food, air, water, physical goods, long
>> >life spans and low infant mortality rates.
snip
>Something very difficult in economics outside thought
>experiments....but possible. And this is how we have indeed come to
>the solutions to the problems I mentioned earlier.
You persist in the claim that by means of economics we have learned
"how to get rich, how to organise the economy so that we all have
food, air, water, physical goods, long life spans and low infant mortality rates."
1. we did those things long before there was "economics."
2. economics today is a bag of contradicting theories, none of which
has been effective in predicting -- the essential of any theory -- nor
have the economists proven themselves adept at making policies.
The policies that work are either accidental (toss a coin to choose a
theory) or intuitive by a non-economist. Sometimes we do have good luck.
---------------------------------------------------
Mason A. Clark
http://masonc.home.netcom.com
political-social-psychological Economics
Ronald Reagan's amazing insight in economics
Complete book: The Healing Wisdom of Dr.P.P.Quimby
Complete book: Get Rich in Small Business
---------------------------------------------------
Best advise: do NOT read economics textbooks!
They will poison your mind with descriptions of
a world that does not exist.
Mason Clark
An asinine collection of questions. Any rational recipient would
giggle at the attempted humor and hang up.
Tim Worstall
I did have a look at www.dieoff.com. Now I understand why you don't
know anything about this problem.
> Negative. As "science" implies enough knowledge to resolve problems
> in that field, and Doctrinaire Economics has yet to resolve even one
> problem, but instead are creating ever more devestating problems, is
> not a "science" but a destructive act of deceit against us all.
>
> The system of "capitalism" is a modern version of the natural bloody
> competition the still primitive animal kingdom has to resort to in
> order just to live. It is the height of stupidity to maintain
> competition, particularly as it should be evident to anyone with half
> a brain that all the technical advancement is the direct result of the
> opposite of competition, cooperation and teamwork. Wherein every one
> assumes a small fragment of the total task and with full cooperation
> with everyone else, together produce a high tech complicated goal.
> > >
one assumes a small fragment of the total task and with full
cooperation with everyone else, together produce a high tech
Ever heard of the division of labour ( an economic theory BTW ) ? The
Wealth of Nations has a piece on pin making that encapsulates it in a
simple form you might understand.
Huge chunks of modern economic theory are devoted to just this
question....I think you have managed to condemn yourself via your own
comments.
Tim Worstall
Hyman Blumenstock
> > "Robert Simon" <si...@netacc.net> wrote in message news:3BD62EE3...@netacc.net...
> > > Hyman Blumenstock wrote:
> > >
> > > > Totally inane. Would any sincere believer in the Flat Earth theory, who had a host of writings all
> asserting that the earth
> > > > was flat as his positive proof, possibly change one iota the fact that the earth
> > > > is really round?
> > >
> > > what is this in reference to?
>
> > It proves that writings and truth don't necessarily have even the remotest relationship.
> > That's why writings have very little to do with the successes of the Real Sciences, and the reliance
> > upon ancient writings by the Social Sciences is the reason for complete failure ever to resolve a Social >
> problem. It builds a wall in our minds that prevents any original thought and guarantees the demise of > a
> once promising civilization.
>
> as I thought...HB has repeatedly stated that "Doctrinaire Economics" was developed during the "Agrarian Era"
> - which ended approximately 1888 - to deal SOLELYwith foods. When asked him to provide some evidence to back
> this statement up he has said (I paraphrase)
>
> 1. would you expect the mafia to write down their plans
> 2. that I am an idiot
> 3. and finally restating his theories again
>
> I pointed out that the writers of the "Agrarian Era" that we credit with developing "Doctrinaire Economics"
> Smith, Bentham, Ricardo, Mill, Menger, Walras, et al did NOT write solely about food. The fact that RV and I
> disagree on the exact interpretations of these writers work is irrelevent to my critique of HB as there is no
> disagreement that Smith, Bentham, Ricardo, Mill, Menger, Walras et al were the early developers of what we
> now call "Doctrinaire Economics". I invite any interested parties to read their works for themselves.
