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Economics

social science that studies the production, distribution, and consumption of goods and services

Economics is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Greek oikos (house) and nomos (custom or law).

The whole notion of the free market, laissez-faire capitalism, globalization is a very thin rationale for unmitigated greed by a tiny oligarchic elite. And they have made sure that that ideology is taught in universities across the country. And people, especially economists, who deviate from that ideology have been pushed aside, and become pariahs. And yet the driving ethos of that ideology is really to justify the hoarding of immense amounts of wealth by a very tiny percentage of the upper ruling class. ~ Chris Hedges
When people behave badly they always invent a philosophy of life which represents their bad actions to be not bad actions at all, but merely results of unalterable laws beyond their control. ~ Leo Tolstoy
With the year 1830 came the decisive crisis. In France and in England the bourgeoise had conquered political power. Thenceforth, the class-struggle, practically as well as theoretically, took on more and more outspoken and threatening forms. It sounded the death knell of scientific bourgeois economy. It was no longer a question, whether this theorem or that was true, but whether it was useful to capital or harmful, expedient or inexpedient, politically dangerous or not. In place of disinterested enquirers, there were hired prize-fighters; in place of genuine scientific research, the bad consequence and the evil intent of apologetic. ~ Karl Marx
A reconsideration of the discussion in which I took an active part more than 40 years ago has left me with a rather depressing view of the somewhat shameful state of what has become an established part of economic science, the subject of ‘economic systems’. It appears to me that in this subject political attractiveness has been preserved by the flimsiest of arguments. The kindest thing one can say is that some well-meaning people have allowed themselves to be deceived by the vague and thoughtless language commonly used by specialists in the theory of these issues. ~ Friedrich Hayek
Many economic fallacies depend upon (1) thinking of the economy as a set of zero-sum transactions, (2) ignoring the role of competition in the marketplace, or (3) not thinking beyond the initial consequences of particular policies. ~ Thomas Sowell
The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists. ~ Joan Robinson
It is the expensiveness of our pleasures that makes the world poor and keeps us poor in ourselves. If we could but learn to find enjoyment in the things of the mind, the economic problems would solve themselves, ~ John Lancaster Spalding

Arranged alphabetically by author or source:
A · B · C · D · E · F · G · H · I · J · K · L · M · N · O · P · Q · R · S · T · U · V · W · X · Y · Z · See also · External links

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  • In fact, without any exaggeration, the current mechanism of money creation through credit is certainly the "cancer" that's irretrievably eroding market economies of private property.
    • Maurice Allais, in La Crise mondiale d'aujourd'hui. Pour de profondes réformes des institutions financières et monétaires (1999), p. 74

