Author Topic: Economic Theory  (Read 10452 times)

mrpercentage

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Economic Theory
« on: March 07, 2016, 12:52:34 AM »
I read somewhere that Western Civilization came to dominate due to their geographic location. You see maintaining the latitude is very important to host various species of plant and animal life. Too far north and its too cold. Too far south and its too hot. Europe had the luck of being placed right where they had the largest access of longitude in the same latitude allowing many species could thrive. And allowing those species to be transported east to west. This gave birth to farming and a host of livestock that made large cities possible. Also they had a larger exposure to animals that were tamable and trainable. Example: try to train a rhino for a mount. Good luck with that. Horses however were easy.

New economic theory is that countries with the largest most vibrant middle class will lead in innovation and economic power. There are two reasons for this:

1. Two minds are better than one. When you have 100,000,000 people that make enough money to go mad scientist in their garage like Bill Gates you will get plenty of things like Microsoft.

2. When you have 100,000,000 making a good amount of money they will be spending a good amount of money. This throws it right back into the economy feeding the economic engine and producing more Apples, Microsofts, and even some cool little guys like GoPro.

Lesson: support your middle class America because you are killing your innovation engine.

End of line

matchewed

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Re: Economic Theory
« Reply #1 on: March 07, 2016, 06:06:38 AM »
Premise with some concepts.

Entirely unrelated section.

End of line.

How does your first paragraph and everything else fit together? Rather what does some hindsight evaluation of the rise of agriculture have to do with middle class America and its ability or not of being an innovation engine?

acroy

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Re: Economic Theory
« Reply #2 on: March 07, 2016, 06:42:22 AM »
Ouch
Not sure what the point was (or if there was one)
Better discussed in person with brew in hand.
Cheers

ScarElbow

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Re: Economic Theory
« Reply #3 on: March 07, 2016, 08:34:07 AM »
Was liquor the driving engine behind this theory? I've read some opaque stuff and eventually found clarity but this....

mrpercentage

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Re: Economic Theory
« Reply #4 on: March 07, 2016, 08:35:41 AM »
Aristocrats move over. The middle class made you 💪🏻👈🏻

sol

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Re: Economic Theory
« Reply #5 on: March 07, 2016, 08:48:10 AM »
Your first premise has been widely discussed, for example in Jared Diamond's classic Guns, Germs, and Steel.  He expands the idea considerably, explaining why some plants and animals were more suited to domesticiation, and puts the information into the context of human migragation and technological development.  He also pointed out that if you're going to make the latitude argument, Asia has WAY more longitude available.

Your second unrelated observation sounds like something a drunk person would come up with.  "Wait, wait, guys, listen to this, guys.  What if the economy does better when lots of people buy stuff!  That's so deep, man!"

matchewed

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Re: Economic Theory
« Reply #6 on: March 07, 2016, 09:30:40 AM »
Aristocrats move over. The middle class made you 💪🏻👈🏻

Said every few generations or so ever...

soccerluvof4

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Re: Economic Theory
« Reply #7 on: March 07, 2016, 09:35:46 AM »
Think I need a cocktail!

bobechs

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Re: Economic Theory
« Reply #8 on: March 07, 2016, 09:46:17 AM »
That's what they want you to think...

Financial.Velociraptor

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Re: Economic Theory
« Reply #9 on: March 07, 2016, 05:47:21 PM »
What the hell.  This thread is a train wreck anyway: https://finance.yahoo.com/news/goldman-sachs-ready-labor-crush-193412094.html

mrpercentage

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Re: Economic Theory
« Reply #10 on: March 07, 2016, 06:33:50 PM »
Yeah point is everyone is talking jobs numbers and wage. Well where is the increases? Is it in the middle class? Is it in the lower to mid middle class? If they don't have money how do earnings go up?

TXScout2

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Re: Economic Theory
« Reply #11 on: March 07, 2016, 06:39:28 PM »
I think the point was that civilization thrives due to conditions in "middle" latitudes, therefore economies should thrive due to contributions from the "middle" class.

