Economics (from December fantasy thread)

wakarimasen

Journeyed there and back again
#3
I've never read an economics book. I think what puts me off is it is a bit like statistics, which are as malleable as Odo.
Also, there tends to be an agenda as you can't separate it from philosophy, or at the least from personal agenda .
I'm willing to be persuaded though...
 

wakarimasen

Journeyed there and back again
#5
I'd be interested to know what you find in terms of rebuttal or support. Often the nature of a work is only revealed in the opposing reaction. Maybe one day, if there is a stand out book I might give it a go. At the moment my learning brain is taken with psychology though, so no time for another subject. I'll check back here and follow your adventures happily though...
 

Derk of Derkholm

Journeyed there and back again
#6
I read a very interesting book once, unfortunately it is only available in German, that is called "Wir Untertanen. Ein deutsches Anti-Geschichtsbuch" (roughly translated to "us subjects, a. German anti-history book")

It IS a history book but the special thing is that it is written from the point of view of the subjects. The author critisizes that whenever we read "normal" history books, we hear which king was victorious over which other king in the battle of wherever, but we hear very little about the "common people" of the time. What those do have in common (pun intended) is that during the longest period of known history, they were basically suppressed by their respective rulers. So the author tries to describe historical occurrences with the effects they had on the poor masses.

From that perspective, and hearing more about what "normal life" and working conditions meant for a poor worker in the 19th century, Karl Marx's targets to ameliorate the life of the working poor definitely did make a lot of sense to me.
 

moonspawn

Journeyed there and back again
#7
I gave that a try, taking a break from Assail last night, but I had to quit after a few chapters. Simply put, I'm not looking for a book that affirms or contradicts my views on economics, I'm looking to learn some stuff about the field and to do that I need books based on data/facts/evidence - there's none of that in this book. This book is just a feel-good propaganda piece meant to reaffirm a reader's world view - if the presented world view matches your own, you'll love this book, whereas if not, you'll hate it. I have no use for it.
In that case you should read The Law by Frederic Bastiat. The entire thing is a rant against socialism. As for the Economics in One Lesson book the entire thing is simply about the concepts of economics. You don't need statistics and hard data for that. By going through the various fallacies in the field of economics and debunking them one by one Hazlitt made a very compelling argument. Also there are some statistics in there. In the chapter on the minimum wage using data he shows that the minimum wage has increased at the exact same rate as average wages. There also might be statistics in the chapters for price controls and rent controls and inflation.

I do recall you asking recommendations for complex books on this site a few times. My two favorite non-fiction books are Democracy in America and The Creature from Jekyll Island. Both are very heavy reading and yes they are complex. The former book is the most stylistically well written book I have ever encountered and the latter definitely one of the most mind blowing. Its about the Federal Reserve and the history of banking and about how the Federal Reserve is actually what is causing our countries monetary problems. All or at least most of the information is all backed up with thorough research so its not propaganda except for maybe the last couple of chapters where he starts talking about the New World Order. The main issue I had with it is that the author took history out of context a few times.
 

Derk of Derkholm

Journeyed there and back again
#8
By going through the various fallacies in the field of economics and debunking them one by one Hazlitt made a very compelling argument
We might have different views here. The parts of the book (First chapters) that I read seemed way to simplistic to me to "debunk" any fallacies apart from the most superficial ones. The author seems to have a strong political agenda (any kind of government involvement is BAD), he proposes assumptions that can be easily refuted and claims that those assumptions prove the point beyond doubt.

My suggestion is to go to any good university and ask them to give you a solid economics education in one lesson (after that, this is what the book and its backers claim, more or less). My experience with various economics lectures I attended during the cause of my studies (Business Administration) leads me to expect that you will not be successful. The matter is a bit too complex for that, and it is rarely as "black and white" as the author makes it to be. If anything, it has not become less complex in the last 70 years since the book was written.

