Posted tagged ‘Economics’

Must Reads For The Week 12/5/15

December 5, 2015

Economics Is About Scarcity, Property, and Relationships, by Michael J. McKay, at mises.org. A free market is about  individuals making voluntary exchanges of what they own (property) in a world of scarcity.

The Department of Agriculture is a Welfare Scam, by Dan Mitchell, at freedomandprosperity.com. Crony capitalism for big Agribusinesses consists of subsidies, handouts, and favorable regulation, all on the tax payers dime. We also have to pay higher prices than would be charged in a true free market.

Black Friday Breaks Record With 185K Gun Background Checks, at tammybruce.com. No comment needed.

Chart Of The Day: More Guns Less Gun Violence Between 1993 and 2013, by Mark J. Perry, at carpediemblog. No comment needed.

Hunger And War In WWI Germany: Remembering The Slaughter Of Pigs, by T. Hunt Tooly, at mises.org. The During WWI, the German Government fixed the prices of potatoes. This made it more profitable for the farmers to feed them to their hogs. The result was a potato shortage (which is what happens when government sets a price ceiling). The government solution to the potato shortage they created was to kill a third of the pig population. This resulted in a shortage of pork and potatoes. Central planners are much smarter than the market!

Extreme Poverty Worldwide Has Plummeted As Market Economics Has Spread, by Ryan McMaken, at mises.org. The best anti poverty plan is to keep governments from interfering in the free market. Just think how prosperous the world would be if government sanctioned central banks hadn’t printed multiple trillions of dollars over the past ten years.

Incentives, Ideology, and Climate Change, by Peter G. Klein, at mises.org. Excerpt from the article: “journalists think  that “scientists are disinterested truth-seekers immune from institutional and organizational constraints. This is the default assumption about scientists working within the general consensus of their discipline. By contrast, critics of the consensus position, whether inside our outside the core discipline, are presumed to be motivated by ideology or private interest.”

A Behind The Scenes Look At The November Jobs Report, by Jonathan Newman, at mises.org. Government jobs and jobs created because of Obamacare provisions are part of this increase. Tax payer funded jobs are not productive jobs.

Video Captures At Least Nine Cops Surround, Shoot A California Knife Wielding Man, at reason.com. I have one question. Why don’t cops carry billy clubs anymore? This guy would be beaten and bruised, but at least he would be alive. Can someone help me out on this?

Person Who Made Racist Death Threats Against Blacks…Is A Black Woman Who Participated In Protests, at thepcgraveyard.com. No comment needed.

Writing Posts Has Become A Marginal Activity

December 9, 2013
Law of Diminishing Marginal Utility

Law of Diminishing Marginal Utility (Photo credit: Wikipedia)

LABOR vs. LEISURE

I haven’t written as many posts the last two months as I have the previous months. The simple reason is I haven’t put as much time into writing as I had before. After rereading a section titled “Factors of Production: Labor Versus Leisure”, in Murray Rothbards tome “Man Economy and State”, I figured out that the law of Marginal Utility was why I wasn’t putting as much time into writing. After some deeper analysis I came to the conclusion that either the law of Marginal Utility explains it or my situation explains the law of Marginal Utility. Let’s try to explain Marginal Utility by analyzing why I haven’t been posting more articles.

THE MARGINAL UNIT

Prior to 2008 I had always spent an hour or two a day reading. I read books about economics, history, and Government, and I also  keeping up on current events on the internet. Reading was a leisure activity that I valued higher than other leisure activities. This higher value was demonstrated by me using time to read instead of  doing something else with that time. My labor was an expenditure of time for the purpose of exchanging what I produced for consumers goods that meet my needs. These needs are related to food, shelter, clothing, transportation, etc, and yes, even leisure.  We exchange what we produce with our labor to pay for our leisure activities (golf or fishing), unless our leisure activities can fund themselves. As the hours we spend on labor increase, a certain point is reached where we decide the expenditure of the next hour on labor is not valued higher than the leisure activity we would undertake with that hour. That hour is the marginal hour. Put another way we have decided that what we could receive in exchange for that hour of labor isn’t valued higher than the leisure activity that we want to pursue with that time. The leisure activity is the marginal activity. It is the  activity we value higher than the next consumers good we could purchase with the time spent on labor. If we worked every hour of the day, we would have the means to fund just about any leisure activity we desired, but we wouldn’t have the time to spend undertaking that activity.

WHAT WE VALUE CHANGES WITH THE PASSAGE OF TIME

When the economic crisis hit in 2008 the number of hours I was working decreased by two to three hours a day on average. The extra few hours I was afforded, could now be spent on any activity, or be divided between different activities, depending on how I valued them. I chose to spend the extra hours studying economics. I now had three or so hours to use reading if I continued to value reading above some other leisure activity. I spent a good part of my leisure time, from September of 08 to September of 12, reading about economics from the Austrian perspective, because I had found the website mises.org in 08. I had already read a lot of F. A. Hayek’s and Thomas Sowell’s books, so I had a fairly solid base of understanding before I took on books like Man Economy and State, Human Action, Prices and Production, The Theory of Money and Credit, and The Failure of the New Economics. Mises.org was also posting two to three articles a day related to the 2008 crisis which really helped me understand the abstract concepts written about in these books, concepts like The Austrian Business Cycle Theory. When I decided to start this website in September of 2012, the unintended consequence was, the time I was spending reading would now have to be used writing and managing the website. Writing for the site was now the activity I was choosing to spend my leisure hours on, and reading became the activity on the margin, which means reading become the activity I would choose to undertake if I had extra hours to spend on leisure.

