Albert B Fernandez's List: Economy

• The American tradition is to enshrine economic activity as a central element of "the pursuit of happiness.
• In reality, however, economic activity is largely concerned with the relief of unhappiness.
• At the subsistence level of economic activity that has prevailed through most of human history, people must work to eat and to be clothed and housed, not so that they can enjoy the happiness that these goods can bring but so that they can avoid the pain of hunger, cold, and exposure to the elements.
• Tomas Sedlacek's Economics of Good and Evil: The Quest for Economic Meaning From Gilgamesh to Wall Street
• what Joseph Schumpeter called "Das Adam Smith probl
• Adam Smith of The Wealth of Nations—the advocate of the benefits of self-interest celebrated
• Smith the advocate of sympathy as the foundation of social order in The Theory of Moral Sentiments
• "greed" or "avarice" in Christian thought, but viewed more positively as "aspiration" in modern times
• Views about life and its possibilities, about good and evil, are fundamentally altered in a society characterized by economic growth as compared with the essentially static economic possibilities of the ancient and medieval worlds.
• it is precisely the experience of economic growth that distinguishes the economists of the Enlightenment era (most notably the Scottish Enlightenment, which gave us Smith) from their pre-modern forebears.
• rom early times—say, 2,000 years before Christ—down to the beginning of the 18th century, there was no very great change in the standard of life of the average person living in the civilized parts of the world.
• Some periods perhaps 50 percent better than others—at the utmost 100 percent better—in the
• 4,000
• years that ended roughly in AD 1700.
• Sedlacek'
• But he fails to convince us that "being satisfied with what we have" is an adequate goal for modern humanity
• technological progress provides us with more options, as John Maynard Keynes observed in his "Economic Possibilities for Our Grandchildren."
• But taking advantage of the opportunities provided by developments like the Internet without being seduced by the appeal of ever more intricate gadgetry remains a challenge most of us find difficult
• Stefano Bartolin
• that growth in the economy is driven by negative, self-reinforcing externalities; that is, economic interactions among people that are not mediated by markets or voluntary exchange. One class of externalities arises from positional aspects of consumption, or, more plainly, "keeping up with the Joneses.
• This need not be a matter of superficial envy or aspiration. For example, at a college where few students
• wn cars, social interactions will necessarily take place on or near the campus, and will typically involve relatively limited expenditures. But if many students own cars, they can socialize in nightclub districts or other off-campus venues. Not only are students without cars disadvantaged in terms of access, but the new entertainment options are likely to be more expensive. So there is pressure to take on part-time or even full-time jobs to finance the expenditures required for participation in the social life of the college
• The other class of externalities considered by Bartolini are those associated with environmental degradation
• The classic example is that of environmental pollution, in which a factory can pour smoke into the atmosphere without compensating its neighbors or obtaining their agreement.
• people seek to insulate themselves from the consequences of environmental degradation through the acquisition of yet
• more material goods
• Bartolini argues for a focus on relationships as the antidote to a materialist culture

• In particular, and in common with many proponents of similar arguments in the past, he sees the industrialized education system as a fundamental part of the problem, and a more humane "relational" approach to education as central to the solution.

   

  H
• e argues for an education based on the intrinsic enjoyment of learning and creation, rather than the extrinsic goals of money, jobs, and social status.

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• This is not a dispute about whether planning is to be done or not. It is a dispute as to whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals. Planning in the sp
• Today it is almost heresy to suggest that scientific knowledge is not the sum of all knowledge.
• In a competitive industry at any rate—and such an industry alone can serve as a test—the task of keeping cost from rising requires constant struggle, absorbing a great part of the energy of the manager. How easy it is for an inefficient manager to dissipate the differentials on which profitability rests, and that it is possible, with the same technical facilities, to produce with a great variety of costs, are among the commonplaces of business experience which do not seem to be equally familiar in the study of the economist. The very strength of the desire, constantly voiced by producers and engineers, to be allowed to proceed untrammeled by considerations of money costs, is eloquent testimony to the extent to which these factors enter into their daily work.
• If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them.
• The marvel is that in a case like that of a scarcity of one raw material, without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly; i.e., they move in the right direction. This is enough of a marvel even if, in a constan
• ly changing world, not all will hit it off so perfectly that their profit rates will always be maintained at the same constant or "normal" level.
• The problem which we meet here is by no means peculiar to economics but arises in connection with nearly all truly social phenomena, with language and with most of our cultural inheritance, and constitutes really the central theoretical problem of all social science.
• Whitehead
• It is a profoundly erroneous truism, repeated by all copy-books and by eminent people when they are making speeches, that we should cultivate the habit of thinking what we are doing.
• The precise opposite is the case. Civilization advances by extending the number of important operations which we can perform without thinking about them.
• an has been able to develop that division of labor on which our civilization is based because he happened to stumble upon a method which made it possible. Had he not done so, he might still have developed some other, altogether different, type of civilization, something like the "state" of the termite ants,
• The thesis that without the price system we could not preserve a society based on such extensive division of labor as ours was greeted with a howl of derision when it was first advanced by von Mises twenty-five years ago.
• Lerner rediscovers Adam Smith and emphasizes that the essential utility of the price system consists in inducing the individual, while seeking his own interest

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