Economics Quotes - Page 5

It is irrelevant to the entrepreneur, as the servant of the consumers, whether the wishes and wants of the consumers are wise or unwise, moral or immoral. He produces what the consumers want. In this sense he is amoral. He manufactures whiskey and guns just as he produces food and clothing. It is not his task to teach reason to the sovereign consumers. Should one entrepreneur, for ethical reasons of his own, refuse to manufacture whiskey, other entrepreneurs would do so as long as whiskey is wanted and bought. It is not because we have distilleries that people drink whiskey; it is because people like to drink whiskey that we have distilleries. One may deplore this. But it is not up to the entrepreneurs to improve mankind morally. And they are not to be blamed if those whose duty this is have failed to do so.

Jean-Baptiste Say may have coined the term 'entrepreneur' but he totally missed the opportunity to put it on a t-shirt and sell it.

When jurists and business men assert that the depreciation of money has a very great influence on all kinds of debt relations, that it makes all kinds of business more difficult, or even impossible, that it invariably leads to consequences that nobody desires and that everybody feels to be unjust, we naturally agree with them. In a social order that is entirely founded on the use of money and in which all accounting is done in terms of money, the destruction of the monetary system means nothing less than the destruction of the basis of all exchange. Nevertheless, this evil cannot be counteracted by ad hoc laws designed to remove the burden of the depreciation from single persons, or groups of persons, or classes of the community,

One variety of the balance-of-payments theory attempts to distinguish between the importation of necessaries and the importation of articles that can be dispensed with. Necessaries, it is said, have to be bought whatever their price is, simply because they cannot be done without. Consequently there must be a continual depreciation in the currency of a country that is obliged to import necessaries from abroad and itself is able to export only relatively dispensable articles. To argue thus is to forget that the greater or less necessity or dispensability of individual goods is fully expressed in the intensity and extent of the demand for them in themarket,and thus in the amount of money which is paid for them. However strong the desire of the Austrians for foreign bread, meat, coal, or sugar, may be, they can only get these things if they are able to pay for them.

Wealth, in even the most improbable cases, manages to convey the aspect of intelligence.

It is not the poverty of individuals and the community, not indebtedness to foreign nations, not the unfavourableness of the conditions of production, that force up the rate of exchange, but inflation.

The global economy is a doomsday machine that must be stopped and reprogrammed.

Etatism by no means aims at the formal transformation of all ownership of the means of production into State ownership by a complete overthrow of the established legal system. Only the biggest industrial, mining, and transport enterprises are to be nationalized; in agriculture, and in medium- and small-scale industry, private property is nominally to continue. Nevertheless, all enterprises are to become State undertakings in fact. Owners are to be left the title and dignity of ownership, it is true, and to be given a right to the receipt of a 'reasonable' income, 'in accordance with their position'; but, in fact, every business is to be changed into a government office and every livelihood into an official profession.

While the invisible hand looks after the private sector, the invisible foot kicks the public sector to pieces.

Sustainability is best illustrated by those who sell food … just so they afford something to eat.

What most of these doomsday scenarios have gotten wrong is the fundamental idea of economics: people respond to incentives. If the price of a good goes up, people demand less of it, the companies that make it figure out how to make more of it, and everyone tries to figure out how to produce substitutes for it. Add to that the march of technological innovation (like the green revolution, birth control, etc.). The end result: markets figure out how to deal with problems of supply and demand.

Whatever Latin America sells—raw materials or manufactures—its chief export product is really cheap labor.

Actually, the idea of economic man is an efficient way of excluding women. We have historically allocated women certain activities and said that she must do them because she is a woman. Then we create an economic theory that states that these activities have no economic meaning.

My hunch is that as the importance of a decision grows, the tendency to rely on quantitative analyses done by others tends to shrink. When the championship or the future of the company is on the line, managers tend to rely on their gut instincts.

It was the American middle class. No one's house cost more than two or three year's salary, and I doubt the spread in annual wages (except for the osteopath) exceeded more than five thousand dollars. And other than the doctor (who made house calls), the store managers, the minister, the salesman, and the banker, everyone belonged to a union. That meant they worked a forty-hour week, had the entire weekend off (plus two to four weeks' paid vacation in the summer), comprehensive medical benefits, and job security. In return for all that, the country became the most productive in the world and in our little neighborhood it meant your furnace was always working, your kids could be dropped off at the neighbors without notice, you could run next door anytime to borrow a half-dozen eggs, and the doors to all the homes were never locked -- because who would need to steal anything if they already had all that they needed?