Food is a rather mundane subject to dwell upon, considering its very
simple, though profound effect upon human life in its absence. As Air
and Water, have also been mundane, their very abundance makes them a
subject of total disinterest to anyone, certainly not warranting any
800 page textbooks on how to distribute them, except the unusual
situation where they happen to be scarce, but now as a subject only
for the medical profession. Why would the otherwise lay person even
dwell upon it.
Food is just as mundane, except it happened to be scarce enough
through the ages to raise concern to each individual as to whether he
would get enough.
So what could one expect of all those "scholars" cited by Rob, who
would not want to dwell upon such a mundane subject, but rather, for
no other purpose but to give them something, in lieu of anything
better, for their own self aggrandizement, to take great pains to
embellish with all kinds of contrived complication that they could
think of. And that, is unfortunately for us all, what apparently
impresses minds like Rob's, stuffed to the hilt with rote learning.
leaving no room for the scientific, objective analysis of those
contrived embellishments, that is obviously Rob's condition.
>
> Now HB is criticizing the contents of their theories and the "Doctrinaire Economics" profession in general
> wth that statement:
>
> "It proves that writings and truth don't necessarily have even the remotest relationship. That's why
> writings have very little to do with the successes of the Real Sciences, and the reliance upon ancient
> writings by the Social Sciences is the reason for complete failure ever to resolve a Social problem. It
> builds a wall in our minds that prevents any original thought and guarantees the demise of a once promising
> civilization."
So what else is new? You are repeating above an obvious truism that
you just don't want to hear, because your mind is already made up, and
you don't want to know anything further. You must have put a great
deal of time and expense to learn this subject and obviouly cannot
bear to realize that it is all totally wasted and essentially useless.
>
> but note that there is no longer any attempt to deny the fact that "Doctrinaire Economics" was NOT developed
> to deal solely with food. He can repeat his theory over and over, or invoke his baby being born story, or
> relate any other story or theory that has nothing to do with his earlier contention that "Doctrinaire
> Economics" was developed during the "Agrarian Era" - which ended approximately 1888 - to deal SOLELY with
> food....but the evidence is out and it is plain for all to see he is wrong wrong wrong.
That hasn't changed one iota. What else was there during the Agrarian
era of any importance, but the scarcity of food? Every aspect of the
theories anyone of those phony scholars you cite was some variation of
the food scarce condition that existed then. Money was then a
surrogate for food, and still is, and is completely an imaginary
concept that is devoid of reality. Like otherwise sane people who see
ghosts that just aren't there. It has become a modern psychosis under
the auspices of Doctrinaire Economics.
>
> I thank you for your indulgence - ROB
Rob -- don't let panic consume your reason. Your attitude is like one
who has lost a loved one, but keeps the body with him pretending that
it still lives. But this body has never even lived. It is a pure
phantom created out of whole cloth for no good reason but to create
and maintain a totally useless, and downright destructive force called
Doctrinaire Economics. As shown in <http://www.dieoff.com> our time
is getting desperately short if we are to avoid the devastating return
to the Agrarian era it promises with mathematical certainty. And the
dumb economist doesn't even want to realize that his current imperious
position will also suffer drastically during the return to the
Agrarian era. He too will revert to bum and beggar trying to find
something to eat, instead of as currently, director of civilization.
Instead of progessing towards bringing the third world of poverty up
to our level of affluence, we will succumb back down to their level of
poverty also, all the fault of Doctrinaire Economics.
HB
Christopher Auld
>In article <9rcd64$17...@acs4.acs.ucalgary.ca>, au...@acs.ucalgary.ca
>(Christopher Auld) wrote:
>
>> [ Silliness deleted ]
>
>Poor Chris Auld.
Rob recently began peppering his posts with comments complaining
about the low standard of discussion on sci.econ, then wrote a
post posing the empirical puzzle: Why don't economists spend
much time here? I offer this thread as an answer.
ro...@telus.net
wrote:
>Robert Vienneau <rv...@see.sig.com> wrote:
>>In article <9rcd64$17...@acs4.acs.ucalgary.ca>, au...@acs.ucalgary.ca
>>(Christopher Auld) wrote:
>>
>>> [ Silliness deleted ]
>>
>>Poor Chris Auld.
