Factoids

 Factoids (Truths that may be contested)

Social Security originally covered most Americans -- NYT, P. Krugman 12/10/2010

Economic notes

     "Economics Offers Tactics, Not Strategy - NYTimes.com" -- Interesting distinction...
http://economix.blogs.nytimes.com/2010/11/16/economics-offers-tactics-not-strategy/

     "Comics for Economics"
http://economix.blogs.nytimes.com/2010/11/15/comic-for-economics/

     'As noted in our news article, corporate profits reached a record last quarter, at least in nominal terms"
http://economix.blogs.nytimes.com/2010/11/23/visualizing-booming-profits/

     "The Other Taxes: Who Pays Them?" According to this, excluding redistribution paybacks, we seem to have a sort of flat tax now.
http://economix.blogs.nytimes.com/2010/11/24/the-other-taxes-who-pays-them/

Gaming the Vote

I have been taking a course on Choice/Voting theory, Arrow's theory, etc. and ran into this book, Gaming the Vote,  discussing the benefits of Range Voting, e.g. each Voter gives each, or some of the, candidate{s} a "value", say from 0 to 5, and the winning candidate is the one with the largest total . The author indicates that this is a better voting system (at least statistically) than the others, though it does require that each voter be able to not only rank, e.g. a > b > c...  the candidates, but also given them relative ratings.e.g.  a = 5, b= 4, c=0

• Note: as is pointed out, this does not disprove Arrow's theorem, and  of course in some cases may be worse than others, but the author suggests that this system generates choices that minimize the "Bayes Dissatisfaction" and is relatively resistant to strategic voting manipulation.

This system was, the author says, discussed by: Warren D, Smith, during the 1990's, and his papers are at Temple University in {Works} the following are the ones that I think may be most interesting to me :

• 56. TITLE: Range Voting pdf
  
  • Center for Range Voting
• 79. TITLE: The voting impossibilities of Arrow and of Gibbard & Satterthwaite.pdf
• 81. TITLE: Direct Democracy.pdf
 

My edit of the Wikipedia article is as follows 

Range voting (also called ratings summation, average voting, cardinal ratings, score voting, 0–99 voting, the score system, or the point system) is a voting sym for one-seat elections under which voters score, e.g 1-5, 0-99, etc. each candidate, the scores are added up, and the candidate with the highest score wins. “Gaming the Vote”  suggests that Range voting leads to the minimum Bayes dissatisfaction of all the voting systems analyzed. Range voting satisfies:

• monotonicity criterion,
• favorite betrayal criterion,
• participation criterion,
• consistency criterion
• independence of irrelevant alternatives,  (See WIKI IIA)
• Note: Range Voting does NOT satisfy the IIA condition as expressed by Arrow, who specifically rejects Cardinal ordering in this criteria, but it does satisfy the other condition  
• "If A is preferred to B out of the choice set {A,B}, then introducing a third alternative X, thus expanding the choice set to {A,B,X}, must not make B preferable to A."
• resolvability criterion,
• reversal symmetry.
• It is immune to cloning, except for the obvious specific case in which a candidate with clones ties, instead of achieving a unique win. 

It dies not satisfy:

• not satisfy either the Condorcet criterion (i.e. is not a Condorcet method) or the Condorcet loser criterion, although with all-strategic voters and perfect information the Condorcet winner is a Nash equilibrium.[7]
• not satisfy the majority criterion, but it satisfies a weakened form of it: a majority can force their choice to win, although they might not exercise that capability.
• not satisfy the later-no-harm criterion, meaning that giving a positive rating to a less preferred candidate can cause a more preferred candidate to lose.
• not regarded as a counter-example to Arrow's theorem is that it is a cardinal voting system, while the "universality" criterion of Arrow's theorem effectively restricts that result to ordinal voting systems.

Note: I expect to add more links to Wikipedia discussions of various topics, but just wanted to point to the Smith papers now.