[A] great embarrassing fact… haunts all attempts to represent the market as the highest form of human freedom: that historically, impersonal, commercial markets originate in theft.

If we try to run the economy for the benefit of a single group or class, we shall injure or destroy all groups, including the members of the very class for whose benefit we have been trying to run it. We must run the economy for everybody

It is hard to understand how a compassionate world order can include so many people afflicted by acute misery, persistent hunger and deprived and desperate lives, and why millions of innocent children have to die each year from lack of food or medical attention or social care. This issue, of course, is not new, and it has been a subject of some discussion among theologians. The argument that God has reasons to want us to deal with these matters ourselves has had considerable intellectual support. As a nonreligious person, I am not in a position to assess the theological merits of this argument. But I can appreciate the force of the claim that people themselves must have responsibility for the development and change of the world in which they live. One does not have to be either devout or non devout to accept this basic connection. As people who live-in a broad sense-together, we cannot escape the thought that the terrible occurrences that we see around us are quintessentially our problems. They are our responsibility-whether or not they are also anyone else's. As competent human beings, we cannot shirk the task of judging how things are and what needs to be done. As reflective creatures, we have the ability to contemplate the lives of others. Our sense of behavior may have caused (though that can be very important as well), but can also relate more generally to the miseries that we see around us and that lie within our power to help remedy. That responsibility is not, of course, the only consideration that can claim our attention, but to deny the relevance of that general claim would be to miss something central about our social existence. It is not so much a matter of having the exact rules about how precisely we ought to behave, as of recognizing the relevance of our shared humanity in making the choices we face.

To whom is an international corporation answerable? Often they do not employ workers. They outsource manufacturing to places far away. If wages rise in one place, they can, almost instantly, transfer production to somewhere else. If a tax regime in one country becomes burdensome, they can relocate to another. To whom, then, are they accountable? By whom are they controllable? For whom are they responsible? To which group of people other than shareholders do they owe loyalty? The extreme mobility, not only of capital but also of manufacturing and servicing, is in danger of creating institutions that have power without responsibility, as well as a social class, the global elite, that has no organic connection with any group except itself.

In the global marketplace of the future the price of every product will tell the ecological truth.

Economics ought to be a magpie discipline, taking in philosophy, history and politics. But heterodox approaches have long since been banished from most faculties, claims Tony Lawson. In the 1970s, when he started teaching at Cambridge, the economics faculty still boasted legends such as Nicky Kaldor and Joan Robinson. "There were big debates, and students would study politics, the history of economic thought." And now? "Nothing. No debates, no politics or history of economic thought and the courses are nearly all maths."How do elites remain in charge? If the tale of the economists is any guide, by clearing out the opposition and then blocking their ears to reality. The result is the one we're all paying for.

Our knowledge of dynamic processes is necessarily inferior to our ability to describe stationary conditions.

Then the shit hit the fan.

Let us merely discuss the question, what consequences would necessarily follow if, ceteris paribus, with an increasing quantity of money, prices were restricted to the old level by official compulsion? An increase in the quantity of money leads to the appearance in the market of new desire to purchase, which had previously not existed; 'new purchasing power', it is usual to say, has been created. If the new would-be purchasers compete with those that are already in the market, then, so long as it is not permissible to raise prices, only part of the total purchasing power can be exercised.

Copyright law has got to give up its obsession with 'the copy.' The law should not regulate 'copies' or 'modern reproductions' on their own. It should instead regulate uses--like public distributions of copies of copyrighted work--that connect directly to the economic incentive copyright law was intended to foster.