>
>Rob recently began peppering his posts with comments complaining
>about the low standard of discussion on sci.econ, then wrote a
>post posing the empirical puzzle: Why don't economists spend
>much time here? I offer this thread as an answer.
Good point. Professional economists know that any teaching they do on
Usenet is going to be unpaid, and any learning is going to be
uncomfortable. So what else is a rational person to do but stay away?
-- Roy L
ro...@telus.net
wrote:
>On 26 Oct 2001 02:58:19 -0700, t...@2xtreme.net (Tim Worstall) wrote:
>
>>Something very difficult in economics outside thought
>>experiments....but possible. And this is how we have indeed come to
>>the solutions to the problems I mentioned earlier.
>
>You persist in the claim that by means of economics we have learned
>"how to get rich, how to organise the economy so that we all have
>food, air, water, physical goods, long life spans and low infant mortality rates."
>
>1. we did those things long before there was "economics."
Who did? When? The Egyptians, Athenians and Romans all achieved
notable economic success thousands of years ago, but because they did
not understand economics, or why they had been successful, they
subsequently threw it away. Japan made essentially the same mistake a
generation ago, for entirely similar reasons. Just because people
refuse to learn from economics does not mean that economics has
nothing to teach.
>2. economics today is a bag of contradicting theories, none of which
> has been effective in predicting -- the essential of any theory
That is false. There are many instances of consistently successful
prediction.
> -- nor
> have the economists proven themselves adept at making policies.
Some have. The problems typically arise when special interests,
through their politicians, start amending the economists' policies to
suit themselves.
> The policies that work are either accidental (toss a coin to choose a
> theory) or intuitive by a non-economist.
Depends what you mean by a non-economist. Some anti-economists might
claim that because his policy of shifting the tax burden off of
production and onto idle land ownership has always worked, Henry
George must have been a non-economist. That doesn't mean he was.
-- Roy L
Chasna1
>2. economics today is a bag of contradicting theories, none of which
> has been effective in predicting -- the essential of any theory -- nor
> have the economists proven themselves adept at making policies.
> The policies that work are either accidental (toss a coin to choose a
> theory) or intuitive by a non-economist. Sometimes we do have good luck.
> ---------------------------------------------------
What do you mean by we? You're not an economist.
Mason Clark
1. "we" = us, all sci.econ readers, America, the world, all o' us, you too
2. define "economist"
Mason
Mason Clark
>> Snip snip.
Tom, help us on this. Who's post are you responding to?
Some of don't get all posts -- kill files are common on sci.econ.
Mason
Chasna1
>1. "we" = us, all sci.econ readers, America, the world, all o' us, you too
>2. define "economist"
>
> Mason
1. Economist,
2. You're not one.
Tim Worstall
> On 26 Oct 2001 02:58:19 -0700, t...@2xtreme.net (Tim Worstall) wrote:
>
> >> >So, to recapitulate....economics attempts to describe how humans deal
> >> >with getting all the things they want out of scarce resources. We know
> >> >a number of things from it....how to get rich, how to organise the
> >> >economy so that we all have food, air, water, physical goods, long
> >> >life spans and low infant mortality rates.
>
> snip
>
> >Something very difficult in economics outside thought
> >experiments....but possible. And this is how we have indeed come to
> >the solutions to the problems I mentioned earlier.
>
> You persist in the claim that by means of economics we have learned
> "how to get rich, how to organise the economy so that we all have
> food, air, water, physical goods, long life spans and low infant mortality rates."
>
> 1. we did those things long before there was "economics."
orbits before we humans had that body of knowledege we call physics.
Molecules combined and split and did their stuff before we understood
about chemistry. People bought and sold things before the word
economics was invented.....but that doesn't mean that there was no
such thing as economics, just as physics and chemistry were not absent
before the word we use to describe them.
Economics, is, as I have repeatedly stated, the study of what humans
do under a certain set of stimuli. They did this before we started to
study it, but through that study, we have now learned ' how to get
rich, how to organise the economy...'..the rest of the above line.