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  • Most of the presidential candidates' economic packages involve 'tax breaks,' which is when the government, amid great fanfare, generously decides not to take quite so much of your income. In other words, these candidates are trying to buy your votes with your own money.
    • Dave Barry, "The Bucks Drop Here", Washington Post Magazine, February 9, 1992
  • See, when the Government spends money, it creates jobs; whereas when the money is left in the hands of Taxpayers, God only knows what they do with it. Bake it into pies, probably. Anything to avoid creating jobs.
    • Dave Barry, "On the Sidewalk to Ruin" ,Washington Post Magazine, February 23, 1992, p. 36.
  • Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.
  • How is property given? By restraining liberty; that is, by taking it away so far as necessary for the purpose. How is your house made yours? By debarring every one else from the liberty of entering it without your leave.
    • Jeremy Bentham, "A Critical Examination of the Declaration of Rights; Article II" in The Works of Jeremy Bentham, Vol. II (1839), p. 503.
  • ECONOMY, n. Purchasing the barrel of whiskey that you do not need for the price of the cow that you cannot afford.
    • Ambrose Bierce, The Cynic's Dictionary (1906); republished as The Devil's Dictionary (1911).
  • These guys believe that a 350 billion dollar tax cut will stimulate the economy, and they are full of shit. Because they don't know what stimulates the economy. The economy goes up, it goes down, it goes up, it goes down, it goes up, it goes down, nobody knows why the fuck it happens. And I know this because I took economics, and I'd explain it to yea'... but I flunked that course. Not my fault. They taught it at 8 o'clock in the morning. And there is absolute nothing that you can learn out of one bloodshot eye. After I failed my second test, I grabbed my teacher by the front of the shirt and said 'Are you *trying* to keep this shit a secret?'
  • The dictionary defines "economics" as "a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services." Here is another definition of economics which I think is more helpful in explaining how economics relates to software engineering.
Economics is the study of how people make decisions in resource-limited situations.
This definition of economics fits the major branches of classical economics very well.
Macroeconomics is the study of how people make decisions in resource-limited situations on a national or global scale. It deals with the effects of decisions that national leaders make on such issues as tax rates, interest rates, foreign and trade policy.
Microeconomics is the study of how people make decisions in resource-limited situations on a more personal scale. It deals with the decisions that individuals and organizations make on such issues such as how much insurance to buy, which word processor to buy, or what prices to charge for their products or services.
  • Barry Boehm "Software engineering economics." Software Engineering, IEEE Transactions on 1 (1984): 4-21. p. 4.
  • The president, the secretary of state, the businessman, the preacher, the vendor, the spies, the clients and managers—all walking around Wall Street like chickens with their heads cut off—rushing to escape bankruptcy—plotting to melt down the Statue of Liberty—to press more copper pennies—to breed more headless chickens—to put more feathers in their caps—medals, diplomas, stock certificates, honorary doctorates—eggs and eggs of headless chickens—multitaskers—system hackers—who never know where they’re heading--northward, backward, eastward, forward, and never homeward—(where is home)—home is in the head—(but the head is cut off)... Beheaded chickens, how do you breed chickens with their heads cut off? By teaching them how to bankrupt creativity.”
  • Most managements feel that, on the price of their shares, the higher the better — and that's an understandable feeling. But, the trouble is that the game isn't over at any time. We really feel — the fairer the better. Our goal is that every shareholder participates in the progress that Berkshire makes as a business during their holding period. We don't want one party getting wealthy off the other. We want them to share based on the gain in value of the business .. In economics the most important question ... — maybe important beyond economics, too — ... when ... somebody ... tells you something, the first question to ask yourself is, "And then what?" ... the stock going up is not an end of itself ... we really like the idea of the price tracking intrinsic value over time ...

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95% of Economics is common sense deliberately made complicated. ~ Ha-Joon Chang
 
In my youth it was said that what was too silly to be said may be sung. In modern economics it may be put into mathematics. ~ Ronald Coase
  • Economics has long struggled with diversity. Only about a third of economics doctorates go to women, and the gender gap is wider at senior levels of the profession. Racial and ethnic minorities — particularly African-Americans and Latinos — are even more underrepresented. And notably, the gender gap in economics is wider than in other social sciences and, at least by some measures, traditionally male-dominated fields such as science and math.
    Certain subfields, like finance, have a particularly poor record of advancing women. A branch of the American Finance Association presented survey results in Atlanta that show barely 10 percent of tenured finance professors, and 16 percent of tenure-track faculty, are women. In economics as a whole, women accounted for about 23 percent of tenured and tenure-track faculty in 2015.
  • Emas non quod non opus est, sed quod necesse est. Quod non opus est, asse carum est.
    • Buy not what you want, but what you have need of; what you do not want is dear at a farthing.
    • Cato; as quoted by Seneca the Younger, Epistles, 94. Reported in Hoyt's New Cyclopedia Of Practical Quotations (1922), p. 216.
  • The more opportunities there are in a Society for some persons to live upon the toil of others, and the less those others may enjoy the fruits of their work themselves, the more is diligence killed, the former become insolent, the latter despairing, and both negligent.
  • Magnum vectigal est parsimonia.
    • Economy is a great revenue.
    • Cicero, Paradoxa, VI. 3. 49. Reported in Hoyt's New Cyclopedia Of Practical Quotations (1922), p. 216.
  • I just don’t trust any of it. Every time I read something about how there’s been another ridiculous climb of the Dow Jones, there’s a part of me that goes, “This can’t be good.” None of this is real money. You know what I mean? It’s not like there’s actually more of anything. It’s just ideas. When people are getting richer and richer but they’re not actually producing anything, it can’t end well.
  • Deprive economics of the concept of welfare and what do you have? Nothing.
  • In my youth it was said that what was too silly to be said may be sung. In modern economics it may be put into mathematics.
    • Ronald Coase, The firm, the market and the law (1988) Chapter 6. A remark on "The problem of social cost" (last sentence).
  • Economism is the view that the economy is the most important part of society and that the other dimensions such as politics and education should serve it. Economism has become the ruling ideology, not because of claims of economists, but because of the decisions of political leaders, financiers, corporate leaders, and the general public.
    • John B. Cobb, Spiritual Bankruptcy: A Prophetic Call to Action (2010)
  • Capitalism is the exploitation of man by man; Communism is the exact opposite.
    • Coluche, "Les syndicats et le délégué," Coluche : l'intégrale, vol. 3, "1989 chez Carrère".

