Reading Assignment #14-The Sumptuary Manifesto

A.
I found a couple things in this article to be interesting and I am happy I chose this article because it made me think of a ton of economic related topics we have learned this year. Specifically, I think the reading very well articulated how a society should NOT be run to promote economic growth. Most, if not all, of the laws presented in this article would be bad for economic growth and go against what we have learned this semester to be "good economics."

First a foremost, I found it interesting how this society/governing body felt that wasting resources was so bad that it was necessary to enact such specific regulations so as to control exactly what a person can and cannot do.

All semester long, we have learned how over regulation is a bad thing, that is prevents possible transactions from taking place that could very well be productive. I just found it interesting how convinced the governing body seemed to be that their ridiculous regulatory behaviors would lead society to more success than harm. As we have learned in class, this couldn't be farther from the truth.

I also found the rules and regulations presented in this article to be completely hypocritical. In the article, it says that no one should "propagandize" against them. Meanwhile, this entire article is complete propaganda, spitting out ridiculous and oppressing regulations for people to follow.

Finally, the last thing I found interesting about this article was the ridiculousness of some of these rules. I don't even understand the goal in some of them- does the governing body really think enacting some of these rules will do anything to help society? Some of the rules I am talking about are:

1. You can't live in a dwelling of more than 400 square feet.
2. You can't own a car with a wheelbase over 72 inches.
3. Drink whiskey aged more than 60 days. 

The article hints at that such regulations are in order to minimize wasteful consumption of things. My question is how do these regulations help anybody? What if people enjoy whiskey aged 70 days? Why shouldn't they be able to drink it? By taking whiskey and the other items above off the market, they are removing potential transactions that could take place, which effectively makes the society poorer and worse off.

Also, to go back to the whiskey example, think about what making whiskey aged over 60 days illegal might do. It might increase crime. As we have learned in class about drugs, making stuff illegal incetivizes people to commit crimes. If whiskey over 60 days old becomes illegal, people who want aged whiskey might be willing to harm someone in order to get it or prevent themselves from getting in trouble for having it. Thus, to me at least, most, if not all, of these regulations seem completely counter productive to me.

B.
1. Why do they think such a large amount of regulation will lead to success in society?
2. Did they ever stop to consider the ramifications of regulating so much? Did they consider how much production they are losing by regulating so much?
3. Is there any chance for this society to thrive, or is it almost a guarantee that it will become stagnant at one point or another? Is it possible for a society to not be stagnant and thrive even if it has so much regulation that it prevents productive transactions from taking place?


C.
After reading this week's reading assignment, I thought of one thing: how everything in this article basically represents bad economics and goes against what we have learned this semester as being good economics.

The article starts out explaining how the society is trying to minimize "wasteful" consumption. To do this, the society is enacting a myriad of laws. Here are some of them:

It is a capital offense to:

1. Live in a dwelling of more than 400 square feet.
2. Own an automobile with a wheelbase over 72 inches.
3. Drink whiskey aged more than 60 days.
4. Smoke more than one cigarette in one day
5. Appear in public clean shaven (if a male)

There are countless more laws in order like this. The whole point of this, as the reading points out, is to minimize waste in society so as to reconstruct their "greedy wasteful society".

As a side- here was my reaction: Who is actually being the greedy one? I say the government for enacting these rules. They are limiting what people can and cannot do. Who says if someone smokes more than 10 cigarettes a day they are wasting? By doing all of the "offenses" above, economic growth happens. If people have a need to do the above things, they should be allowed.

The article then goes on to say how these rules will be enforced through monitoring techniques/jobs such as judges, policemen, detectives, etc. As we learned in class, this is also ridiculously unproductive. Instead of going out and producing more goods for society to use and benefit from, these monitors will be wasting their time monitoring when, in reality, they may very well not be necessary at all (if people were just allowed to do as they pleased). 

Thus, all of the rules/enactments in this society go against what we have learned to be good economics. 

The reading then concludes with presenting more rules and regulations, such as taxing certain things and having price ceilings in certain markets.

Once again, as we have learned in class, these regulations can be bad as well to economic growth because they prevent transactions that would be beneficial to sellers and buyers from taking place.

The reading also concludes with saying that freedom/a free market is an enemy and that real consumer freedom should be, and possibly is, what the governing body is proposing as laws.

This is comical, and, as we have learned in Econ 108 this semester, not logical one bit.

Reading Assignment #13- Golf Digest Bethpage Gray (Market)

A.

The beautiful and desirable Bethpage Golf Course in NY.

I found this article to be extremely interesting and it was my favorite reading assignment piece of the semester so far (although I am a bit biased since I am a sports fan and this was an article on sports economics).

I'll point out three things in particular I found interesting in the article.

I found it amazing how Bethpage was so upset that people were making "side deals" to get in to the park. In fact, if Bethpage finds out that a customer used NYGolfShuttle.com (NYGS) to get on their course, the customer will be banned from the course for a year. In my opinion, this is ridiculous, and I explain why I feel this way below.

When the website NYGS makes their "side deals", they are still paying Bethpage the full price of admission. Thus, Bethpage is not losing any money.

In fact, we are all wealthier because of NYGS. NYGS has opened a market that would otherwise not be in existence.

Thus, economic growth is occurring in countless places- the golf course is getting paid as is NYGS and the customer is getting to go to the golf course he/she desires. Thus, we are all much wealthier because of NYGS, which makes me question why Bethpage would be upset.

If Bethpage wants more money, they should charge more. Otherwise, they are actually HELPING our economy by having their golf course at such a low price and causing there to be a huge demand. Now, more people get a good job because of NYGS. So, Bethpage, in my opinion, really has no right to be upset.

A second aspect I found interesting was how NYGS operates. Basically, they take care of ordering the ticket for the customer to get on the golf course. It is fascinating to me because NYGS is operating as a middleman.

I always thought of a middleman as a store selling groceries. I never thought of a scalper, or a website like NYGS, as a middleman, and that is just what NYGS is.

The website is bringing together buyer (the golfer) and seller (Bethpage). The website charges more money than Bethpage does because of the convenience NYGS is offering customers to get in to the golf course (the golfers don't have to wait hours on end outside to get on the course.) Thus, NYGS is reducing transaction costs for both parties as they are making it easier for buyer and seller to come together.

I also found it interesting how in this instance, since the price for admittance is so low, the price rationing system is not that successful since those who value it the most don't have the best chance to get in. But, NYGS makes it so the price rationing system is indeed successful, as those who are willing to pay a heftier monetary price to get in will get the good (a chance to play on Bethpage).


B.
1. If Bethpage State Park is getting its money, why does it care if people are "beating" the system? No one is stealing money from the course as it is receiving its full entry free from NYGS.
2. What would happen if Bethpage State Park raised their prices significantly? Would that have any effect on the business NYgolfshuttle.com? It might since quantity demanded would probably decrease, lines/demand to get in the park might decrease as well, and then the company could go out of business.
3. Does Bethpage even have a right to be upset? Is NYgolfshuttle.com doing anything wrong? Economically, it seems that the website is doing people a favor by rationing the tickets through the price system, so is Bethpage actually the wrong ones in this situation for being upset at what NYgolfshuttle.com is doing?


C.
This article talks about how the demand is very high to play golf at a US Open Golf Course, Bethpage (N.Y.) State Park and this very much affects the allocation of who gets to play on the course (known in the article as "tee-time allocation". The demand to play at Bethpage is arguably higher than any other golf course in the country. The factors that lead to this are:

1. The course is located right outside the most populated area in the country
2. The course had a recent $3 million renovation that made the courser nicer than it already was
3. The cost of admission is modestly priced in comparison to other professional golf courses. Prices are between $60-$120 depending on where you are from.

Bethpage presents golf fans the best chance to play at a US Open golf course at a cheap price, so there are few, if any, substitutes for the course. The effect of this is humongous lines for customers to get a chance to play on the course. The lines are so large that many people are turned away from playing on the course despite the fact that they have waited in line for hours on end- there are only so many hours in a day, and quite often, the golf course will close for the day or reach maximum occupancy while many people are still in line.