> 2. economics today is a bag of contradicting theories, none of which
> has been effective in predicting -- the essential of any theory -- nor
> have the economists proven themselves adept at making policies.
> The policies that work are either accidental (toss a coin to choose a
> theory) or intuitive by a non-economist. Sometimes we do have good luck.
are still divided about Steady State or Big Bang universes ( although
steady staters are a shrinking group to be sure ) but that does not
mean that the physics that keeps a nuclear power station running is
wrong.
Huge areas of economics are known, and similarly huge areas are not.
The bits about how to get rich are the ones we do know.
Prediction is pretty simple in some areas. Raise interest rates and
you will slow the growth of the economy. Have high tariff barriers and
you will be poorer than if you did not. Sell stuff for less than it
costs to make and you will go bust. Strict employment laws raise
unemployment. All of these are based on sound economic theories. That
they are often ignored by politicians just means that more of them
should study the subject.
The bit about intuitive is well understood by those inside the
profession ( no I'm not, although my training was in it ) .....one
famous economist, whose name I cannot recall at present , was once
asked whether there was any part of economics that was not obvious or
( bugger it, now I can't even remember the quote....begins with an a,
similar to irrelevant, not absurd, means too small to be interesting )
....his answer was ' Only one. Ricardo's Theory of Competetive
Advantage.'
Pretty much the rest of it can be worked out from basic principles by
anyone with the time and cynicism necesssary. But why bother to try
and recapitulate 300 years of thought ? Why not just read and learn
from others ?
Tim Worstall
>
> >> >So, to recapitulate....economics attempts to describe how humans deal
> >> >with getting all the things they want out of scarce resources. We know
> >> >a number of things from it....how to get rich, how to organise the
> >> >economy so that we all have food, air, water, physical goods, long
> >> >life spans and low infant mortality rates.
>
> snip
>
> >Something very difficult in economics outside thought
> >experiments....but possible. And this is how we have indeed come to
> >the solutions to the problems I mentioned earlier.
>
> You persist in the claim that by means of economics we have learned
> "how to get rich, how to organise the economy so that we all have
> food, air, water, physical goods, long life spans and low infant mortality rates."
>
> 1. we did those things long before there was "economics."
orbits before we humans had that body of knowledege we call physics.
Molecules combined and split and did their stuff before we understood
about chemistry. People bought and sold things before the word
economics was invented.....but that doesn't mean that there was no
such thing as economics, just as physics and chemistry were not absent
before the word we use to describe them.
Economics, is, as I have repeatedly stated, the study of what humans
do under a certain set of stimuli. They did this before we started to
study it, but through that study, we have now learned ' how to get
rich, how to organise the economy...'..the rest of the above line.
> has been effective in predicting -- the essential of any theory -- nor
> have the economists proven themselves adept at making policies.
> The policies that work are either accidental (toss a coin to choose a
> theory) or intuitive by a non-economist. Sometimes we do have good luck.
Tim Worstall
Mason Clark <mas...@ix.netcom.com> wrote in message news:<n65gctgmfqep62euj...@4ax.com>...
> On 26 Oct 2001 02:58:19 -0700, t...@2xtreme.net (Tim Worstall) wrote:
>
> >> >So, to recapitulate....economics attempts to describe how humans deal
> >> >with getting all the things they want out of scarce resources. We know
> >> >a number of things from it....how to get rich, how to organise the
> >> >economy so that we all have food, air, water, physical goods, long
> >> >life spans and low infant mortality rates.
>
> snip
>
> >Something very difficult in economics outside thought
> >experiments....but possible. And this is how we have indeed come to
> >the solutions to the problems I mentioned earlier.
>
> You persist in the claim that by means of economics we have learned
> "how to get rich, how to organise the economy so that we all have
> food, air, water, physical goods, long life spans and low infant mortality rates."
>
> 1. we did those things long before there was "economics."
This simply isn't true. Stones fell and planets went round in their
orbits before we humans had that body of knowledege we call physics.
Molecules combined and split and did their stuff before we understood
about chemistry. People bought and sold things before the word
economics was invented.....but that doesn't mean that there was no
such thing as economics, just as physics and chemistry were not absent
before the word we use to describe them.