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  • Everybody wants to see the economy improve, but more importantly, everybody wants to feel that improvement in their day-to-day lives.
  • Capitalism is the exploitation of man by man. Yes? Well socialism is exactly the reverse.
    • Len Deighton, Funeral in Berlin (1964; repr. Harmondsworth: Penguin, 1966) p. 145
    • Described there as a joke current in 1960s Czechoslovakia.
  • So-called macroeconomics has never been real economics but rather an endless series of engineering-type models purporting to guide politicians in centrally planning an economy. In the bizarro world of macroeconomics all capital is the same, and all workers are the same, as one big lump, expressed as 'K' and 'L' in the models. Relative prices and their role in allocating resources in a market economy are mostly ignored, while 'economic aggregates' are said to influence 'the' price level.
    In macroeconomics it is taken as a given that markets are incapable of allocating resources in an acceptable way; that's why there is supposedly a need for macroeconomic central planning in the first place. No such 'failures' are assumed on the part of the macroeconomic central planners.

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  • With the proper understanding of the economic system, the workers will soon find means to end that system, and to raise on its ruins a development of society having for its goal the benefit of the whole, instead of a part, of the community.
    • William Earsman, The Proletariat and Education: The Necessity for Labor Colleges (1920)
  • Money, which represents the prose of life, and which is hardly spoken of in parlors without an apology, is, in its effects and laws, as beautiful as roses.

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  • A penny saved is two pence clear,
    A pin a day's a groat a year.
    • Benjamin Franklin, Necessary Hints to those that would be Rich. Reported in Hoyt's New Cyclopedia Of Practical Quotations (1922), p. 216.
  • Many have been ruined by buying good Pennyworths.
    • Benjamin Franklin, Poor Richard's Almanac. Reported in Hoyt's New Cyclopedia Of Practical Quotations (1922), p. 216.
  • The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.

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  • Until recently, economists have not been particularly carried away with concern over environmental problems caused by industrial development. ...[T]he few economists ...who have always sounded the alarm ...are somewhat out of the mainstram. These humanist concerns seem to have gone out of style after the age of classical economics. Even the conventional analytical models of contemporary economics seem to prefer to exclude these concepts by ignoring them entirely or by shunting them off into their own branch, called "economic externalities." ...In recent years concern over these ...externalities has grown. The environmentalists are beginning to be included in the mainstream. ...Attempts are even being made to extend the theoretical framework to include the changes in the environment caused by economic activity... The Materials Flow of the Economy... sees the human race living on a 'space ship earth' in which all the inputs and outputs, all the original resources and all the final wastes, must be accounted for. ...[W]hen the materials are returned in the form of smoke, sewage, garbage, junk, heat, noise, and a wide variety of noxious gases... the change is seldom for the better. ...[T]he less production that is needed to maintain an adequate level of affluence, the better. An efficient economy is one that gets big results with little effort. More industries, more mines, more businesses, more employment, and more consumer goods do not always mean more well-being... because all these also mean more destruction of our natural resources and despoilation of our surroundings.
    • Martin Gerhard Giesbrecht, The Evolution of Economic Society: An Introduction to Economics (1972) Ch. 10, The New Dimensions of Mature Economies, pp. 321-322.
  • Cut my cote after my cloth.
    • Godly Queene Hester, Interlude (1530). Expression said to be a relic of the Sumptuary Laws. Reported in Hoyt's New Cyclopedia Of Practical Quotations (1922), p. 216.
  • Presented with the prospect of its own eternity, capitalism-or anyway, financial capitalism-simply explodes. Because if there's no end to it, there's absolutely no reason not to generate credit-that is, future money-infinitely. Recent events would certainly seem to confirm this. The period leading up to 2008 was one in which many began to believe that capitalism really was going to be around forever; at the very least, no one seemed any longer to be able to imagine an alternative. The immediate effect was a series of increasingly reckless bubbles that brought the whole apparatus crashing down.

