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HONORS ECONOMICS PREINDUSTRIAL ECONOMIES & THE MONEY ILLUSION

HONORS ECONOMICS PREINDUSTRIAL ECONOMIES & THE MONEY ILLUSION. THE GREAT DIVERGENCE. CALCULUS. GUNPOWDER / EYEGLASSES. PRINTING PRESS / MECHANICAL CLOCK. TRIGONOMETRY / PAPER. IRON / STEEL. THE WEST & THE REST. 25¢. 34¢. 3¢. 17¢. 20¢. 23¢. 23¢. 14¢. 2¢.

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HONORS ECONOMICS PREINDUSTRIAL ECONOMIES & THE MONEY ILLUSION

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  1. HONORS ECONOMICS PREINDUSTRIAL ECONOMIES & THE MONEY ILLUSION
  2. THE GREAT DIVERGENCE CALCULUS GUNPOWDER / EYEGLASSES PRINTING PRESS / MECHANICAL CLOCK TRIGONOMETRY / PAPER IRON / STEEL
  3. THE WEST & THE REST 25¢ 34¢ 3¢ 17¢ 20¢ 23¢ 23¢ 14¢ 2¢ CHINESE REVOLUTION WWI, WWII, DEPRESSION GANDHI /INDEPENDENCE MING DYNASTY RENAISSANCE / COLUMBUS MUGHAL EMPIRE OPIUM WAR INDUSTRIAL REVOLUTION INDIA  BRITISH COLONY
  4. THE ECONOMY HAS LEFT THE BUILDING
  5. PRODUCTION POSSIBILITY FRONTIER asdfasdf WASTED POTENTIAL ♂ ♀
  6. INDUSTRIOUS vs. INDUSTRIAL REVOLUTION TWO WAYS TO INCREASE PRODUCTION: 1) WORK HARDER (INTENSIVE GROWTH) 2) WORK SMARTER (EXTENSIVE GROWTH) ===== THE REST: (CHINA, INDIA, etc.) NO FRONTIER  NO MORE LAND TO USE  FARM LAND MORE INTENSELY (RICE CULTIVATION) GROWING POPULATION  INCREASED LABOR INPUTS NO CHEAP ENERGY – NO MORE FORESTS THE WEST: (ENGLAND, FRANCE, etc.) DISCOVERY OF AMERICA  PLANTATION AGRICULTURE BUBONIC PLAGUE  INCREASES LAND-LABOR RATIO  CAPITAL INPUTS / INNOVATION CHEAP NEW ENERGY SOUCES (COAL) NEAR WATERWAYS
  7. AGRICULTURAL DIVISION OF LABOR NOBILITY CLERGY LONG DISTANCE MERCHANTS P E A S A N T S MONEY EXCHANGES BARTER EXCHANGES YORKTOWN MAHOPAC BREWSTER PUTNAM VALLEY OSSINING FOX LANE HEN HUD CARMEL
  8. BARTER EXCHANGES LEANNE WANTS COWS, SELLS CHICKENS MARLENA WANTS CHICKENS, SELLS GRAIN LISA WANTS GRAIN, SELLS COWS 1 CHICKEN = 4 GRAIN 1 COW = 7 GRAIN
  9. EXCHANGES WITH MONEY LEOMI WANTS COWS, SELLS CHICKENS $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ CAMERON WANTS CHICKENS, SELLS GRAIN MICHELLE WANTS GRAIN, SELLS COWS $ $ $ $ $ $ $ $ 1 CHICKEN = 4 GRAIN 1 COW = 7 GRAIN 1 GRAIN = $1 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
  10. THE KULA RING
  11. KULA RING, PART II PROBLEM: HOW TO TRADE DIVERSE PRODUCTS AMONG ANONYMOUS INDIVIDUALS? How much should you produce? How much should you charge? How much should you pay your employees? How much should you pay for raw materials? How do you communicate this information to others? What job should you choose? What training? ANSWER: MONEY. (GIFT-EXCHANGE) NECKLACES (Counter-clockwise) BRACELETS (Clockwise) NO PROFIT. GIFT = TOTAL VALUE OF GOODS