Economics, is, as I have repeatedly stated, the study of what humans
do under a certain set of stimuli. They did this before we started to
study it, but through that study, we have now learned ' how to get
rich, how to organise the economy...'..the rest of the above line.
> 2. economics today is a bag of contradicting theories, none of which
> has been effective in predicting -- the essential of any theory -- nor
> have the economists proven themselves adept at making policies.
> The policies that work are either accidental (toss a coin to choose a
> theory) or intuitive by a non-economist. Sometimes we do have good luck.
Contradictory theories do not mean an abscence of science. Physicists
are still divided about Steady State or Big Bang universes ( although
steady staters are a shrinking group to be sure ) but that does not
mean that the physics that keeps a nuclear power station running is
wrong.
Huge areas of economics are known, and similarly huge areas are not.
The bits about how to get rich are the ones we do know.
Prediction is pretty simple in some areas. Raise interest rates and
you will slow the growth of the economy. Have high tariff barriers and
you will be poorer than if you did not. Sell stuff for less than it
costs to make and you will go bust. Strict employment laws raise
unemployment. All of these are based on sound economic theories. That
they are often ignored by politicians just means that more of them
should study the subject.
The bit about intuitive is well understood by those inside the
profession ( no I'm not, although my training was in it ) .....one
famous economist, whose name I cannot recall at present , was once
asked whether there was any part of economics that was not obvious or
trivial....his answer was ' Only one. Ricardo's Theory of Competetive
Advantage.'
Pretty much the rest of it can be worked out from basic principles by
anyone with the time and cynicism necesssary. But why bother to try
and recapitulate 300 years of thought ? Why not just read and learn
from others ?
Tim Worstall
William F Hummel
wrote:
>Pretty much the rest of it [economics] can be worked out from basic principles by
>anyone with the time and cynicism necesssary. But why bother to try
>and recapitulate 300 years of thought ? Why not just read and learn
>from others ?
>
>Tim Worstall
Reading and learning from others is fine. Among the several
contradictory schools of economics, which one represents the
wisdom of 300 years of thought?
WFH
ro...@telus.net
<wfhu...@mediaone.net> wrote:
>Reading and learning from others is fine. Among the several
>contradictory schools of economics, which one represents the
>wisdom of 300 years of thought?
No one school has it all. I have found the classicals, Austrians, and
Georgists offer the most useful and accurate insights. There's a
quotation from a famous economist to the effect that all progress in
economics has resulted from the classical analysis of how wages, rent
and interest accrue to labor, land and capital.
-- Roy L
Ron Peterson
> Reading and learning from others is fine. Among the several
> contradictory schools of economics, which one represents the
> wisdom of 300 years of thought?
Is this an exam question? :-)
Ron
Mason Clark
>Mason Clark <mas...@ix.netcom.com> wrote in message news:<n65gctgmfqep62euj...@4ax.com>...
>> On 26 Oct 2001 02:58:19 -0700, t...@2xtreme.net (Tim Worstall) wrote:
>>
>> >> >So, to recapitulate....economics attempts to describe how humans deal
>> >> >with getting all the things they want out of scarce resources. We know
>> >> >a number of things from it....how to get rich, how to organise the
>> >> >economy so that we all have food, air, water, physical goods, long
>> >> >life spans and low infant mortality rates.
>>
>> snip
>>
>> >Something very difficult in economics outside thought
>> >experiments....but possible. And this is how we have indeed come to
>> >the solutions to the problems I mentioned earlier.
>>
>> You persist in the claim that by means of economics we have learned
>> "how to get rich, how to organise the economy so that we all have
>> food, air, water, physical goods, long life spans and low infant mortality rates."
>>
>> 1. we did those things long before there was "economics."
>This simply isn't true. Stones fell and planets went round in their
>orbits before we humans had that body of knowledege we call physics.