As we learned in class during a lecture, people are forced to wait in line to get in to the course. Thus, the rationing of who gets to go in has to do with who is willing to wait the longest in line. But people are wasting time waiting in line (they could be out producing or doing something more productive for society than waiting), so this is an ineffective way to ration.

Because of the difficult to get on the course, a business was born: NYGolfShuttle.com (NYGS). They take care of setting up reservations for people to get on the course and they charge a lot more money than does Bethpage. It costs $850 for one person or $450 per person for a foursome. Because of NYGS, there is now an effective rationing mechanism in place: the price system. Those who value playing on the course the most will pay the most and don't have to waste time waiting in line. 

Simply put, NYGS is a company that "scalps tee times". The way NYGS operates is by getting a customer to give his/her information (credit card, name, address, etc.) to them. NYGS then hires a ton of people to basically wait in line or call in for a reservation on behalf of the customer. Doing this greatly increases the chance for the customer to get a tee time.

This practice is by no means illegal, according to the article. And as I wrote about in Part A, it is actually very good for the economy (although Bethpage employees are against it). In short, this "side deal" helps everyone get what they want and makes us more wealthier because more money is spent, jobs are created, and the customer gets what he/she values without having to waste his/her time waiting in line.

Reading Assignment #12- Euvoluntary Exchange, Exchange is Immoral

A.
I am extremely happy that I chose this article to read as I found it to be a fascinating and fun article. Even more than that, I thought it very much applied to what we are learning in class about rationing mechanisms (specifically the one about rationing mechanisms and lottery) as well as how over regulation of government can lead to stagnation (which has been an underlying theme of many lessons throughout the semester.)

One aspect of the article I found interesting was how the author "Mungowitz" shows how little options students have with a lottery. We have learned that the lottery rationing mechanism is not really ideal because it:

• Does not provide people with an opportunity to get what they most value
• Makes it difficult to plan for the future

For the students at Duke, and in the article's case, the fraternity Iota Tappa Kegga (ITK), certain students desire certain residential areas for specific reasons. ITK wanted a hall close to campus that is generally noisy. 

But because of the lottery, and the limitations the Duke housing office placed on students, it was impossible for them to get what they wanted if they could not find a willing group with whom to trade. 

This goes back to the barter economy lesson we had- without being able to pay another group for the housing they wanted, ITK would have to waste a lot of time searching for a group with whom to trade. All of that wasted time would come at a huge opportunity cost for EVERYONE in society because of how much time ITK could have used to produce or do something else more productive, even if it was just for their own well-being.

I found it very interesting- and completely mind-boggling- how the Duke housing office would not allow students to exchange money for the housing they wanted. If they allowed this, everyone would be better off. ITK would have gotten what they wanted, the baseball stat group would have gotten what they wanted, everyone would have been happier and better off. It just makes absolutely no sense why Duke administrators would not allow this.

I also found one point made by Mungowitz to be eye-opening. In his article, he writes: "One of the features of a lottery, of course, is that the assignment of a group to a space allocation has zero, zilch, bagel, nada to do with how much that group VALUES that location."

This is so true and explains why a lottery is such a poor rationing mechanism. People have different wants and wishes, and in the case of the housing at Duke, a lottery gives people certain housing in spaces that they may not want at all. A lottery limits the options of people and when "exchanging" has been outlawed, much more people lose out than would have if Duke just allowed people to exchange or ration the housing by a price system- that way, everyone would get the housing at a price each party values.

B. 

1. Why does the Duke University housing office feel the need to control the students and not allow them to exchange? In other words, what makes "trading" acceptable, but "exchanging" not acceptable.
2. Is the regulation that Duke's housing office imposes that types of problems we face with over-regulation in everyday society by governing bodies? If these types of regulating-bodies were not in existence, would we be better off?
3. Would anything actually go wrong if Duke allowed people to exchange housing in the format that the author "Mungowitz" shows? Obviously the Duke housing office is concerned that something bad will happen as a result of money transfers, so would whatever they are worried about come to fruition if students still went ahead and exchanged money as part of the housing trade?

C.

In this article, the author Mungowitz explains a scenario at Duke University in which the housing office prohibited students from exchanging.

It all started when Duke's housing office (DHO) decided to implement a lottery system to ration out residential halls.

As a result of this, many Duke students considered making trades to get the housing the wanted. Except these weren't normal trades, these were exchanges, where groups would exchange houses and in some instances, even money. As Mungowitz points out, this money is often referred to by economists as "side payments."

The example that Mungowitz gives is that the Baseball Stats Study Group (BSSG) gets placed to live in the middle of campus where it is noisy and ITK gets placed off campus. But ITK wants to "be in the middle of things" and BSSG wants a quiet area to study (it is loud in the middle of campus) but also likes the location of the middle of campus because it is close to the academic buildings.

To offset the cost, ITK would be willing to exchange residential areas with BSSG and give BSSG added compensation ($5,000). BSSG valued having $5,000 and the off-campus residence than just having the on campus residence while ITK valued giving up $5,000 and having the on-campus house than living off-campus.

Thus, everyone is happy and everyone is better off because each group gets what they value. 

But then, the DHO found out about the monetary exchanges going on, as these were not the oly two groups exchanging this way. DHO was outraged and sent out a letter to the students, effectively making it illicit to "exchange" where money is involved, but legal to "trade" housing residences as long as no money is involved.

Mungowitz questions the motive behind the DHO doing this (as do I). By enacting this rule, it prevents people from making an exchange that would better countless groups around campus and make people wealthier. 

I wonder if the DHO would be more willing to legalize these "exchanges" if they received a portion of the money being exchanged. 

Based on my experiences dealing with the U of R financial aid office and the like, I have to think that the DHO would indeed be more willing to allow these transactions if they received some of the pot (in short, it is all about money!!! currency!!!- this is especially true in a world where almost everything is rationed through the price system!!!)

Reading Assignment #11- World War II Propaganda Posters

Prompt: please look at the following images and discuss them particularly in the context of what supply and demand suggests how we can think of this issues illustrated:


Poster 4: This poster can be related to our class discussion on Friday. We talked about how when there is a drought, the government mandates that water be preserved. But, as Professor Rizzo points out, that is truly not enough to preserve water. A price needs to be associated with using water in times like that because when prices are higher, people are less likely to use water aimlessly due to the high cost.

So, this poster talks about "Waste Helps the Enemy" and how we should "Conserve Material". In my opinion, this propaganda poster is not enough to preserve the goods. The poster needs to somehow explain HOW waste helps the enemy and how conserving material is less costly than is not conserving material.

In short, this poster is trying to show how we should maintain the supply of a good by not wasting it. But once again, going back to Friday's lecture, without quantifying what the cost is, it may not be successful in conserving the good, as we saw with the water example Prof. Rizzo gave us.

Poster 10: This is a very interesting propaganda poster which shows a man driving a car and an outline of Hitler in the passenger seat. The poster states: "When you ride ALONE you ride with Hitler!" and "Join a car-sharing club TODAY!"

Connecting this to supply and demand, I would say that this advertisement is advertising the idea that we should reduce the demand of cars, which would increase the supply. The advertisement is saying to share cars. If people share cars, people overall would demand them less because instead of lets say every single person in a household having one car, there might be only one per family. And if families consider that to be sufficient, demand for cars would decrease.

As a result, that means that supply of cars would increase. Less of a demand for cars would translate into less cars being bought. With less cars being bought, there would be a much higher supply of cars that were not sold.

Poster 19: This poster is a slave poster which says: "This World Cannot Exist Half Slave and Half Free" and "Sacrifice For Freedom".

This can be connected to Poster 10. What the advertisement is trying to tell us is that we can't live in a world that is half free and half not-free, and that freedom for all is the best way to live. Thus, the poster wants us to "sacrifice" the slaves people owned so everyone can be free.

If people did this, demand of slavery would definitely decrease- if everyone were free, than that would be a result of people not wanting to own slaves anymore. Thus, the demand for slavery would decrease.