ScarElbow

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Re: Economic Theory
« Reply #12 on: March 07, 2016, 06:42:16 PM »
Ahh I get it now. Although I must say, points were clumsily threaded together to support a classic theory. So basically it comes down to this:

1+1=2
Me + you = Us
Me/You = shit
(Me * You) * 1000s = awesomeness
Therefore, revolution!

Rufus.T.Firefly

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Re: Economic Theory
« Reply #13 on: March 07, 2016, 06:59:11 PM »
Ahh I get it now. Although I must say, points were clumsily threaded together to support a classic theory. So basically it comes down to this:

1+1=2
Me + you = Us
Me/You = shit
(Me * You) * 1000s = awesomeness
Therefore, revolution!

It's math. You can't argue with math.

mrpercentage

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Re: Economic Theory
« Reply #14 on: March 07, 2016, 07:19:30 PM »
I just wanted to talk macro. We needed a macro thread and all things economic theory. I am open to book suggestions

Adventine

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Re: Economic Theory
« Reply #15 on: March 07, 2016, 07:23:11 PM »
Hey look, emojis!

mrpercentage

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Re: Economic Theory
« Reply #16 on: March 07, 2016, 07:25:31 PM »
Hey look, emojis!

#Apple iPhone

Almost got a iPad pro today. The Zen Drawing app had me transfixed

Curbside Prophet

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Re: Economic Theory
« Reply #17 on: March 07, 2016, 07:26:32 PM »
Yeah point is everyone is talking jobs numbers and wage. Well where is the increases? Is it in the middle class? Is it in the lower to mid middle class? If they don't have money how do earnings go up?

The job increase was due to part-timers.  I believe net-net the number of full-time jobs declined by about 60k.  Of course you don't ever see this in the headlines, everyone just sees the big number and doesn't go through the effort of dissecting what's behind the number.

mrpercentage

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Re: Economic Theory
« Reply #18 on: March 07, 2016, 07:54:07 PM »
Yeah point is everyone is talking jobs numbers and wage. Well where is the increases? Is it in the middle class? Is it in the lower to mid middle class? If they don't have money how do earnings go up?

The job increase was due to part-timers.  I believe net-net the number of full-time jobs declined by about 60k.  Of course you don't ever see this in the headlines, everyone just sees the big number and doesn't go through the effort of dissecting what's behind the number.

I think you are probably right. I also think the middle class has been squeezed to hard the last few years leading to slow growth. They are the spenders.

To quote Tron legacy.  "The conditions were right so they came into being."
You want know Americas secret sauce. It isn't some ideology. It's the middle class. It's a huge middle class. Those who share the wealth get more. Together we build great things

Metric Mouse

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Re: Economic Theory
« Reply #19 on: March 07, 2016, 08:10:49 PM »
Your first premise has been widely discussed, for example in Jared Diamond's classic Guns, Germs, and Steel.  He expands the idea considerably, explaining why some plants and animals were more suited to domesticiation, and puts the information into the context of human migragation and technological development.  He also pointed out that if you're going to make the latitude argument, Asia has WAY more longitude available.

There's a lot to be said for mountains and deserts and high, arid plains being slapped into the middle of one's 'perfect latitude'. Poor Asia was so close to hitting it out of the park...

mrpercentage

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Re: Economic Theory
« Reply #20 on: March 07, 2016, 08:25:33 PM »
Your first premise has been widely discussed, for example in Jared Diamond's classic Guns, Germs, and Steel.  He expands the idea considerably, explaining why some plants and animals were more suited to domesticiation, and puts the information into the context of human migragation and technological development.  He also pointed out that if you're going to make the latitude argument, Asia has WAY more longitude available.

