"You should not say that you won't love again."
Why can't i not?
Wednesday, August 11, 2010
For my debate in Socio10
Economics is the social science that is concerned with the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek (oikonomia, "management of a household, administration") from (oikos, "house") + (nomos, "custom" or "law"), hence "rules of the house(hold)".Current economic models developed out of the broader field of political economy in the late 19th century, owing to a desire to use an empirical approach more akin to the physical sciences.
Economics aims to explain how economies work and how economic agents interact. Economic analysis is applied throughout society, in business, finance and government, but also in crime, education, the family, health, law, politics, religion, social institutions, war, and science The expanding domain of economics in the social sciences has been described as economic imperialism.Economic imperialism (sometimes economics imperialism) in contemporary economics refers to economic analysis of seemingly non-economic aspects of life, such as crime, law the family, prejudice, tastes, irrational behavior, politics, sociology,culture,religion,war,and science and research.
ts emergence has been attributed to a method that, like that of the physical sciences, permits refutable implications testable by standard statistical techniques.[15][16] Central to that approach are "[t]he combined postulates of maximizing behavior, stable preferences and market equilibrium, applied relentlessly and unflinchingly."[17] These and a focus on economic efficiency, ignored in other social sciences, "have allowed economics to invade intellectual territory that was previously deemed to be outside the discipline’s realm."
Growth
Main articles: Economic growth and General equilibrium
Growth economics studies factors that explain economic growth – the increase in output per capita of a country over a long period of time. The same factors are used to explain differences in the level of output per capita between countries, in particular why some countries grow faster than others, and whether countries converge at the same rates of growth.Much-studied factors include the rate of investment, population growth, and technological change. These are represented in theoretical and empirical forms (as in the neoclassical and endogenous growth models) and in growth accounting.[40]
General equilibrium theory is a branch of theoretical neoclassical economics. It seeks to explain the behavior of supply, demand and prices in a whole economy with several or many markets, by seeking to prove that equilibrium prices for goods exist and that all prices are at equilibrium, hence general equilibrium, in contrast to partial equilibrium. As with all models, this is an abstraction from a real economy; it is proposed as being a useful model, both by considering equilibrium prices as long-term prices and by considering actual prices as deviations from equilibrium.
General equilibrium theory both studies economies using the model of equilibrium pricing and seeks to determine in which circumstances the assumptions of general equilibrium will hold. The theory dates to the 1870s, particularly the work of French economist Léon Walras.
Public sector
Main articles: Economics of the public sector and Public finance
See also: Welfare economics
Public finance is the field of economics that deals with budgeting the revenues and expenditures of a public sector entity, usually government. The subject addresses such matters as tax incidence (who really pays a particular tax), cost-benefit analysis of government programs, effects on economic efficiency and income distribution of different kinds of spending and taxes, and fiscal politics. The latter, an aspect of public choice theory, models public-sector behavior analogously to microeconomics, involving interactions of self-interested voters, politicians, and bureaucrats.[34]Much of economics is positive, seeking to describe and predict economic phenomena. Normative economics seeks to identify what economies ought to be like.
Welfare economics is a normative branch of economics that uses microeconomic techniques to simultaneously determine the allocative efficiency within an economy and the income distribution associated with it. It attempts to measure social welfare by examining the economic activities of the individuals that comprise society
Economic growth is the increase of per capita gross domestic product (GDP) or other measure of aggregate income. It is often measured as the rate of change in GDP. Economic growth refers only to the quantity of goods and services produced.
Economic growth can be either positive or negative. Negative growth can be referred to by saying that the economy is shrinking. Negative growth is associated with economic recession and economic depression.
In order to compare per capita income across multiple countries, the statistics may be quoted in a single currency, based on either prevailing exchange rates or purchasing power parity. To compensate for changes in the value of money (inflation or deflation) the GDP or GNP is usually given in "real" or inflation adjusted, terms rather than the actual money figure compiled in a given year, which is called the nominal or current figure.
Economists draw a distinction between short-term economic stabilization and long-term economic growth. The topic of economic growth is primarily concerned with the long run. The short-run variation of economic growth is termed the business cycle.