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The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. ~ Friedrich Hayek
  • I am a capitalist, and after a 30-year career in capitalism... I'm not just in the top one percent, I'm in the top .01 percent of all earners. Today, I have come to share the secrets of our success, because rich capitalists like me have never been richer... How do we manage to grab an ever-increasing share of the economic pie every year? ... here's the dirty secret. There was a time in which the economics profession worked in the public interest, but in the neoliberal era, today, they work only for big corporations and billionaires... We could choose to enact economic policies that raise taxes on the rich, regulate powerful corporations or raise wages for workers... But neoliberal economists would warn that all of these policies would be a terrible mistake, because raising taxes always kills economic growth, and any form of government regulation is inefficient, and raising wages always kills jobs.
    Well, as a consequence of that thinking, over the last 30 years, in the USA alone, the top one percent has grown 21 trillion dollars richer while the bottom 50 percent have grown 900 billion dollars poorer, a pattern of widening inequality that has largely repeated itself across the world. And yet, as middle class families struggle to get by on wages that have not budged in about 40 years, neoliberal economists continue to warn that the only reasonable response to the painful dislocations of austerity and globalization is even more austerity and globalization.
  • The calculations and models are every day a confirmation, beyond the academic libraries and government dossiers, of the utopia of political reaction.
  • Economics is more disciplinary than any other discipline, and it has been ever since its origins.
  • A reconsideration of the discussion in which I took an active part more than 40 years ago has left me with a rather depressing view of the somewhat shameful state of what has become an established part of economic science, the subject of ‘economic systems’. It appears to me that in this subject political attractiveness has been preserved by the flimsiest of arguments. The kindest thing one can say is that some well-meaning people have allowed themselves to be deceived by the vague and thoughtless language commonly used by specialists in the theory of these issues.
  • The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
    • Friedrich Hayek, The Fatal Conceit : The Errors of Socialism (1988), p. 76.
  • The art of economics consists in looking not merely at the immediate hut at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.
  • Economy, in the estimation of common minds, often means the absence of all taste and comfort.
    • Lady Saba Holland, A Memoir of the Reverend Sydney Smith (London: Longman, Brown, Green, and Longmans, 1855), vol. I, ch. 8, p. 263.
    • Often misattributed to Lady Holland's father, Sydney Smith.
  • Serviet eternum qui parvo nesciet uti.
    • He will always be a slave, who does not know how to live upon a little.
    • Horace, Epistles, I. 10. 41. Reported in Hoyt's New Cyclopedia Of Practical Quotations (1922), p. 216.
  • Here then we may learn the fallacy of the remark... that any particular state is weak, though fertile, populous, and well cultivated, merely because it wants money. It appears that the want of money can never injure any state within itself: For men and commodities are the real strength of any community. It is the simple manner of living which here hurts the public, by confining the gold and silver to few hands, and preventing its universal diffusion and circulation. On the contrary, industry and refinements of all kinds incorporate it with the whole state, however small its quantity may be: They digest it into every vein, so to speak; and make it enter into every transaction and contract.
    • David Hume, Of Money (1752) as quoted in David Hume: Writings on Economics (1955, 1970) ed., Eugene Rotwein, p. 45.
  • If one's point of view is that of the anarchist, he is led inevitably to make his war upon individuals. The more sensitive and sincere he is, the more bitter and implacable becomes that war. If one's point of view is based on what is now called the economic interpretation of history, one is emancipated, in so far as that is possible for emotional beings, from all hatred of individuals, and one sees before him only the necessity of readjusting the economic basis of our common life in order to achieve a more nearly perfect social order.

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  • Over the years and against conventional wisdom, utopians sustained a vision of life beyond the market. … Georg Lukács set forth a theory of the “old and new culture” in which he argued that the socialist economy was not the goal; it was simply a precondition for humanity to advance to a new and humane culture. Most radicals do not understand that political power and economic reorganization is not the end-all, stated Lukács. The goal is not a new economic order, but freedom from an obsession with economics.

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  • The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil.
    • John Maynard Keynes, The General Theory of Employment, Interest and Money (1936), Ch. 24 "Concluding Notes" p. 383-384
  • Economics is a science of thinking in terms of models joined to the art of choosing models which are relevant to the contemporary world. It is compelled to be this, because, unlike the typical natural science, the material to which it is applied is, in too many respects, not homogeneous through time. The object of a model is to segregate the semi-permanent or relatively constant factors from those which are transitory or fluctuating so as to develop a logical way of thinking about the latter, and of understanding the time sequences to which they give rise in particular cases.
    Good economists are scarce because the gift for using "vigilant observation" to choose good models, although it does not require a highly specialised intellectual technique, appears to be a very rare one.

