Why do most people have no clue about economics?

You're just reiterating Michael Moore shtick; If you don't believe you can do it, you can't do it. Just because you don't know how to make money, it doesn't mean everyone is as hopelessly lost when building companies as you are. All multinationals start out as a mom-and-pop business, and all of you market-control advocates simply refuse to acknowledge that. They got where they did by being smart about their operations, by having a desire to expand, and by doing so efficiently. If they didn't, PEOPLE WOULD NOT DO BUSINESS WITH THEM.

Let's put it this way; There's a 7/11 across the street from a convenience store in my town. The convenience store has always been more successful than the 7/11, because of a smart business practice; the proprietor does not follow me around the store thinking I'm going to steal something like the short lady at the 7/11 does. As a result, I do business there more often, even though it's slightly more expensive. If the convenience store was the exact same as the 7/11, besides price, do you honestly think I'd still be buying anything there? No. The convenience store was not *ruthless*. They simply saw an opportunity to do something better than the 7/11 and have managed to stay in business throughout the 15 years the 7/11 has been here.

Those opportunities are all around us. Lots of smaller companies are capitalizing on the fact that they manufacture goods in the USA or that they use ethically sourced cotton in their clothing, or that for every pair you buy, they donate one to a kid in a third world country (Tomms). These people have done business successfully. They sure aren't as big as Wal-Mart, but they are NOT AS OLD AS WAL MART. With time, you'll see a general transition, though branding would suggest Wal Mart will be around for a while anyways.

I don't advocate for them. I advocate for their "right" to do business as they please, because if it's revoked for them, it can be revoked for anyone else as well, just like free speech. Justice is blind; special legislation shouldn't be levied against individual organizations. That's the basis for a corrupt legal system. Any government powerful enough to give you everything, also has the power to take everything away.

Based on the HDI, standards of living are only improving.

Yes, yes I do. Life expectancy is up.
(http://www.infoplease.com/ipa/A0005148.html)

World GDP has more than doubled.
(http://en.wikipedia.org/wiki/List_of_regions_by_past_GDP_(PPP))

I couldn't find any on historical literacy rates, but I think it's safe to assume those have increased as well, being that 105 countries have literacy rates over 90%, and it only seems to be growing in Africa and Asia.

The amount of money corporations are bringing in is irrelevant. Look at your life style. You have a box in your house than can talk to boxes that are half way across the planet in seconds. You can make a phone call virtually *anywhere*. Do you really mean to say that since 1970, that there haven't been some serious improvements to our quality of life? Or that because the wealth of corporations has increased, you're somehow living a world of poverty? Google the Zero Sum Fallacy. It pretty much wipes away the illusion that we can't all have a bigger piece of the metaphorical pie.

To establish very clearly; I'm not saying this wasn't unfortunate. However, we have the same problem in Canada with the Natives. Every year we pay huge sums of money to send a teacher off to some remote village that produces absolutely nothing simply because the government is obligated to. When you live in a place that's not producing anything, you go to where they are. That's what happened during the industrial revolution.

I wouldn't wish such a loss on anybody, but that's the nature of the beast.

Yeah, of course, Jesus is going to lift me up to economic heaven, where interest rates are always high and the GDP grows indefinitely.

Now, see, it's funny, it wasn't. I used to be a communist (I didn't know what it was, but the ideology was the same). I used to envision a perfect world where everyone was equal and no one was poor or starving. I spent years trying to figure out WHY no one was doing it this way.

Then I got interested in the stock market and enrolled in a class on basic economics. Honestly, I didn't even get the higher level math stuff, but it's still easy to see from the core concepts why communism will never work and why socialism will barely work.

 

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Uh, yeah, - due to socialist organizations such as the Post Offices of various countries and the US government developed and community owned/managed internet.

You were trying to argue for capitalism, right?

More vice versa - the cause and effect sequence is worth some thought.

Either way, they do not become more democratic as their elites become relatively wealthier, and income inequality grows.

I think I will rest my case right there, frame that as a classic example of its kind, and leave you to Google Enron on your own.

 

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I'm not even going to argue this because you don't have an argument, and you're putting words in my mouth I never said. You are not debating, get lost.

 

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The internet was privatized years ago, and I'm pretty sure the post office didn't develop the technology to ship things faster; they just adopted it from private sources who did it for profit, like, uh, I don't know *Henry Ford*. Ship me a package via FedEx and UPS, and we'll see which one gets here first.

