EC 12. Pointers No. 2

FAQs on Ch. 3 of Backhouse – the 16th Century

1.What historical event, centered in Italy, was of importance to the emergence of modern science? Explain your answer.

2.Copernicus thought that the earth revolved around the sun, instead of the other way around. What objection, in the form of a question, was raised by those who opposed Copernicus? Since Copernicus could not answer this question, who subsequently gave a reasonable answer or answers?

3.What were the two main scientific or philosophical contributions of William of Ockham? (Hint: One of these contributions is not mentioned in Backhouse, but you can try to Google the answer.)

4.In the medieval world view, sovereignty came from God, hence kings ruled by divine right. With the Reformation, what became the basis for the legitimization of sovereignty?

5.Who were the early rulers of nascent nation-states? What did they acquire with their rise to such positions?

6.Summarize the doctrines of mercantilism.

7.What did Machiavelli contribute to political science? Explain.

8.Summarize the economic thought of the School of Salamanca, especially in terms of how it differs from the previous thoughts of Aristotle and Aquinas.

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EC 12. Pointers No. 1

FAQs on early thinking about economic concepts and related issues from the time of the Ancients to that of the Middle Ages

These cover the Prologue and the first two chapters of Backhouse, and McCloskey’s Three-Minute History of economic thought.

General pointers:

Get a textbook on introductory economics, such as those by Gerry Sicat, Mankiw, or Parkin. Such a book will help you to understand concepts discussed in the history of economic thought.

Before doing any of the assigned readings, take some time to ask yourself what you want to learn from the readings. This means you have to skim the material to get a sense of what they cover, and whether the topics discussed are interesting.

Specific pointers are given here in the form of questions that could be part of an essay exam or homework. Read the material in search of answers to the pointer-questions. You may jot down notes for yourself on how you would answer the questions.

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By Kermit Kefafel (at Facebook)

Now that the cat’s out of the bag, we now know that unlidata is not unlidata. Those who sign up for unlidata at P1k/month are the most frustrated users because they get throttled by something ironically called “fair use.” In effect, these folks shelled out good money for basically nothing!

Apologists for Globe and Smart now point to volume bucket deals as the promos to use by the harassed consumer. What follows are tips for prepaid sims. (Basically, postpaid sims used for surfing are vulnerable to undue charges.)

What to do then if you use Globe’s GoSurf or Smart’s Big Bytes?

Check the ISP speeds. Pricing is basically P17/100mb for both telcos. Small users can go slow with the 3-day 300mb buckets for P50.
To register, text GOSURF50 to 8888 for Globe, or text BIG50 to 9999 for Smart.

Once registered, you can monitor your usage at *143# for Globe, or at your sim toolkit for Smart.

What happens if you use up your data allocation and the promo expires? Ordinarily, you pay the standard P5/15min charge for data connection. But both telecoms offer a “load protect” scheme, as follows:

Smart has a load protect that’s automatic if you register a surf promo like BigBytes. They claim you can’t connect to the internet once your promo expires.

At Globe, use SurfAlert (text SURFALERT ON to 8888, or turn on mobile internet alerts at *143#). If SurfAlert is on, you can’t connect to the web if you don’t have a promo.

You should test your load-protect feature by having only minimal extra load.

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Wrap-up Lecture in History of Economic Thought

The ancient world

Serious thought began in the ancient world – roughly 400 BC – with ideas on how to deal with what we know today as the “economic problem” (scarcity, and how society decides what to produce/consume, how to produce, and who will consume).

The background then was a stage in history when man had progressed from hunting/gathering to agriculture. We can imagine that the economic problem for hunter/gatherers was then mostly that of survival, but agriculture later brought some element of abundance beyond the most basic necessities of food and water.

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Conflate vs. confuse (re-blog)

I get confused when you conflate.

To confuse is to treat two different things the same.

To conflate is to combine two things to make up a third.

Where’s the fourth? At the firth?

Hat tip to Kate Porter.


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Forced Saving

Early in the history of the debate between Keynes and Hayek, the two struggled without success to clarify the meaning of something called “forced saving.”

It turns out that they didn’t really disagree; they just didn’t agree on definitions.

The following are notes based on excerpts of an article by Roger Garrison.


Hayek and Keynes:
The problem with Hayek’s “forced saving,” then, is that it presents itself syntactically as a kind of saving while referring contextually to a pattern of investment. Hayek himself was certainly alive to this point even as early as his Monetary Theory and the Trade Cycle. In a chapter titled “Unsettled Problems in Trade Cycle Theory,” Hayek ([1928] 1975, p. 220) referred to the term as a “rather unfortunate expression.” He preferred the phrase “artificially induced capital accumulation.” In his subsequent “Note on the Development,” Hayek ([1939] 1975, p. 197) mentions Keynes’s avoidance of the term in his Treatise on Money: “Keynes … rejects this terminology [forced saving] and prefers to speak simply of investment being in excess of saving; and there is much to be said in favor of this.” But despite Hayek’s and others’ dissatisfaction with using the term to refer to a pattern of investment rather than a kind of saving, forced saving (both the term and the concept) has come to be considered the sine qua non of Austrian business cycle theory and particularly of Hayek’s rendition of that theory.

Mises and Hayek:
There is an easy—though only partial—reconciliation between Mises’s and Hayek’s contrasting formulations. It comes from our recognition that Hayek’s “forced saving,” rather than being the antonym of “overconsumption,” is actually a synonym for “malinvestment.” With unduly favorable credit conditions, the business community is investing as if saving has increased when in fact saving has decreased. There is no contradiction here between Mises and Hayek but rather a contradiction recognized by both in the market forces associated with a credit-driven boom. It is this contradiction, if fact, that lies at the root of the boom’s unsustainability. A fuller resolution of the differences between Mises and Hayek requires a closer look at “forced saving” and “overconsumption” as used by each.

Hayek had a concept of “forced saving” that is equivalent to “malinvestment” or investment in excess of what is optimal (optimal being consistent with maximizing society’s welfare). Indeed, he accepted that he really meant it to mean “artificially induced capital accumulation.”

Keynes tried to wrestle with the idea, and used it, according to Hayek, to mean something else: the excess of (desired) aggregate investment by firms over (actual) saving of households (assuming that only firms invest and only households save). The term would then cover an unwanted and unexpected increase in business inventories (that might signal that producers are producing more than quantity demanded at the prevailing prices). The concept, in the language of Keynes, could easily have been named “forced investment.”

We can then reconcile Keynes with Hayek. In either of these two’s views, forced saving comes at the down-turn of the business cycle. But in Hayek’s views, forced saving also happens at the boom, when there is over-investment by firms who have a too-rosy projection of future demand; the forcing factor here is artificially low interest rates arising from too-easy monetary policy.

Garrison states that the concept of forced saving is central to Austrian business cycle theory.

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Recovery of the Soul

The theory seems plausible.

The idea is that consciousness consists of certain “perturbations” extant in our brains not contained in time/space that “migrate” to some other universe when humans die (what about plants and animals?).  This is a theory that the soul lives on, and by extension, can be infused into another body of matter that can hold consciousness.

But why can’t we remember our past incarnations? And if we can’t remember, isn’t it the same as having “died” in the sense of the consciousness going elsewhere that we can’t recover? Or is the secret to immortality the discovery of how we can recover that consciousness, the way we move “trash” in a Mac back to regular memory?

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