History UsefulNotes / Economics

11th Jan '16 10:36:48 AM ayjazz
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This violent collision leaves a few absolutes to take refuge behind, and a wide open mine field for catastrophic assumptions and mistakes, and prime FlameBait. There are a fair number of widely divergent economic schools of thought, each with a reasonable claim to accuracy, and each which believes the others to fail economics forever. The major difference between this schools is in what they decide to grossly oversimplify in their bid to understand something. This is probably one of the reasons Thomas Carlyle called economics "the dismal science". (And few agree on that term... Economists will claim their science isn't dismal, and many other fields will claim it's not a science. The dance goes on.) [[note]]Actually the reason why Carlyle called the economics "the dismal science" was because John Stuart Mill and his fellow economists supported the equality between all men and the abolishment of the slavery, and Carlyle was afraid that the economics would cause the decadence of the society. [[http://aprendeenlinea.udea.edu.co/revistas/index.php/lecturasdeeconomia/article/viewFile/7874/7415 Source (in Spanish)]][[/note]].
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This violent collision leaves a few absolutes to take refuge behind, and a wide open mine field for catastrophic assumptions and mistakes, and prime FlameBait. There are a fair number of widely divergent economic schools of thought, each with a reasonable claim to accuracy, and each which believes the others to fail economics forever. The major difference between this schools is in what they decide to grossly oversimplify in their bid to understand something. This is probably one of the reasons Thomas Carlyle called why economics is sometimes called "the dismal science". (And few agree on that term... Economists will claim their science isn't dismal, and many other fields will claim it's not a science. The dance goes on.) [[note]]Actually [[note]]The origin of the reason why Carlyle called the economics term, "the dismal science" was because for economics, is from how during the time of slavery, John Stuart Mill and his fellow economists supported the equality between all men and the abolishment of the slavery, and Thomas Carlyle was afraid that the economics would cause the decadence of the society. [[http://aprendeenlinea.udea.edu.co/revistas/index.php/lecturasdeeconomia/article/viewFile/7874/7415 Source (in Spanish)]][[/note]].
14th Oct '15 9:57:15 AM chc232323
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** Finally, as a resource becomes less available to meet demand, the incentives to develop replacements rises. Furthermore, science reveals new methods to replace those resources over time, and demand for replacements can lead to the necessary R&D to make those replacements more efficient. Fossil fuels serve as an excellent example. Humans don't necessarily want oil and coal; we want warm houses, the power to move our vehicles, lubricants, plastics, and other products that are based on fossil fuels. As the costs - including pollution, environmental damage, and moral concerns - of these fuels rise, the incentive to meet those needs in other manners rises.
28th Sep '15 12:57:20 PM BoredMe
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*** Needless to say, there's one flaw in this potential concern: The fact that the United States is, by far, the most militarily powerful nation on Earth.
18th Sep '15 7:45:07 AM FordPrefect
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However these concepts are used to describe behaviors and concepts in an economic system and not necessarily does it describe how things will play out in reality. Human beings can be one side at times, the other side at other times, or some wild combination. Human beings may try to purchase or sell at the best price for them possible, but they may buy a product that is cheaper because it is cheaper, then have it cause trouble for them and cost more in the long run due to low quality, or perhaps a person might buy from from a producer because they are friends with the producer, and not because of product/service quality or price, or they prefer that brand due to false perceptions, or they simply don't have the time or resources available to research the best possible trade and are picking this one out of convenience, or they believe it is a better buy due to some other reason, be that reason be rational or not. A criticism of homo economicus is that real humans do not always know what is best for them in the long-run, and may perform an action due to its short term benefits, but run into problems when unforeseen (or willfully ignored) long-term costs rear their ugly heads. Also, homo economicus runs on the idea of actors having perfect information available, while real humans do not.
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However these concepts are used to describe behaviors and concepts in an economic system and do not necessarily does it describe how things will play out in reality. Human beings can be one side at times, the other side at other times, or some wild combination. Human beings may try to purchase or sell at the best price for them possible, but they may buy a product that is cheaper because it is cheaper, then have it cause trouble for them and cost more in the long run due to low quality, or perhaps a person might buy from from a producer because they are friends with the producer, and not because of product/service quality or price, or they prefer that brand due to false perceptions, or they simply don't have the time or resources available to research the best possible trade and are picking this one out of convenience, or they believe it is a better buy due to some other reason, be that reason be rational or not. A criticism of homo economicus is that real humans do not always know what is best for them in the long-run, and may perform an action due to its short term benefits, but run into problems when unforeseen (or willfully ignored) long-term costs rear their ugly heads. Also, homo economicus runs on the idea of actors having perfect information available, while real humans do not.
18th Sep '15 7:38:48 AM FordPrefect
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# '''Third World Countries: Paradise of rich nations' investments''': Ah... Third World Countries, with their cheap labor supply, lax regulations, and prime materials just waiting to get exploited. With such advantages, wouldn't the average Joe invest his life savings into opening a business in say... Somalia? As you probably answered... not so, normally, the reason labor is cheap in [=TWC=]s is because the workforce is also unskilled, lax regulations also usually mean a high crime rate or even political instability. That's why it's usually the big businesses the ones that take the plunge to do the tremendous investments in [=TWC=]s, since they can absorb the cost of giving training to the workforce and providing security for their investments.
