the conscience of economics

There are two things an economist fears: one, that things will never go back to normal and two, that they already have. Who? Rebecca What? An economics blog designed for the every day person, the economics student, the interested citizen. Where? Mount...

[traceexcalibur]

INTRODUCING: THE PRISONER’S TROLLEY PROBLEMMA

A trolley full of your loved ones is heading down the tracks and will hit another loved one. If you redirect it, it will hit three strangers, but all of your loved ones will be fine. However, there is another person on the other side of the tracks facing the same problem. If you both choose to redirect the trolleys, they will crash in the middle, killing almost everyone. 

The least amount of people will die if you do nothing and allow a loved one to die, the best-case scenario for you will occur if you pull your lever and the other person does not pull theirs, and the worst-case scenario will occur if you both pull your levers.

What do you do???

[argumate]

good lord

[elleanthus-deactivated20210606]

@20furiousbluebirds

[conscienceofeconomics]

The extreme prisoner’s dilemma. The Nash equilibrium is mass death.

[conscienceofeconomics]

Please bring this back! I'm learning economics in high school and this is really interesting compared to my Econ class

Well thank you very much! I’ve been swamped with school work this term, and had fallen off the map working on my summer undergraduate research project this past season, but I can’t see myself not reopening this in the future when things eventually calm down and I can form coherent thoughts!

Thank you for your support!

[conscienceofeconomics]

For an undergrad do you need to understand calculus for economics?

Good question! For first year level economics, no, but if you’re planning to pursue anything past your intro courses, then definitely! I took calculus in high school and first year, but you don’t need to take it in high school unless you want the leg up. Calculus is really useful for understanding marginal effects – so what happens when you change something by one unit, that’s using derivatives – and for understanding how to find areas under curves using integrals, which gives you a sense of total benefits or surplus in economics. 

On the whole, yes, calculus is super useful, and is required for upper year economics courses. At intro level, it’s okay to not have a good grasp on it, but you’ll likely want to take it simultaneously. 

[did-you-know]

Diamonds aren’t actually rare or valuable; they’re the product of one of the most successful ad campaigns of all time. De Beers once claimed a man should spend a month’s salary on a diamond ring as a marketing strategy. It worked so well, they raised prices and restricted their supply, creating an illusion that generations of people still believe to be a mandatory part of the marriage process. Source

[conscienceofeconomics]

Why do you never hear this?

business: I can't afford to pay my employees a living wage.

free market conservatives: Lazy! If you can't afford one of the basic expenses of running a business, you shouldn't be running a business. Go back to school and learn how to run a business! Get a better business model! Why should you expect the rest of us to prop up your failure by feeding and clothing the employees YOU can't pay for with our tax money?

[economicreading-blog]

Whether it is robots in manufacturing, automated check-out of retail establishments, e-shopping taking people out of distribution networks, information technology replacing what used to be done by low-level, white-collar managerial and clerical labor, the ability to take blood pressure and perform other medical tests with much less human labor input, automated call-center systems – it appears that technology is permitting very large-scale substitutions.

Larry Summers being interviewed by the Washington Post’s Wonk Blog: http://larrysummers.com/2015/03/03/3977/ (via economicreading)

[conscienceofeconomics]

So, if I've got it right, while North America is reluctant to support the economic "incompetence" of Native people, it is more than willing to throw money at the incompetence of corporations.

Thomas King, The Inconvenient Indian (2012).  

So this isn't exactly about economics, and I guess economics isn't exactly about economics either. It's supposed to be about people and about helping people access the best the world can offer them. It's supposed to be about progress and growth, not for the sake of progress and growth, but for the individuals and communities and nations that make up the world. The argument that King refers to here is not one specific to the Aboriginals in North America, though they are its main target. The argument is this: these people need to figure out how to look out for themselves; they need to figure out how to survive and grow and prosper; we can't throw money at them and teach them every little detail about how to do this.  