  12. MONEY CHANGES EVERYTHING MEDIUM OF EXCHANGE: MONEY = LOWEST COMMON DENOMINATOR ALLOWS EFFICIENT TRANSACTIONS AMONG ANONYMOUS INDIVIDUALS WITH DIVERSE PRODUCTS STORE OF VALUE: MONEY = PRESERVES VALUE OVER TIME BORROW FROM THE FUTURE INCOME WORK NOW, SPEND LATER INTERTEMPORAL SUPPLY & DEMAND IMBALANCES UNIT OF ACCOUNT: MONEY = SCORECARD / PRICING THE PRICELESS
  13. SAY’S LAW SUPPLY WILL CREATE ITS OWN DEMAND HUMAN ACTIVITY IS EITHER WORK or LEISURE LEISURE = PRODUCTION FOR PERSONAL CONSUMPTION WORK = FOR SALE TO OTHERS === INCREASING SUPPLY OF GOODS  INCREASE THE DEMAND FOR GOODS === ZERO-SUM  NO FREE LUNCH IF YOU CONSUME MORE, I MUST CONSUME LESS  ARTIFICIALLY STIMULATING DEMAND = BAD IDEA THE MARKET IS ALWAYS RIGHT UNEMPLOYMENT = VACATION
  14. HUMAN BODY (AS AN ASSET) = $47 MILLION Bone Marrow: $23.0 Million DNA: $ 9.7 Million Antibodies: $ 7.3 Million Lung: $ 116,400 Kidney: $ 91,400 Heart: $ 57,000 HUMAN BODY (AS A COMMODITY) = $4.50 COMMODITIES & ASSETS BUSHEL OF APPLES GALLON OF GASOLINE OUNCE OF GOLD SHEET OF PAPER HIGH SCHOOL DIPLOMA MEGAWATT OF ELECTRICITY HEALTH INSURANCE METRIC TON OF CO2 VOTE FOR PRESIDENT MILLIGRAM OF PARACETAMOL COMMODITIES – OBJECTIVE, DEFINED CHARACTERISTICS & HOMOGENOUS QUALITY – QUANTITY KEY ASSETS – SUBJECTIVE OR INTANGIBLE DIMENSIONS & HETEROGENOUS QUALITY – QUALITY KEY MARKETS = GOOD AT COMMODITIES / BAD AT ASSETS PREMODERN ECONOMY= BARTER = COMMODITIES  MODERN ECONOMY = EXCHANGE = ASSETS INT’L MERCHANDISE TRADE IN GOODS & SERVICES: $13 - $16 TRILLION US GDP: $14 TRILLION GLOBAL GDP: $60 TRILLION GLOBAL FINANCIAL ASSETS: $140 TRILLION PUBLICLY TRADED STOCKS REAL ESTATE SERVICE SECTOR JOBS HEALTH TECHNOLOGY / PATENT FASHION CURRENCY “BRAND NAME” MERCH’ WORKS OF ART CLEAN ENVIRONMENT RELIGIOUS SALVATION ADVICE
  15. “FICTITIOUS” COMMODITIES MONEY IS STERILE : MONEY IS A VEIL BUYING / SELLING MONEY = BUYING / SELLING AN INCH SIN OF USURY: CANNOT LEND MONEY AT INTEREST CHRISTIANITY, ISLAM, & CONFUCIANISM ALL FORBADE FINANCIAL INSTITUTIONS (TEMPLARS) JEWS DEMONIZED FOR “MONEY-LENDING” & “MONEY-CHANGING” WALL STREET vs. MAIN STREET TRAGEDY OF THE COMMONS LAND = NATURE; NOT PRODUCED FOR MARKET STRANGE IDEA: MANHATTAN FOR $24 NATIONAL BORDERS INVISIBLE FROM THE “BIRD’S EYE” VIEW EMINENT DOMAIN: GOD  KING  LORD  VASSAL  SERF PEOPLE BELONG TO THE LAND,  LAND BELONGED TO THE PEOPLE GRAZING & FOREST LAND HELD IN COMMON FOR FOOD & ENERGY TRAGEDY OF THE COMMONS / ENCLOSURE MOVEMENT SELLING ONESELF LABOR = HUMAN ACTIVITY; NOT PRODUCED FOR MARKET CANNOT SELL YOUR TIME WITHOUT RELIABLE CLOCKS(c. 1700) PROSTITUTION & ORGAN SALE  ILLEGAL STADTLUFT MACHT FREI – WORKERS BELONGED TO THE LAND & LORD
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