As I started to get busier with work at the start of the summer, the couple of hours that I had previously spent on leisure activity, were now being spent working. With less leisure time I had to find extra time from somewhere if I was to continue posting articles at the previous rate. I started to write later into the night and began sleeping less hours. I temporarily decided that spending hours writing and managing the website was more valuable than a couple of hours of sleep. By the end of September I decided that I valued those couple of hours of sleep more than I valued the leisure time spent writing. The total number of posts and articles I have written since then, is lower because of my decision. If I want to post more articles I have to take the time from some other activity and use it for writing, and I also have to be more productive with the time I spend writing.

BECOMING INFORMED IS A MARGINAL ACTIVITY

We always wonder why people are not as informed about what is going on as we think they should be. Each individual goes through the same process of valuation about what they will undertake with their leisure time. Becoming informed about economics, Government, and politics takes time, and therefore will compete with other leisure activities for that time. Most people are so busy with work, family, and the daily grind of life, they don’t have a lot of leisure time to spend becoming informed, that’s where we come in. Those of us who are more informed, have to be the go to guys for the busy people who are less informed. I try to tell my friends that I’m putting the time in to learn about what’s going on. I’m condensing the information so they don’t have to spend vast amounts of leisure time searching for it. I tell them all it will take is 20 minutes a day. All they have to do is go to my website, pick three blogs from the blog roll, and read them every day. The accumulative effect will inoculate them from the spin of the media and politicians. They will eventually be able to look at the news, sift out the B.S., find the truth, and pass it on to the next person who doesn’t have time to spend on becoming informed, because it is a marginal activity.

Related ArticleEnds And Values And The Law Of Marginal Utility, by Murray N. Rothbard, at mises.org.

Related ArticleMarginal Utility Is Not Rocket Science, by Frand Shostak, at mises.org.

Thomas Sowell’s Random Thoughts.

July 29, 2013

Thomas Sowell gives us some Random Thoughts (read here) from wise thinkers. Here are a few examples.

“We shall not grow wiser before we learn that much that we have done was very foolish.” (F.A. Hayek)

“There is no safety for honest men, but by believing all possible evil of evil men, and by acting with promptitude, decision, and steadiness on that belief.” (Edmund Burke)

“The study of history is a powerful antidote to contemporary arrogance. It is humbling to discover how many of our glib assumptions, which seem to us novel and plausible, have been tested before, not once but many times and in innumerable guises; and discovered to be, at great human cost, wholly false.” (Paul Johnson)

As a bonus, here are some short videos of Thomas Sowell, from commonsensecapitalism.com.

Equality As A False Norm.

We Can’t All Be Made The Same.

Thomas Sowell Discusses His Ideology.

Human Action Reveals The Reality About Political Decisions.

May 1, 2013
English: Cover of the scholar's edition of Hum...

Human Action by Ludwig von Mises (Photo credit: Wikipedia)

HUMAN ACTION, IN A CHANGING WORLD.

The book  Human Action (link here), by Ludwig von Mises is full of great insights into how the world works. These insights are very helpful in understanding what happens in the world of Government and politics. The books starting point for analysis is this: man acts because of the mere fact of his existence. Human action is purposeful behavior. Action is not verbal preference, it is an individual choosing, and acting, to reach a particular end. Man acts to substitute what he thinks will be a more satisfactory state of affairs for a less satisfactory state. He wouldn’t want to change his existing state of affairs, if he didn’t think his action would bring about a better state. His actions will reveal the correctness of his thinking. Action is a tangible thing and cannot be confused with wishes or hopes. Both the material and the ideal are valued differently by each individual, and what each individual values changes in time and place. What a man values the highest drives his actions. He uses available means to achieve his most highly valued ends, and his action toward his most valued end, takes place in a world of imperfection and constant change. So to summarize: (more…)

Walter E. Williams Speaks About The Economics Of Liberty.

December 7, 2012

This is a video by one of the great communicators on liberty and economics, Dr. Walter E. Williams. He talks about what money represents, redistribution of income by Government, or what he calls it legalized theft, and how capitalism raised the standard of living of the world. He never fails to deliver a great message.

Read this short article titled, The Fantasy of Wealth Redistribution by Lorenz Kraus at Mises.org, for further analysis.

 

Thomas Sowell’s Vision of the Anointed.

November 26, 2012

The first book I read by Thomas Sowell was, “The Vision Of The Anointed”. Nobody explains complexity more understandably than Thomas Sowell. This book helps pour a mental foundation on which to build your future thinking and understand about how to analyse everything. If I had not  stumbled upon Thomas Sowell being interviewed about this book on the radio one day, I would probably be blissfully ignorant of (more…)