There's a lot to be said for mountains and deserts and high, arid plains being slapped into the middle of one's 'perfect latitude'. Poor Asia was so close to hitting it out of the park...
+1

Travis

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Re: Economic Theory
« Reply #21 on: March 07, 2016, 09:31:35 PM »
I read somewhere that Western Civilization came to dominate due to their geographic location. You see maintaining the latitude is very important to host various species of plant and animal life. Too far north and its too cold. Too far south and its too hot. Europe had the luck of being placed right where they had the largest access of longitude in the same latitude allowing many species could thrive. And allowing those species to be transported east to west. This gave birth to farming and a host of livestock that made large cities possible. Also they had a larger exposure to animals that were tamable and trainable. Example: try to train a rhino for a mount. Good luck with that. Horses however were easy.

The weather didn't hurt, but civilization in general popped up across multiple climate zones at roughly the same time.  Horses were domesticated on the Eurasian steppes and those groups/tribes/nomadic nations got far more use out of them than sedentary civilizations.  Farming was required for settlements and cities to emerge and may have developed in multiple longitudes simultaneously.  Compared to France, the Middle East has crap for farmland and domesticated animals, but that's where the first cities were built.  The tribes of western Europe didn't put much thought into settling down until the Romans arrived and showed it to them despite having plenty of farmland, animals, and good weather.  Trade, weather, and animal populations had little to do with civilization starting in general.  The Nile, Euphrates, and Indus all being giant rivers is more central to that development.  The ground trade routes from Syria to India put the Middle East in the spotlight of commerce and science for centuries until Europe settled down and developed shipping empires which moved the center point of those activities west. 

mrpercentage

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Re: Economic Theory
« Reply #22 on: March 08, 2016, 07:10:21 AM »
I read somewhere that Western Civilization came to dominate due to their geographic location. You see maintaining the latitude is very important to host various species of plant and animal life. Too far north and its too cold. Too far south and its too hot. Europe had the luck of being placed right where they had the largest access of longitude in the same latitude allowing many species could thrive. And allowing those species to be transported east to west. This gave birth to farming and a host of livestock that made large cities possible. Also they had a larger exposure to animals that were tamable and trainable. Example: try to train a rhino for a mount. Good luck with that. Horses however were easy.

The weather didn't hurt, but civilization in general popped up across multiple climate zones at roughly the same time.  Horses were domesticated on the Eurasian steppes and those groups/tribes/nomadic nations got far more use out of them than sedentary civilizations.  Farming was required for settlements and cities to emerge and may have developed in multiple longitudes simultaneously.  Compared to France, the Middle East has crap for farmland and domesticated animals, but that's where the first cities were built.  The tribes of western Europe didn't put much thought into settling down until the Romans arrived and showed it to them despite having plenty of farmland, animals, and good weather.  Trade, weather, and animal populations had little to do with civilization starting in general.  The Nile, Euphrates, and Indus all being giant rivers is more central to that development.  The ground trade routes from Syria to India put the Middle East in the spotlight of commerce and science for centuries until Europe settled down and developed shipping empires which moved the center point of those activities west.

Do you think plants and animals had anything to do with domination in economic power? Obviously the economy is different today. Didn't it start off with livestock and agricultural?

I was summarizing a humanist book I read several years go.

Metric Mouse

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Re: Economic Theory
« Reply #23 on: March 08, 2016, 07:34:32 PM »

Horses were domesticated on the Eurasian steppes and those groups/tribes/nomadic nations got far more use out of them than sedentary civilizations.  Farming was required for settlements and cities to emerge and may have developed in multiple longitudes simultaneously.  Compared to France, the Middle East has crap for farmland and domesticated animals, but that's where the first cities were built.  The tribes of western Europe didn't put much thought into settling down until the Romans arrived and showed it to them despite having plenty of farmland, animals, and good weather.  Trade, weather, and animal populations had little to do with civilization starting in general.  The Nile, Euphrates, and Indus all being giant rivers is more central to that development.  The ground trade routes from Syria to India put the Middle East in the spotlight of commerce and science for centuries until Europe settled down and developed shipping empires which moved the center point of those activities west.

Don't your statements I underlined points contradict the points I've bolded?

