EWOT for 10/28

I was recently looking for handlebar tape for my bicycle and found it for 5 cents with free shipping from mainland china. I bought it just to see what it was all about, but the whole idea of a product from china being sold to me the consumer for 5 cents seems crazy. For there to be any profit that 5 cents has to cover production, development and shipping and then have some left over. Seems unlikely. So, if that's not the case, either this tape has to cost almost nothing to produce, weigh just about 0 ounces, and take up about no space. And even then, the profit is just hovering around 3 cents. So, maybe there's something else wrong, maybe it'a s stolen product, or maybe it just won't ever ship. I figured 5 cents was worth it just to find out.

Krugman (Homework for 10/28)

I think that these krugman articles formed a solid foundation for the concept that free trade is the best possible ensure a solid market economy and better the most people. They also cement the idea that it really is just that simple.

1) To what extent is it difficult to accept Ricardo's proposition because it is just so simple?
2) Is it really the betterment of another society that makes free trade the ethically correct choice? Is it still exploitation if they are bettering themselves but in poor conditions?
3) Could a non-free trade environment ever be more beneficial overall than the opposite?

I think the importance of these pieces lie in what is essentially a structured retelling of what Rizzo has been saying in class. What Rizzo has told us in stories about trade, Krugman provides in more of a structured, argument-type manner.

Property Rights

I thought it was very interesting that this reading was much more about the philosophy of what property rights are, where they stem from and what they entail. The ideas surrounding who gets property and what "owning" something means are a nice side-step from what we've been looking at so far in Econ

1) How useful is property if you aren't allowed to transfer ownership?
2) Is does the right to future property fit into this picture?
3) If the government is a collection of people acting together, and the government owns something, what is the role of any individual citizen in that ownership? Do they have any property rights at all?

It's pretty clear that we read this to understand the sheer strength and significance of personal property rights to a secure market economy

10/21

Everyone benefits from trade!

Value is what we give to something, not inherent. 

Technologies have cool ways of shifting and pivoting PPT curves

10/19

It's still hard to make full, accurate judgements on what the best action is in any given situation.

Trade & Specialization:
3 factors of production
1) Land
-ANYTHING physically here irrespective of human action.
2) Labor
-Hunks of flesh. Stock of human beings available. No learned skills/talents included.
3) Capital
-Something that must first be produced before another thing can be produced. (ore is land, iron is capital)
--Two kinds, physical and human.

10/17

Doing something good for yourself, exercising, quitting smoking, whatever, is societally regarded as good. Running a profit seeking company for your own profit is regarded as bad. Why are those bad/different?

Unconnectedly giving someone money when they've given you a kidney makes you a good person, but actually paying someone for a kidney is horrible. But to an economist, at some level every interaction is a reciprocal altruistic act.

Don't live by the golden rule, it's just too hard. It's actually improbably difficult. Try instead to live by the silver rule: Do not do to others what you would consider unfair or unjust if they did it to you.

accumulated profits of exxon since 1980s?

Case for Contamination

1) How does globalization effect the lower classes of peoples around the world?
2) Is culture more important than wealth?
3) What is the biggest threat to cultural variance?

I think that what we should get out of this piece is that the globalization of the world is not only inevitable but essential to progress. And not only that, but that it is totally possible for culture to survive and flourish in a globalized world.

EWOT

It used to be that airlines had very attractive stewardesses, that was par for the course. But today, they're no different from workers in any non-tip-based service industry. This probably ha a little to do with the fact that ideas of gender roles have changed over time, but it probably also has something to do with government regulations. Airlines used to have regulated prices. When the government controlled prices, the airlines had to find other ways to compete. One of the things they ended up competing on was the attractiveness of the service staff, namely stewardesses. Eventually government mandated pricing ended, and flight attendants became what they are now, with more gender equity and less objectivity. One more case where government regulation was the wrong answer.

Marx doesn't really make sense: property isn't important. Everyone needs equal property...huh?
Efficiency - what you want at least cost
You can't eat money

8/12

• Unintended consequences!
• Trade is not zero-sum
• "Pie fallacy" -- there is a fixed amount of weath
•  Zero-sum situations can be exciting! Space race!

10/7

The more you release something the lower its relative value.
Total value of water exceeds total value of diamonds. But lack of scarcity of water drives its price down.
What if it's "water" and "diamonds"
You aren't really buying the physical good (objective reality) you're buying human perspective.

People still respond to incentives.

10/5

Broken Window fallacy
Money gets spend contrary to consumer preference
The individual is worse off because all they've done is kept themselves in a stagnant position by spending money.

Money in pocket + roof VS no money + a roof

Breaking something doesn't actually cause economic growth

Scarcity and other underlying concepts from this part of the course are necessary to get everything out of the rest of the class (supply/demand curves etc)

Equity often comes at the cost of efficiency and vice versa

Opportunity cost, what you must give up to get something else, is the most important thing to consider.

Debate About Happiness

The significance of this debate to me isn't about either side of the argument. I think that both have clear arguments and huge amount of both statistical and anecdotal evidence. This debate in and of itself isn't a place to be able to make a formal decision about the topic. However, both would agree that if you live in a society where most people make $100 a year, and you make $1000 a year, you will be both better off and happier in relation to your own society and at least happier than most of the world. 

1.  The McMansion example where a small house in Aspen would be the last desirable thing and therefore less expensive is obviously wrong, but it could be for more than one reason. What is one that is more in line with Bob's reasoning than Justin's?

2. If money leads to happiness, why do so many wealthy people go to therapists?

3. Would giving a million dollars to a middle-class family from Sierra Leone, or giving a million to a lower class American family be better? Why?