Email me at Mike Emery. All financial contributions are cheerfully accepted. If you want to keep it private, use my PGP Key. Home Page
Economics is a subject which is not very exciting for the rest of us. There are two main kinds of economists, Austrians and rubbish. Friedrich von Hayek was an Austrian who wrote The Road to Serfdom, telling us that central planning is not and cannot be effective because planners cannot know what people want. Even if the planners did know they might well decide to inflict their own preferences. Herr Professor Hayek also told us that the Communists were worse than the Nazis. Given that he wrote his book in 1942 it sounds prescient.
Another good economist is Sean Gabb. Doctor Gabb is for free enterprise which allows people to have ideas and put them into practice. Then they profit - if they happen to get it right. He tells us in A Defence of Free Enterprise: Part Two—The Cost of Bad Economics that:-
The Government is right. This country does need a culture of enterprise. If only it could understand that this is more than the regulatory equivalent of growing ivy on a garden trellis—allowing growth in one direction, positively encouraging it in another, and ruthlessly forbidding it in others. Real enterprise is a natural growth, and flourishes best when left to its own directions. This is an insight of the Austrian school of economists......... But let us end with this chapter with the words of the free trader Richard Cobden, speaking in Parliament back in 1846:
You may, by legislation, in one evening, destroy the fruits and accumulations of a century of labour; but I defy you to show me how, by the legislation of this House, you can add one farthing to the wealth of the country. That springs from the industry and intelligence of the people of this country. You cannot guide that intelligence; you cannot do better than leave it to its own instincts. If you attempt by legislation to give any direction to trade or industry, it is a thousand to one that you are doing wrong; and if you happen to be right, it is a work of supererogation, for the parties for whom you legislate would go right without you, and better than with you.
Doctor Roberts, a distinguished economist writes at some length about the way in which economists are ignoring the ugly realities of factories being exported to low wage countries & impoverishing American Working Men. See #Economists Are Blind To The Damage They Are Doing To Americans. Ignoring the difference between absolute advantage and #Comparative Advantage is a key issue. They are helping to make Capitalist Swine richer though.
Joseph Stiglitz, a Jew and well known economist addresses the same theme in One Percent Versus The Other Ninety Nine Percent, telling us that “self-interest properly understood.” is the way to go. It means looking after those around you.
This fits well with what Pat Buchanan has to tell us about Economic Nationalism.
Economic Bubbles
Are a danger to be understood. For some they are a tool to be used.
Efficient Market Hypothesis
The efficient-market hypothesis (EMH)[a] is a hypothesis in financial economics that states that asset prices reflect all available information. A direct implication is that it is impossible to "beat the market" consistently on a risk-adjusted basis since market prices should only react to new information.
Informal Economy
Is another name for Free Trade, a policy advanced by Adam Smith, the author of The Wealth of Nations.
Friedrich von Hayek
A good economist which makes him a rare beast.
Economics Explained
By Professor Hayek. Economists are, in the main dangerous idiots.
John Maynard Keynes
Fool or rogue? Take your pick. At all events he was an economist, an influential economist which made him dangerous then and now.
Economic Problems
An American explains.
Keys To Development
QUOTE
But this misses the broader point. The Harvard historian Niall Ferguson, who has just written a book, Civilization: The West and the Rest, puts things in historical context: "For 500 years the West patented six killer applications that set it apart. The first to download them was Japan. Over the last century, one Asian country after another has downloaded these killer apps — competition, modern science, the rule of law and private property rights, modern medicine, the consumer society and the work ethic. Those six things are the secret sauce of Western civilization."To this historical challenge from nations that have figured out how the West won, add a technological revolution. It is now possible to produce more goods and services with fewer and fewer people, to shift work almost anywhere in the world and to do all this at warp speed. That is the world the U.S. now faces. Yet the country seems unready for the kind of radical adaptation it needs. The changes we are currently debating amount to rearranging the deck chairs on the Titanic.
UNQUOTE
Europeans developed these ideas using their own brains. Foreigners are catching up. How do we keep up? More science sounds good. This does not mean numbers; it means quality. It also means a certain amount of redundancy. Men following their own interests, making connections are not always going to find the Next Big Thing. Telecommunication along with the Internet, games computers etc. depend on just three key inventions, the transistor, solid state laser and fibre optics. Another development could drive a lot more progress. One crucial point is nurturing talent, the top of the best one percent. The American answer for decades has been to buy it in when they want it. Fools they are not.