The long-run path of economic growth is one of the central questions of economics; despite some problems of measurement, an increase in GDP of a country is generally taken as an increase in the standard of living of its inhabitants. Over long periods of time, even small rates of annual growth can have large effects through compounding (see exponential growth). A growth rate of 2.5% per annum will lead to a doubling of GDP within 29 years, whilst a growth rate of 8% per annum (experienced by some Four Asian Tigers) will lead to a doubling of GDP within 10 years. This exponential characteristic can exacerbate differences across nations.
The Four Asian Tigers or Asian Tigers are the highly developed economies of Hong Kong, Singapore, South Korea and Taiwan. These regions were the first newly industrialized countries, noted for maintaining exceptionally high growth rates and rapid industrialization between the early 1960s and 1990s. In the 21st century, all four regions have since graduated into advanced economies and high-income economies. These regions are still the world's fastest growing industrialized economies. However, attention has increasingly shifted to other Asian economies which are now experiencing faster economic transformation.
All four Asian Tigers have a highly educated and skilled workforce and have specialized in areas where they had a competitive advantage. For example, Hong Kong and Singapore became world leading international financial centres, while South Korea and Taiwan became world leaders in information technology. Their economic success stories became known as the Miracle on the Han River and the Taiwan Miracle and have served as role models for many developing countries,[1][2][3] especially the Tiger Cub Economies.
Economy
| Country or territory  | GDP nominal millions of USD (2008) | GDP PPP millions of USD (2008) | GDP nominal per capita USD (2008) | GDP PPP per capita USD (2008) |
|---|---|---|---|---|
 Hong Kong | 210,731 | 307,065 | 29,826 | 42,748 |
 Singapore | 177,132 | 238,755 | 37,293 | 50,523 |
 South Korea | 832,512 | 1,364,148 | 17,074 | 27,978 |
 Taiwan | 378,969 | 735,997 | 16,392 | 31,834 |
Politics
| Country or territory | Democracy Index (2008) | Press Freedom Index (2009) | Corruption Perceptions Index (2009) | Political Status |
|---|---|---|---|---|
| Hong Kong | 5.85 | 11.75 | 8.2 | Partially Democratic SAR |
| Singapore | 5.89 | 45.00 | 9.2 | Parliamentary Republic |
| South Korea | 8.01 | 15.67 | 5.5 | Presidential Republic |
| Taiwan | 7.82 | 15.08 | 5.6 | Semi-Presidential Republic |
Various theories on economic growth
Origins of the concept
Later, such trade policies were justified instead simply in terms of promoting domestic trade and industry. The post-Bullionist insight that it was the increasing capability of manufacturing which led to policies in the 1700s to encourage manufacturing in itself, and the formula of importing raw materials and exporting finished goods. Under this system high tariffs were erected to allow manufacturers to establish "factories". Local markets would then pay the fixed costs of capital growth, and then allow them to export abroad, undercutting the prices of manufactured goods elsewhere. Once competition from abroad was removed, prices could then be increased to recoup the costs of establishing the business.Under this theory of growth, one policy attempted to foster growth was to grant monopolies, which would give an incentive for an individual to exploit a market or resource, confident that he would make all of the profits when all other extra-national competitors were driven out of business. The "Dutch East India company" and the "British East India company" were examples of such state-granted trade monopolies.
*The Dutch East India Company (Vereenigde Oost-Indische Compagnie or VOC in Dutch, literally "United East Indian Company") was a chartered company established in 1602, when the States-General of the Netherlands granted it a 21-year monopoly to carry out colonial activities in Asia. It was the first multinational corporation in the world and the first company to issue stock.[1] It was also arguably the world's first megacorporation, possessing quasi-governmental powers, including the ability to wage war, negotiate treaties, coin money, and establish colonies.[2]
Statistically, the VOC eclipsed all of its rivals in the Asia trade. Between 1602 and 1796 the VOC sent almost a million Europeans to work in the Asia trade on 4,785 ships, and netted for their efforts more than 2.5 million tons of Asian trade goods. By contrast, the rest of Europe combined sent only 882,412 people from 1500 to 1795, and the fleet of the English (later British) East India Company, the VOC’s nearest competitor, was a distant second to its total traffic with 2,690 ships and a mere one-fifth the tonnage of goods carried by the VOC. The VOC enjoyed huge profits from its spice monopoly through most of the 1600s. [3]
The Dutch East India Company remained an important trading concern for almost two centuries, paying an 18% annual dividend for almost 200 years. In its declining years in the late 18th century it was referred to as Vergaan Onder Corruptie (referring to the acronym VOC) which translates as 'Perished By Corruption'. The VOC became bankrupt and was formally dissolved in 1800,[4] its possessions and the debt being taken over by the government of the Dutch Batavian Republic. The VOC's territories became the Dutch East Indies and were expanded over the course of the 19th century to include the whole of the Indonesian archipelago, and in the 20th century would form Indonesia.