The book might make a good primer for a cocktail conversation to back up your political views on economics, however (until you enounter a real economist, that is.)

Best regards,
Andy
 

moonspawn

Journeyed there and back again
#9
We might have different views here. The parts of the book (First chapters) that I read seemed way to simplistic to me to "debunk" any fallacies apart from the most superficial ones. The author seems to have a strong political agenda (any kind of government involvement is BAD), he proposes assumptions that can be easily refuted and claims that those assumptions prove the point beyond doubt.

My suggestion is to go to any good university and ask them to give you a solid economics education in one lesson (after that, this is what the book and its backers claim, more or less). My experience with various economics lectures I attended during the cause of my studies (Business Administration) leads me to expect that you will not be successful. The matter is a bit too complex for that, and it is rarely as "black and white" as the author makes it to be. If anything, it has not become less complex in the last 70 years since the book was written.

The book might make a good primer for a cocktail conversation to back up your political views on economics, however (until you enounter a real economist, that is.)

Best regards,
Andy
Government should be simplified. That way it will run more efficiently and not end up as a tangled bureaucratic mess. In economics just like with any field it is best to stick with what works. For the most part I would say government involvement is bad. When the governments gets too involved in the free market it is really hard for their progressive policies that favor one group to not also do so at the expense of other groups. First of all that isn't fair and secondly the government then has to enact more legislature to rewrite the problems that their previous policies caused which in turn could cause more problems. It is simplistic not to look at how policy affects all groups. This is a point that the author stresses over and over again. That seems very, very logical to me. As far as fallacies are concerned there were some in there the author debunked that seemed so idiotic I don't see how any intelligent person could honestly call their theories good economics. The blessings of destruction is the one that really sticks out in my mind.... don't know if anyone still believes that.

I wouldn't necessarily trust universities to teach me economics. The professors that teach those classes certainly have agendas as well. Also did you encounter micro/macro economics in your studies? I don't know much about either of those but from what I understand of macroeconomics it looks only at economic growth as an indicator of economic success and I imagine microeconomics is the idea that governments need to micro manage economies. Also from what I understand both ideas are crappy, simplistic economics.
 

Derk of Derkholm

Journeyed there and back again
#12
Also did you encounter micro/macro economics in your studies?
Actually, those two are simply terms that describe parts of economics analysis/theory.

Microeconomics analyzes the behaviour and actions of small units (single people, companies), while macroeconomics looks at the behaviour, dynamics and decision-making of the economy as a whole.

Hazlitts stories about the bridge, the butcher and the window etc. are classical examples of microeconomic theories.


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moonspawn

Journeyed there and back again
#13
Anyhow, what Piketty says is that the majority of the 1% are still entrepreneurs, but a rapidly growing percentage are becoming an inheritance class.
Where's the evidence to back that statement up? I have no idea if that is true or not.

And on inequality it was certainly much worse back when we had aristocracies. Poor people had no hope of making a better life for themselves. You simply stayed in the class you were born into all your life with no hope of moving up. What makes capitalism so great is that it allows poor and middle class people the opportunity to move up in society and create more wealth. By overtaxing the wealthy socialism taints that opportunity. Inequality is a solvable problem but there are no easy solutions to it. The progressive solution of lets just tax the rich some more is too simplistic and predictable. How much is enough? What is a fair share? At least that Piketty guy seems to know the answer to these two questions but a lot of liberals in congress certainly do not.

P.S. I think one small step towards creating a more equal society is to reduce sales tax on cigarettes and maybe get rid of sales taxes all together. The rich can easily afford these types of taxes but the poor cannot.

On the Economics in One Lesson book I admit there are some oversimplifications and there were some claims that should have been backed up that weren't. I recall the author saying that for every government job created a job is lost in the private sector. That's not backed up by any data and I highly doubt it works out that perfectly. His point was that no net gain is made when government jobs are created but that doesn't necessarily mean that government jobs are bad.