Peter Drucker
Was a good economist, a decent man and an Austrian. He believed that it was people that mattered. He was not a fan of Capitalist Swine.
David Ricardo And Free Trade
David Ricardo brought us the idea of #Comparative Advantage, the idea that some countries are better at doing certain things. Thence mutual trade helps both. This is the intellectual underpinning for Free trade.
Pareto 80-20 Rule
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The Pareto principle (also known as the 80-20 rule, the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes.Business-management consultant Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed in 1906 that 80% of the land in Italy was owned by 20% of the population; he developed the principle by observing that 20% of the pea pods in his garden contained 80% of the peas.
It is a common rule of thumb in business; e.g., "80% of your sales come from 20% of your clients". Mathematically, where something is shared among a sufficiently large set of participants, there must be a number k between 50 and 100 such that "k% is taken by (100 − k)% of the participants". The number k may vary from 50 (in the case of equal distribution, i.e. 100% of the population have equal shares) to nearly 100 (when a tiny number of participants account for almost all of the resource). There is nothing special about the number 80% mathematically, but many real systems have k somewhere around this region of intermediate imbalance in distribution. The Pareto principle is only tangentially related to Pareto efficiency, which was also introduced by the same economist. Pareto developed both concepts in the context of the distribution of income and wealth among the population.
In software
In computer science and engineering control theory such as for electromechanical energy converters, the Pareto principle can be applied to optimization efforts. For example, Microsoft noted that by fixing the top 20% of the most reported bugs, 80% of the errors and crashes would be eliminated [ so they did not bother with the rest - Editor ].
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Microsoft is totally greed driven but then the head man today is a Jew, which is not to say that Gates did have unlimited greed along with a ruthless attitude to rival operations. NB It seems that Bill and Ballmer the Jew plotted to screw Paul Allen.
Economists Are Blind To The Damage They Are Doing To Americans
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February 6, 2007 Volume 14, No. 3At a Washington, D.C., press conference last November, Harvard University economics professor Michael Porter claimed that globalism was bringing benefits to Americans (Manufacturing & Technology News, Nov. 30, 2006). Porter was introducing the latest report, “Competitiveness Index: Where America Stands” [PDF]of which he is a principal author, from the Council on Competitiveness.
I recognized a number of Porter’s claims to be inconsistent with empirical data. After examining the report, I can confidently state that the report provides scant evidence that America is benefiting from globalism.
This is not to say that the statements in the report and the information in the numerous charts are untrue. It is to say that the data do not support the claim that America is benefiting from globalism.
The competitiveness report boasts that the United States “leads all major economies in GDP per capita”; that “household wealth grew strongly, supported by gains in real estate and stocks”; and that "poverty rates improved for all groups over the past two decades.”.............
Economists maintain that labor is paid according to its productivity, and historically this has been the case in the United States. The correlation began to break down with the advent of offshoring to the Asian Tigers and deteriorated further with the advent of offshoring of manufacturing and service jobs to China and India made possible by the collapse of world socialism and the advent of the high-speed Internet. The historical correlation between productivity and wages has been further eroded by the importation into the United States of cheap foreign skilled labor on work visas. Many Americans have been forced to train their foreign replacements who work for one-third less pay.
The greatest failure in the competitiveness report is the absence of mention of the labor arbitrage and its consequences when U.S. firms offshore their production for U.S. markets. This practice translates into direct job loss and direct tax base loss, and it transforms domestic output into imports. This is capital and technology chasing absolute advantage abroad. This cannot be considered trade based on resources finding their #Comparative Advantage in the domestic economy.............
The report downplays the extraordinary trade and current account deficits on the grounds that "foreign affiliate sales” do not count against the trade deficit and “intra-firm trade” is a significant proportion of the trade deficit and “is due to trade within American companies.”
This argument shows that the report is written from the standpoint of what is good for global firms, not what is good for America.............
Economists cannot speak the obvious truth, because they mistake the operation of absolute advantage for comparative advantage. The case for free trade rests on the comparative advantage argument that countries that specialize in what they do best and trade for goods that other countries do best share in the gains from trade and experience higher standards of living...................
Economists long ago ceased to think objectively about free trade. Free Trade has become an unexamined article of faith. As far as I can ascertain, economists no longer are even aware of the necessary conditions specified by Ricardo that are the basis for the free trade case................
Another problem is that the corruption of the outside world has found its way into universities. Today, universities look upon “name” professors as rainmakers who bring in funds from well-heeled interest groups. Increasingly, research and reports serve the interests that finance them and not the truth. Money rules, and professors who bring money to universities find it increasingly difficult to avoid serving the agendas of donors................