Travis

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Re: Economic Theory
« Reply #24 on: March 08, 2016, 09:21:29 PM »

Horses were domesticated on the Eurasian steppes and those groups/tribes/nomadic nations got far more use out of them than sedentary civilizations.  Farming was required for settlements and cities to emerge and may have developed in multiple longitudes simultaneously.  Compared to France, the Middle East has crap for farmland and domesticated animals, but that's where the first cities were built.  The tribes of western Europe didn't put much thought into settling down until the Romans arrived and showed it to them despite having plenty of farmland, animals, and good weather.  Trade, weather, and animal populations had little to do with civilization starting in general.  The Nile, Euphrates, and Indus all being giant rivers is more central to that development.  The ground trade routes from Syria to India put the Middle East in the spotlight of commerce and science for centuries until Europe settled down and developed shipping empires which moved the center point of those activities west.



Don't your statements I underlined points contradict the points I've bolded?

Not quite. The OP seemed to assert that international trade and bountiful livestock populations led to the establishment and/or success of civilization.  I was pointing out that civilization as we recognize it was formed in places that in many ways were not the most agriculturally robust parts of the world (awesome rivers and little else).  He specified that Europe was in some sweet spot for having a successful civilization.  The plentiful resources of Europe certainly helped during the Early Middle Ages through modern times, but the first civilizations were started in deserts.  Most of Europe consisted of small villages and semi-nomadic tribes well after many desert empires with great cities had risen and fallen and risen again.  Baghdad and its neighboring cities were the centers of international trade due to their centralized location more than anything for hundreds of years.  There was trade in food, but much more was traded in metals, spices, and knowledge. Agriculture could make a city thrive, but it didn't necessarily make it rich.  Once European nations formed post-Roman era they put those great lands and resources to use and supplanted the Middle East as the economic center of the world.

scottish

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Re: Economic Theory
« Reply #25 on: March 10, 2016, 08:11:00 PM »
Well heck, why do you think the Islamic golden age came to an end 600 years ago?

mrpercentage

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Re: Economic Theory
« Reply #26 on: March 11, 2016, 06:04:38 AM »
Well heck, why do you think the Islamic golden age came to an end 600 years ago?

Fall of old Rome when they picked up and moved to Constantinople. They left the sweet spot. Random guess.

Travis

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Re: Economic Theory
« Reply #27 on: March 11, 2016, 01:32:18 PM »
Well heck, why do you think the Islamic golden age came to an end 600 years ago?

Fall of old Rome when they picked up and moved to Constantinople. They left the sweet spot. Random guess.

I mentioned it a little at the end of my last comment. Once Europe turned back Islamic invasions in the 15th Century they were in a position to become global empires based on naval expansion.  The Silk Road and the Middle East trading zones lost their importance around this time due to vastly expanded European exploration and economic activity which more or less sailed around them and made them obsolete.

As far as Constantinople (Byzantine Empire), that capitol ran concurrent with Rome as major powers after they split the empire in half in the 4th Century.  After Rome fell it remained a pretty powerful location, but its power waned during the Early Middle Ages as western and eastern empires encroached on it.  Byzantium more or less fell apart as a regional power during the Crusades since both sides wanted it.  The Ottomans captured it in 1453.

Metric Mouse

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Re: Economic Theory
« Reply #28 on: March 11, 2016, 10:42:46 PM »
Well heck, why do you think the Islamic golden age came to an end 600 years ago?

Fall of old Rome when they picked up and moved to Constantinople. They left the sweet spot. Random guess.

I mentioned it a little at the end of my last comment. Once Europe turned back Islamic invasions in the 15th Century they were in a position to become global empires based on naval expansion.  The Silk Road and the Middle East trading zones lost their importance around this time due to vastly expanded European exploration and economic activity which more or less sailed around them and made them obsolete.