Those people who were slaves, however, would no be free. But, if we thought of them still as slaves, the supply of slavery would spike up dramatically. If slave owners decided to get rid of slaves, there would be a lot more available to have because less were being used.

Poster 31: This poster includes a blonde woman with her right hand raised. The poster reads: "I pay no more than top legal prices" and "I accept no rationed goods without giving up ration stamps".

I believe this poster has a little to do with rationing mechanisms and supply and demand.

The first quote on the poster says that we should not pay anymore than top legal prices. Thus, if prices are above legal prices, it appears that demand would decrease and supply would increase as a result, as explained in the posters above. At the same time, if the price for goods were below the legal price, and we were to follow these instructions, demand would increase and supply would as a result decrease.

The second quote is an example of a rationing mechanism, something we have discussed in class this week frequently.

Ration stamps, it appears, are a form of currency like money. Perhaps the poster is also implying that some people receive rationed goods without having to give up ratio stamps, which is not good either.

I'd like to connect this to the discussion we had in class about the swine flu vaccine Prof. Rizzo talked to us about. He told us that the way the flu vaccine dispersion worked was as follows: the vaccine was distributed to different counties, and the county governments were free to pass out the vaccine any way they wished. The way it worked was that whoever "needed" the vaccine, got it. It didn't cost more money for people who needed it more as no price was attached to it. It all had to do with how much each person claimed that he/she did or didn't need it.

As Prof. Rizzo points out, this is not good because some people received it who didn't really need it. That is why the price system is so good- those who need a good are most are willing to pay the highest price, which is why it is a good rationing mechanism.

So, back to the poster. If people were accepting rationed goods without paying, that is not good because then people who truthfully need the goods may not be able to do so since supply would be lower. It is important, in this case, to only accept rationed goods when paying for it because those who need it most are willing to incur the cost of paying for it. If it is given out freely, than demand would shoot up for the goods because people will want to get the goods in case they need it for the future, while supply would decrease as a result which could cause certain people not to be able to get the goods of which they are in dire need.

So, I think the 2nd quote on this poster is a very legitimate piece of advice. If everyone follows the price system (in this case, rationing stamps) we are all better off.

Reading Assignment #10-The Theory of the Leisure Class

A.
Overall, I did not find this article to be interesting, but one or two points did peak my interest.

I found it interesting how the author points out that productive labor is the lower classes means of acquiring goods. It is pretty interesting in my opinion how lower class and leisure class differ on what types of jobs are successful- the leisure or upper class wants to have ownership jobs while the lower class is more than fine having production type jobs underneath an owner.

One final thing I found interesting was the reading pointed out that it has been traditional belief of the leisure class that women should prepare the luxury foods for leisure class men to enjoy, while lower class citizens do not think this way.

I found this interesting because in today's day and age, that really is not a pragmatic way to think of things- more and more, women are working prominent roles in businesses and to an extent, there seems to be somewhat of a role reversal, as more and more than ever there are stay-at-home men.

That part of the article piqued my interest because it made me think how much our traditional beliefs are changing. I really do feel like people, especially leisure class people, are less and less attributing these types of descriptions to women.

B.

1. Why do we attribute certain behaviors to certain classes? Why is it typical according to traditional practice that women produce the food and men consume it, as is show to be prevalent in the article surrounding the leisure or upper class?
2. Why is it that working classes interests lie mostly within the industrial employments? Why do they accept the industrial employments while the leisure class rarely does so?
3. How did the two categories in modern economic institutions come about- the pecuniary and the industrial employments?

C.
This article described traditional beliefs and practices of the leisure class versus the working, or in many cases, the lower class.

The first few pages we had to read talked about how productive labor is the lower class's ordinary means of acquiring goods and this is especially true when a community is at an agricultural stage of industry.

These lower classes also tend to not be lazy and do no avoid labor in any way because labor is their accepted way of life and they take pride in efficiently working since doing so is all they truly know.

Then the author discusses the superior class's ideals, which includes not accepting the thought of being inferior. The superior class does not like having to report to a master and doing traditional labor is a debasing practice to many in the superior class. Also, for these types of individuals to be satisfied, it is not sufficient to just have wealth and power--> they must be able to buy material stuff so as others can witness their wealth.

On the second group of pages, the author writes about the ideal of the superior class that men should consume what women produce. This is a traditional belief (a belief that I believe is changing), especially when it comes to preparing luxury food for the luxury working men to consume. Thus, a signal of being in the upper class for many is being able to consume luxury foods at the hands of women.

On the final set of pages, the authors explains how there are two categories in the modern economic employment world: the pecuniary and the industrial. The pecuniary refer to ownership positions and industrial refers to production-type work.

The leisure class employment interests lie almost solely within the pecuniary employments. The working class can indeed fit into the pecuniary employments, but the majority of the time, they strive for the working/industrial class of employments.

A key note the author shared was that the way to enter into the leisure class is by being having a pecuniary employment. This reason behind this is because as the author writes, the pecuniary employments are the "captains of industry."

Reading Assignment #9- The Economic Organisation of a P.O.W Camp

A.
Overall, I found this reading assignment to be very interesting. It opened my eyes to how a market develops spontaneously.

I'd have to say the most interesting thing I gleaned from the article was just that: the development of the market.

Truthfully, before I read this article, I never stopped to think about why or how a market comes into existence. It was amazing to me how the market developed spontaneously simply because people had desires and wants, which led to people exchanging, which in turn led to a market being developed.

I also found it fascinating how cigarettes became the currency used in the market because outside of the camp, cigarettes would not have had nearly the same value- it is interesting how one man's gold is worthless to others, as a cigarette for a normal citizen who was free at that time could not buy much in the free world.

One other thing I found interesting was how much the market thrived with little regulation- when the store and restaurant owners began regulating the prices and market, sales started dwindling. This exemplifies how little regulation (a-la laissez-faire) can help a society economically.

I also found it fascinating how when the Red Cross failed to deliver a certain number of cigarettes, prices dwindled and deflation/inflation occurred depending on the number of cigarettes in circulation. This perfectly compares to the currency we use in our society- money. When there is too much in circulation, inflation occurs, while deflation occurs when there is a small amount in circulation.

In essence, I thought this article was a very worthwhile read as it encompasses a number of different themes and topics we have learned/discussed thus far in ECON 108.


B.

1. What is it that leads to a market being created?
2. Is the market that was created in the POW camp an accurate representation of how markets in countries and around the world were created?
3. How does a market decide what the currency will be backed by? In the POW camp, currency was cigarettes. Does it just have to do with what, collectively, the most valued item is?

C.
The 11-page excerpt from a book, written by R.A. Radford, basically explained the development of a market in a Prisoner of War Camp (POW=Prisoners of War) during WWII in 1944. The market thrived for much of the story and was free from regulation until the end of the story, when regulation started taking place. And of course, the market was created spontaneously, which is a theme we have learned about through economics this semester.

The market described in the POW camps were all based on trade and exchange between food, attire/desirable items, and cigarettes, which turned out to be the most valuable currency (more to come on that later).

The article begins by explaining the development of the market. For the purpose of getting the point across, I am just going to explain what went on in the German camp, as several different camps were discussed in the excerpts but the German camp is where the majority of the action takes place.

Initially, when the writer arrived at the camp, prices and values started to develop for different foods and items. You see, the Red Cross would deliver rations of different necessities to the POW, so the rations can be referred to as the source of "income" for the POWs.

Trade values started to come into existence after these rations were delivered- certain foods/items were worth certain values, and thus, these foods/items were traded for other things. Diced carrots, for example, were worthless and a cigarette was worth several chocolates.

Eventually, everything was traded not in terms of other foods but in terms of cigarettes. Cigarettes, which were highly valued by the POWs, became the new currency of the POW Camp.

Additionally, an "Exchange and Mart Notice Board" was put up in the camp to list offers from different people, so people could be aware of what was up for sale. This, in a way, was a type of middleman, as it allowed for buyers and sellers to come together and see what means needed to be met to make a deal.