Economists need to inject some realism into their dogmas. The U.S. economy did not develop on the basis of free trade. Whatever the costs of protection, the costs did not prevent America’s economic rise.
Much American economic thinking is grounded in the fact of America’s past success. Many economists take it for granted that as long as the U.S. has free markets, it will continue to be successful. However, much of America’s success is due to World War I and World War II, which bankrupted rivals and destroyed their industrial capacity. It was easy for the United States to dominate world trade after World War II as America was the only country with an intact economy.
Many economists dismiss the problems with which offshoring confronts developed economies with the argument that it is just a question of wage equilibration. As wages rise in China and India, the labor cost differential will disappear and wages will be the same everywhere. This argument overlooks the lengthy period required for the hundreds of millions of workers, who overhang labor markets in India and China to be absorbed into the workforce. During this time, hardships in currently high-wage countries will be severe. Moreover, once the wage adjustment is complete, the new developed countries will have the upper hand. Will they give up their competitive and strategic advantages?
In the July 2006 issue of CounterPunch, I wrote that jobs offshoring was the new form of class warfare and that it was bringing political instability and social strife to the United States. There is nothing in the Council on Competitiveness’ latest report to cause me to alter my view.
– Dr. Roberts held the William E. Simon Chair in Political Economy at the Center for Strategic and International Studies at Georgetown University and was Senior Research Fellow in the Hoover Institution at Stanford University. He served as Assistant Secretary of the U.S. Treasury in the Reagan administration.
UNQUOTE
Are economists blind or wilfully blind? They are helping destroy the Working Class, the Forgotten Man, he who prays & he who pays.
Comparative Advantage ex Wiki
The law or principle of comparative advantage holds that under free trade, an agent will produce more of and consume less of a good for which they have a comparative advantage.[1] Comparative advantage is the economic reality describing the work gains from trade for individuals, firms, or nations, which arise from differences in their factor endowments or technological progress.[2] In an economic model, agents have a comparative advantage over others in producing a particular good if they can produce that good at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to trade.[3] One does not compare the monetary costs of production or even the resource costs (labor needed per unit of output) of production. Instead, one must compare the opportunity costs of producing goods across countries.[4]David Ricardo developed the classical theory of comparative advantage in 1817 to explain why countries engage in international trade even when one country's workers are more efficient at producing every single good than workers in other countries. He demonstrated that if two countries capable of producing two commodities engage in the free market, then each country will increase its overall consumption by exporting the good for which it has a comparative advantage while importing the other good, provided that there exist differences in labor productivity between both countries.[5][6] Widely regarded as one of the most powerful[7] yet counter-intuitive[8] insights in economics, Ricardo's theory implies that comparative advantage rather than absolute advantage is responsible for much of international trade.
Opportunity Cost ex Wiki
In microeconomic theory, the opportunity cost, refers to the next cost best alternative use of resources. It is also known as alternative cost, is the value (not a benefit) of the choice in terms of the best alternative while making a decision. A choice needs to be made between several mutually exclusive alternatives; assuming the best choice is made, it is the "cost" incurred by not enjoying the benefit that would have been had by taking the second best available choice.[1] The New Oxford American Dictionary defines it as "the loss of potential gain from other alternatives when one alternative is chosen." Opportunity cost is a key concept in economics, and has been described as expressing "the basic relationship between scarcity and choice."[2] The notion of opportunity cost plays a crucial part in attempts to ensure that scarce resources are used efficiently.[3] Thus, opportunity costs are not restricted to monetary or financial costs: the real cost of output forgone, lost time, pleasure or any other benefit that provides utility should also be considered an opportunity cost.
The Fatal Delusions of Western Man [ 2 March 2018 ]
QUOTE
“We got China wrong. Now what?” ran the headline over the column in The Washington Post.............America’s elites believed that economic engagement and the opening of U.S. markets would cause the People’s Republic to coexist benignly with its neighbors and the West.
We deluded ourselves. It did not happen..............
Who is responsible for this epochal blunder? The elites of both parties. Bush Republicans from the 1990s granted China most-favored-nation status and threw open America’s market.
Result: China has run up $4 trillion in trade surpluses with the United States. Her $375 billion trade surplus with us in 2017 far exceeded the entire Chinese defense budget. We fed the tiger, and created a monster.
Why? What is in the mind of Western man that our leaders continue to adopt policies rooted in hopes unjustified by reality?.........