Voting System evaluation

A voting system contains rules for valid voting, and how votes are counted and aggregated to yield a final result. The study of formally defined voting systems is called voting theory,

With majority rule, those who are unfamiliar with voting theory are often surprised that another voting system exists, each of which has some undesirable features, or that "majority rule" systems can produce results not supported by a majority.

economy and budget Nov, 2010

June 22-23, 2010 -- Federal Reserve Banks ... 
submitted projections for output growth, unemployment, and inflation for the years 2010 to 2012 and over the longer run. Economic projections of Federal Reserve Governors and Reserve Bank presidents, June 2010
Percent

Variable	Central tendency1				Range2
	2010	2011	2012	Longer run	2010	2011	2012	Longer run
Change in real GDP	3.0 to 3.5	3.5 to 4.2	3.5 to 4.5	2.5 to 2.8	2.9 to 3.8	2.9 to 4.5	2.8 to 5.0	2.4 to 3.0
April projection	3.2 to 3.7	3.4 to 4.5	3.5 to 4.5	2.5 to 2.8	2.7 to 4.0	3.0 to 4.6	2.8 to 5.0	2.4 to 3.0
Unemployment rate	9.2 to 9.5	8.3 to 8.7	7.1 to 7.5	5.0 to 5.3	9.0 to 9.9	7.6 to 8.9	6.8 to 7.9	5.0 to 6.3
April projection	9.1 to 9.5	8.1 to 8.5	6.6 to 7.5	5.0 to 5.3	8.6 to 9.7	7.2 to 8.7	6.4 to 7.7	5.0 to 6.3
PCE inflation	1.0 to 1.1	1.1 to 1.6	1.0 to 1.7	1.7 to 2.0	0.9 to 1.8	0.8 to 2.4	0.5 to 2.2	1.5 to 2.0
April projection	1.2 to 1.5	1.1 to 1.9	1.2 to 2.0	1.7 to 2.0	1.1 to 2.0	0.9 to 2.4	0.7 to 2.2	1.5 to 2.0
Core PCE inflation3	0.8 to 1.0	0.9 to 1.3	1.0 to 1.5		0.7 to 1.5	0.6 to 2.4	0.4 to 2.2
April projection	0.9 to 1.2	1.0 to 1.5	1.2 to 1.6		0.7 to 1.6	0.6 to 2.4	0.6 to 2.2

August 21, 2010  Economic Projections in CBO's Budget Update


Fy 2009 -- United States federal budget, Wikipedia
The U.S. budget situation has deteriorated significantly since 2001, when the Congressional Budget Office (CBO) forecast average annual surpluses of approximately $850 billion from 2009-2012. The average deficit forecast in each of those years as of June 2009 was approximately $1,215 billion. The New York Times analyzed this roughly $2 trillion "swing," separating the causes into four major categories along with their share:

• Recessions or the business cycle (37%);
• Policies enacted by President Bush (33%);
• Policies enacted by President Bush and supported or extended by President Obama (20%); and
• New policies from President Obama (10%).

(Log Scale) Long-term real growth in US GDP 1871-2009 by Catherine on November 4, 2010
Log scale version of yesterday’s Real Growth of US GDP graph.

• Annualized Real Stocks Price Growth    1.95%
• Annualized Real GDP Growth                  3.47%

Law-268

The following are some articles that I though might be interested for the Law-268 class that I am taking at Stanford. (mllive)

Week 2 -- Constitutional Interpretation

• The perils of constitution-worship also [blog] -- One of the guiding principles of the tea-party movement is based on a myth (Economist  Sep 23rd 2010 ) 

 Week ? -- Election law

• 
  

Hints

Google Reader

• Next: Shift-A (Mark all read), Shift-N (Next Folder), Shift-O (Open)
  

14th ammendment

Amendment XIV, Section 1, Clause 1:

• All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.

In Wong Kim Ark (169 U.S. 649 (1898)) the Supreme Court held that under the Fourteenth Amendment to the U.S. Constitution, a man born within the United States to foreigners (in that case, Chinese citizens) who have a permanent domicile and residence in the United States and are carrying on business in the United States^[10] and who were not employed in a diplomatic or other official capacity by a foreign power, was a citizen of the United States. (Wiki)

Alternatives to Birthright Citizenship by Will Wilkinson on August 10, 2010

Birthright Citizenship Act of 2009 - Amends the Immigration and Nationality Act to consider a person born in the United States "subject to the jurisdiction" of the United States for citizenship at birth purposes if the person is born in the United States of parents, one of whom is:

1. a U.S. citizen or national;
2. a lawful permanent resident alien whose residence is in the United States; or
3. an alien performing active service in the U.S. Armed Forces.