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  • Morality, it could be argued, represents the way that people would like the world to work-whereas economics represents how it actually does work. Economics is above all a science of measurement. It comprises an extraordinarily powerful and flexible set of tools that can reliably assess a thicket of information to determine the effect of any one factor, or even the whole effect. That’s what “the economy” is, after all: a thicket of information about jobs and real estate and banking and investment. But the tools of economics can be just as easily applied to subjects that are more-well, more “interesting”.
  • I make the point to remind you, if reminder be necessary, that the study of economic growth is still in its infancy. Countries rise up and fall, and we are not in a position to predict which ones will do best or worst over the next twenty years. This is equally true of developed and developing countries. Economics is good at explaining what has happened over the past twenty years, but when we turn to predicting the future it tends to be an essay in ideology.
    • W. Arthur Lewis, lecture in September 1984, published in William Breit and Barry T. Hirsch (eds.), Lives of the Laureates (5th ed., 2009)

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It is no coincidence that the novel and economics science were born at the same time. Economists are tellers of stories and makers of poems. ~ Deirdre McCloskey
  • Economics is the study of how society manages its scarce resources. In most societies, resources are allocated not by an all-powerful dictator but through the combined actions of millions of households and firms. Economists therefore study how people make decisions: how much they work, what they buy, how much they save, and how they invest their savings. Economists also study how people interact with one another. For instance, they examine how the multitude of buyers and sellers of a good together determine the price at which the good is sold and the quantity that is sold. Finally, economists analyze forces and trends that affect the economy as a whole, including the growth in average income, the fraction of the population that cannot find work, and the rate at which prices are rising.
    • N. Gregory Mankiw, Principle of Economics (6th ed., 2012), Ch. 1. Ten Principles of Economics
  • Political Economy or Economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of wellbeing.
  • I have not been able to lay my hands on any notes as to Mathematico-economics that would be of any use to you. I have very indistinct memories of what I used to think on the subject. I never read mathematics now: in fact I have even forgotten how to integrate a good many things.
    But I know I had a growing feeling in the later years of my work at the subject that a good mathematical theorem dealing with economic hypotheses was very well unlikely to be good economics: and I went more and more on the rules—(1) Use mathematics as a shorthand language, rather than as an engine of inquiry. (2) Keep to them till you have done. (3) Translate into English. (4) Then illustrate by examples that are important in real life. (5) Burn the mathematics. (6) If you can’t succeed in (4), burn (3). This last I do often.
  • Mit dem Jahr 1830 trat die ein für allemal entscheidende Krise ein. Die Bourgeoisie hatte in Frankreich und England politische Macht erobert. Von da an gewann der Klassenkampf, praktisch und theoretisch, mehr und mehr ausgesprochne und drohende Formen. Er läutete die Totenglocke der wissenschaftlichen bürgerlichen Ökonomie. Es handelte sich jetzt nicht mehr darum, ob dies oder jenes Theorem wahr sei, sondern ob es dem Kapital nützlich oder schädlich, bequem oder unbequem, ob polizeiwidrig oder nicht. An die Stelle uneigennütziger Forschung trat bezahlte Klopffechterei, an die Stelle unbefangner wissenschaftlicher Untersuchung das böse Gewissen und die schlechte Absicht der Apologetik.
    • With the year 1830 came the decisive crisis. In France and in England the bourgeoise had conquered political power. Thenceforth, the class-struggle, practically as well as theoretically, took on more and more outspoken and threatening forms. It sounded the death knell of scientific bourgeois economy. It was no longer a question, whether this theorem or that was true, but whether it was useful to capital or harmful, expedient or inexpedient, politically dangerous or not. In place of disinterested enquirers, there were hired prize-fighters; in place of genuine scientific research, the bad consequence and the evil intent of apologetic.
      • Karl Marx, Capital, Postscript to the Second Edition
  • It is no coincidence that the novel and economics science were born at the same time.
  • To have peace and not war, the drift toward a war economy, as facilitated by the moves and the demands of the sophisticated conservatives, must be stopped; to have peace without slump, the tactics and policies of the practical right must be overcome. The political and economic power of both must be broken. The power of these giants of main drift is both economically and politically anchored; both unions and an independent labor party are needed to struggle effective.
  • Since the state must necessarily provide subsistence for the criminal poor while undergoing punishment, not to do the same for the poor who have not offended is to give a premium on crime.
    • John Stuart Mill, Principles of Political Economy (1848), Book V, Chapter XI, §13.
  • Economics takes a while to learn, even if much of it is in a way quite simple. It is simple to be wrong as well as to be right, and it is none too easy to distinguish between them.
    • James Mirrlees in: Anders Barany, ‎Nobelstiftelsen (1996). Les Prix Nobel. p. 353