Actually, those two are simply terms that describe parts of economics analysis/theory.

Microeconomics analyzes the behaviour and actions of small units (single people, companies), while macroeconomics looks at the behaviour, dynamics and decision-making of the economy as a whole.

Hazlitts stories about the bridge, the butcher and the window etc. are classical examples of microeconomic theories.


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Oh I see. In that case it is important to look at both when analyzing economics.
 

moonspawn

Journeyed there and back again
#16
On the other hand, a family of 4 making $500,000 would have $450,000 to live on after taxes - they'd barely even notice.
Would they barely notice? You can't necessarily make that assumption with such little information at hand. We can speculate as to what their living expenses are but unless we actually know I don't know if they would barely notice.

It gets even less noticeable for wealthier families as their incomes rise, if you keep a flat tax rate of 10%. So, with some simple math, we've just seen how a flat tax, no matter how low, will always benefit the wealthy.
In our country its just the opposite, taxes are so progressive. A huge percentage of Americans don't even pay income taxes while almost the entire tax burden is imposed on the rich. That situation isn't one I like either. I think taxes should be modest and reasonable. Taxes shouldn't be designed to hurt poor or rich people. And there's nothing wrong with having a flat tax.

When income taxes were first implemented in our country it was only a flat tax of like three or two percent and then for a little while they got rid of income taxes and the during the progressive era the constitution was changed to allow income taxes.
 

ralfy

Got in a fistfight with Dresden
#17
Capitalism is not sustainable because it requires continuous economic growth. Since economies are ultimately based on material resources and energy, then such growth cannot continue given a planet with physical limitations. In addition, pollution is the result of using these resources and energy.

That is why we are now experiencing a combination of multiple predicaments: increasing debt, peak oil, and global warming.
 

Griffin

Journeyed there and back again
#18
We're experiencing anything but that actually. Oil hasn't been this cheap in years. Other than that. Growth is finite indeed, but capitalism will probably be able to stretch this by developing a bigger and better recycling system for most resources. All this considered, I still don't see a believable alternative to capitalism despite its many flaws.
 

Boreas

Journeyed there and back again
Staff member
#19
Just to be a little clearer: the free market system is often confused with the more negative connotations of capitalism. They are intertwined with each other, but capitalism refers more to the production of wealth, an economic setting comprising of owners and workers where its key feature is private ownership.

A free market is not regulated by government, but rather driven by the pressures of demand and supply. An ideal free market is one where goods and services are voluntarily exchanged at a price determined by the buyer and seller without external influences. The free market embodies the idea of the exchange of wealth in numerous ways.

Capital (money, hard cash, land, resources, jewelry, brain power, etc) is an element of both capitalism and the free market, but the idea of free competition is an essential element of a free market, but NOT of capitalism, where owners have dominance over means of production and yield greater, often unfair, influence over workers. While a free market determines price, the concentration of the means of production in capitalism distorts and perverts the supply side in the free market ideal.

The reason why capitalism has the negative connotations that it does is because many owners use their influence unfairly, especially by using special interest groups to lobby the government for special privileges which completely distorts the free market, and makes it much harder for those with less wealth and influence to compete fairly. Most governments give in to these special interest groups, and this is where the big time corruption happens, especially as there is a frequent exchange between top executives of huge corporations to governmental posts and vice versa: corpotocracy, a prevalent feature of many countries, especially in the U.S.A. I would include unions with those groups lobbying for special privileges. The granting of special privileges by the government makes the market less free and harder for the smaller fry to get ahead. This is the feature that most people think about when they hear the word capitalism, this close camaraderie between owners and government.

EDIT: The free market is the most optimal method we have (in comparison to other methods in existence) to allocate resources in a scarcity based society. The only way out of this whole mess is technology to such a level that allows us to harness, create and use energy freely, without cost. That would make us a post-scarcity society and, needless to say, we would have long moved away from the need of man to labour to subsist.
 
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