References

• Wikipeda

Free Enterprise fundamentalists

The Free Enterprise fundamentalists theorize that:

The Free Enterprise system optimizes a society's economic welfare and therefore any other economic system is sub-optimal and is less beneficial.

=====

I believe that there are a number of questions:


1) Which type of Free Enterprise system?

• Fe.0 - Anarchy - There is no government involvement in the economic system, i.e. no protection for private property or against violence with respect to property
  
  
  
• Fe.1 - Libertarian - The Government manages a court system that adjudicates contracts and natural law protection against theft and a legal enforcement system that enforces the judgements of the court.
  
  
• Fe.2 - Communal - The Government provides the "Essential" common services, e.g. Defense, Police, Fire, Local roads, And??? (Note: Services that can be reasonably provided by private agencies, either by voluntary individual funding with some regulation or subsidies will generally be reserved for Fe.3+?)
  
  
• Fe.3 - Regulatory - The Government passes laws that are meant to express the costs of dis-economies, market failures, and common understandings, and these are also judged and enforced.
  
  
• Fe.4 - Re-Distributional - The Government determines that the poorer are not getting essential services or their "fair" share of the GDP and thus Taxes the richer to either provide the services or income to the poorer
  
  
• Fe.5 - Planned - The Government determines future costs and benefits and Taxes and Subsidizes to decrease or increase activity in coordination with these determinations.

• Fe.6 - Socialist - The Government owns and runs the major industries.
  
  
• Fe.7 - Communist - The Government owns and runs the businesses and directs the employment of the citizens.
  

2) What is the definition of society's economic welfare?

1. GDP
2. Maximum median income/wealth
3. Maximum lower 1/10 income/wealth
   
4. Jobs -- NO
5. Size of Government -- NO

and of course what time period should be considered, tomorrow, 10 years, a generation


3) What other assumptions are required to prove the theory?

1. Homo Economist
1. Full information
2. Rational consideration of present value
3. etc?
2. Static, Monotonic, ?Gaussian? Supply and Demand functions
3. Lack of Chaotic system
4. Lack of monopolies and irrational nations
   

=====

Open Questions

1. Are there significant benefits to having small, diverse companies rather than large mega companies that man be balanced against some synergy?
   
   
2. Are there significant benefits to having continuing existence on companies that may be balanced against increased efficiency of newer companies

=====

Problems

1. Failure to "clear" labor market
   
   
2. Instability of markets and general economy
   
   
3. Lack of "sharing" of productivity growth, Income spread and median income does not increase
   
   
4. Dis-economies, Elimination of Commons
   
   
5. Insufficient investment and concern in the future

=====

Possible causes

1. Black swan
   
   
2. Fooled by Randomness
   
   
3. Missing and asymmetric information
   
   
4. Behavioral economics
1. Excessive value for present
   
   
5. Arrows impossibility theory
   

=====

Political Urban Legends

There are a number of political statements, Urban Legends, that are believed that seem to be unsupported by any facts.

Conservative Canards

The Chinese are drilling in the gulf of Mexico (PolitiFact 2010)

• GOP claim about Chinese oil drilling off Cuba is untrue and (Mother Jones 2008)
• Cheney Admits Mistake in Claim of China Drilling Near Florida
  

Liberal Lies

___________________________

Also see:

• About political urban legends

Contribute any others that you run across

Subscription benefits

Many WEB sites and News sources are trying to find out how to balance the material that they should offer free and that which they should only offer to their subscribers.

My standard suggestion is that anyone should be able to link to your information, and add direct comments, but a subscriber should also be able to:

1) Go directly to the information without going through an Ad Wall.

2) Access past issues table of contents, their front page...

3) Search past articles by tag, Keyword...

4) Link their blog to any article with a headline of their choosing, with popularity ordering,, etc.

5) More TBD.

Paradoxes

The 20-th century was the "No you Can't" century in which there were a number of Paradoxes that were discovered that "proved" that not all things were possible.

Physics

. Relativity -- Large Physics

1. No material particle can be accelerated to the speed of light.
2. The Speed of light is a constant and is not observed to be changed no matter the speed of the observer.
3. There is no absolute space frame, e.g. one can not determine if one is stationary relative to any absolute space.