That should be the only lesson you need in privatization.

 

Well, I don't know if "killing us" is fair. Granted, I don't eat McDonald's often, maybe when I'm at the airport. In Japan there are McDonald's but they're not everywhere and there are lots and lots of small businesses everywhere. It seems like Japanese (and Germans) prefer buying local and they like their small shops. At least I think so.

Americans OTOH don't. They prefer pre-fab crap. So, each society develops to the tastes of the people in that society. We like cheap Chinese made crap. So, we have a society that revolves around that. Or so I think anyway.

When I was in Germany I never got checked if I paid for a bus ticket or not. It was expected I had paid.

The German Chancellor recently stated "multiculturalism" had failed in Germany. I don't think you can run a country like Germany and be as multicultural as the USA. The same in Japan. I am 99% positive if can not be done AND respect multiculturalism. We're different. One shoe doesn't fit all feet.

That said, there is an economic reality. Germany has benefited from a cheap Euro, they've outsourced a lot of their jobs to East Germany (and Eastern Europe), they've did their best to increase productivity (and unlike in the USA where UAW would balk), Germans have not seen a wage hike in over 15 years! They have lots of small family run shops, and a million other differences. Germans and Japanese are just not the USA. Everything from their lack of big box tops to the way homes are rented is different.

The Germans and Japanese have suffered from socialism (particularly the Japanese). The Germans restructured their economy the Japanese didn't (recall Germany WAS the "sick man of Europe" not long ago - you know, because they were still "manufactoring"... In This Day and Age!?!?!

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The German and Japanese business that I have been associated with are much much more cut throat when they compete head-to-head with the USA. Why? Because they couldn't compete otherwise. What does this mean? I'm not sure but I was talking to some people in big pharma the other day and was told exactly this. So, don't think there's not an economic reality that is also layered in these very different cultures.

I think it's very complex but I also know we're not German and we're not Japanese and the USA (much to the chagrin of politicians) can not be run like a Singaporean City State.

We have strengths, I feel they are much greater than Japanese and Germans - but those strengths only become evident in a free-market. At least I think so. Socialism will destroy us quicker than it did to the Russians and Chinese. AND, I believe it has. I look at our cities and see utter shitholes. To imagine there are places you can not walk in the city that are not safe? This just isn't thinkable in Japan. I see 7-8 year old children on subways all the time.




As an aside: I sometimes wonder if we wouldn't be better of individually without a Union? What's so good with a Union? Maybe the Europeans had the right idea BEFORE their monetary Union? Perhaps individual States with their own currencies would introduce a type of competition back to the USA where *gasp* we might even be able to produce again!

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I know some Swedish who used to think high taxes were "Good for the Nation" but since the influx of refugees and the deterioration of their inner cities (as I was told they're become as shitty as ours) many people are unhappy. Which is interesting. Is this true? I'm not sure. But I am pretty sure they're going to have the exact same problems we have.




Another aside:
Why be democratic? If you can run City-States and mono-cultural countries by technocrats why not do that? Just do away with a lot of civil liberties and use a lot of force. I'm sure you can get some really good short term gains in production and even prosperity. Is that what we want to be? Like it or not, that's the direction our society is moving in. In my view at least.

The road to Hell is paved with good intentions. An example: I somethings think about phrase when I think about the whole notion of Medical Doctors. You need the approval of the State to practice medicine. Why? Doesn't that seem perverse? It should. But, it doesn't. The road to Hell is paved with good intentions. Something to think about. Did you know DOs can not practice medicine in Australia? They'd go to prison for doing what they freely do in the USA. Such as open heart surgery. AND they'd do it better than most MDs in AU. Yet, here we are. Our entire society is mirrored in this example. The way I see it.

 

The internet was and still largely is a socialist entity, created and managed by the US government.

The technology to ship things faster (roads, ships, ports, etc) was mostly developed by various national military and other socialist entities.

The private industries that piggyback on initial socialist innovations, and improve them, deserve much credit. But you happened to pick two of the most solidly socialist economic institutions on the planet, all over the planet, for examples - are you sure you have researched this whole area enough to support such definite opinions as you have?

 

You picked them.