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Henry Ducard: Over the ages, our weapons have grown more sophisticated. With Gotham, we tried a new one - economics. But we underestimated certain of Gotham's citizens. Such as your parents. Gunned down by one of the very people they were trying to help. Create enough hunger, and everyone becomes a criminal. ~ Christopher Nolan and David S. Goyer

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Faith is what makes an economy exist. Without faith, it is only plastic cards and paper money. ~ Trey Parker
  • Even if the days of 1928 and early 1929 could be brought back again, the economic situation would be utterly indefensible on moral grounds. The greedy scramble for private gain and special privilege, the gambling spirit and the ruthless determination to gain wealth by means fair and foul, the callous indifference to how the other half lived or at most the throwing of a few crumbs of philanthropy, the bitter exploitation of the weak and the brutal suppression of the workers as they attempted to organize in defense of their minimum rights, the cruel assumption that there must always be a wide gulf between the rich and the poor, the willingness to send unnumbered victims to their doom on the battlefield in defense of vested interests—all these and countless other evils are inherent in the economic order which held sway in 1929. God forbid that we should have any desire to return to that living hell!
  • In three ways unemployment would be reduced. First... by greater equalization of purchasing power and consequent stimulus in the form of effective demand. Second, by utilizing the national credit and socialized industries for the creation of new industries and the extension of existing ones. ... Social ownership and operation of the basic industries, and especially socialized banking and credit, would greatly facilitate the task of shifting the masses of unemployed into productive channels. Third, if necessary, by shortening working hours and dividing the available work among all the people.
  • The consolidation of financial and industrial power in the hands of a small section of the people leads inevitably to more and more intense congestion of money.
  • Men did not make the earth. ... It is the value of the improvements only, and not the earth itself, that is individual property. ... Every proprietor owes to the community a ground rent for the land which he holds.
  • To balance Fortune by a just expense,
    Join with Economy, Magnificence.
    • Alexander Pope, Moral Essays (1731-35), Epistle III, line 223. Reported in Hoyt's New Cyclopedia Of Practical Quotations (1922), p. 216.

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  • By robbing Peter he paid Paul, he kept the moon from the wolves, and was ready to catch larks if ever the heavens should fall.
    • François Rabelais, Works, Book I, Chapter XI. Robbing Peter to pay Paul. Westminster Abbey was called St. Peter's! St. Paul's funds were low and sufficient was taken from St. Peter's to settle the account. Expression found in Collier's Reprint of Thomas Nash, Have with you to Saffron-Walden, p. 9. Reported in Hoyt's New Cyclopedia Of Practical Quotations (1922), p. 216.
  • The truth is that economic competition is the very opposite of competition in the animal kingdom. It is not a competition in the grabbing off of scarce nature-given supplies, as it is in the animal kingdom. Rather, it is a competition in the positive creation of new and additional wealth.
  • The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.
    • Joan Robinson, “Marx, Marshall And Keynes” (1955), Occasional Paper No. 9, The Delhi School of Economics, University Of Delhi, Delhi.
  • Our Republican leaders tell us economic laws – sacred, inviolable, unchangeable – cause panics which no one could prevent. But while they prate of economic laws, men and women are starving. We must lay hold of the fact that economic laws are not made by nature. They are made by human beings. Yes, when – not if – when we get the chance, the Federal Government will assume bold leadership in distress relief. For years Washington has alternated between putting its head in the sand and saying there is no large number of destitute people in our midst who need food and clothing, and then saying the States should take care of them, if there are. Instead of planning two and a half years ago to do what they are now trying to do, they kept putting it off from day to day, week to week, and month to month, until the conscience of America demanded action.
  • The first theory is that if we make the rich richer, somehow they will let a part of their prosperity trickle down to the rest of us. The second theory … was the theory that if we make the average of mankind comfortable and secure, their prosperity will rise upward … through the ranks.
    • Franklin D. Roosevelt, campaign address, Detroit, Michigan (October 2, 1932); in The Public Papers and Addresses of Franklin D. Roosevelt, 1928–1932 (1938), p. 772.
  • Too often in recent history liberal governments have been wrecked on rocks of loose fiscal policy.
    • Franklin Delano Roosevelt, request to Congress to effect drastic economies in the government (March 10, 1933); in The Public Papers and Addresses of Franklin D. Roosevelt, 1933 (1938), p. 50.
  • It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.

