What Your Economics Professor Never Understood

1. What Your Economics Professor Never Understood

2. Part one:What is Economics?

3. “The Dismal Science” • “Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.” • "Economics is the social science which examines how people choose to use limited or scarce resources in attempting to satisfy their unlimited wants.”

4. "The combined assumptions of maximizing behaviour, market equilibrium, and stable preferences, used relentlessly and unflinchingly, form the heart of the economic approach." • "Economics ... explores and tests the implications of assuming that man is a rational maximizerof his ends in life, his satisfactions - what we shall call his self-interest."

5. “The study of how people use their limited resources in an attempt to satisfy unlimited wants.” • “Economics is generally understood to concern behaviour that, given the scarcity of means, arises to achieve certain ends. When scarcity ceases, conventional economic theory may no longer be applicable.”

7. Part Two:the American system

8. The Rogues’ Gallery

9. Henry C. Carey Political Economy is “the science which traces the laws of those phenomena of society which arise out of the desire of mankind to maintain and improve their condition.”

15. Part two:The Physical economy Of Lyndon H. LaRouche

16. Lyndon H. LaRouche • “The means by which we increase our creative and productive powers is the primary matter of economic science”

17. The First Economic Statement in History 26 Then God said, "Let us make man in our image, after our likeness; and let them have dominion over the fish of the sea, and over the birds of the air, and over the cattle, and over all the earth, and over every creeping thing that creeps upon the earth." 27 So God created man in his own image, in the image of God he created him; male and female he created them. 28 And God blessed them, and God said to them, "Be fruitful and multiply, and fill the earth and subdue it; and have dominion over the fish of the sea and over the birds of the air and over every living thing that moves upon the earth."

27. Constraints • Per capita market basket must increase • C / V must increase • S / (C + V) must increase • S’ / (C + V) must increase

28. What happens when we halt technological progress? • Per capita of S’ increases by dS’ • Thus: S’/(C+V) > (S’–dS’)/(V+C+dS’) • Relatively entropic • But also: F(u) = Depletion Cost (of resources) • Thus: (S’–dS’)/(V+C+dS’) > (S’–dS’–F(u))/(V+C+dS’) • Entropic • The rate of profit is constantly diminishing over time; therefore, the economy is running down.

29. A Successful Economy • A change in technology gives a 10% gain to C.(let k represent the factor of improvement) • Then (C+V) > (C-kS’+V) • And (S’+kS’) > S’ • Hence (S’+kS’)/(C+V-KS’) > S’/(C+V)

30. Compare S’/(C+V) and (S’)’/(C+V)’ • If (S’)’ = (S’+kS’-dS’) • And (C+V)’ = (V+C-kS’+dS’) • Then: • If kS’ > dS’, then S’/(C+V) < (S’)’/(C+V)’ • The process is at least relatively negentropic • If kS’ > [dS’+F(u)] • The process is absolutely negentropic

42. Part four:negentropy

43. The Laws of Thermodynamics • In any process, the total energy of the universe remains the same. • The entropy of an isolated system not in equilibrium will tend to increase over time, approaching a maximum value at equilibrium. • As temperature approaches absolute zero, the entropy of a system approaches a constant minimum.

45. The Golden Section and The Universe