FedEx is faster than UPS; private industries do not piggy back on socialised industries, the opposite occurs. Postal services did not get faster as a result of their own innovations because they had a monopoly on their service; they didn't have to innovate. Henry Ford's ingenuity in production allowed motor vehicles to become wide spread enough for use in postal services, which sped them up. Henry Ford did this *privately*.

I'm going to drop the argument on the Internet because I know you're not going to budge off that one no matter what I tell you.

 

You did. Post 39.

Yes, they did. They got much faster (air mail, anyone?), and much more reliable, while they were a monopoly owned by the government.

The post office in my town (Minneapolis) had same day service for the price of a stamp when it was a monopoly and owned by the government (mail posted before 9 AM would make the afternoon delivery anywhere in the Twin Cities).

Now that it is spun off from the government and has competition, it has slowed down a bit and become more expensive - but it is still far cheaper for the same time scale of delivery for most items, especially letters and the like. My paycheck from a rural house 60 miles away goes out Friday morning and lands in my PO Box Saturday afternoon for less than 50 cents.

I recently bought a few books from Powell's in Oregon and a couple items of clothing from a dealer in Colorado shipped the same day - about the same weight package. The books promised a week to ten days, the clothing five to eight business days. The books went USPS and cost about 7 dollars to ship, the clothing went FedEx and cost about 13 dollars. The books came in seven days, the clothing came in ten (eight business).

Twice the price for an extra 40% delay in the shipping. And the books went into a guarded, secure place with 24 hour access for me - the clothing was left on the front step while I was at work, and my choice was another day delay and a ten mile drive during business hours.

The highway and the railroad line and the airport system - the one pure socialism, the others private corporation piggybacking on government (especially military) provisions - sped the mail up. Not the private car.

The Pentagon is a socialist institution. So is NASA, the NSA, the CIA, and the major land grant and State universities involved in inventing and setting up the internet and running it to this day.

Give it up. Very few radically new innovations are private corporation projects, because such new things by their nature have no predictable or even likely payoff to a designated beneficiary.

 

I definitely did not...

I'm pretty sure that air mail would have been the result of the work done by Orville and Wilbur Wright. Tell me if I'm wrong here, but I'm pretty damn sure the government didn't have the budget to pay engineers to develop faster mailing techniques. They adopted the plane from a private enterprise. Had the plane not been invented, they would not have needed to invent a faster way to deliver mail because where are the customers going to go? To another provider? Good luck.

Why do you think FedEx has to be faster and more reliable? Because they're competing with the government.

Fair enough. I'm living in Canada so we may have different experiences on this front.

At risk of sounding pompous, anyone on a science forum should understand why that isn't sound reasoning.

So two of your three examples are the results of capitalism, and the other one is predicated on the use of a car? Which side are you arguing, again?

I'm not arguing for Libertarian Capitalism, just free market; All those entities, barring NASA and the universities, are for the purposes of defence, which is one of the few responsibilities I believe a government should have dominion over.

Lockheed Martin.
Kevlar.
The MP3 Player.
The Personal Computer.
The Airplane.
The Automobile.
Martin Luther King (His ideas certainly weren't sponsored by the state)
William Kamkwamba.
Sci-Forums.com
The Pirate Bay (and torrenting in general)
Youtube.
Facebook.
The skyscraper (Andrew Carnegie)
The Statue of liberty (French money was squandered on the statue, and the US had to get public donations at the rally of a local newspaper to get the statue assembled)
Railroads (they're usually constructed by governments, but almost always built with the capital of private investors. They were in Canada, anyhow)
The Transatlantic Cable
Silicon Valley.

My argument is not that everything the government does is bad or evil. I'm a Canadian. I enjoy free health care. My argument is that entrepreneurial activities will result in the betterment of mankind, and to encourage entrepreneurship you must reduce the red tape the government throws up and allow for competition. I'm not advocating Libertarianism; I support the idea of a government, so long as it does not impede progress.

 

I am glad to hear you don't think everything that government does is bad or evil. Many of the betterments/inventions you listed were developed by or financed by government research (e.g. personal computers).

Government in my view, should foster opportunity. Opportunity results in innovation and betterment. Trying to define "impeding progress" gets a bit sticky, a coal mine owner might think allowing natural gas to compete freely on the energy markets is an impediment.

 

All three are the results of government support and interference with free markets. (Capitalism does not require free markets, btw.)

And highways are not predicated on the use of a car - they predate cars by a couple of thousand years. They are usually military in inspiration - like the US freeway system. Cars "are predicated" on the existence of roads, not the other way around.