Okay. But the other side of the argument is a little ironic given the above. We also want these people to be like us and follow in our footsteps to development. Native peoples faced assimilation and execution, but that's old history, isn't it? Now they need to learn to stand on their own feet. 

So a lot of what I've just written is sarcastic and satirical, because for those of you who don't know me, I happen to be native and I feel incredibly passionately about Aboriginal issues. Being sarcastic about this kind of thing leaves a bad taste in my mouth. What I'm trying to say is that economics fails all the time because of the policy making and people behind it. Fair isn't often considered when making economic decisions, and that sucks. Of course. 

Where economics and economists fall short, people need to fill in. People with consciences and dreams and hearts. People are not parts of an engine. They are not disposable and they are not to be aggregated at every turn. People need to be understood as they want to be understood, not how others want to see them. People need to think and feel, not one or the other. 

We need to learn from the past, but that doesn't mean learn and repeat. We need to learn what we did wrong and how to fix it, and not put all the bad stuff that happened in a report or file and store it away forever. 

[zwischenstadt]

If you are 35 or younger - and quite often, older - the advice of the old economy does not apply to you. You live in the post-employment economy, where corporations have decided not to pay people. Profits are still high. The money is still there. But not for you. You will work without a raise, benefits, or job security. Survival is now a laudable aspiration.

Quoted from Sarah Kendzior’s “Surviving the Post-Employment Economy" 

“In the United States, nine percent of computer science majors are unemployed, and 14.7 percent of those who hold degrees in information systems have no job. Graduates with degrees in STEM - science, technology, engineering and medicine - are facing record joblessness, with unemployment at more than twice pre-recession levels. The job market for law degree holders continues to erode, with only 55 percent of 2011 law graduates in full-time jobs. Even in the military, that behemoth of the national budget, positions are being eliminated or becoming contingent due to the sequester.

It is not skills or majors that are being devalued. It is people.”

Her work is frank, speaking of a reality I hope that will never be mine. At the same time, it gives me a strange comfort to know that I am not alone.

(via sextus—empiricus)

[oupacademic]

Poverty is not just a lack of income, wealth and assets. Rather it is the multiple consequences of this lack that are experienced simultaneously by people in poverty.

Robert Walker, preface to Poverty and Shame: Global Experiences (via oupacademic)

[conscienceofeconomics]

Why should I major in economics in college?

This is fantastic question. Let me do my best to convince you.

The study of economics is really the study of decision making. We have to make choices, both big scale and small scale, at every moment in our lives. For example, I’m choosing to answer this question now, rather than going out for a run or calling my grandmother. Why do I have to make that choice? One simple reason exists: scarcity.

Scarcity means we have limited resources, such as money and time. I can’t answer this question and go for a run and call my grandmother at the same time. If I could, I’d be pretty talented. What economics does is inform you of how decisions ‘should’ be made in the face of scarcity. It does so with the aim of maximizing utility (ie. your benefit), or profit, or whatever else you may wish to maximize.

Economics gives you a lens with which you can look at the world critically. It teaches you how to see the costs and benefits of every decision, be it production, policy, or anything else. It teaches you to remember that nothing is free, that everything costs something, that every choice has consequences. Economics tries to weigh these consequences, and make the ‘best’ decision in light of all the information available. 

It’s a profession that gets a bad rap, and sometimes for good reasons. It’s dismal, it’s sometimes wrong, it can be seen as cold and calculating, and even as immoral. Sometimes that’s fair. Nothing is absolute in the world of economics; everything is subject to biases and context. But the tools economics give us are incredibly invaluable to understanding how the world works, how anything ever gets done. How do we allocate our health care resources? What should we do to reduce our carbon footprint? How does education play into wages? What determines the prices of avocados at the supermarket? Economics supplies answers to all of these questions, and that’s just the tip of the iceberg. 

I guess what I’m trying to say, if I’m saying anything at all, is that economics explains a lot about the world we live in. It tries to help us understand how we got where we are, and how to get where we want to go. 