A lot of commercial organization developed in the German POW Camp, as a shop with public utility that was controlled by officers on a non-profit basis came into effect. With the new currency in cigarettes, bartering was now at a minimum and everything was bought like a real retail store with currency in the form of cigarettes.

Thus, a market came into existence without labor or production. It was all based on spontaneous operation, with prices being fixed by supply and demand (sometimes cigarette amounts were not as great for whatever reason which led to deflation and vice-versa).

There was some labor in the form of offering services for cigarettes, as well as the shop and eventually the restaurant, but ultimately this was a market based on no regulation that developed from the Red Cross dropping off rations at the POW Camp.

As I stated above, economic instability occurred when cigarette amounts dwindled. Weather conditions and rumors affected prices for items as well. Simply put, just like our economy, changes in conditions affected the price level and structure.

Later on, paper money began to get issued that was backed 100% by food. This paper money was called the Bully Mark (BMk).

Eventually, when the POW Camp was bombed, BMk began to fall because of the shortage of food. If BMk could've been tied to cigarettes, it would have been like a real money currency that we have today. Once the BMk came into existence, however, regulation in the market really took off.

Towards the end of the camp, the shop and restaurant that was created on the camp took over the "Exchange and Mart Notice Board" and started regulating the market. Prices increased as the "middleman" had to be compensated for his work.

Eventually, public opinion went against these middlemen and the idea of regulation fell and everything returned to as it had been before (at least somewhat to what it had been like before), with cigarettes being the main currency in society.

At the very end of the story, the 30th US Infantry Division arrived with elements. Radford used this occurrence to show how having infinite products causes economic organization and activity to be unnecessary since every "want" people had could be met without any effort or work.

Reading Assignment #8- Paul Krugman Articles

Article #1: Ricardo's Difficult Idea

A. 
Truth be told, I found this article to be extremely trite and boring. But, I did feel like it brought up a couple valuable point. I guess the most interesting part I got out of the article was how according to Krugman, many people in society (including economists) have strong economic ideals/values, yet they don't understand/are unable to grasp basic economic principle that is vital to understanding such economic phenomenons as comparative advantage.

Because of this, several economists and non-economists are against comparative advantage. It is not necessarily because they think it is untrue, but rather, because they don't understand the complete phenomenon.

This misunderstanding of comparative advantage causes many intellectuals to refuse to talk about comparative advantage.


B.
1. Krugman argues that people who don't understand certain economic principles disagree with comparative advantage. Are there people who do understand these economic principles but also don't accept comparative advantage?
2. If the answer to the above question is yes, why do these people disagree with comparative advantage?
3. Why or why not is comparative advantage an important economic principle?

C. 
Krugman's article basically gives reasoning for why certain economic intellectuals and non-economists reject comparative advantage. The reasoning he ultimately gives is that these people who do reject comparative advantage simply don't understand the phenomenon fully because they are lacking understanding in certain economic principles.

As Krugman explains, comparative advantage implies that trade between two nations raises the real income of both. Many people who disagree with comparative advantage also do so because they reject the idea of understanding the world in mathematical terms, which effectively is how comparative advantage looks at the world.

Specifically, Krugman also talks about people's rejection of Ricardo's idea, which in less words is that: we as a world/society will be able to produce more if everyone/every country specializes in what they are good at and abandon trying to produce what they aren't good at. This would make the world more productive with a lot of trade.

Krugman is convinced that those economists/non-economists who reject this idea and comparative advantage do so because they don't full grasp the concepts of it.

Krugman also discusses how he believes some people reject these ideas because most people aren't interested in reading/hearing about confirmation of old economic ideas, such as that of comparative advantage. People want new fresh ideas or ideas that challenge established beliefs. Thus, many people go against comparative advantage to accomplish that.

Krugman concludes his story by explaining what, in his mind, can be done to fix these issues:

1. We need to understand that even renowned economists may be lacking in the understanding of simple economic principles
2. We need to support old/accepted economic ideas because even though they have been around for a while, they are accurate in many instances
3. We must explain our economic reasoning and can't assume people understand our economic ideas and modeling even if they are learned in the economics field

___________

Article #2: In Praise of Cheap Labor

A.

I found Krugman's piece to be much more interesting than the previous article. The one thing I found most interesting was his outlook on low wages. I have always wondered how it is fair that people in third world countries get paid so little to make us Westerners items we covet. But, I found the article Krugman makes in favor of low wages fascinating- and truthfully, very logical.

Krugman argues that if we as "wealthy" Westerners refuse to buy from cheap labor companies in Third World Countries, we are ultimately ridding these poor people of the best opportunity they have for progress, simply because our values say that it isn't right for low wage workers to make our luxuries for us.

I also found it very interesting how Krugman argues that if we do refuse to buy these products, we will be hurting the Third World Countries even more. Without these means of income, many poor people in these countries will have no jobs at all and will have to live in "garbage dumps", i.e. Smokey Mountain, to make ends meet.

And if we do decide to pay them more with higher wages, that would be harmful as well because it would create distinct social classes where a few people are wealthy, while the majority of people who don't have jobs would be extremely poor. Not to mention, it would be difficult for companies to be able to hire such workers so it is possible than an increase in wages would cost more people their jobs.

B.

1. Is there a psychological reason for why people feel so against receiving items from third world countries where wages are so low? If so, what is it?

2. Has anyone ever tried increasing their wages to see the effect it would have on their economy? If so, what did happen?

3. As a westerner, is it really in the third world countries' best interest for us to continue to buy from them even if the wages continue to stay low?

C.

Krugman's article begins with him explaining how some people in third world countries live/work on a garbage dump known as Smokey Mountain looking for scraps they can sell for money. He goes on to show how the biggest beneficiaries of globalization are Third World Workers.

Very interestingly, Krugman goes on to show how low labor wages in third world countries have led to  progress in those countries. For reason's we can't fully grasp, these labor forces reduced the disadvantages of production in developing countries to that of first world and western countries. 

Simply put, low wage labor allowed developing countries to break into world markets, which has led to the improvement in the lives of ordinary people.

The main reason why these low wage labor forces has led to relative progress in many of these developing countries is because they created competition among companies to get the most productive/efficient workers. While this hasn't happened in all instances, this progress has allowed many people to get off garbage dumps and "Smokey Mountain" and move from abject poverty to living conditions that are still bad, but are much, much better.

Finally, Krugman goes on to argue why low wage labor is actually a good thing for the countries who have it, despite many people in the western world believing it is an unethical behavior. (to see the reasons why Krugman argues it is not actually unethical to have low labor forces, see part A of this entry).
_______________________________
Article #3: A Raspberry for Free Trade

A.
I found it interesting how Krugman argues how people will fight against low wage labor, but few will ever stop to realize how a country actually thrives on low wage labor. Without it, some countries would have very few means of income.

This begs the question whether or not people are against low wage labor because it is unethical or because it takes away jobs in America. According to Krugman, he says it actually creates different jobs and more competition, which is good. Low wages maybe aren't so unethical since some countries rely on it to thrive as a society.

B.
1. Why do people find it so wrong that there is low wage labor?
2. Has anyone ever went over to countries to analyze how third world countries are run with low wage labor? If so, what have these people found?
3. Are conditions really that bad in third world countries due to low wage labor or is the low wage labor helping those countries prosper?

C.
Krugman tells a story of imported raspberries and uses it to illustrate a point about globalization. He begins by talking about how Clinton asked for legislation that would allow him to ban the importation of raspberries from countries that don't have adequate health regulations. Opponents of globalization then came out and said why is it ok for the government to prevent trade of raspberries that hurt us, but not trade itself that hurts our economy/jobs.

According to Krugman, however, it is NOT the same thing. He asks how opponents of globalization would've reacted if the story was a bit different.

He points out how people's arguments against low wage labor might come about because their industry in America is faltering due to the sale and consumption of these low wage products. In reality though, the nation (Freedonia) might actually be booming, just people might go against it because they want to save their own industry.

In short, the point of the story is to argue against how complainers who are against the third world trade industry mix up protecting people from tainted products from third world countries and protecting workers from competing products. In reality, the competition is good.

