[Noisebridge-discuss] economics

Felix Sargent felix.sargent at gmail.com
Wed Nov 23 13:50:02 PST 2011


RE: Liberal Conservative, see:
http://en.wikipedia.org/wiki/Political_compass


RE: Terminology
Economics has to have specific terminology that may be confusing to people
not familiar with the terms. What exactly is the difference between Average
and Median? Nothing, right? So why do we use it? To be specific.

The concept of the "margin" is incredibly important to fundimental economic
understanding, and is not something to be labled 'jargon.' The margin is
the place from where we all make decisions. The most erroneous analogies
are often said without understanding of the status quo of the margin.

Modern economics is shifting away from the concept of Micro and
Macroeconomics, mainly because it creates disparate models that create
these horrible situations we see in the macro economy.
Now "Microfoundations" is working to generate a more unified consistent
 model built from the microeconomic model. i.e. we know how households,
businesses and governments behave in a game theory fashion, what happens if
we scale those up to all work together, while maintaining a solid
understanding of our core assumptions (which are often broken, still!).
http://en.wikipedia.org/wiki/Microfoundations

Ignore the concept of elasticity, it's a real mind fuck and not that useful
unless you're trying to set the price of something to maximize revenue in a
very demand or supply driven market. IE, if you're selling oil, elasticity
matters, and you can control the market if you have the inventory (see
OPEC). If you're selling bread, you sell bread at the price everyone else
sells it at.


-----EDIT---- I wrote this list below first, with the intention being a
serious long term delve into economic theory. Fuck that. Just read this,
seriously:
The Cartoon Introduction to Economics: Volume One: Microeconomics By Yoram
Bauman
http://www.amazon.com/Cartoon-Introduction-Economics-Microeconomics-v/dp/0809094819/ref=sr_1_1?s=books&ie=UTF8&qid=1322084775&sr=1-1
It's the best, most simple, and fucking awesome explanation of economics. I
giggled my way through the book, and it's also fantastically accurate.

Here's what you should read to get a better understanding of economics:
1. *An Inquiry into the Nature and Causes of the Wealth of Nations by Adam
Smith* (Yes, seriously, his concepts are still extraordinarily valid. The
concept of "what is wealth" is still missed by most people.)
2. The Theory of Comparative Advantage by David Ricardo (
http://en.wikipedia.org/wiki/Comparative_advantage) Book optional, just get
the concept. This is why "Free Trade" is "good".
3. *Economics* by Paul Samuelson -- This guy literally wrote the book on
Economics, and his theories are fantastic. This is the intro level book for
most economics majors, and is fantastic.
http://www.amazon.com/Economics-Paul-Samuelson/dp/0073511293 Get a cheap
version!
4. *Revealed Preference Theory* by Paul Samuelson (
http://en.wikipedia.org/wiki/Revealed_preference) This is
the fundamental assumption in economics -- We can never predict what anyone
wants, except by what they do.
5. *Game Theory* (Just get the concepts. I can't recommend a good book here)
7. *The Trouble with Markets *by Roger Bootle (
http://www.amazon.co.uk/Trouble-Markets-Saving-Capitalism-Itself/dp/1857885376)
A great book about how markets SHOULD work and why they AREN'T working
under the current system, by a well regarded british economist.



I love economics dearly, so please ask me any questions you might have,
controversial or not.

Regards,

Felix Sargent
(415) 935-3354
felix.sargent at gmail.com


On Wed, Nov 23, 2011 at 12:03 PM, Joseph Brenner <doomvox at gmail.com> wrote:

>  Brian Morris <cymraegish at gmail.com> wrote:
>
> >Here it seems you are batting around with the terms "conservative" and
> "liberal". I very strongly disagree that conservatives are liberal on
> environmental issues.
>
> One meaning of the term "conservative" is "reluctant to make changes".
> (Though it's hard to get that meaning to line up with any existing
> group that calls itself  "conservative", which is the kind of thing I
> was trying to get at. )
>
> When a system is (a) important and (b) too complex to really
> understand, you can make a case for not messing with it.  People who
> call themselves "liberal" tend to agree with that thought when you're
> talking about the environment, they're less impressed with the idea
> that economic systems should be left free to run unchecked.
>
> But the issue gets murkier when you're talking about the economy,
> because you could say that "regulation" is the normal state of
> affairs, and repealing rules that have been around for half-a-century
> is a reckless gamble.
>
> But then, just to keep playing with this analogy, there are
> people-who-call-themselves-conservative who like the idea that we're
> due for a new Ice Age, and it's only being held at bay by the
> greenhouse gases we're pumping into the air.
>
> (By the way, I think I had it backwards: Adam Smith was an influence on
> Darwin.)
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