In the previous post "Economics and Physics" I briefly explored why the basic explanations of physics are hard to understand and why the basic explanations of economics are easy to understand. Physics is called a "hard science". I believe it is hard in the sense that advances in physics are made by supremely intelligent people and … Continue reading Understanding Economics is Easy
Physics is Not Logical Nobel Prize winning New Zealand physicist Ernest Rutherford (1871 - 1937) is reported to have claimed that "all science is either physics or stamp collecting." He evidently meant that physics is the only real science and everything else that goes under that label is just a collection of facts. The wiki's definition … Continue reading Economics and Physics
Most people would readily identify a heap of gold ingots as wealth. But a moment's reflection is enough to conclude that what can be considered wealth depends on the context. Imagine Robinson Crusoe alone on his otherwise uninhabited island coming across a pile of gold nuggets in a stream. What's more valuable to him: the gold … Continue reading The Wealth of Nations — Part 4: What’s Wealth?
The persistence of the canard that India was once a rich country is understandable. A quick glance at the simple graph illustrates very clearly why it is easy to conclude that India was rich. This piece has loads of graphics -- more than any other piece I ever wrote. No arguments here, just a lot … Continue reading The Wealth of Nations — Part 3: How Rich was India
If you ask me what are the necessary causes of the wealth of nations, I will answer -- having spent decades learning about and pondering that question -- in just one word: Freedom! Freedom is the sweetest word I know in English. The advancement of civilization is essentially the expansion of individual freedom -- the … Continue reading The Wealth of Nations — Part 2: Freedom
A comment on the last piece prompts this tiny lesson in microeconomics. "Corruption is one big pain point in the economic growth of a country. I have this funny idea but would like your inputs from an economists perspective. If things get costly it reduces its demand. Can corruption be made costly? This may increase … Continue reading The Demand and Supply of Fines and Corruption
In his 2016 annual letter (pdf, 28 pp) to the shareholders of Berkshire Hathaway, Warren Buffett makes this observation about America's economic dynamism. "One word sums up our country’s achievements: miraculous. From a standing start 240 years ago – a span of time less than triple my days on earth – Americans have combined human … Continue reading The Wealth of Nations — Part 1