It was a counterexample to an unsupported assertion of yours, that is generally false in my experience and presumes a historical record that is fantasy.

If you're going to be silly, the work of the Wright Bros was a result of their skills as bicycle mechanics, which is predicated on (government, always) roads.

But a better idea would be to notice that US government support via Post Office contracts was critical in launching the domestic airline industry - otherwise, airplanes had their best hope in the (socialist) military. So airplane travel in the US came from the government Post Office more than the other way around, if you even want to argue like that. (It's an empty line of argument anyway. )

You're wrong there. You're forgetting the needs of bureaucracy, the risk avoidance of large corporations, and the huge sums thrown at the military.

 

TravisW,

It's unclear what you're arguing. The thread title is becoming self-evident. You simply equate economics with politics.

I don't think anyone doubts the resiliency of capitalism. Nor do most capitalist systems operate completely devoid of other political theories. Thus American capitalism has absorbed socialism and produced welfare.

The problem I have with your logic is a lack of compassion, or even realism. You started out telling us about someone who was griping about taking out a loan he couldn't afford, that he felt enslaved. Your response is that he has to assume responsibility for it, and you conclude that the world at large is ignorant of economics.

Lacking in this is the fact that--except for family money--you, who do not feel enslaved, and the other guy, both came into this world as equally human beings. But it's a crowded world, one that invariably imposes its strictures on the individual.

At some point, the person needing a loan may have already fallen victim to any number of harmful consequences of the system you support. Applying for a loan can damage a person's sense of self-worth. Try living in a tenement or as a dependent for any reason beyond your control and you'll see the other side of your argument.

There's nothing great or wonderful about capitalism or any other institution. These are just delusional views of the world shored up by aggrandizement.

Better is to see the world in its full and harsh reality. It's not only a world of entrepreneurial innovation--unless you fairly count the people who get up before dawn to fetch water and find firewood as entrepreneurs, or the mother who is even now milking the family cow to feed her hungry children. The best entrpeneur among them teaches the child how to be tough. Suicide, for reasons other than serious eminent harm, is probably more common among capitalists.

Economics is math. And Sheherezade answered correctly, we don't understand it because we don't learn it in school. It's generally an optional course of study. Arfa Brane correctly said that it's hard to understand because it's complex. JoeEpistle spoke to the way right-wing hyperbole has substituted for that knowledge. And a whole slew of folks spoke to ethics, esp. spidergoat and iceaura.

So what is the math of social justice? I think we're mostly adults here and don't need to be patronized.

It has been said that you will know the worth of a nation by the way it treats its prisoners. Events witnessed by people alive today include torture, rape and murder on a massive scale that were done in the name of capitalism and supported by the institutions you seem to think are so great. Tell that to the victims.

Apparently the other thing lacking in our education is history.

 

People are clueless about economics because, in the first place, it isn't much of a science. It's not like math or physics where it's straightforward (-ish) to unequivocably prove that some statement is incorrect. Add to that the fact that certain people have a clear, vested interest in getting it wrong - and, more to the point, in others also getting it wrong - and you arrive at the scenario we observe, with all of the petty little ideologues trolling away in service of plutocrats who laugh all the way to the bank.

 

This would only mean that economics itself is clueless...seeing as it has little inherent prophetic integrity.

 

I see your point, quad, even though as a field of study it can involve nothing but math. In practical terms, it will at best be applied to the problem of developing and implementing policies that are "best" according to some heuristic rule. The economist tends to play a minor role in setting the rules, except for the few who are in positions of power. In that case, they are likely acting as politicians, or police, or otherwise exercising judgment that average economists don't have in their bailiwicks.

This speaks to the unethical nature which capitalism tends to breed. And here you speak of the other kind of slavery not mentioned in the OP.

Only of you don't "believe" the weatherman, since they apply much of the same math in making predictions.

Worse is that an economist can tell us what our odds are of choosing Plan B, and against all odds we do it anyway, and then blame the messenger when it goes South.

I think economists have only recently become unpopular because they have probably been right all along, and we have only been too stubbornly stupid to back away from the slavish loyalties to the "plutocracy", as quad put it.