The overall U.S. homeownership rate increased from 64 percent in 1994 to a peak in 2004 with an all-time high of 69.2 percent. Real estate had become the leading business in America, more and more speculators invested money in the business. During 2006, 22 percent of homes purchased (1.65 million units) were for investment purposes, with an additional 14 percent (1.07 million units) purchased as vacation homes.These figures led Americans to believe that their economy was indeed booming. And when an economy is booming nobody is really interested in foreign affairs, certainly not in a million dead Iraqis. But then the grave reality dawned on the many struggling, working class Americans and immigrants, who were failing to pay back money they didn't have in the first place.Due to the rise in oil prices and the rise of interest rates, millions of disadvantaged Americans fell behind. By the time they drove back to their newly purchased suburban dream houses, there was not enough money in the kitty to pay the mortgage or elementary needs. Consequently, within a very short time, millions of houses were repossessed. Clearly, there was no one around who could afford to buy those newly repossessed houses. Consequently, the poor people of America became poorer than ever.Just as Wolfowitz's toppled Saddam, who dragged the American Empire down with him, the poor Americans, that were set to facilitate Wolfowitz's war, pulled down American capitalism as well as the American monetary and banking system. Greenspan's policy led an entire class to ruin, leaving America's financial system with a hole that now stands at a trillion dollars.

[Economics] is all about observing the world with genuine curiosity and admitting that it is full of mysteries

The older theories, which started from an erroneous conception of the social demand for money, could never arrive at a solution of this problem. Their sole contribution is limited to paraphrases of the proposition that an increase in the stock of money at the disposal of the community while the demand for it rClnains the same decreases the objective exchange-value of money, and that an increase of the demand with a constant available stock has the contrary effect, and so on. By a flash of genius, the formulators of the Quantity Theory had already recognized this. We cannot by any means call it an advance when the formula giving the amount of the demand for money (Volume of Transactions + Velocity of Circulation) was reduced to its elements.

One who criticises capitalism while approving of immigration, of which the working class is its first victim, would do better to remain silent. One who criticises immigration while remaining silent regarding capitalism should do the same.

Sometime I'm going to do an essay called 'The Virtues of Amateurism' for all of those people who wish they earned their living in the arts. The market kills more artistic people than anything else. It's a world of safety out there, for most people. They want safety, the magazines and manufacturers give them safety, give them homogeneity, give them the familiar and comfortable, don't challenge them.

More than any other colonial founder, Oglethorpe made himself one of the people, promoting collective effort.

It is a curious thought that the earliest description of the steam-engine in antiquity describes its use for the magic opening of the temple doors, when the priests lit the fires on the altars, to deceive the populace into ascribing to a deity what was the work of the engineer. In much the same way today, the almost boundless fecundity of the creative scientific discoveries and inventions of the age are being appropriated for the purpose of the mysterious opening of doors into the holy of holies of the temples of mammon by a hierarchy of imposters and humbugs, whom it is the first task of a sane civilization to expose and clear out.

Two mystic states can be dissociated: the ecstatic-beneficent-and-benevolent, contemplation of the divine love, the divine splendour with goodwill toward others.And the bestial, namely the fanatical, the man on fire with God and anxious to stick his snotty nose into other men's business or reprove his neighbour for having a set of tropisms different from that of the fanatic's, or for having the courage to live more greatly and openly.The second set of mystic states is manifest in scarcity economists, in repressors etc.The first state is a dynamism. It has, time and again, driven men to great living, it has given them courage to go on for decades in the face of public stupidity. It is paradisical and a reward in itself seeking naught further... perhaps because a feeling of certitude inheres in the state of feeling itself. The glory of life exists without further proof for this mystic.

Economics. "Something humans invented and then lost control of, it isn't real, it's not like gravity and we could evolve the economic process to make sense, but can't because we would all lose money if we did. Hysterical scientific exerts aside, it doesn't exist outside of our collective heads. So at best its a pseudo science of religious proportions, at worst, it will turn us into a globally warmed suicide cult en mass. ;-)

[I]n communism, you'd threaten a dog into compliance, while in capitalism, obedience is obtained through bribes.

Suckers think that you cure greed with money, addiction with substances, expert problems with experts, banking with bankers, economics with economists, and debt crises with debt spending

But a progressive policy needs more than just a bigger break with the economic and moral assumptions of the past 30 years. It needs a return to the conviction that economic growth and the affluence it brings is a means and not an end. The end is what it does to the lives, life-chances and hopes of people. Look at London. Of course it matters to all of us that London's economy flourishes. But the test of the enormous wealth generated in patches of the capital is not that it contributed 20%-30% to Britain's GDP but how it affects the lives of the millions who live and work there. What kind of lives are available to them? Can they afford to live there? If they can't, it is not compensation that London is also a paradise for the ultra-rich. Can they get decently paid jobs or jobs at all? If they can't, don't brag about all those Michelin-starred restaurants and their self-dramatising chefs. Or schooling for children? Inadequate schools are not offset by the fact that London universities could field a football team of Nobel prize winners.

