Value and Wealth

Since this is an essay on poverty (part 1 here), it is useful to consider its polar opposite, namely wealth. Defining wealth precisely is therefore the first order of business. Wealth is anything that is of some value to some person. Value is hard to pin down because it varies according to the person doing the evaluating. Just as beauty lies in the eye of the beholder, value lies in the mind of the evaluating person. 

Exchange

One man’s garbage is another man’s treasure, as the adage states quite correctly. Therefore two people may value the same thing quite differently. That difference is the only reason that people exchange stuff. For example, when Jim buys a sandwich for $5 from Joe, clearly Jim values the sandwich more than he values $5, and conversely Joe values $5 more than he values the sandwich. Also worth noting that exchange involves distinctly dissimilar things. Continue reading →

Economics

In the following, I explore a few fundamental ideas relating to the core subject matter of economics. One can precisely date the founding of the discipline with the publication in 1776 of Adam Smith’s seminal work titled An Inquiry into the Nature and Causes of the Wealth of Nations.

Note that the focus was on the wealth of nations, and not  the poverty of nations. Poverty is the default condition of all peoples in all times; it is the nature and causes of the wealth of nations that require explaining.

Economics is a branch of social science. Social science is devoted to the study of human societies and human interactions. Today economics is a vast field with dozens of specialized areas of inquiry. But the discipline was started by, would you believe, philosophers. What we call classical economists today — Adam Smith, David Hume, John Stuart Mill, et al — were philosophers. Smith’s first book Theory of Moral Sentiments (1759) laid the ethical and moral foundations for his later book on the wealth of nations. Continue reading →

April is the National Poetry Month in the US. “Inaugurated by the Academy of American Poets in 1996, National Poetry Month is now held every April, when publishers, booksellers, literary organizations, libraries, schools and poets around the country band together to celebrate poetry and its vital place in American culture.”
Continue reading →

So last month I tweeted this:

People are recognizing that WHO is China’s bitch and is in bed with Xi and his gang. Good news is that Trump halted the US donation to the WHO. I hope this is the first step to giving the WHO a quick burial. And I hope that the UN is also dismantled soon. If Trump can do that it would be marvelous, and all his insanity will be forgiven.

Here’s a short take on why WHO is China’s bitch. Continue reading →

Culling is a well-known phenomenon in biology — the process of selective removal of weaker individuals from the breeding stock. Although not done deliberately, something similar happens in markets. Entities that are “weak” are selected out of the marketplace, and the health of the economy improves.

In a previous post, I wrote:

If an unprofitable firm fails, it is bad for the workers of the firm. But the failure of firms within an industry could be good for the health of the industry and for the larger economy. At the next level up, an entire industry could fail and cause misery for its workers, and yet that could be very good for the economy. Continue reading →

Until a few months ago, China was doing spectacularly well in terms of economic growth, and the power and influence that the new wealth bought. But I think China’s goose is cooked, thanks to the Chinese virus that causes the Wuhan flu aka Covid-19. There’s going to be a backlash. OECD countries’ manufacturers who were off-shoring their production in China will pull out as fast they can. In all likelihood, electronics majors will cut their China-based supply chains.

This is not mere wishful thinking. It was economics that led to China becoming the global manufacturing destination. But the world has learned a lesson that will be hard to ignore — that putting all eggs in one basket is not a sound strategy. In any event, it was time for manufacturing to return to the OECD countries; the Wuhan flu just advanced the move a few years.

And one more thing. I think these institutions have to be given a quick burial: the FDA, the WHO and the UN. They are all evil. Continue reading →