. Quantum Mechanics -- Small Physics

1. Many measurements are intermingled in that one can not measure both with infinite accuracy, e.g. Position and Momentum.
2. The state of a system often is indeterminate, with no hidden values, and only exists when an observation collapses the state.
3. Small particles (or waves) sometimes seem to be Particles, when their position is measures, and Waves when their path is measured.

Arrow's impossibility theorem (for voting) -- There is no voting system that is a fair way of determining group Public Good from individual preferences if the system is meant to satisfy: "

1. unrestricted domain, -- It should yield a unique and complete ranking of societal choices for any set of individual voter preferences.
2. non-dictatorship, -- It cannot simply mimic the preferences of a single voter.
3. independence of irrelevant alternatives -- Changes in individuals' rankings of irrelevant alternatives (ones outside the subset) should have no impact on the societal ranking of the relevant subset.
4. Pareto efficiency, -- If every individual prefers a certain option to another, then so must the resulting societal preference order. (note: monotonicity, non-imposition, and independence of irrelevant alternatives together imply Pareto efficiency)

Practical Paradoxes

the following seem to be paradoxes, but are not proven.

. Democratic Trilemma -- Fishkin -- No democratic system seems to satisfy the following three objectives.

1. Participation -- All qualified members of the society shall participate in the determination of the policies of the society.
2. Equality -- They shall be equally deterministic of the policies.
3. Deliberation -- They shall spend sufficient time to thoughtfully evaluate the values and implications of their decisions.

Competitive Democracy

I am taking a course in Models of Democracy and leading the session on Competitive Democracy. As part of this I wrote a set of Class notes via Google Docs, and posted it on the web. The problem is that they generate a long URL, so I thought it would help to put it in this Blog post to make it easy to get to. The notes are linked to the title of this post and also from the following:

Competitive Democracy Notes

Also see:

• Schumpeter: Capitalism, Socialism, and Democracy From WikiSummary

• "Schumpeter's Leadership Democracy" Mackie, Gerry, 2004. -- Joseph Schumpeter's theory of democracy is set forth, and criticized as both insufficiently normative and ultimately incoherent. {TBD}
  

Wingnuts

Wingnuts

A new book "Wingnuts: How the Lunatic Fringe is Hijacking America (Paperback) ~ John Avlon (Author)", describes the ideas and people that the author feels are "A wingnut is someone on the far-right or far-left wing of the political spectrum – professional partisans, unhinged activists, and paranoid conspiracy theorists". As this may be a subjective evalution, I am looking into a more objective measure of these catagories.

• Wingnut Idea: An idea that is supported/believed by 5 to 15% of the population. (Note: I define an idea that is supported by less than 5% as just crazy and by over 15% as just unpopular or not)
  
  
• Group Wingnut Idea: A Wingnut idea that is supported/believed by twice the percent of a specific group. (note: If the group is small, e.g. 1/nn-th of the overall population, then the percent should "nn" times as large.
  
  
• Wingnut: A person who supports/believes 50% of the wingnet ideas.
  
  
• Group (partisan) Wingnet: A person who supports/believes 50% of the wingnet ideas of one specific group.

{TBD}

Working across the Isle

In the spirit or working across the isle I note some suggestions that might be interesting.

• Schedule monthly 2 hour open, Televised, sessions between the president and the legislators in which they could discuss the issues and proposals that are important to them and the country. There is a first report, "John Cornyn: No thanks to President Obama Q & A" that it may be difficult to establish this.
  
  
• Bring the Medicare and the Social Security proposals of the Republican Budget to the floor to have them voted upon. As I understand it:
  
• 1. The proposal on Social Security is to move toward a Defined Contribution system, whose return might be based on stock market performance, rather than a system that pays a specific income, and if it is like the previous Bush plan, makes the Social Security system worse off for decades until the current generation dies off.
     