The time to repair the roof is when the sun is sh

Sooner or later the Internet will become profitable. It's an old story played before by canals, railroads and automobiles.

Have you ever witnessed the anger of the good shopkeeper, James Goodfellow, when his careless son has happened to break a pane of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation – "It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?"Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier's trade – that it encourages that trade to the amount of six francs – I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, "Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen."It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.

There is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system...

While there are certainly informational spillovers as ideas move from person to person, it is hard to see why in most instances they are not priced. Although it is possible to imagine examples such as the wheelbarrow where an idea cannot be used without revealing the secret, relatively few ideas are of this type. For copyrightable creations such as books, music, plays, movies and art, unpriced spillovers obviously play little role. A book, a CD or a work of art must be purchased before it can be used, and the creator is free to make use of his creation in the privacy of his home without revealing the secret to the public at large. Similarly with movies or plays. In all cases, the creation must effectively be purchased before the “secret” is revealed.

If you can survive and won the battle over other millions of semen deposited alongside with you in your mothers womb, tell me why you cannot win the battle over challenges, difficulties and poverty? Friend, I know you will succeed because; you'd once done it in the womb.

It is not the fault of the entrepreneurs that the consumers,the people, the common man,prefer liquor to Bibles and detective stories to serious books, and that governments prefer guns to butter. The entrepreneur does not make greater profits in selling bad things than in selling good things. His profits are the greater the better he succeeds in providing the consumers with those things they ask for most intensely.

In California, the state's huge dairy herd produces twenty-seven million tons of manure a year, the particulates and vapors from which have helped to make air quality in the argiculturally intensive San Joaquin Valley worse than it is Los Angeles.

At one time, this gave rise to the question of whether the legal validity of the money was determined by the stamp of the ruler of the country or by the metal content of the coin; later, to the question of whether the command of the law or the free usage of business was to settle if the money was legal tender or not. The answer of public opinion, grounded on the principles of private property and the protection of acquired rights, ran the same in both cases: Prout quidque eontraetum est, ita et solvi debet; ut cum re eontraximus, re solvi debet, veluti cum mutuum dedimus, ut Tetro pecuniae tantundem solvi debeat.

Parents are not alone in focusing their expectations on success at the graduation exam: The whole education system colludes with them. The curriculum and organization of schools often date back to a colonial past, when schools were meant to train a local elite to be the effective allies of the colonial state, and the goal was to maximize the distance between them and the rest of the populace.

the euro, it seems, is stuck in a political no man's land – trapped between two opposing world views. And the battleground is not economics, but ethics.

What is called economic power, while it can be an instrument of coercion, is in the hands of private individuals never exclusive or complete power, never power over the whole life of a person. But centralised as an instrument of political power it creates a degree of dependence scarcely distinguishable from slavery.

The genuine object of debate raised by the [2008 financial] crisis ought to be how to overcome the short-termism to which we have been led by a consumerism intrinsically destructive of all genuine investment in the future, a short-termism which has systematically, and not accidentally, been translated into decomposition of investment into speculation.

They did not suffer shipwreck because the entrepreneurs were not public-spirited, as the socialist-etatistic legend has it. They were bound to fail because the economic organization based upon division of labour and private property in the means of production can function only so long as price-determination in the market is free.

Most of us are pseudo-scholars...for we are a very large and quite a powerful class, eminent in Church and State, we control the education of the Empire, we lend to the Press such distinction as it consents to receive, and we are a welcome asset at dinner-parties.Pseudo-scholarship is, on its good side, the homage paid by ignorance to learning. It also has an economic side, on which we need not be hard. Most of us must get a job before thirty, or sponge on our relatives, and many jobs can only be got by passing an exam. The pseudo-scholar often does well in examination (real scholars are not much good), and even when he fails he appreciates their inner majesty. They are gateways to employment, they have power to ban and bless. A paper on King Lear may lead somewhere, unlike the rather far-fetched play of the same name. It may be a stepping-stone to the Local Government Board. He does not often put it to himself openly and say, "That's the use of knowing things, they help you to get on." The economic pressure he feels is more often subconscious, and he goes to his exam, merely feeling that a paper on King Lear is a very tempestuous and terrible experience but an intensely real one. ...As long as learning is connected with earning, as long as certain jobs can only be reached through exams, so long must we take the examination system seriously. If another ladder to employment were contrived, much so-called education would disappear, and no one be a penny the stupider.

