Chronicles of the Lifeworld

lifeworld–the world of everyday life; the world as experienced.

Posts Tagged ‘economics


From David Henderson at EconLog:

Here’s what I’m wondering. If a local government in Pacific Grove or elsewhere got rid of such laws, how many extra productive jobs would be created? How many people would hire workers to cut down trees, build extra rooms, etc.? The city of Pacific Grove is also hostile to anyone who wants to have a medical marijuana clinic. It also doesn’t allow bars. If the city government started allowing these things, how many extra jobs would be created? I know that jobs are not the measure of wealth, but in all these cases, the jobs would create wealth.

This is an example of economic reductionism–the act of reducing social life into a narrow set of economic variables, namely wealth and productivity. Wealth and jobs are important. Communities live and die by them. But wealth is not always the most important factor by which communities thrive. Other factors are important too, such as community solidarity and happiness. Introducing policies designed to increase wealth and productivity could have destabilizing effects on solidarity and happiness, a sort of mini-“creative destruction,” if you will.

I’m not against communities introducing wealth producing policies, or un-policies (deregulations). Those decisions should ultimately lie with local governments, which tend to have a better understanding of the wants and desires of their constituents than state or federal representatives.


Written by Cody

July 24, 2010 at 18:40

Posted in economics, sociology

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Adam Smith: Behaviorist

In book one, chapter two of The Wealth of Nations, Adam Smith credits reason and speech for the propensity for individuals to truck, barter, and exchange. Through reason and speech, human beings coordinate their wants and needs with others. Smith argues that this propensity facilitates the division of labor. A person, for example, say, a tribesman, could fashion his own bow and arrow and trek out into wild and hunt for game. If he had a special talent for making bows and arrows but was an average hunter, he could concentrate on bow and arrow making and exchange his wares for game from hunters who are exceptional hunters. Smith does not give this phenomenon a name, but he is discussing the concept of comparative advantage. The example above also points to the topic of stratification.

Further, Smith claims that the difference in abilities between individuals is the result of the division of labor and can be attributed to habit, custom, and education. He remarks that the differences between children are little but widen as they enter into their respective occupations. This view would place Smith firmly in the nurture camp of the nature-nurture debate.

Written by Cody

July 23, 2010 at 10:45

Posted in economics

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Economists as Mystics

From the introduction to A Humane Economy by Wilhelm Röpke (with the introduction by Dermot Quinn):

Economists do not stand high in public esteem, and for good reason. For one thing, they seem to get it wrong as often as they get it right. Offering certainties with the confidence of hard scientists, their predictions dressed in the best mathematical finery, they seem to have a record of success somewhere between that of a fairground madame and a reader of tea-leaves. The public, embarrassed and bemused by this nakedness, rightly prefers the Famer’s Almanac to Keynes’s General Theory.

Written by Cody

July 22, 2010 at 22:02

Posted in economics

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