Reading Assignment #7: Individualism vs. Altruism

A.
Truthfully, I did not find the document to be overwhelmingly interesting, as most of it was just a bunch of notes. But I did find a couple examples that were provided to be interesting to think about.

One example of altruism that really stood out to me is the one about saving a stranger child who is drowning over your own (see part C below for the example I am talking about).

Like the document discusses, a truly altruistic person would elect to save another child over one's own. I'd be hard-pressed to believe that any single person in the world would prefer to save a child who is a stranger over one's own child. This just is not a pragmatic concept. I found this example to be very interesting and it made me think that the document is completely right: no one in this world can be completely altruistic.

One final thing I found interesting was how individualism is actually beneficial to our society. The document does a beautiful job explaining how thinking in one's self-interest actually benefits all because it spurs more production and exchange. This idea made me think that when people do something I consider "greedy", maybe it is not greedy at all. If a person does not want to donate money to a charity, maybe it is not greedy on his/her part because he/she might spend that money elsewhere to spur economic growth that could help more people than the charity could.

This made me think that when I call someone greedy, maybe it is actually me who is the greedy one since I am not looking out for others well-being, but rather, the people's well-being who I believe are more important.


B.
1. What would our world look like if everybody truly was altruistic? Would we have a productive economy with technological growth or would the world be stagnate as it once was prior to the Industrial Revolution?
2. Were/Are there ever any completely altruistic societies, and if so, how did/are they fare/faring?
3. Can a personal actually be considered selfish/greedy even if he/she is taking his/her self-interests "too far?" This document shows how acting in one's self-interest is actually good for society in many ways, so, are the people who claim that self-indulged people are greedy actually the selfish ones?

C.

This compilation of a book excerpt/notes included an excerpt from Hayak's book, in which he discusses the meaning of Extender Order as well as the idea of individualism vs. altruism.

The document begins with discussing how the morals of the market economy cause us to benefit others, but this isn't the case because we intend to do so.

In short, we benefit others because the market makes us act in a manner that allows that effect take place. According to Hayak, the Extended Order is to thank for this. The extended order is simply what happens when a system embraces specialization and trade and thus constitutes an information gathering process that no governmental/high authority or any one individual could know how to attain.

The document later goes on to discuss how our moral obligations extend ONLY to our own values. For example, if I provide financial charity to a mohair farmer, I am not doing it as an altruistic action. Rather, I am doing it because of my values. Maybe I value human life, and therefore, it is in my best interest to donate to this farmer.

Another great example this is provided in the document is one about attaining wealth. Let's say I want to become wealthier for my own personal well-being. But to do this I must, as the article puts it, "enter society and become a social being."

This simply means that I have to trade and produce to attain wealth, which are actions that benefit everyone else in the economy. This shows perfectly how when one tries to act in his/her own self-interest, he/she is being altruistic even though he/she may not have necessarily meant to have been.

The individualism segment of the document concludes with the idea that individualism is the basis of the institution of private property- altruism rejects private property, and I have learned throughout this course, property rights are vital because it gives people incentives to work harder/produce more/exchange more.

After this segment, the article discusses altruism. Here are some notes from that section that were important:

1. Altruism: one's devotion to the interests of others more than one's own interests
2. There is nothing wrong with having the best interests of others in mind, but the bottom line is that an individual will almost always be more likely to be motivated by his/her own values than others value.
3. The morality of altruism is simply: sacrifice
4. A couple great examples of why altruism is not as realistic as it may seem:
1. If a friend is in financial trouble, you may give him money. While this may seem like altruism, it is not. Clearly, by giving your friend money, you are showing that the satisfaction you receive by giving your friend money is of greater value than the money and the material goods the money represents.
2. Many people consider themselves altruistic, but think about this: if two kids are drowning and one is yours and another kid you don't know. You can only save one kid. Which one would you save? Almost definitely your own child. If you were a pure altruist, you would pick the stranger because you'd be thinking in the best interest of others above your own interests.

Reading Assignment #6- "The Most Unusual Day" and "An Academic Episode"

"The Most Unusual Day"

A.


Overall, I found the article to be extremely interesting. We have been learning in class about the "Law of Unintended Consquences" and this article can absolutely be applied to the law because of the fact that there were consequences the government wasn't necessarily expecting: that people would alter their births to get the bonus, which in turn, increased the amount of people delaying their births and made the hospital very crowded in July. I found it very interesting how a policy can indeed have inverse effects, and this article was proof in the pudding.

I also found it interesting how Gans pointed out how usually, governments try to avoid giving citizens an incentive for fraud on medical decisions. The government in Australia, in Gans words, did this to save $100 million. It is interesting because clearly the Australian government weighed the costs/benefits of its policy, and in the end, came to the conclusion that the benefit in ultimately promoting medical fraud outweighed the cost they would endure.


B.


1. What was the ultimate goal of the Australian government to pass this policy? What, besides saving money, did they think they would get out of the policy?
2. This is more of a question that would require research, but I am interested to know the answer nonetheless: Did this policy cause any babies to pass away from parents trying to prevent a birth to take place later than expected?
3. Why is it that people value money so much, they are willing to risk the health of their baby to gain extra money? Why is having a healthy baby not an incentive enough to give birth?


C.


Josh Gan's article starts off discussing how there are several unusual days in the world. According to Gans, however, none is more unusual than July 1, 2004- the day the Australian government began paying $3,000 for every baby born.

The Australian government was doing this to save money, but their reasoning was to offset the costs that mothers incur when having a new/not being able to work because of maternity leave.

This policy passed by the Australian government is called "The Maternity Payment" or the "Baby Bonus" and it was set to rise to a $5,000 bonus by July 2008.

Gans, who was expecting his third baby, talked to his wife about having his baby in July to get the bonus. The author believe that he was not the only one thinking this way- he was expecting that ultimately no births would occur on June 30 because people would want to get extra bonus.

The data about child births since that policy was passed is now officially out. The results show that over 1,000 births across the country were shifted as a result of the new policy. He knows that this was the case because "normal" delivery statistics remained unaffected, but all the inducement and cesarian statistics went up. Also, June was a low month for births while July was unusually high. In fact, 25% of all births were shifted by more than 2 weeks.

A result of all of this? When Gans went in to have his baby born, the hospital was completely overwhelmed. This shows an unintended consequence- perhaps the Austrialian government didn't expect people to create fraud. Next time, Gans pointed out, he hoped that the hospitals would be better prepared/staffed.

The end lesson Gans pointed out was that the Australian government shouldn't introduce policies this was so as not to create such an incentive for people to produce fraud- and alter birth dates.
________________________________

"An Academic Episode"

A.


I found Stigler's article to be quite interesting in one particular way: how he tried to show the results/effects of unintended consequences. In class earlier today and last week, we talked a lot about the effects of unintended consequences. This article perfectly illustrates them.

Throughout the article, Seguira continues to make new policies that he thinks will fix the problems that are going on in his university. While the policies do indeed fix the problems in one regard, other problems are born from these new policies. This is the perfect description of unintended consequences, because Seguira did not in any way expect these issues to arise when he enacted his new policies.


Thus, I found the clever way that Stigler was able to weave the concept of unintended consequences into a story the most interesting part of the article.

B.


1. Why is it that Seguira did not comprehend that by continuing to make new policies, more issues were caused? Why did he feel the need to change something that already ran somewhat smoothly?
2. How much do unintended consequences play into policy maker's decisions to enact a policy? Do policy makers even try to consider what unintended consequences might come about from enacting a certain policy?
3. In the end, did Seguira honestly think everything was better than it was before he enacted his policy? What does the end result of all of his policies say about trying to change the landscape of the labor force?


C.


George Stigler starts off his article mentioning how he believes we run our universities backward and then progresses into a story about a president (Seguira) of a university in South America.

In June of each year, any member of the faculty (including graduate students) could challenge the person who had the position immediately above him to a competitive examination. Impartial judges would judge the competition and whomever won would get the higher position/salary.

This new policy at the school led to many unintended consequences, something we have been learning about in class a lot.

