Being poor is expensive. Not only do you have less money to get by with but everything also costs more. The secret to getting rich is in economies of scale and bulk buying, something the poor simply can’t afford. As they’re stuck trying to make ends meet day-to-day, they can’t invest in the future and so are stuck with false economies that cost them more in the long run. This is the source of the counter-intuitive saying that “You have to be rich to be poor.”
I know the title sounds bizarre but hear me out. I’m not a Communist, just thinking aloud. Allow me to play Devil’s advocate for a moment, and have a little thought experiment. I’ll just apply the logic of public or private debate to the legal service and see where we end up.
For the free market to work it is assumed that everyone knows everything, or at least everything they need to know. However the world is full of things we know nothing about. This is the problem of asymmetric information, where one person knows more than the other. This creates many problems which hamper the operation of the free market and prevent it from reaching the perfect equilibrium. Continue reading “What We Don’t Know”
Is an Israeli life worth more than a Palestinian life? Much of the commentary on the bombing of Gaza seems to suggest so. 5 Israelis and 156 Palestinians have been killed, yet the story seems to be how Israel is the victim. Great emphasis is put on Israel’s right to exist, little thought is given to the fact that Palestinians do not have a state of their own. Israel claims the right to defend itself while denying Palestinians right to do the same. It is a tragedy when an Israeli is killed, while little attention is paid to vast number of dead Palestinians. Great attention is given to Palestinian extremists while Israeli extremists are ignored. The history and root causes of the conflict are ignored and little effort is made to understand the conflict. Continue reading “Double Standards On Gaza”
Whenever I tell people that I’m studying economics they usually ask me how to solve the recession or what to do about the banks. Each time I’m embarrassed over the fact that we have never even mentioned these issues in lectures. In my course I have basically been taught that the free market is the most efficient and best system in the world and trouble always results when it is interfered with. In my textbooks recessions are not mentioned, they do not happen. There is no explanation of unemployment, the biggest issue of our times. There is no mention of profit, the heart of capitalism. Nor do they talk about banks or money or advertising or how systems are guided by power relations. No mention is made of poverty, in effect ignoring three-quarters of the world.
Continue reading “What Economics Doesn’t Talk About”
There is a problem with the free market and consumerism. You see, it is based upon increasing sales as much as possible. As soon as you sell something you want that same person to buy another product from you. You could do this by competing on price or quality, or you could build the product such that it either breaks down or goes out of fashion very soon. This process, known as Planned Obsolescence, is rarely discussed but quite logical and sensible. Continue reading “Built To Break”
Back in 1930 Keynes predicted that in the future people would only work 15 hours a week. We would become so productive that we could produce everything we needed while only working a short amount of time. Our lives could then be devoted to things we love and enjoy. Instead we are in a world of extremes. Some are lost in a sea of despair and hopelessness, ashamed that they cannot find work. Others are on the verge of burnout from overwork and stress, with no time for their friends or family. We need to stop and relax and enjoy things that really matter. The solution is to reduce the working week, initially to four days and then after several years to three days. There are 3 main reasons for this, it will reduce unemployment, reduce consumerism and increase leisure time. Continue reading “Three Day Working Week”
There are many questions about this current recession. Why did the economy decline so much? Why are most economies stagnating? Why has low interest rates and quantitative easing not lead to recovery? I recently read Richard Koo’s The Holy Grail Of Macroeconomics which answers these questions. I found it deeply insightful, not only for its explanation of the current recession and the Great Depression but also because it was written before the crisis even happened. Koo accurately describes out current mess, what’s wrong and what we have to do to fix it. Continue reading “Balance Sheet Recession”
Don’t get me wrong, I’m a liberal, a Democrat and I’ve voted for Obama for this election. My problem is that my main reason for voting for Obama is that I want Romney to lose. Obama’s campaign has consisted solely of stating Romney’s ideas are bad (which they are), yet he has not defended his own ideas or offered any new policies for his second term. Obama is fighting a defensive campaign, offering to prevent Romney from making things worse, but not offering any ideas for how to make things better. If you ignore the rhetoric and look only at the actions, you will see Obama has not been offering the radical solutions to turn America around. Continue reading “My Problem With Obama”