  2. The proposal for Medicare is to provide vouchers for un-regulated insurance purchases and these vouchers are to increase at 50% the rate of the cost of health care. Thus, if one assumes that the administrative cost of private insurance is 25% or so, and that Medicare is paying say 70% of the cost of medical treatment, then at year 1, this will reduce the amount of health care for the Medicare Patient by roughly half and then reduce it more as time proceed

Also see:

• Republican Solutions (January 29, 2010)
• Liberal analysis of Republican 2010 Budget
• Dems Push Election-Year Resolution Against Privatizing Social Security

The government is not working

Often I say, and hear "The Government is not Working" and was challenged at to what I meant and how to improve it.

The easy definition, with I will reject, is that "The Government is not doing what I want it to do". This Subjective definition just leads to saying that one doesn't like the results, in general does not like some specific action.

The definition that I'd like to explore is based on the assumption that America is supposed to be a Representative Democracy, and thus that "The Government is Enacting, or Not, laws that a large majority prefers". This definition is closer to an Objective one that might be tested and perhaps improved by changing the system in a non-ideological way rather working within a "broken" system.

• Evidence

(tbd)

• Proposal

• Any candidate, President, Congress person, commit to supporting any bill that polls over 67% support or to opposing any bill that polls under 33% in a properly defined poll.

The poll would have to be

1. Directly funded by the bills supporters or opposors, and be
2. Sufficiently deep, say 5,000 respondents.
3. Responsibly accurate, say only 3% Non Americans, etc???
4. Reasonably thoughtful, say delayed 60 days after it is announced to give the respondents a chance to become educated on its proposal.

Details

Rational, Natural

The terms "Rational" and {Super}Natural have been brought up in a discussion, and I realize that often there are diferent understandings.

Rational == Logical and Verifiable

• Logical = There are a set of understood first principals, e.g. Axioms that are, at least for discussion assumed. and then conclusions are derived from them by applying standard FORMAL logic, Math, etc.
  
  
• Verifiable = The conclusions are clear enough so that they lead to predictions of the state of the observable world that can either be the basis of experiments or general obervations that are either fulfilled, i.e. or not, i.e. falsiable, and if the conclusions are not "true" then the original Axioms or derivations must be abandomed or adjusted.

Note: A good Scientiest/Rationalist should attampt to
derive conclusions that are improbable so that
they are probably false rather than ones that
are probable, e.g. they should try to DISPROVE
their "Rational" theory rather than to support it.


Supernational == ???

iPhone world factbook, atlas

iPhone world factbook, atlas

• 2010 World Factbook $0.99 (4.5/5) -- geographies, economies, populations, and militaries of more than 250 nations and territories spanning the globe. -- Maps, Facts, Ranks (w - Fuzzy Peach LLC [tbd])
• The World Factbook 2010 $0.99 (w - jDictionary)

iPhone Sound Meters

Sound Meters

• Sonic Scan $0.99, rate:3.0 -- Displays sound pressure level [decibel] and frequency [Hertz] of sound in your environment. Features: Graph Sound Level, Frequency == Zero Crossings.
• Digital Sound Meter $0.99, rate:2.5 -- Display of the average and peak levels with a bargraph and with a numeric LCD display.
• dBMeter Pro $2.99, rate:3.0 -- General This application can be used to measure ambient noise in Decibels.
  Features: Graph, Meter, eMail Results.

Knowledge Space

It seems to me that it is convenient to categorize human knowledge in a 2-d space rather than along a 1-d line or a 0-d choice, This is inspired by Rumsfield quote:

• "There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don’t know. But there are also unknown unknowns. These are things we do not know we don’t know."

The two dimentions that I see are the the Quality of the Theories and the Quality of the Results.

• Known, Knowns -- Example: Classical Physics -- The theory is clear and it leads to exact fully reproducible predictions.
• Knows, UnKnows -- Example: Evolution -- The theory is clear but leads to statistical or trend predictions.
• UnKnown, Knows -- Examples: Heurictics -- The theory is ad-hock but leads to tendencies.
• UnKnown, UnKnowns -- Example: Religion -- The theory is disconnected from the real world and leads to no predictions.

On the other hand, others are moe comfortable with a 1-d classification or a 0-d Judgement.

• 1-d -- a Theory, area of knowledge, is Generally righter or wronger.
• 0-d -- a Theory ..., is either Right or Wrong.
  

Note: This is similar to the way the the Advocates for Self Goverment suggest that we catagorize political leanings. See: 10 question quiz.

iphone apps

There are a number of sites, (services) that allow one to get access to the applications for the iPhone/iTouch. This list started from the Winter 2010 issue of iPhoneLife magazine (Weekly Update Newsletter).