Pretty much exactly right. You can move goods far faster and cheaper over water than you can on land.

scottish

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Re: Economic Theory
« Reply #29 on: March 12, 2016, 11:02:02 AM »
IIRC it started because there were alot of unattached young knights travelling around Europe causing trouble.  The religious leaders declared a crusade against the infidels in the middle east - so all of these knights would go bother someone else.    There's a good book - Destiny Disrupted - that discusses the history in depth.

mrpercentage

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Re: Economic Theory
« Reply #30 on: March 12, 2016, 11:53:08 AM »
I find it interesting that the bulk of response is towards the history portion. I would site the book if I could. It was a humanist collection of essays and it had a candle on the cover. I borrowed it from Phoenix Library a few years ago. It's not even on my booklist-- strange.

Almost no response to the American secret sauce being the middle class. I will add to this for good measure

The opportunity perceived by those who seek a citizenship in the United States comes from a large middle class. The facts are in--- much wealth has been taken from the middle and moved to the top 1% in the last couple of decades. I think it is a threat to the American way everyone boasts of. Where is the opportunity to advance without this huge middle class? I thought what set America apart was that anyone with the will could succeed here. That is still true but has greatly diminished. I know people with a masters degree that work where a high school education is efficient. What a waste of financial resources. This is the most overqualified generation we have ever had.

for some reason I think of this movie
https://www.youtube.com/watch?v=rGHDATIJIX8

Metric Mouse

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Re: Economic Theory
« Reply #31 on: March 12, 2016, 06:39:34 PM »
I find it interesting that the bulk of response is towards the history portion. I would site the book if I could. It was a humanist collection of essays and it had a candle on the cover. I borrowed it from Phoenix Library a few years ago. It's not even on my booklist-- strange.

Almost no response to the American secret sauce being the middle class. I will add to this for good measure

The opportunity perceived by those who seek a citizenship in the United States comes from a large middle class. The facts are in--- much wealth has been taken from the middle and moved to the top 1% in the last couple of decades. I think it is a threat to the American way everyone boasts of. Where is the opportunity to advance without this huge middle class? I thought what set America apart was that anyone with the will could succeed here. That is still true but has greatly diminished. I know people with a masters degree that work where a high school education is efficient. What a waste of financial resources. This is the most overqualified generation we have ever had.

for some reason I think of this movie
https://www.youtube.com/watch?v=rGHDATIJIX8

I think the response was that the American Middle Class is infact NOT the 'secret sauce.'  That America's success was largely due to accidents in geography and not some unique work ethic or special class of individual that other groups of humans didn't possess. 

While the American Middle Class may be important to the current economic system, they didn't create it - rather the system as a product of the environment gave rise to the middle class.

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Re: Economic Theory
« Reply #32 on: March 12, 2016, 06:56:30 PM »
I find it interesting that the bulk of response is towards the history portion. I would site the book if I could. It was a humanist collection of essays and it had a candle on the cover. I borrowed it from Phoenix Library a few years ago. It's not even on my booklist-- strange.

Almost no response to the American secret sauce being the middle class. I will add to this for good measure

The opportunity perceived by those who seek a citizenship in the United States comes from a large middle class. The facts are in--- much wealth has been taken from the middle and moved to the top 1% in the last couple of decades. I think it is a threat to the American way everyone boasts of. Where is the opportunity to advance without this huge middle class? I thought what set America apart was that anyone with the will could succeed here. That is still true but has greatly diminished. I know people with a masters degree that work where a high school education is efficient. What a waste of financial resources. This is the most overqualified generation we have ever had.

for some reason I think of this movie
https://www.youtube.com/watch?v=rGHDATIJIX8

I think the response was that the American Middle Class is infact NOT the 'secret sauce.'  That America's success was largely due to accidents in geography and not some unique work ethic or special class of individual that other groups of humans didn't possess. 

While the American Middle Class may be important to the current economic system, they didn't create it - rather the system as a product of the environment gave rise to the middle class.

I'm not sure I totally agree with either of these assessments.

Surely the biggest engine of economic growth has been America's technological advances. America developed the cotton gin, Morse code, telephones, airplanes, light bulbs, movies, computers, biotechnology, the internet, and on and on...