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  • Let us begin with a definition of economics. Over the last half-century, the study of economics has expanded to include a vast range of topics. Here are some of the major subjects that are covered in this book:
  • Economics explores the behavior of the financial markets, including interest rates, exchange rates, and stock prices.
  • The subject examines the reasons why some people or countries have high incomes while others are poor; it goes on to analyze ways that poverty can be reduced without harming the economy.
  • It studies business cycles — the fluctuations in credit, unemployment, and inflation — along with policies to moderate them.
  • Economics studies international trade and finance and the impacts of globalization, and it particularly examines the thorny issues involved in opening up borders to free trade.
  • It asks how government policies can be used to pursue important such as rapid economic growth, efficient use of resources, full employment, price stability, and a fair distribution of income.
This is a long list, but we could extend it many times...
 
The competitive price system adapted from Samuelson, 1961
  • The field of economics is not exempt from the consequences of chaos and complexity. Marketplaces are indeterminate; value is subjective; and outcomes are subject to interpretation. Economic forecasting is just as nebulous, being based on the probability of statistical information that may or may not be accurate.
    • L.K. Samuels, In Defense of Chaos: The Chaology of Politics, Economics and Human Action, Cobden Press (2013) p. 16.
  • Economics is the study of how societies use scarce resources to produce valuable goods and services and distribute them among different individuals
  • I remember how happy I felt when I graduated from Berkeley many years ago. But I thought the graduation speeches were long. I will economize on words.
    Economics is organized common sense. Here is a short list of valuable lessons that our beautiful subject teaches.

    1. Many things that are desirable are not feasible.
    2. Individuals and communities face trade-offs.
    3. Other people have more information about their abilities, their efforts, and their preferences than you do.
    4. Everyone responds to incentives, including people you want to help. That is why social safety nets don’t always end up working as intended.
    5. There are tradeoffs between equality and efficiency.
    6. In an equilibrium of a game or an economy, people are satisfied with their choices. That is why it is difficult for well-meaning outsiders to change things for better or worse.
    7. In the future, you too will respond to incentives. That is why there are some promises that you’d like to make but can’t. No one will believe those promises because they know that later it will not be in your interest to deliver. The lesson here is this: before you make a promise, think about whether you will want to keep it if and when your circumstances change. This is how you earn a reputation.
    8. Governments and voters respond to incentives too. That is why governments sometimes default on loans and other promises that they have made.
    9. It is feasible for one generation to shift costs to subsequent ones. That is what national government debts and the U.S. social security system do (but not the social security system of Singapore).
    10. When a government spends, its citizens eventually pay, either today or tomorrow, either through explicit taxes or implicit ones like inflation.
    11. Most people want other people to pay for public goods and government transfers (especially transfers to themselves).
    12. Because market prices aggregate traders’ information, it is difficult to forecast stock prices and interest rates and exchange rates.