Suppose that we believe that in 200 years, people would be prepared to pay a million dollars (that's in today's dollars, not inflated ones) to be able to have an unspoilt valley. Now imagine that today we can profit by cutting down the forest in the valley, which will never regrow. If we apply an annual discount rate of 5 percent, compounded exponentially, how big would that profit have to be to justify the loss of a million dollars in 2210? The answer, surprisingly, is just sixty dollars! That's all that a million dollars in 200 years is worth, at that rate of discount. Obviously, then, if we use a 5 percent discount rate, values gained one thousand years in the future scarcely count at all. This is not because of any uncertainty about whether there will be human beings or other sentient creatures inhabiting this planet at that time, but merely because of the compounding effect of the rate of return on money invested now.

If the State uses this power systematically in order to force the community to accept a particular sort of money whose employment it desires for reasons of monetary policy, then it is actually carrying through a measure of monetary policy. The States which completed the transition to a gold standard a generation ago, did so from motives of monetary policy. They gave up the silver standard or the credit-money standard because they recognized that the behaviour of the value of silver or of credit money was unsuited to the economic policy they were following.

When I was an undergraduate studying economics under Professor Arthur Smithies of Harvard, he asked me in class one day what policy I favored on a particular issue of the times. Since I had strong feelings on that issue, I proceeded to answer him with enthusiasm, explaining what beneficial consequences I expected from the policy I advocated. “And then what will happen?” he asked. The question caught me off guard. However, as I thought about it, it became clear that the situation I described would lead to other economic consequences, which I then began to consider and to spell out. “And what will happen after that?” Professor Smithies asked. As I analyzed how the further economic reactions to the policy would unfold, I began to realize that these reactions would lead to consequences much less desirable than those at the first stage, and I began to waver somewhat. “And then what will happen?” Smithies persisted. By now I was beginning to see that the economic reverberations of the policy I advocated were likely to be pretty disastrous— and, in fact, much worse than the initial situation that it was designed to improve. Simple as this little exercise might seem, it went further than most economic discussions about policies on a wide range of issues. Most thinking stops at stage one.

The objective exchange-value of money which rules in the market to-day is derived from yesterday's under the influence of the subjective valuations of the individuals frequenting the market, just as yesterday's in its turn was derived under the influence of subjective valuations from the objective exchange-value possessed by the money the day before yesterday. If in this way we continually go farther and farther back we must eventually arrive at a point where we no longer find any component in the objectIve exchange-value of money that arises from valuations based on the function of money as a common medium of exchange; where the value of money is nothing other than the value of an object that is useful in some other way than as money.

A good way to do econometrics is to look for good natural experiments and use statistical methods that can tidy up the confounding factors that Nature has not controlled for us.

The fact that the United States has political, economic, and legal structures that do indeed create incentives to control hazards (in the workplace) is one the reasons the corporations have moved to Latin America and Asia.

best practices are useful reference points, but they must come with a warning label : The more you rely on external intelligence, the less you will value an internal idea. And this is the age of the idea

The sums of money collected in hoards lie there idle, waiting for the moment when commerce needs them for maintaining the stability of the objective exchange-value of money; and all those sums of money, that might threaten this stability when the demand for money decreases, flow back out of circulation into these hoards to slumber quietly until they are called forth again. This tacitly assumes ll the fundamental correctness of the arguments of the Quantity Theory, but asserts that there is nevertheless a principle inherent in the economic system that always prevents the working out of the processes that the Quantity Theory describes.In the first place, it must be recognized that from the economic point of view there is no such thing as money lying idle. All money, whether in reserves or literally in circulation (i.e. in process of changing hands at the very moment under consideration), is devoted in exactly the same way to the performance of a monetary function. The stock of money of the community is the sum of the stocks of individuals; there is no such thing as errant money.