I actually do believe, to some extent, in American exceptional-ism. This is not to say American's possess some special trait that other human's do not. Rather, I believe that personal freedom in American has unleashed human potential to create, develop and grow in a way that other country's have not. America is an immigrant nation that has attracted the brightest and best minds from around the world. Those who are born here develop a strong sense of independence of thought which is a key ingredient of invention.

mrpercentage

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Re: Economic Theory
« Reply #33 on: March 12, 2016, 07:09:59 PM »
I think it began with pilgrims becoming instant land owners of land they worked. This effectively created the middle class by creating vast wealth for any who dared risk their lives in the new land. If I were to add a little to the secret sauce it would be freedom of speech. That's not entirely true as evidenced by the oppression of communism and any other ideal that prevents the exploitation of other people. I am just saying it like my non-established highly self educated self sees it.

I suppose "accidents in geography" means it is as historically hard to invade. I do t think that's it. I think all that innovation comes from the middle class ( the opportunity America offers to all those bright minds that come here).

I think if the conditions are right fire happens. The middle class is innovations fire. I know deep down we all want to be more special than that but I don't see it that way


Metric Mouse

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Re: Economic Theory
« Reply #34 on: March 12, 2016, 07:54:17 PM »
I'm not sure I totally agree with either of these assessments.

Surely the biggest engine of economic growth has been America's technological advances. America developed the cotton gin, Morse code, telephones, airplanes, light bulbs, movies, computers, biotechnology, the internet, and on and on...

I actually do believe, to some extent, in American exceptional-ism. This is not to say American's possess some special trait that other human's do not. Rather, I believe that personal freedom in American has unleashed human potential to create, develop and grow in a way that other country's have not. America is an immigrant nation that has attracted the brightest and best minds from around the world. Those who are born here develop a strong sense of independence of thought which is a key ingredient of invention.


I think it began with pilgrims becoming instant land owners of land they worked. This effectively created the middle class by creating vast wealth for any who dared risk their lives in the new land. If I were to add a little to the secret sauce it would be freedom of speech. That's not entirely true as evidenced by the oppression of communism and any other ideal that prevents the exploitation of other people. I am just saying it like my non-established highly self educated self sees it.

I suppose "accidents in geography" means it is as historically hard to invade. I do t think that's it. I think all that innovation comes from the middle class ( the opportunity America offers to all those bright minds that come here).

I think if the conditions are right fire happens. The middle class is innovations fire. I know deep down we all want to be more special than that but I don't see it that way

I think in the end we agree far more than we disagree -

America's accidents of geography include, among many things, vast tracks of arable land - so much that it was indeed given away. As pointed out, this allowed poor people an almost immediate step up in the socio-economic ladder. Such massive influx of capital looking for investment certainly encouraged businesses to start and allowed them the best opportunity in the world to grow. As businesses grew, even more capital became available - more people had more time and resources to pursue education. Perhaps education was truly the 'spark' for innovation?  And as the middle class had increasingly greater access to education, they increasingly became a larger part of technological advancements?  For much of history, even in the U.S., technological innovation came from those with the means and time to pursue their ideas. So the mix of education and easily accessible capital is what spurred innovation.  These 'resources' were a product of America's geography - unprecedented areas of arable land, unimaginably advantageous interconnected waterways and easily defensible boarders.  These combined to create the middle class and allow a large number of people the time and resources to innovate which in turn allowed America to become the powerful country it is today.

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Re: Economic Theory
« Reply #35 on: March 13, 2016, 10:48:24 AM »
Surely the biggest engine of economic growth has been America's technological advances. America developed the cotton gin, Morse code, telephones, airplanes, light bulbs, movies, computers, biotechnology, the internet, and on and on...
Polite cough while polishing one's monocle, and sipping one's tea - who invented most things?
 

Travis

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Re: Economic Theory
« Reply #36 on: March 13, 2016, 10:56:09 AM »
I'm not sure I totally agree with either of these assessments.