Apple Services

• On iPhone, iPhoneLive app -- WEB Browser // Plus // Add to Home Screen (or Bookmarks)
• On iPhone, iPhone genius -- App store, // Featured // Genius
  
• Apps for Everything -- Once you discover the App Store, you’ll see how applications can make your iPhone do just about anything.

Web Sites

• MacWorld Application Reviews: iPod touch & iPhone app reviews from our editors—and you!
• Apptism -- Check out the current Top Paid iPhone Apps and Top Free iPhone Apps!
• AppReview -- There are 123,438 total applications available from the Apple Store. AppReview has reviewed 37,633 (as of 12/22/2009).
• 148 Apps -- In addition to the reviews and news, we keep track of what’s selling, what’s new and what prices are dropping in the iTunes App Store.
• App Space -- an intelligent recommendation engine designed to find the apps relevant to you.
• App Classics -- From the front page users can see the top app classics across all categories, or search deeper into individual categories through the drop down menu.
• Info World -- interactive catalog of iPhone apps designed for businesses, professionals, and IT staff

Social sites

Free Enterprise theory

The conditions for a market/economy to be a Free Enterprise Economy that can be proven to be "Efficient" are:

1. There are many competing suppliers (consumers) such that none of them can effectively individually, or do conspire to set prices in the market.
   
2. There are no Economies of Scale, e.g. the Incremental cost of production does not decrease as the number produced increases. (I think that it must also be assumed that there are no Economies of Consumption e.g. that the value to the consumer for additional units consumed also does not increase as the number consumed increases [Q.1: Economies of Scale and interdependance])

If a market satisfies these conditions then it can be proven, the General Equiblirum Theory, that the market is efficient, as defined as follows, that (page 50):

1. Market clearing prices exist, one for each product.
2. Supply and Demand will be equal at these prices, i.e.,
3. Resources will be fully used.
4. Inputs will be used in the most productive way, e.g. there is no way to produce more by re-arranging the inputs, [Q.2: what is more]
5. The result are Pareto-efficient, i.e. it is not possible to improve anyone's situation except by degrading another's (or by obtaining more researces) e.g. [Q.3: Pareto-Efficient:] (page 54)
   

Note 1: The term "Free Enterprise"
(markets) will often be used as a synonym for:

• Competitive Economy
• Lessez-faire
• Capitalism

Note 2: I am not really sure what the exact assumptions for the Free enterprise system are. e.g. I don't see the mathemetical model.

1. What is the original wealth of individuals? (if it matters)
2. How do individual's wages get determined?
3. How do individual's values get determined? (though this may be irrelevant)
4. Re: 2, is is required that the Demand:Value curves are decreasing and Supply and Demand curves are all fixed and independant?

Note 3: Though it may be 'efficient'
there are a number of other possible problems:

1. 
   

Question:

• Q.1: Economies of Scale and interdependance: Do the conclusions depend on there being no economies of scale for consumption, e.g. that the utility of consuming decreases as more is consumed, and does it depend on their being no cross value, e.g. that each product's worth or cost is independent of any other product. e.g. Gas is worth $2.00/gal whether or not one has a car?
  
• Q.2: What is more: Is this 'more' as valued by the Quantity*Clearing_Price, or is this a Pareto more, e.g. No more except at the cost of Less?
• Q.3: Pareto-Efficient: Is it even true that Pareto-efficiency exists based on the studies in Behavioral Economy that seem to indicate that increasing the Richness of the Wealthy, even if there is not reduction in the Poorer, decrease the happyness of the poorer.

Economic Theorists

• Adam Smith -FE- 1723-1790 (page 26): The Wealth of Nations - 1776
  
• John Stuart Mill -FE - (page 33): Principals of Political Economy - 1848
• Ludwig van Mises -FE- (page 29): Socialism: An Economic and Sociological Analysis - 1922
• John Maynard Kaynes -WE-: Theory of Money - 1930, General theory of Employment, Interest and Money - 1936
  
• Friedrich Hayek -FE- (page 29): Prices and Production - 1931 (Recessions were a way of restoring the balance between savings and investment (page 38)) Economics and Knowledge - 1937 (market prices are primarly a way of collaring and communicating information) (page 14))
  
• Joseph Schumpeter -FE-: Capitalism, Socialism, and Democracy - 1942
  

Note:

• -FE- A Free Enterpirse theorist
• -WE- A Welfair theorist
  
  
• LSE: London School of Economics
  

Free Market Capitalism (def)

A Free market, Competitive economy, is one in which there are a number of suppliers, and consumers, each of which can not, does not, signifficantly set the price for the "thing".