 

One of the strangest things about capitalism is that it invades our personal lives with Greenspan-esque jargon and technicalities beyond normal experience, and this somehow forms the priority in the national and global conversations, where we used to talk about curing poverty, aiding its victims, and promoting social justice. If stealing the dialogue is largely what politics is about, then the opposite of what you're saying is what's being politicized.

That is, poverty and injustice have always been the residue of capitalism. That some have been smudged by it and not others--and the patterns and practices of the smudge-works--is the subject of the anti-capitalist complaint. Blotting this out by stealing the dialogue politicizes the issue, which begins as a purely social justice one. In a few triple flips with a twist from the high board, the right wing converts the victims into lazy, whining reprobates.

In a way, "understanding economics"--other than as an academic pursuit for a person with a genuine love of knowledge--is a task foisted on us by capitalists. We must comply. There will be consequences. Considering the intimidation, it's no wonder so many people have little or no comprehension of it.

The dream of what life would be like without this millstone around our collective neck is the stuff idealism is made of. It's the reason folks identify with freedom fighters and minority ideologies from socialism to anarchy. It's why people turn out in droves for Occupy demonstrations. I don't hold this against them. Given where the great contributors of the past paid their dues, some future visionary may just as well be incubating in an Occupy event as in the classroom.

But to infer that capitalists are not idealists is a fallacy. They have their own utopian view of reality. In "trickle-down" idealism, the kings and queens are responsible parents who hover over their little serfs ready to wipe their noses. In the older "religious right" ideal, everyone is white, middle class, and male, with their Stepford wives serving them like robots. In the newer one the paradigm is shifted to account for the economic clout of women, but it remains a world in which everyone who wants to is working and pulling their own load, and all other problems with crime, poverty, human rights and injustice are heaped on the aforementioned persona non grata, who are seen as a blight on the neo-con picture-perfect plain-vanilla world.

The presumption of ethical and moral authority, and the claim as heir to the throne, which conservatives personify, is generally regarded by the rest of the world as another just another incarnation of the same bluster, styrofoam and horseshit as any of the most infamous socialists, fascists or communists have built their institutions on.

Until then I would rather see Occupy demonstrators in Congress, pouring their hearts out into legislation that protects victims from the harm of capitalism, and the economics students who attended the rallies as our chief economists. I would love to see them standing next to the folks who are screaming "repeal Obamacare" screaming back "repeal Citizens United", and actually winning, and actually getting it repealed.

The day the rich and privileged are not protected by the same hand that's in the till is the day the conservatives can even enter the Holy of Holies where ethics and morality are on the sacrificial altar, without being smitten by lightning.

Until then they're the unclean, and their antagonism against anyone who thinks differently is all just wasted smoke.

 

Yeah, pretty much. Notice how economics professors are seldom rich - this should tell us something pretty important.

 

No, economics cannot ever be so reduced. It's a social science, and always will be. The delusion that it can all be reduced into math problems is one of the silly ideas that drove the finance industry into a ditch a few years ago. It just ends up being a way to avoid dealing with the messy, difficult-to-quantify aspects of any social science.

That sounds more like "management" or "operations research" than "economics."

Weathermen apply math to physical systems with well-understood, deterministic behavior. That's a far cry from applying the same approach to human social systems.

The problem is that there's always some economist who will tell you whatever you want to hear, and it can be very difficult to figure out which ones are the charlatans. Worse, probably almost none of them are actual charlatans, but more like stopped clocks (and so, right twice a day and wrong the rest of the time).

 

I was referring to PC in the more modern sense of the word, which was more developed by Apple computers (if it was a government backed venture it's the first I've heard of it, links please?)

I find myself of the more Libertarian mind because I find it's *cleaner* legally speaking in that it doesn't become vastly overcomplicated by stagnant political debates over what a government *can* and *cannot* do. I do understand that governments are essentially just another entity that can influence business and innovation positively if they do things correctly (which I find they often don't), but I view them primarily as tools for defense, law enforcement, and maybe infrastructure and healthcare (tough the Canadian health care system is getting to be pretty terrible).

I've never been a fan of companies who lobby to create artificial demand, but as much as I hate the tactic, I like the strategy; they're playing smart. The whole idea is, you have to play smarter.

 

Everything is reducible to mathematics, because we live in a binaric universe. It's all calculable in one way or another (the question is whether we have the resources to model huge economic systems). I sort of disagree that it's a social science. In the theoretical sense of the word, it's mostly mathematical, but to apply it you do have to factor in social elements, so I do see your point.