Surely the biggest engine of economic growth has been America's technological advances. America developed the cotton gin, Morse code, telephones, airplanes, light bulbs, movies, computers, biotechnology, the internet, and on and on...

I actually do believe, to some extent, in American exceptional-ism. This is not to say American's possess some special trait that other human's do not. Rather, I believe that personal freedom in American has unleashed human potential to create, develop and grow in a way that other country's have not. America is an immigrant nation that has attracted the brightest and best minds from around the world. Those who are born here develop a strong sense of independence of thought which is a key ingredient of invention.


I think it began with pilgrims becoming instant land owners of land they worked. This effectively created the middle class by creating vast wealth for any who dared risk their lives in the new land. If I were to add a little to the secret sauce it would be freedom of speech. That's not entirely true as evidenced by the oppression of communism and any other ideal that prevents the exploitation of other people. I am just saying it like my non-established highly self educated self sees it.

I suppose "accidents in geography" means it is as historically hard to invade. I do t think that's it. I think all that innovation comes from the middle class ( the opportunity America offers to all those bright minds that come here).

I think if the conditions are right fire happens. The middle class is innovations fire. I know deep down we all want to be more special than that but I don't see it that way

I think in the end we agree far more than we disagree -

America's accidents of geography include, among many things, vast tracks of arable land - so much that it was indeed given away. As pointed out, this allowed poor people an almost immediate step up in the socio-economic ladder. Such massive influx of capital looking for investment certainly encouraged businesses to start and allowed them the best opportunity in the world to grow. As businesses grew, even more capital became available - more people had more time and resources to pursue education. Perhaps education was truly the 'spark' for innovation?  And as the middle class had increasingly greater access to education, they increasingly became a larger part of technological advancements?  For much of history, even in the U.S., technological innovation came from those with the means and time to pursue their ideas. So the mix of education and easily accessible capital is what spurred innovation.  These 'resources' were a product of America's geography - unprecedented areas of arable land, unimaginably advantageous interconnected waterways and easily defensible boarders.  These combined to create the middle class and allow a large number of people the time and resources to innovate which in turn allowed America to become the powerful country it is today.

This hits much closer to the mark.  The US (even pre-US) started out with almost limitless access to capital and few rules on how it could be developed.  The Homestead Act opened up massive new territory in the mid-19th Century for expansion and development.  That Act practically said "take some land, do something useful with it, and its yours."  The conditions must be set before a middle class can even be created.  On the national scale, the US became an economic powerhouse on the backs of cheap labor and massive capital investment during the post-Civil War era, though it enriched a disproportionate section of the population.  Balancing the scales and giving more people access to opportunities via education, labor laws, and protecting entry into the market continued that upward trend.

I don't have the source in front of me, but there was a South American country that revolutionized its economy in the 1970s by giving the population the title to the land they were occupying.  At the time families were living on government-owned plots of land, but when the were given ownership of that land they could leverage it for loans to start businesses or sell it outright for profit.  It was a ridiculously easy way of generating capital that benefited everyone.

China had a problem in the early 2000s with its middle class (and kinda still does).  Their economic expansion of the last 20 years or so has created a growing middle class, but the government is still sorting out what to do with it.  It is not a source of significant political or economic power - but it could be in the near future.  China has almost exclusively relied on top-down economic planning which put them on center stage, but is starting to show its limits.  China cannot address the environmental damage its economy has wrought and as it further integrates with global trade it cannot react fast enough to the specific economic needs of its population nor more nuanced micro-economic changes (see last fall's currency and stock market trouble). Their middle class as a bloc may be able to bring balance to the force as it were.

The US, China, and countless other nations became powerful without a middle class, but they reached a limit on what they could accomplish until everyone had an economic stake and increased the number of people who could contribute.

Travis

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Re: Economic Theory
« Reply #37 on: March 13, 2016, 12:34:41 PM »
Surely the biggest engine of economic growth has been America's technological advances. America developed the cotton gin, Morse code, telephones, airplanes, light bulbs, movies, computers, biotechnology, the internet, and on and on...
Polite cough while polishing one's monocle, and sipping one's tea - who invented most things?