• Adam Smith (1776) - theorized that specialization lead to efficiency and that Free Markets could coordinate the supply of goods to allow specialization of function., thus raising living standards (page 28)
  
• The theory was that Free Markets would lead to a price close to the cost of producting the products, Raw Materials, Labor, and Capital.
• The purpose of Government was to provide for the National Defense, Ensure that Laws, contracts and property rights were properly enforced. e.g Laissez-faire, (but Smith also mentioned and somehow preventing swindles and speculative panics (page 35), erecting and maintaining certain public works and certain public instutions(page 34))
  
• The ultimate goal of an economic policy was maximizing a countries wealth, ... the gross domestic product. (page 31)
  

Note (Smith understood that:):

• some Un-regulated markets are unstable, not self correcting.
  
  
• some Public works and instutions would be beneficial.
  

Market (def)

A Market is simply [a real or virtual set of 1] somewhere[s] [physical, virtual, or other conceptual 2] things are bought [traded 3] and sold. (page 26),

• 1] Assumed, the somewhere can be also virtual and can consist of a set of interrelated single markets.
  
  
• 2] Things can be generalized to other than physical objects such as intelectual property, songs, software...
  
  
• 3] Similarly bought and sold can be generalized to situations where the more conventional "money" transfer is replaced by some "payment" in kind.

There are at least 3 different markets:

1. Goods Market -- Note: one can perhaps subdivide this into Consumables, Investment, and Tools, and probably others depending on how the good is "used", e.g. for "pleasure"..., for future wealth, or to permit production.
   
2. Labor Market -- Again this may be divided into the purpose of the labor to the buyer, e.g. is it for immediate consumption or for producing goods.
   
3. Financial Market --
   
   

Notes:

• 0: My comments are generally normal or italic text where as the original author's are BOLD.
  
  
• 1: One can "narrow" a market to dealing with a specific product or set at a specific location..., but it is important to remember that since money is fungible and since products are shareable, conplementary, and competative, the Market, for example, for food corn in Chicago is effected by the markets in New York, for Sugar and for Ethenal.

From:

How Markets Fail: The Logic of Economic Calamities

~ John Cassidy 2009

• [D]escribes the rising influence of what he calls utopian economics—thinking that is blind to how real people act and that denies the many ways an unregulated free market can produce disastrous unintended consequences. He then looks to the leading edge of economic theory, including behavioral economics, to offer a new understanding of the economy—one that casts aside the old assumption that people and firms make decisions purely on the basis of rational self-interest.

Also see:

• Reviews of “How Markets Fail” Posted by John Cassidy -- November 16, 2009
• John Cassidy's New Yorker bio and Columns
  

Economic charts/graphs and discussions

The following are some sites
that generate
Charts/Graphs, on , or discuss
the Economic situation.
12/07/2009

Charts and Graphics

• Dshort.com gives me {Doug Short. a retired first wave boomer with a Ph.D. in English from Duke. } a chance to combine several interests — economics, web design, and pro-bono financial counseling. I'm also a contributor to the Motley Fool Rule Your Retirement subscription service.
  
  
• Visualizing Economics is an economics web site started in 2006 by Catherine Mulbrandon. I believe design can contribute to public debates by creating information-rich, easy-to-understand graphics revealing the meaning of data without hiding its complexity.

Blogs

• Economix: (New York Times) will analyze the news and use economics as a framework for thinking about the world.
• Rational Irrationality: (New Yorker): on economics, money, and more. by John Cassidy
  
  

Articles

• Rational Irrationality: The real reason that capitalism is so crash-prone. by John Cassidy
  

Books

• How Markets Fail: by John Cassidy
• The Soulful Science: What Economists Really Do and Why It Matters ~ Diane Coyle (Author)