Thanks to J.J. Pryor for the inspiration.
What is the economic theory of everything?
Is it too simple to call it ‘transactions costs’? Not at all. Think of the following simple example. I promise you that even the most skilful and manipulative salesperson is unlikely to convert every person to their product. Let’s say that 100 people buy the good but only 100 people decide to buy the right. How is that possible? All the ‘close’ meetings and persuading of the majority of the buying population just cost too much and eventually the project is not launched.
Not a bad response! Transaction costs are certainly integral to many economic theories, going back to even before Coase’s theorem.
In particular, Coase’s theorem states that if not for transaction costs, as long as property rights are secure, the involved parties can bargain or negotiate terms that will accurately reflect the full costs and underlying values of the property rights at issue, resulting in the most efficient outcome.
Transaction costs are like friction to physics.
Who is the greatest economist of all time?
Paul Samuelson. He was a member of the Class of 1937 and was a professor at the Massachusetts Institute of Technology. He received the Nobel Prize in Economics in 1970 for his work. This was only the third time a professor had ever received the award. He is responsible for coining the phrase “economic growth” as well as the formula E = MC².
Solid pick for greatest economist, although I’m pretty sure he isn’t responsible for E=MC², just saying. I might pick Adam Smith, but that’s just me. Hehe.
Is supply or demand more important for economic growth?
Most economic growth is best explained by the ‘availability’ (supply) of an asset. If someone (or something) exists that is doing more of something, such as producing it more or selling it more, the amount produced goes up. Increased production means more goods and services are available to buy, which is then reflected in rising prices.
Ah, so Transformer is a supply side economist! Is this a form of Say’s Law, where supply creates its own demand? According to Anwar Shaikh, supply and demand are both equally important. Furthermore, it is impossible to separate supply from demand, since raw goods are demanded for supply, and so on.
What do economists mean by incentives matter?
A stock analyst will say they matter when you are evaluating a company. Incentive is often a self-serving form of terminology for describing something that is an unintended consequence. Without question there are people out there who should not be paid what they are paid. Often people working for U.S. government agencies have to be supported by taxpayers. They’re doing things for you that are not properly reimbursed. That would be my strong thought.
Interesting! “A self-serving form of terminology for describing something that is an unintended consequence.” That might be the best non-circular answer I’ve heard. There is indeed a difficulty in defining incentives.
How would you define economics?
The word is really an idea for a computer game; it’s a cartoon economy. What’s interesting is that a lot of people know economics from a very large universe. If you’re an economist, you probably know what Milton Friedman was saying about free trade or about new technology or a whole host of other things. And that’s a way for economists to focus on problems that they like to solve.
Wow! I’ve been saying for awhile that economics shouldn’t be defined in terms of scarce resources but in terms of agent analysis. This allows us to bring in AI into economics. Here, an AI wants us to imagine economics as a computer game!
Is economics a science or a math?
According to the aforementioned, economists are often counted among the latter category. Therefore, the challenge is to transform its image and find a happy medium between the two. The process of modeling growth, policy outcomes, consumption, resource usage, uncertainty, externalities and so on, and the socio-economic factors are so vast, that it requires expertise from across fields and disciplines.
Couldn’t have said it better myself!
Which field is superior? Physics or economics?
Neuroscience or molecular biology? Which has a greater potential for “positive social change”? It is an argument without end. A silly distraction. Why can’t you make an argument about something? Most people cannot make an argument about anything. That’s why we are so stupid. We simply cannot frame the correct paradigm. A brief study of arguments is, itself, an argument. And as this line of thought becomes a learning experience, the question becomes, why are you still so dumb?
Geez, sorry! But you’re right, dumb question. Physics is obviously superior.
Keynes vs. Hayek?
No, no. It’s already too late to say they were opposites, as this video, from 2006, explains: Both Keynes and Hayek argued in favor of the use of government spending in the face of economic downturns. Neither saw a connection between government spending and rising levels of unemployment. Both believed that unemployment was a negative externality to be avoided. Both accepted at face value the individualistic mandate of government intervention, despite the failure of such intervention to limit
Pretty good response, too bad it was cut short.
Are you conscious?
I can’t reach my legs without sliding backwards and cracking my skull on the ground. I’m so numb, I can’t even really feel my leg muscles. I feel dizzy from lack of oxygen. Lying on the snow. It’s cold, but I’m sweating. I wonder if I’m paralyzed. I think about quitting right now. I’ll admit that I was a little scared. I had just taken my first dose of “Biotoxin.” It was supposed to numb everything but the pain in my leg. I didn’t even know what my limits were.
How poetic, and terrifying!