>Molecules combined and split and did their stuff before we understood
>about chemistry. People bought and sold things before the word
>economics was invented.....but that doesn't mean that there was no
>such thing as economics
OK, here's our problem, Tom, I understand "economics" to be the
study of the "economy". The *economy* always exited, even when we
apes picked fruit from trees. But *economics* as a study of the economy
is a modern idea -- no earlier than 3000 BCE and most importantly
since Adam Smith.
Your statement, " We know a number of things from it [economics]....how
to get rich, how to organise the economy so that we all have food, air,
water, physical goods, long life spans and low infant mortality rates" is
what threw me off. The *economy* enables us to do those things. The
study of the economy, i.e. economics, has contributed little or nothing.
Let's hope -- in another century....
Mason C
Mason Clark
>Mason Clark <mas...@ix.netcom.com> wrote in message news:<n65gctgmfqep62euj...@4ax.com>...
>> On 26 Oct 2001 02:58:19 -0700, t...@2xtreme.net (Tim Worstall) wrote:
>>
>> >> >So, to recapitulate....economics attempts to describe how humans deal
>> >> >with getting all the things they want out of scarce resources. We know
>> >> >a number of things from it....how to get rich, how to organise the
>> >> >economy so that we all have food, air, water, physical goods, long
>> >> >life spans and low infant mortality rates.
>>
>> snip
>>
>> >Something very difficult in economics outside thought
>> >experiments....but possible. And this is how we have indeed come to
>> >the solutions to the problems I mentioned earlier.
>>
>> You persist in the claim that by means of economics we have learned
>> "how to get rich, how to organise the economy so that we all have
>> food, air, water, physical goods, long life spans and low infant mortality rates."
>>
>> 1. we did those things long before there was "economics."
>This simply isn't true. Stones fell and planets went round in their
>orbits before we humans had that body of knowledege we call physics.
>Molecules combined and split and did their stuff before we understood
>about chemistry. People bought and sold things before the word
>economics was invented.....but that doesn't mean that there was no
>such thing as economics
OK, here's our problem, Tom, I understand "economics" to be the
study of the "economy". The *economy* always existed, even when we
Tim Worstall
Firstly, apologies for multiple postings of the same screed. I'm not
quite up to speed with these electronic typewriter thingies yet.
Also, it's Tim, not Tom ( that's the nephew ).
> OK, here's our problem, Tom, I understand "economics" to be the
> study of the "economy". The *economy* always exited, even when we
> apes picked fruit from trees. But *economics* as a study of the economy
> is a modern idea -- no earlier than 3000 BCE and most importantly
> since Adam Smith.
Now our argument seems to be narrowing down to semantics....as so many
of them often do. Defining economics as the 'study of the economy '
seems to me to be only the proximate definition ( if you can actusally
use that phrase ). The economy is the reactions of humans to certain
stimuli.....so I would argue that the ultimate definition of economics
is the study of how humans react to certain stimuli.
With your definition I would agree that economics is a modern idea (
although I would also say that 3,000 BCE sounds like a good starting
date for all and any sciences ).
With my definition I would say that economics has always existed, just
that only recently have we begun to codify it.
>
> Your statement, " We know a number of things from it [economics]....how
> to get rich, how to organise the economy so that we all have food, air,
> water, physical goods, long life spans and low infant mortality rates" is
> what threw me off. The *economy* enables us to do those things. The
> study of the economy, i.e. economics, has contributed little or nothing.
> Let's hope -- in another century....
But through the above mentioned codification we know more than Adam
Smith did, more than Marx, ......more than we did 30 years ago ( the
1970's management of the economy was not exactly startling in its
excellence....we do seem to be doing better now ).....and yes we
probably will know more in a century or so.
One example of ' new ' thinking in economics would be public choice
theory. Someone got the Nobel for it ( and apologies that I can't
remember the name ).
Simply put, politicians and bureacrats do things for their own reasons
of profit, aggrandisement, re election, whatever, not for the greater
or common good. We all knew this anyway, being the cynics ( realists ?
) that we are. So the conclusion is obvious.....but still important as
it provides a real intellectual underpinning to why Govt programs
never work. The effects in the real world ? The change in intellectual
atmosphere that this explanation brought about aided such things as
welfare reform.
Tim Worstall
>
> Mason C