Some results of the new policy included:

1. Libraries had an unprecedented rush- the older professors who had higher positions started working harder and studying more.
2. People began to hoard their knowledge, worrying that sharing any knowledge could lead to someone getting an upper hand in the competition
1. A result of this was that the graduate students started to receive less sufficient education

Seguira was understandably concerned about the lack of teaching that was taking place after his new policy was put into effect, so he began granting 5 points per teacher whose students won a challenge. The points would go towards a teacher's point total in the competition, and Seguira believed all of this would promote teachers to teach again. But then this led to a paradox in one instance:

• One professor was challenged by seven of his grad students, they all did better than him on the exam, but his 35 points he received helped him win the victory.

The ensuing fall, less grad students enrolled because all who could afford to do so went to study in the US. People then realized that the grad students were doing this to study the examinations in another country. This proved to be a smart idea for the grad students: Of the 61 students who spent the year in the US, 46 won their challenge the following spring.

To prevent this from happening again, Seguira presented more policies which led to unintended consequences:

1. The exam would be given by professors chosen at random from the US, England, France, Sweden and German. Now, if a grad student went out of the country to study, 4 times out of 5 he'd guess the wrong country.

In the 3rd year, it became apparent that research almost stopped completely because all the professors were putting their time towards preparing for the challenge. Thus, Seguira made a new policy, giving the professors more of an incentive to publish work: 2 points for every article and 7 points for each book published. 

1. More unintended consequences: research did revive a bit, but the research was not nearly as good since the professors were rushed to get it completed before the following year's challenge.

This all probably would have continued on forever but Seguira received a new presidential position at a very good South American university. He accepted, but before he left, he made one final amendment: A man could receive a permanent number of points the department chairman deemed fit when an offer was received from another university.

This allowed Seguira to move up to a higher position.

Reading Assignment #5-Theaters and Fine Arts

A. 
I thought that Bastiat provided a couple interesting viewpoints pertaining to subsidizing certain professions, specifically art. Overall, I found the article be quite interesting.

One of the most interesting parts of the article was how Bastiat talks about how subsidizing one profession lowers the wages for other professions- I never really thought about the act of subsidizing by the government in this matter.

If one profession is subsidized, it comes at the expense of other profession's wages unless taxes are increased. Because increasing taxes to subsidize artists is not really a pragmatic idea in many instances, it is just not feasible to easily subsidize artists as Bastiat argues against.

I thought that this point by Bastiat really points out how in economics, there is always a cause and effect- one economic decision effects economic outcomes in many ways.

I also found it very interesting how Bastiat argues how subsidizing artists would not be a great idea because regulating that industry could come at the expense of creativity. He points out that by regulating the art industry, there would be less freewill to make certain art because maybe the government would refuse to compensate certain artists for certain types of paintings (if let's say, the paintings were considered inappropriate by governmental standards).

In short, I really do agree with Bastiat's point- not subsidizing art allows for more freedom among artists. Artists can create whatever they want based on their feelings and receive compensation from people who buy their work. By not having governmental regulation, artists do not have to worry about whether or not their paintings will be "accepted" or subsidized by the government.

B.
1. Why is it that some people believe that economists want art to be abolished when economists claim that art should not be subsidized by the government?
2. What would be the economic result of subsidizing artists? As in, would doing so hurt or help our economy?
3. Do artists actually need to be subsidized for their work? Would doing so promote more or less artistic innovation/creation?

C. 
This article covers whether or not the government should support- and subsidize- the arts. The author, Bastiat, believes that the desire to make art should not come from the government subsidizing artists, but rather, from "below", or in other terms, from the desire within artists to create. He doesn't believe that artists should be motivated by state compensation- he feels that they should be motivated by the artists themselves.

Bastiat goes on to claim that many people consider economists who argue against the state subsidizing artists to be against art altogether. But Bastiat argues that economists who think this way don't want art to be abolished at all.

In fact, Bastiat wants no governmental subsidation because he wants the state to protect the free development of those types of human activity, so that artists can create whenever, and about whatever, they want.

Bastiat then goes on to how how people who are against Bastiat's economic thinking believe that if an activity is not subsidized, it will eventually be abolished. In the case of art, Bastiat argues, this is not the case at all.

The final argument Bastiat goes on to make is that by taking tax money to subsidize artists, there will be lower wages of other jobs such as plowmen, road construction workers, etc. Thus, more money would be given to artists than these other workers. And who is to say that these other workers are less important than artists?

Reading Assignment #4- Aspen Ideas Festival Debate

A. 

Overall, I found the points made by Justin Wolfers and Robert Frank to be quite interesting. Broken up by what each of them had to, below is what I found to be most interesting:

Wolfers:
Wolfers did an extremely good job arguing that overall, people become happier as their income increases. What I found fascinating was that he showed the happiness trends in the US. According to Wolfers, in America, most people haven't had income gains, which explains why Americans aren't necessarily becoming happier.

I found this fascinating because as one of the richest countries in the world, I assumed the US was experiencing income increases. But perhaps as we learned in class, we are not experiencing such astronomical income growths as we did in the past because or economic growth is slowing down.

One other very interesting point Wolfers made was that while it appears income growth is directly correlated with happiness to an extent, it is NOT the desire of all humans to be rich. A perfect example of this is how no one goes from moving from poor America in southern Texas to northern Mexico, where those same Texans who may be poor would be extremely rich in Mexico, a poor country. Thus it appears we are all giving up the option of being rich in a poor country.

Frank:
As I explain in part C, I did not find Frank's argument to be that convincing, which really wasn't his fault. It is difficult to argue something that is proven untrue by statistical evidence, which is why in my opinion, Wolfers had such an easier time arguing his point.

This hockey player didn't wear a helmet, perhaps trying to gain a competi-
tive advantage. As Frank points out, this resembles the real life economy.

Nonetheless, Frank really did present some fascinating points that sort of proved that it is not necessarily money that makes us happy, but how we as human beings feel in comparison to other humans.

I really found Frank's example about how hockey players are a good example to show how competitive advantages in society work to be very interesting. He asked the question: Why do hockey players often wear no helmets when they have the chance to, but they will often vote to make helmet wearing a requirement?

Frank's response: If one person takes a helmet off, that player gets a competitive advantage because he can skate faster and move around easier on the ice without having to worry about a helmet on his head. The other team's response to a player taking a helmet off, however, is that they too take their helmets off. The end result is that now everyone skates without a helmet and neither team gains a competitive edge, and we are right back to wear we started.

I thought this was an interesting way to look at competitive advantages in the market because one of the things Frank was trying to show is how valuable competitive advantages are in the economy. In the case of the hockey players, they were willing to risk their lives by taking off their helmets. But competitive advantages are so desired, it is worth such a big risk.

I also found Frank's points about relativivity to be very interesting as well. He talked about how people set the bar for wealth in many instances. Take a mansion for example. People consider a mansion to be a house that is bigger than what is considered a normally sized house. But, if you live in a poor country where houses are small, a "normal size" house might be a mansion.

Also consider the example he shared about celebrity birthday parties. Celebrities spend millions of dollars on birthday parties, so other celebrities are pressured to do the same, and if they don't the party might not be considered a good party.

This is a perfect example of relativity because to one person, a house/party might be great but to another, it might be horrible. Thus, in many instances, we as a society decide what is good or bad and what will makes us content.


B.


1. In my opinion, Frank had the unfair task of trying to prove that income and happiness are unrelated. Have we gotten to the point where we can literally say that income and happiness are 100% correlated?
2. Frank also mentioned how it might be relativity that makes us all happy and not income. Do we as people really care about how much money we make, or is it more about how much success/materials we have in comparison to others in the world?
3. While the data does support that wealthier people seem to be happier, there have to be at least a handful of poor people who are happy (I don't recall either Wolfers or Frank mentioning this in the debate, this is just an assumption on my part). What is it that allows certain poor people to be happy when data suggests income is such a big part of happiness.

C. 

The video we watched for our weekly reading assignment was a video that covered the topic of the economics of happiness. In short, it was a debate between the two economic professors about whether or not income and happiness are related. Justin Wolfers argued that happiness and income are related, while Robert Frank argued that happiness and income are not related.