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# '''Third World Countries: Paradise of rich nations' investments''': Ah... Third World Countries, with their cheap labor supply, lax regulations, and prime materials just waiting to get exploited. With such advantages, wouldn't the average Joe invest his life savings into opening a business in say... Somalia? As you probably answered... not so, normally, the reason labor is cheap in [=TWC=]s is because the workforce is also unskilled, lax regulations also usually mean a high crime rate or even political instability. That's why it's usually the big businesses the ones that take the plunge to do the tremendous investments in [=TWC=]s, since they can absorb the cost of giving training to the workforce and providing security for their investments.
6th Jul '15 8:44:45 AM RichardX1
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And then there's TheCynic's criticism of both models in their [[HumansAreMorons assumption that humans will be rational]], but [[RuleOfCautiousEditingJudgement we'll leave that for the discussion boards]].
3rd Jul '15 2:16:21 PM PaladinPhoenix
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** Also as the price rises former non-profitable actions have to be reconsidered - they might generate a profit now. Case in point - the Bakken formation in [[UsefulNotes/TheSeveralStates western North Dakota]] is currently undergoing a huge oil boom because of both technologic advances and rising oil prices making it very profitable to drill there now; not ten years ago North Dakota was losing population like much of the Great Plains.
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** Also as the price rises former non-profitable actions have to be reconsidered - they might generate a profit now. Case in point - the Bakken formation in [[UsefulNotes/TheSeveralStates western North Dakota]] is currently undergoing a huge oil boom because of both technologic advances and rising oil prices making it very profitable to drill there now; not ten years ago North Dakota was losing population like much of the Great Plains. The same is true of most natural resources: they are extracted only when it's profitable to do so. If a gold mine gets an ounce of gold for $100 worth of effort, and gold is worth $110 an ounce, then it's profitable and the mine operates. If it takes $150 worth of effort, then the mine is "mothballed" and mining stops until the price of gold goes up, likely due to scarcity. This is actually one reason of many for why oil hasn't suddenly dried up: when it's gushing out of the ground, it's cheap, and the harder-to-reach sources are left alone. When it becomes more costly to extract everywhere and the price goes up, those harder-to-reach sources suddenly beckon when their costs become less than the potential profit.
23rd Jun '15 12:52:10 PM Lukethehedgehog
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** Also as the price rises former non-profitable actions have to be reconsidered - they might generate a profit now. Case in point - the Bakken formation in [[TheSeveralStates western North Dakota]] is currently undergoing a huge oil boom because of both technologic advances and rising oil prices making it very profitable to drill there now; not ten years ago North Dakota was losing population like much of the Great Plains.
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** Also as the price rises former non-profitable actions have to be reconsidered - they might generate a profit now. Case in point - the Bakken formation in [[TheSeveralStates [[UsefulNotes/TheSeveralStates western North Dakota]] is currently undergoing a huge oil boom because of both technologic advances and rising oil prices making it very profitable to drill there now; not ten years ago North Dakota was losing population like much of the Great Plains.
22nd Jun '15 3:03:06 PM chc232323
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This is not to say that its impossible to imagine. If we're talking about a post singularity society, it is possible that they will figure out a way to replicate all the essential qualities of even seemingly unique goods. The house on that one hill next to that waterfall could be replicated right down to the waterfall and the hill with sufficiently advanced terraforming technology. We could reshape the landmasses of a planet to maximize the beachfronts if that's what people want. Alternatively, a society which exists totally within a virtual universe could do the same thing arguably for a much cheaper price.
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This is not to say that its impossible to imagine. If we're talking about a post singularity society, it is possible that they will figure out a way to replicate all the essential qualities of even seemingly unique goods. The house on that one hill next to that waterfall could be replicated right down to the waterfall and the hill with sufficiently advanced terraforming technology. We could reshape the landmasses of a planet to maximize the beachfronts if that's what people want. Even that isn't enough to completely eliminate scarcity, since an item's history might be what makes it desirable and scarce. Sure, the Singularity can produce a perfect ''replica'' of anything, but there are more collectors that want an authentic original than can possibly have it. No matter how perfectly you could recreate a copy of one of the surviving First Folios of William Shakespeare, it's the originals that collectors would want. A minor version of this can be seen today when a desirable collectible can be reprinted or reproduced, and the replicas almost invariably sell for far less and are far less desirable. This gets even more important for sites that are holy to some faith or culturally significant to a people. Imagine using the Singularity to replicate the Dome of the Rock or the Great Pyramid or the Nazca lines and claiming the replica is interchangeable with the original. Travel to and visitation rights for such locations would still be scarce. Alternatively, a society which exists totally within a virtual universe could do get around this, since the same thing arguably for a much cheaper price.original would just be some form of data.
10th Apr '15 6:36:13 AM Fighteer
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[[UsefulNotes/EconomicTheories A more detailed explanation of general and specific economic theories can be found here.]]
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