[conscienceofeconomics]

The Promise vs. Performance Debate

"Why do we see so many young male hotshots moving up the ladder ahead of more seasoned females? Women need a longer, stronger track record because they are judged on what they have actually accomplished. For promising men, research shows, potential is enough to win the day."

This comes from Rivers and Barnett's The New Soft War on Women (2013), which looks at all the subtle (and less subtle) ways that gender inequality is present in the labour market and the economy in general.

"The Economist notes, "Discrimination continues in subtle ways. Business schools follow that their alumni's careers find that men are promoted on their potential but women are promoted on their performance, so they advance more slowly. The women adjust to this, which slows their progress even more, and so the discrimination goes on without either side necessarily aware of it.""

[conscienceofeconomics]

Controlling Gas Prices

"Here is a one-item test to see whether you are guilty of cloudy thinking about gas prices: Do you believe that they are something a president can control? Many Americans believe that the answer is yes, but any respectable economist will tell you that the answer is no. [...] Changes in U.S. gasoline prices over the past 10 years have predominantly been due to market factors rather than U.S. federal economic or energy policies.”

What do we mean by market forces? Mostly, it boils down to the fact that the U.S., as a producer of oil, is one tiny drop in the otherwise large oil can. Last I knew, they only held about 2% of the world's reserves, despite using closer to 20%. This means the nation is a price taker, and thus has very little sway as to what happens in the market, ie. no market power. They are subject to the movements of the powerful producers in the market. Here's looking to you, Venezuela, Saudi Arabia, and Canada. (Keep your eye on the Canadians. Alberta is tanking in oil. And not in the good way.) 

"Domestic production has increased during the Obama administration, but it has had minimal effects on global prices because, as producers, we are just too small to matter much. And even if domestic oil companies further increased production, they would sell to the highest global bidder."

[mesman-deactivated20220222]

As defined by the average bourgeois economist, development becomes simply a matter of the combination of given ‘factors of production’: namely, land, population, capital, technology, specialization, and large-scale production. Those factors are indeed relevant, as is implied in the analysis so far; but omissions from the list of what bourgeois scholars think relevant are really overwhelming. No mention is made of the exploitation of the majority which underlay all development prior to socialism. No mention is made of the social relations of production or of classes. No mention is made of the way that the factors and relations of production combine to form a distinctive system or mode of production, varying from one historical epoch to another. No mention is made of imperialism as a logical phase of capitalism.

Walter Rodney, How Europe Underdeveloped Africa (via americanfamilyassiation)

[did-you-know]

Gambling generates more revenue than recorded music, movies, cruise ships, theme parks, and spectator sports combined. It’s a $40 billion a year industry in the U.S. alone. Source

[conscienceofeconomics]

“To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm.” F.A. Hayek.

Is our monetary policy enough? Should we do more? Should we do less? What about fiscal stimulus? Or austerity? What is the best path, and how far do we go? These questions are only the tip of the iceberg, and answering them is a game that's been played for a long time now. Each has their own set of answers to try and figure out how we should intervene in the economy. But what is it that we're trying to solve, exactly? Is it a math problem that needs a simple formula to find the missing number? Or Or do we even know the question that we're trying to solve?

Uncertainty doesn't just refer to things we attribute probabilities to, but rather things that we simply do not know. The future is uncertain on multiple levels to different degrees. We can attribute some probability to the weather, which is uncertain from day to day. But we cannot adequately predict everything, or so some would argue. 

How we use our knowledge and our lack of knowledge is still debated. Should we use it to stabilize the future and our expectations about it? Or should we shy away from getting involved altogether, in part because we just do not know what we're messing with? 

[conscienceofeconomics]

Calling all economics students and/or research enthusiasts!

I'm looking for an interesting topic on health economics and veterans services (especially in Canada) to start with for a research proposal. If anyone has any sources, data base suggestions, or all around useful places they go when starting research, I would love to hear your suggestions!

[guardian]

Seven million Americans work part-time because they have no other choice.

Can the US do better than this? These experts think so. 

Photo: Susie Cagel