Here is a brief summary of what Wolfers had to say:

Overall, I'd say that Wolfers did a better job presenting graphical evidence about his argument. His argument that happiness and income are related was extremely convincing. One graph in particular that he showed was a graph depicting the 25 largest countries in the world and their reported happiness. What the graph showed was that richer people are happier than poorer people.

Wolfers showed several more graphs that proved his point- that it appears wealthier nations are indeed happier.

There were also some other findings Wolfers presented relating to income and happiness. Here is a list of them:

1. People who are wealthier have more enjoyment during the day
2. Less depression for wealthy
3. More stress in wealthy world- perhaps from having to work harder to generate more income
4. More likely to receive respect from people in richer countries
5. More likely people ate good tasting food recently in rich countries
6. People smile/laugh more in richer countries
7. Less pain experienced by people in richer world

I also found one final point of Wolfers to be fascinating: Love is not at all more likely in the rich world. What does the show? It shows that money can't buy a person love. Love is its own entity, and can be attained in any type of culture.

Here is a brief summary of what Frank had to say:

When it came time for Frank to debate his side of the argument, I feel as if he sort of shied away from the topic he was assigned, mostly because it seemed like he didn't entire believe that happiness and income are not related. You can't really blame him either- the is so much evidence to prove that income and happiness are indeed intertwined, so it was a very hard task for Frank to convincingly argue that income and happiness are complete unrelated.

Because of this, he sort of argued that money does buy happiness, but there are other aspects of life as well that lead to our happiness, such as:

1. Adapting to the world around us- this is very important
2. Relative income- perhaps it is not money that makes us happy, but rather, how much money we have in comparison to others, or how big our house is in comparison to others, or how much food we have in comparison to others
3. People care about relative consumption more in some domains than in others
4. Such concerns lead to expenditure arms races focused on positional goods, or those goods for which relative position matters most.
5. These arms races divert resources from non-positional goods, causing large welfare losses.
6. Top earners spend more because they have more money. This too can lead to happiness because these people can have more material gain.

One very interesting point that Frank made for his argument (an argument that actually was very convincing):

1. Large US counties with higher growth also had higher growth in commute times, divorce rates, and bankruptcy rates.
1. Clearly, all of the above things do not make people happy, which could point to the fact that areas with high income/growth could have unhappy people because of the strains/issues with which high income societies commonly have to deal.

Reading Assignment #3, "What Social Science Does- and Doesn't- Know"

A.

Truthfully, there was not too much I found interesting with this article, but there were two specific parts from which I did take something.

First, I found it interesting how the article argued that there is no sure-fire way to test social science/economic bills/programs because unlike natural sciences, you can't control everything that the bill/program is effecting. This leads to not being able to find definitive results when trying to test whether or not a social science program for improve will work successfully or not- at least without letting a program run its course for a significant amount of time.

I found this to be interesting because in today's society, so many people act as if they know what is the best way to improve our economy. Politicians trying to win office will promote a certain stimulus plan that they are confident will improve our economy.

Regardless of what George W. Bush may have claimed, he had no way of
knowing how successful- or unsuccessful- one of his bills/economic refo-
rms was going to be until he allowed it significant time to run its course.

But this article has made me realize that while there may be some reason to believe such politicians, the bottom line is that it is ultimately impossible for anybody to predict how successful (or unsuccessful) a bill/program will be, and therefore, it is important to take those claims with a grain of salt.

One other aspect of the article I found interesting was how the article suggested that over time/through social science experimentation, it was determined that changing one's environment is almost always more successful at fixing a social/economic problem than trying to changing a person.

For example, the article discusses a "social science experiment" about criminals and trying to reduce the crime rate in America. Following the "experiment", it was found that trying to counsel the criminals and changing their outlook on life really didn't change anything and crimes continued to be committed. But when they changed their environment- perhaps by moving them to a different, safer, city, crime was indeed reduced.

In another example, the article mentions how an economic program that creates more jobs was more effective in improve the economy than was a program that helped to build peoples' skills. Changing peoples' skills did not improve the problem, but by changing the environment- and adding more jobs- there was an improvement in a problem.

B.

1. Why is that people continue to be influenced by- and believe- politicians/governmental officials who claim they know how a certain economic program will work? It is clear from this article that in the majority of instances, it is imperative to allow a program to play out before evaluating how successful it is, so why is it that people continue to listen to these types of claims?
2. Since we can't experiment and find a definitive answer about whether or not a bill/program will be successful, on what do people base their beliefs regarding whether or not they think a certain program will improve a problem?
3. The article claims it is very difficult to accurately predict how successful a program will be. Is this really the case? Do you think that one can actually predict the success of a program after doing sufficient research and experimentation and if so, what is the best way to go about performing social science/economic experimentation?

C.

Overall, this article tried to summarize one main point: It is very difficult- or perhaps even impossible- to accurately test social science/economic reform with experimentation, as is does in the natural sciences. Because of this, it is imperative to give new bills/programs time to run its course before claiming that a program is either successful or unsuccessful.

Experimentation works in natural sciences because of how a "control" can be attained. If one does an experiment on let's say a plant, one can control the plants environment completely. If a person wants to see how a certain type of nutrient effect the growth of a certain plant, the person can pretty much get accurate results because they can do everything in their power to make sure that each plant is living in the same exact environment and receiving all the exact same treatments as another plant, except for the nutrient it is receiving. Therefore, from the experiment, one will learn a definitive answer about how successful a certain nutrient is at nourishing a plant.

In economic/social science bills/programs meant for improvement, you simply cannot do this. Let's say the government is trying to improve education in America, and it passes a certain program it thinks will help education in America imrpove. There is no definitive way to know whether or not the program will be an overall success without allowing it to run its course for a significant amount of time because unlike a plant, you can't control everything in different schools around the country. No matter what you do, there are always going to be differences in the school that could affect the success of such a program, such as how different weather might affect one's learning capabilities, how one school's financial situation might affect students' learning capabilities more than a school with another financial situation, etc.

The article also explains that through the social science experiments the author-and other-conducted, there are three lessons that have emerged:

1. Few programs can be show to work in properly randomized and replicated trials ---> one should be reluctant to believe claims of the effectiveness of new programs and policies. It is important to see how each program plays out before deciding whether or not one was a success.
2. In this universe, plans are more likely to fail than succeed. Programs that attempt to change people are more likely to fail than those than try to chance incentives or the environment in which the problem is taking place.
3. It is a rare occasion that a program creates enormous improvements---> programs that do work usually improve problems modestly in comparison to how serious the problem actually is.

The bottom line that we as human beings do not have a scientific method with which to understand human society. We may be heading that way down the line, but at this point in time, we are not yet there. The only way to learn whether or not a program is truly successful and to make a successful program is by trial and error and allowing a program significant time to run its course.

Reading Assignment #2, Economic Revolution

A.

I found several things to be interesting in this piece, but I'd have to say that I found the development that took place for our society to turn into a market system that emphasizes person gain the most interesting.

I had absolutely no idea that societies did not run under a capitalism in the past. In fact, it was frowned upon to try to improve/better oneself by making profit off an item. Everything was about doing what was necessary to keep society running properly, not necessarily bettering it.

And that is what is key. In the Middle Ages and earlier times of society, the way people deal/guarded against breakdown of society was:

1. Handing down responsibilities/jobs from generation to generation. In other words, people knew what they had to do to survive and keep everything running properly by what past generations had done, and continuing the tradition of living/working in that certain way.
• Ex. a son follows a dad, so the son knows what to do in the future. This process repeated over and over again.
2. Oppressive rule also was another way societies stayed in order. That is, by an overseer giving orders.
• Ex. Pyramids in Egypt were created by many people, but one person (a Pharaoh) was giving the orders. Thus, this authority preserved the economic survival of that society.

As mentioned in the article, it turns out that some Eastern countries actually run in the aforementioned ways even today.

But this is how many societies now preserve against chaos/breakdown:

1. Deregulation, or in other words, not having governmental/oppressive intervention and allowing individuals to do as he/she saw fit. This is pretty much how our current society is in many regards. It is a market system, which is where each person should do what is to his/her best monetary advantage.