What is the root of these astounding beliefs — that Stalin would be a partner for peace, that if we built up Mao’s China she would become benign and benevolent, that we could reshape Islamic nations into replicas of Western democracies, that we could eradicate tyranny? Today, we are replicating these historic follies................
But the greatest risk we are taking, based on utopianism, is the annual importation of well over a million legal and illegal immigrants, many from the failed states of the Third World, in the belief we can create a united, peaceful and harmonious land of 400 million, composed of every race, religion, ethnicity, tribe, creed, culture and language on earth.
Where is the historic evidence for the success of this experiment, the failure of which could mean the end of America as one nation and one people?
UNQUOTE
Pat Buchanan writes sensibly as always. Yes, we are ruled by Utopian fools driven by Pathological Altruism. Albeit I would point the finger at the Psychopathic rogues who Brainwashed them using the Education Industry. The Puppet Masters, the Zionist crazies flooding us with Third World parasites are full of hate.
The Ongoing Economic War - Michael Hudson Explains [ 22 May 2022 ]
QUOTE
Peter Scott, RT anchor: Joining us now is Michael Hudson, economist and author of “Super-Imperialism” and the recently-published “Destiny of Civilization”. Welcome to the programme, Michael..........PPS: Let’s say all these European programmes like the REPower Programme come into effect, how do you expect the EU standing to be on the stage after that?
MH: Well, the EU standing will be squeezed economically. It was trying to be a powerhouse in the world economy but in the last month the euro has been declining steadily against the dollar and it’s on the way to one dollar per euro. That’s because it’s having to pay much foreign exchange for energy, for food, for weapons. It’s shrinking in terms of other economies.
PS: Where do you think the EU’s standing will be in relation to powerhouses such as China?................
MH: Well, the crisis is going to come this summer. Now that you have oil and food prices and shipping rates go way, you’re going to have Latin America, Africa and much of Asia have tremendous balance-of-payment deficit. These balance-of-trade deficits for oil, food and shipping are going to go hand-in-hand with huge foreign debts denominated in dollars for foreign bond holders and foreign banks. Something is going to give. What will probably give is massive debt defaults against American bondholders and against American banks. At this point, Russia, China and their allies can say, “We can create parallel institutions in the world. We can create our International Monetary Fund to give you credit.....................
PS: Which countries do you think are gaining the most from the ongoing political and economic turmoil?
MH: I don’t know if you can say win. I’d say Russia and China will be the big winners. Russia already is because the American sanctions against Russia have forced Russia to do something that it could have done half a century ago. It’s forced Russia to create its own consumer goods industry, its own industrial take off. Russia can now build its own plants, equipment and factories and hire its own labour to produce what it was buying from Europe before. So it won’t need Europe anymore. Europe has lost the Russian market. Without the Russian market, I don’t see where Europe can grow because the United States won’t let European goods into it. The United States is protectionist. Europe will be squeezed and ultimately it will end up moving into the Russian and Chinese orbits but it will take years of suffering before that occurs.
UNQUOTE
This is real news for grown ups, unlike the usual Mainstream Media. It is about the three power blocks America, China & Russia. In fact Europe is incidental, a failed big player. You might notice similarities to George Orwell's famous book. Nineteen Eighty-Four.. He had three groupings. The totalitarian superstate Oceania, ruled by the Party, employing the Thought Police to persecute Free Speech. Sounds familiar?One part of it is London on Airstrip One. It is at war with Eurasia or with Eastasia. As Professor Hudson tells us, America provoked war in the Ukraine as part of moving NATO nukes nearer to Russia. Sanctions against Russia & stealing their currency reserves are serious own goals, one breaking the dollar as THE Reserve Currency. Washington regards China as the real enemy. Separating it from Russia is the idea. It will fail. You doubt it? See the next one.
Economics - A Businessman Explains
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‘There are four ways in which you can spend money. You can spend your own money on yourself. [ System 1 ] When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. [ System 2 ] For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. [ System 3 ]And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch! Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. [ System 4 ] And that’s government. And that’s close to 40 per cent of our national income.’
UNQUOTE
System 3 explains business expenses. First class flights and five star hotels burn through money at a great rate. The worst one is System 4, the one used by governments. It explains why a council's civil engineering department can play bridge in the afternoons. Note to the casual admissions by politicians that project has failed utterly at a cost of X billions. It's only our money they are wasting and they have the guns. We don't.
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Updated on 13/04/2024 20:28