Mercantilism
From Wikipedia, the free encyclopedia
The theory assumes that wealth and monetary assets are identical. Mercantilism suggests that the ruling government should advance these goals by playing a protectionist role in the economy by encouraging exports and discouraging imports, notably through the use of subsidies and tariffs respectively.[2] The theory dominated Western European economic policies from the 16th to the late-18th century.[1]
The Austrian lawyer and scholar Philipp Wilhelm von Hornick, in his Austria Over All, If She Only Will of 1684, detailed a nine-point program of what he deemed effective national economy, which sums up the tenets of mercantilism comprehensively:[7]
- That every inch of a country's soil be utilized for agriculture, mining or manufacturing.
- That all raw materials found in a country be used in domestic manufacture, since finished goods have a higher value than raw materials.
- That a large, working population be encouraged.
- That all export of gold and silver be prohibited and all domestic money be kept in circulation.
- That all imports of foreign goods be discouraged as much as possible.
- That where certain imports are indispensable they be obtained at first hand, in exchange for other domestic goods instead of gold and silver.
- That as much as possible, imports be confined to raw materials that can be finished [in the home country].
- That opportunities be constantly sought for selling a country's surplus manufactures to foreigners, so far as necessary, for gold and silver.
- That no importation be allowed if such goods are sufficiently and suitably supplied at home.
Theory
Smith saw the mercantile system as an enormous conspiracy by manufacturers and merchants against consumers, a view that has led some authors, especially Robert E. Ekelund and Robert D. Tollison to call mercantilism "a rent-seeking society". To a certain extent, mercantilist doctrine itself made a general theory of economics impossible. Mercantilists viewed the economic system as a zero-sum game, in which any gain by one party required a loss by another.[9] Thus, any system of policies that benefited one group would by definition harm the other, and there was no possibility of economics being used to maximize the "commonwealth", or common good.[10][11] Mercantilist domestic policy was more fragmented than its trade policy. While Adam Smith portrayed mercantilism as supportive of strict controls over the economy, many mercantilists disagreed. The early modern era was one of letters patent and government-imposed monopolies; some mercantilists supported these, but others acknowledged the corruption and inefficiency of such systems. Many mercantilists also realized that the inevitable results of quotas and price ceilings were black markets. One notion mercantilists widely agreed upon was the need for economic oppression of the working population; laborers and farmers were to live at the "margins of subsistence". The goal was to maximize production, with no concern for consumption. Extra money, free time, or education for the "lower classes" was seen to inevitably lead to vice and laziness, and would result in harm to the economy Mercantilists' writings were also generally created to rationalize particular practices rather than as investigations into the best policies.
Infinite growth
The mercantillists argued that a large population was a form of wealth, making it possible to create bigger markets and armies, as opposed to the doctine of physiocracy that predicted that mankind would outgrow its resources.*In economics, rent seeking occurs when an individual, organization or firm seeks to earn income by capturing economic rent through manipulation or exploitation of the economic or political environment, rather than by earning profits through economic transactions and the production of added wealth.
Most studies of rent seeking focus on efforts to capture special monopoly privileges, such as government regulation of free enterprise competition, though the term itself is derived from the far older and more established practice of appropriating a portion of production by gaining ownership or control of land.
*In game theory and economic theory, zero-sum describes a situation in which a participant's gain or loss is exactly balanced by the losses or gains of the other participant(s). If the total gains of the participants are added up, and the total losses are subtracted, they will sum to zero. Zero-sum can be thought of more generally as constant sum where the benefits and losses to all players sum to the same value of money (or utility). Cutting a cake is zero- or constant-sum, because taking a larger piece reduces the amount of cake available for others. In contrast, non-zero-sum describes a situation in which the interacting parties' aggregate gains and losses is either less than or more than zero. Zero-sum games are also called strictly competitive.
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