I just found this to be extremely interesting because of the fact that I had no idea that in prior years, and even in today in the East, it is basically frowned upon to try to better oneself. In America, we live in a society where competition is everywhere and so much of life is about making as much money as possible.

Truthfully, it sounds like it might be kind of nice, in some ways, to live a life that is not all about bettering oneself, but rather, accomplishing the needs of everyone to keep everyone content.

One other thing I found interesting was that in early civilization, an item wasn't worth something specific. In today's day and age, there is a price tag for everything. But back then, there was no set price for anything- people would trade for different things, and there was not necessarily a "standard" that had to be met to complete a trade for a certain item.

B.

1. Which societal system mentioned in the essay worked the best? Was it when tradition/custom, command, or capitalism/the desire for individual gain kept our society in order?
2. In other countries on Earth (specifically as the essay states, the Eastern World), societies are based on command and/or tradition/custom. This leads me to wonder whether or not in today's day and age of America, could a system based on tradition/custom or command be successful? Could America be kept in order if everyone wasn't striving to better his/her own life as the majority of America does today?
3. Why is it that some countries in today's world function on command and/or tradition/custom while others function on the idea that people should work towards gain and improvement? What decides/causes countries to rely on one of the aforementioned principles to keep the country in order and make sure that everything necessary is getting done?

C.

Economic Revolution is an article that delves into the development of how our market, a free market and the market system, came into being in today's world.

The article starts off by talking about very primitive civilizations, including 1305 France and 1639 Boston, both of which did not yet incorporate the idea of personal gain into its economy. The point of showing these civilizations was to exemplify how the idea of personal gain and profit is a relatively modern one. Back then, everything was about doing things to make needs met, not going above and beyond so as to thrive and prosper.

Sure, there were indeed people back then who did thrive and prosper- like royal families and the nobility- but for the general public, it was almost looked down upon to try to attain improvement in one's life monetarily. Back then, gain for gain's sake was foreign to the world. And while it is no longer  totally foreign to the world, gain for gain's sake still remains foreign in some places in the worlds, specifically in Eastern civilizations.

As the article puts it: back then, kings wanted treasure, nobility wanted land, and everyone else simply wanted to be left alone and live as their fathers before them did.

The so-called "free-for-all" or deregulation of society that led to what we now call capitalism began in the 18th century. This article gets it name from the change in society that took place during this time period. According to the article, a revolution of sorts took place to change society to a deregulated, capitalistic society.

By 1700, the world had changed, and some of the accepted changes included:

1. Every man is naturally covetous of those who live lucrative lives.

2. No laws to prevent people from achieving monetary/personal gain in life

3. Gain becomes the center of the circle of commerce

At this point, the market system was officially born. The problem of survival would no longer be solved by custom or command, but rather, by the actions of free people who were seeking one thing: profit.

Reading Assignment #1- I, Pencil

A. I found a number of parts of I, Pencil to be extremely interesting and eye-opening. For one, I never actually considered how much work goes into making what seem to be the littlest things, such as a pencil. As the essay shows, literally thousands upon thousands of people took part in creating a pencil, which is a tool that almost every single working person in today's world uses at least once a day. The article really has given me a new perspective on the value of items that seem as unimportant as a pencil.

A pencil provides a very good example of how we as human beings are
more than capable of creating very good solutions to societal problems.

But by far, the most interesting idea that I took away from the essay was whether or not we as a society may indeed be better off with as little governmental intervention as possible. The author's writing is extremely convincing in this regard.

I mean, just consider how much we as human beings have created to simplify our lives when the government has not regulated what we are and are not allowed to do. I think the best example shared in the essay was that of the email.

As our society progressed through time, simple letter sending through government mail became too slow of a process, especially when an urgent message needed to be sent to someone. People- "free people" as the essay calls them- developed an new way to send letters through E-mail, which costs a lot less in terms of how much time is being wasted sending one's message to a final address. 

The cost of sending an important letter in the past by mail was the lengthy amount of time it took for the letter to arrive at the desired destination (and not to mention, the monetary cost of buying an envelope, the paper used to write the letter and a stamp). Now, with email, communication is as seamless as people can receive emails within seconds. That takes away the cost of having to wait a lengthy amount of time to contact a person through a letter (as well as the cost of a stamp/paper/envelope). The government had absolutely nothing to do with the development of email. Email was all created by "free people".

This leads me to side with the author's point of view completely. While I do believe that some governmental regulation is important to maintain peace in our country, I truly feel that the less restrictions the government puts on us, the better. As we have seen throughout history, we as people are more than capable of responding to human need by developing our own creations- without the guidance of governing bodies.

B. 

1. The author is trying to argue that in many (if not all) instances, society is better off when government does not place restrictions on what we can and cannot do. We as human beings are more than capable of developing solutions to our own human needs- as seen by such creations as email, airplanes, etc. Is it at all possible that the author believes that we would be better off with no government at all? On that note, could we as a society live safe and productive lives without a government guiding us?
2. At one point in the essay, the author comments that oil/gas is shipped for less money than it costs to send a letter across the street with a stamp. How would not having such governmental intervention be reflected in our economy? For example, would monetary prices for items that our government plays a large part in obtaining (such as gasoline for cars) be as high as they currently are today if our government did not regulate society as much as it currently does?
3. The author mentions that we as people don't believe we can accomplish certain things that the government runs- such as delivering mail. The government takes care of our national defense as well. In today's day and age, is it in anyway viable to believe that someday, we actually could take over mail delivery, national defense, and other responsibilities from the government? If so, how would we go about doing that?

C. I, Pencil is an extremely interesting essay that explains a number of ideas relating to economics.

According to the author of I, Pencil, we as a society are more than capable
of taking care of ourselves without the over regulation of a government.

The majority of the piece explains how a pencil is not made by one single person. When you stop to think about it, there are thousands upon thousands of people who take part in the creation of a pencil. This idea can of course be related to the production of pretty much every single thing in the world no matter how big or small the item is.

Just to give an idea of exactly what I'm talking about, here are a couple of the tasks that go into the making of a pencil, as described in the essay:

-Trees taken down to use for the wood of a pencil. The tools being used to take down the trees are made by many people.

-People who cut down the trees and covert them into logs have to live in a camp on-site where the trees are being taken down, as it is a more than one day job. The camps of course have living arrangements for the workers, so consider how many people took part in building shelter for the workers. Also consider how many people we're involved with making all of the food and the electricity/water pipes in the house.

-Then there is also a countless amount of scientific elements that must be mined from the Earth's surface for the pencil to be made- such as zinc. Consider how many people had to work to find the zinc in the Earth.

-The eraser is made by something called factice, which is a product from the Dutch East Indies. Think about how many people are involved with finding factice and then shipping over the factice from the East Indies to wherever the pencil factory is. Think about how many people we're involved in making the form of transportation that is used to send over the factice.

Following the author's explanation about the creation of a pencil, he goes on to explain how man is capable of doing so many great things in the world when he is left to try on his own. 

For example, take a pencil. When a pencil was first created, there was no direction being given out by the government or some overseeing body as to how a pencil should be made. On their own, people simply figured out the best way to make some sort of writing utensil, which ended up with the development of the pencil. Email, airplanes, and many, many more tools we're created in the same way.

The author's point is that when we as a society are left to fix our own problems, we almost always figure out the best - or at least a very successful- way deal with them. We don't always need governmental intervention to fix our problems.

The author uses the example of regular mail. The government takes care of all of our mail, but is it really necessary for the government to do this?

Over time, we as humans could have adapted to the problem of not being able to communicate over long distances, and would have most likely figured out a process of how to best send letters to one another.

The end lesson the author is trying to make is that the government should remove certain societal obstacles/problems the best it can, but it should, for the most part, allow people to figure out how to make things/deal with issues on their own. The government should let human beings be free to invent and produce as they wish, because as history has proven, when the government has given humans the freedom to create new technologies, some pretty amazing tools have been produced.