Macro Over Micro

Economics is divided into two sections, micro (focusing on individuals) and macro (focusing on the whole economy). However in universities the emphasis is heavily on micro to the extent that macro is often seen as simply micro on a larger scale. This is fundamentally wrong and ignores several points.

This focus ignores the fact that the best option for the individual is not always the best option for society as a whole. Continue reading “Macro Over Micro”

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The Benefits Of Unions

Unions have a pretty bad reputation. They are often stereotyped as protecting lazy and bad workers, as well as causing unemployment other inefficiencies. However the many benefits of unions are often ignored. These include increased morale, productivity and equality. Continue reading “The Benefits Of Unions”

The Advantage Of The Minimum Wage

There is a lot of debate over the minimum wage. An internet search of the topic will return with almost unanimous condemnation of it. It is blamed for unreasonably pushing wages too high and causing unemployment. It is decried as a major cause of economic problems rather than the solution. However, these arguments are based upon over simplified ideas and graphs. Now, most of them look nice and are easy to understand, but they should be judged on how well they describe the real world. The simple fact is they don’t really. Continue reading “The Advantage Of The Minimum Wage”

Rich Get Richer – Poor Get Poorer

It is often claimed that this recession is hitting all of us. It is said that the rich suffer just as much as anyone else, if not more. It is argued that we all must make a sacrifice as we are all in this together. However this simply isn’t true. In fact this crisis is resulting in even further increases in the gap between rich and poor. Inequality and poverty are rising to even higher heights. Austerity is making the poor suffer the most while leaving the rich untouched. Quite simply the rich are getting richer while the poor are getting poorer. Continue reading “Rich Get Richer – Poor Get Poorer”

Nationalise The Banks

Recently I was sitting in my economics lecture trying to figure out what to do about the banks so that we never have another financial crisis. After much thought, I came to the conclusion that banks are too important to be left to the bankers. The only way to avoid future financial crisis and massive bank bailouts is to nationalise the banks. Now I’m no out-and-out Communist driven by ideology alone. I don’t believe in one size fits all, in that everything should be privatised or nationalised, rather it depends upon the situation. Listen to my explanation with an open mind and you might find a certain logic in this seemingly drastic proposal. Continue reading “Nationalise The Banks”

How Rich Countries Got Rich . . . And Why Poor Countries Stay Poor

I have just finished reading How Rich Countries Got Rich . . . And Why Poor Countries Stay Poor by Erik Reinert. The book is interesting for it engages what should be the main question of economics, why are some countries rich and other countries poor? This crucial question is woefully under researched and barely discussed in mainstream economics. I have completed two years of economics study in university without yet having heard an explanation for this phenomenon.

Reinert’s main argument is that the wealth of a nation is based upon the economic activities it specialises in. Poor countries are poor because they specialise in agriculture and the production of raw materials. This is an economic dead end as it does not allow for increases in productivity or innovation, which is how countries get rich. On the other hand, rich countries got rich by industrialising and building up a manufacturing base. Continue reading “How Rich Countries Got Rich . . . And Why Poor Countries Stay Poor”