  • Economists have never allowed their analysis to be influenced by psychologists of their time, but have always framed for themselves such assumptions about psychical processes as they have thought it desirable to make.
  • Sera parsimonia in fundo est.
    • Frugality, when all is spent, comes too late.
    • Seneca the Younger, Epistolæ Ad Lucilium, I. Reported in Hoyt's New Cyclopedia Of Practical Quotations (1922), p. 216.
  • Have more than thou showest,
    Speak less than thou knowest,
    Lend less than thou owest,
    Ride more than thou goest,
    Learn more than thou trowest,
    Set less than thou throwest.
  • Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.
  • The only function of economic forecasting is to make astrology look respectable.
  • Another difference between Milton and myself is that everything reminds Milton of the money supply. Well, everything reminds me of sex, but I keep it out of the paper.
    • Robert Solow, on Milton Friedman's ideas and his own, in a series of papers at a 1966 conference, also published in ‪Price Controls‬ (1992) by Hugh Rockoff; also widely paraphrased as "Everything reminds Milton Friedman of the money supply. Everything reminds me of sex, but I try to keep it out of my papers".
  • Economic events often make headlines in the newspapers or “breaking news” on television. Yet it is not always clear from these news stories what caused these particular events, much less what future consequences can be expected. The underlying principles involved in most economic events are usually not very complicated in themselves, but the political rhetoric and economic jargon in which they are discussed can make these events seem murky. Yet the basic economic principles that would clarify what is happening may remain unknown to most of the public and little understood by many in the media. These basic principles of economics apply around the world and have applied over thousands of years of recorded history. They apply in many very different kinds of economies—capitalist, socialist, feudal, or whatever—and among a wide variety of peoples, cultures, and governments. Policies which led to rising price levels under Alexander the Great have led to rising price levels in America, thousands of years later. Rent control laws have led to a very similar set of consequences in Cairo, Hong Kong, Stockholm, Melbourne, and New York. So have similar agricultural policies in India and in the European Union countries.
  • Economics is not simply a topic on which to express opinions or vent emotions. It is a systematic study of what happens when you do specific things in specific ways. In economic analysis, the methods used by a Marxist economist like Oskar Lange did not differ in any fundamental way from the methods used by a conservative economist like Milton Friedman.
  • Many economic fallacies depend upon (1) thinking of the economy as a set of zero-sum transactions, (2) ignoring the role of competition in the marketplace, or (3) not thinking beyond the initial consequences of particular policies.
    • Thomas Sowell, Basic Economics, 4th ed. (2010), Ch. 25. The History of Economics
  • It is the expensiveness of our pleasures that makes the world poor and keeps us poor in ourselves. If we could but learn to find enjoyment in the things of the mind, the economic problems would solve themselves.
  • The first and the purest demand of society is for scientific knowledge: knowledge of how the economic system works. Knowledge of the consequences of economic actions. Knowledge of the causes of unemployment, of the effects of various taxes, of the sources of income inequality. Whether one is a conservative or a radical, a protectionist or a free trader, a cosmopolitan or a nationalist, a churchman or a heathen, it is useful to know the causes and consequences of economic phenomena.

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  • Economics cannot digest the idea that the collective (and the aggregate) are disproportionately less predictable than individuals.
    • Nassim Nicholas Taleb, The Bed of Procrustes: Philosophical and Practical Aphorisms (2010) Preludes, p.7.
  • Hard science gives sensational results with a horribly boring process; philosophy gives boring results with a sensational process; literature gives sensational results with a sensational process; and economics gives boring results with a boring process.
    • Nassim Nicholas Taleb, The Bed of Procrustes: Philosophical and Practical Aphorisms (2010) The Republic of Letters, p.45.
  • The faith... that riches are not a means but an end, implies that all economic activity is equally estimable, whether it is subordinated to a social purpose or not.
  • When people behave badly they always invent a philosophy of life which represents their bad actions to be not bad actions at all, but merely results of unalterable laws beyond their control.
  • The condition of life to which people of the well-to-do classes are accustomed is that of an abundant production of various articles necessary for their comfort and pleasure, and these things are obtained only thanks to the existence of factories and works organized as at present. And, therefore, discussing the improvement of the workers' position, the men of science belonging to the well- to-do classes always have in view only such improvements as will not do away with the system of factory-production and those conveniences of which they avail themselves.
  • Economy, the poor man's mint.
    • Martin Farquhar Tupper, Proverbial Philosophy, Of Society, line 191. Reported in Hoyt's New Cyclopedia Of Practical Quotations (1922), p. 216.

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[E]conomics is the study of the allocation of scarce resources. But if resources aren't scarce then how can we study the allocation of something that doesn't exist? Of course, you might think that most economists are only discussing angels on pinheads anyway. And if we're honest about it all economists would insist that at least one current major theory is nothing more than that. But in the entire absence of scarce resources, economics would be even more like that. Akin to asking whether those angels could waltz or jitterbug upon their pinhead. ~ Tim Worstall
  • Economists are being indoctrinated into a cardboard version of human nature, which they hold true to such a degree that their own behavior has begun to resemble it. Psychological tests have shown that economics majors are more egoistic than the average college student. Exposure in class after class to the capitalist self-interest model apparently kills off whatever prosocial tendencies these students have to begin with. They give up trusting others, and conversely others give up trusting them.
    • Frans de Waal, Our Inner Ape: A Leading Primatologist Explains Why We Are Who We Are (2006), p. 243.

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  • Economics is a subject that really relates to core aspects of human well-being, and there’s a methodology for thinking about these things. This was a very appealing combination to me. Market systems are capable of massive breakdowns that can result in long, devastating periods of high unemployment. And I felt that economists had really learned something about how to address that.

See also

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