Economic Lesson of the Day

The economics lesson of the day comes from The Onion‘s American Voices (Link)

Sales and rentals of adult DVDs are down 30 percent due to the rise in homemade Internet porn. What do you think?

“That’s the problem with the porn biz. No matter how low your price is for having an entire billiard-ball set shoved up your ass, there’s always some punk waiting in the wings willing to do it for free.”

This brings up the concept of Marginal Utility. That is the additional added utility of a good or services, or the additional disutility of time spent doing something (e.g. working). Utility being a generic term for happiness. So here one person has a negative marginal utility of shoving billard-balls up their assand thus must get compensated for doing so. This compensation will be slightly greater than the disutility of shoving billard-balls up his ass resulting in a positive addition to his utility. Where as another is willing to do it for free, and even presumably pay someone to do it, because they have a positive marginal utility of this action adding to their total utility.

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My research

Yeah I do research, among my analyzing. I have done research my whole life, research papers, research projects, through elementary to graduate school. Well the one cool thing about research is that you see things that others might not see, or at least, a combination of things that others may have never seen. For instance I came across a Dutch Competition Act, that starts like this:

“We Beatrix, by the grace of God, Queen of the Netherlands, Princess of Orange-Nassau, etc. etc. etc.
Greetings to all who see or hear these presents! Be it know:”

How cool. They have so many people and deities that are gracing this act that they need three etc. Yes three etc. etc. etc.

And on the whole purpose of this Competition Act; it’s to foster competitive markets in the Netherlands. Can someone explain to me why the government is best suited to foster competition? Anyone…..any intelligent answer gets you a beer.

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Learn about Nuclear Energy with The Energy Ant

This is a pretty interesting article about ‘The Energy Ant‘ traveling to a nuclear power site; North Anna in VA. It gives a quick overview of nuclear power. 20% of the U.S.’s power is supplied by nuclear. The last nuclear plant was ordered in 1973, in the U.S., but more seem to be in our nations future. Ontario is discussing plans to build two reactors and the latest Energy Policy Act, will subsidize new nuclear power plants, if any are built. So read up on nuclear energy from a trip with ‘The Energy Ant’

Article.

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China and Renewable Energy AND much more

So what’s the benefits of globalization and increasing trade between countries? China, who 15 years ago couldn’t claim to be a developing country is now the world’s leading investor in renewable energy. See Article. So to all those who criticize globalization and free markets, this would not have happened without the ability to trade. We all benefit from countries becoming richer.

China has a long way to go, as does the U.S., them with development us with management of our wealth, but as the world becomes more rich, there are more resources to spend on increasing on our quality of life. And the way wealth is created is through trade. I do what I am best at and you do what you are best at (or comparatively better at), we then trade and both benefit. China is good at manufacturing consumer goods at low prices, the US is good at providing the infrastructure for trade and innovation to occur (the knowledge economy).

If we want to continue enjoying our standard of living we need to keep up what we are good at accomplishing. So support your local schools and get involved in doing something you enjoy so you can help provide not only our country with a higher standard of living, but other countries as well. If we become better at scientific research we can teach other people in other countries to do research well. They then will not only be used for sewing shows together, they will do research and build the machines that produce shoes, a more profitable position. We as the US will not stay the richest country for ever, but all of us should at sometime become so rich that even if we are the 20th richest, we have no complaints.

Two ways to become rich and remain so is to invest in ourselves and trade with other countries. And becoming rich doesn’t just mean new cars and bigger houses. It means we have more money to reduce pollution, help in our communities, pay for medical care, increase recreation, and generally live better lives. We already have a lot of money to provide for some of these increases in our standard of living, but people may not choose to follow the ‘best’ actions. Over time I am confident that we as a society will realize what provides for a happy life. Its not a nicer car or a bigger house. Its being mentally rewarded with our work, involved with our community, close to friends and family, and physically healthy.

I think one can look at my generation and see that we are demanding a more rewarding life. Knowledge workers in general are not satisfied with subsistence wages, they desire a mentally rewarding work environment. And I am confident they will realize that the fancy houses and cars will not fully satisfy them. Desire more out of life. Desire to make a change in at least your own life. Desire to make a change in your community. Simply put desire to act. And realize that these actions are ends in themselves, not means to more income and thus means to better things.

That to me, is what we can show the rest of the world. We at one time were leaders in associations and ‘civil society,’ non-profits and community groups. We helped and interacted within our community, assisted in making a better world. Unfortunately, we often think of the governments’ job to make change to do what is best for our society. Government is nothing but individuals; we can expect nothing more from them then to act as individuals, self-interest and more concerned with re-election than providing for their constituency.

We as individuals need to pick up where they have failed. We need to become more involved in our communities to provide for those in need. It is not the duty of government to provide for us, it is the duty of us as a collection of people to help create what we desire. Churchill once stated that people want peace so badly that eventually they will not allow the government to get in their way. We should realize that the government is not the proper way to accomplish many of our social goals. The proper method is through the use of civil society, church groups, non-profits, fraternities, collections of people.

The power of the government is not needed, in deed the only true power they have is to tax. What is needed is the power of the people, the strength of argument, the strength of truth. If you truly believe that people are better off with little to no pollution, then teach others to value what you value. Teach them to support your cause and require not of government but of themselves to reduce pollution, to conserve energy, to support companies with similar social goals, in this case the goal of lower pollution.

This is direct. It keeps the government out of the process. Often one will hear that it is necessary to mandate action because people are too stupid to understand. There are two responses to this point. First, if people are too stupid and government is made of people, elected by people, then wouldn’t they also be too stupid to know what’s best. Secondly, who are you too judge someone else’s value system? How do you know that your value system is correct and everyone else’s is incorrect? (more on this idea later, existentialism)

Anyways, this is a bit of a rant and more disorganized than I hoped, but it is at minimum an insight into the process of what I call my brain. As always comments and a discussion of these ideas is more than welcome.

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Red Eye



Red Eye, originally uploaded by jdtaylor.

Yes my Thursday night; a red eye (lager and V8) and the infamous ‘The Economist’ And look it is on paternalism, one of my favorite subjects. See paternalism is about the government telling you what is in your best interest, assuming you do not know what is in your best interest. John Stuart Mill wrote in On Liberty; “… the only purpose for which power can be rightfully exercised over any member of a civilized community against his will is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant. He cannot rightfully be compelled to do or to forbear because it will be better for him to do so, because it will make him happier, because in the opinions of others to do so would be wise or even right. These are good reasons for remonstrating with him , or reasoning with him, or persuading him, or entreating him, but not for compelling him, or visiting him with any evil in case he do otherwise. To justify that, the conduct from which it is desired to deter him must be calculated to produce evil to someone else.” (On Liberty, ch. 1.)

And the Red Eye was one of Hemingway’s favorite drinks.

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