Depends on the invention.  Some were made by well-fed companies or government organizations while others were made in a dude's garage, but you're right that it usually took a wealthy benefactor or series of wealthy investors to get it off the ground and out to market.  Invention and innovation usually requires a need, a market, and the means to get it out there.  You also have to ask with those inventions listed: did they make us rich, or were they invented because we were already rich? Probably a bit of both.  When it comes to US innovation we've never really lacked for capital and time to use it.

nobodyspecial

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Re: Economic Theory
« Reply #38 on: March 13, 2016, 01:53:22 PM »
I was making the point, with typical understatement,  that out of the list more where invented in England (or at least Britain) than America.

ulrichw

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Re: Economic Theory
« Reply #39 on: March 13, 2016, 02:14:42 PM »
[...] The facts are in--- much wealth has been taken from the middle and moved to the top 1% in the last couple of decades. I think it is a threat to the American way everyone boasts of. [...]

I dislike this erroneous characterization.

What you *can* say is that the *share* of wealth owned by the middle has moved to the top 1%, but that's not at all the same thing as saying that wealth has been "taken" from the middle class.

Basically what's happened is that for whatever reason, as the economy has grown, the growth has disproportionately benefited the wealthy. But that doesn't mean that anybody is worse off - some just haven't benefited as much.

I do agree that it's something that needs to be watched, but it's not the black and white "evil" that people make it out to be (in my opinion).

One thing that's good about it is that it reflects to a degree what makes this country great - there is huge opportunity here, and a significant number of the 1%-ers are first-generation. Take the highly visible ones, for example: Warren Buffet, Bill Gates, Larry Ellison, Mark Zuckerberg, etc.

All of these people are contributing greatly to income and wealth inequality, yet are prime examples of social mobility and the opportunity for people to go from modest backgrounds to extreme wealth in one generation - something that I believe most of us would consider a good thing.

I believe that as the economy grows, inequality probably should grow to some degree, too. The reason is the "multiplier effect" - basically inordinately successful individuals have a larger base to pull their income from, which will tend to make things more top-heavy.

What would be bad is if this trend continues to too large a degree. If we see people actually losing out (not just losing "share"), this would definitely be a bad thing, and to some degree it may even be the case that some "rebalancing" would be good now, but it's not as cut and dried as many make it out to be.


Rufus.T.Firefly

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Re: Economic Theory
« Reply #40 on: March 13, 2016, 03:36:07 PM »
I was making the point, with typical understatement,  that out of the list more where invented in England (or at least Britain) than America.

Ha ha, I caught the British understatement. Some of the items I listed were invented by American inventors. Some where just arenas in which Americans contributed significantly. I don't think one person can claim "biotechnology," but a lot of American scientists discovered advances in this field. Britain and Germany have a pretty good history of technological progress too. My point wasn't limited to just America.

I also agree that the Homestead Act contributed significantly to America's early success. I'm not sure about education. We've ain't never been dun educated very good. Sure our secondary education system is good, but those homesteaders in the 19th century weren't exactly receiving a lot of schooling. The Wright Brothers never received a high school diploma, for example. Today's tech industry is full of successful entrepreneurs who never graduated from college.

Metric Mouse

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Re: Economic Theory
« Reply #41 on: March 13, 2016, 05:01:43 PM »
I was making the point, with typical understatement,  that out of the list more where invented in England (or at least Britain) than America.
I also agree that the Homestead Act contributed significantly to America's early success. I'm not sure about education. We've ain't never been dun educated very good. Sure our secondary education system is good, but those homesteaders in the 19th century weren't exactly receiving a lot of schooling. The Wright Brothers never received a high school diploma, for example. Today's tech industry is full of successful entrepreneurs who never graduated from college.

While your point about the education level of the USA compared to other countries may be arguable, you're missing the point. The abundance of resources allowed homesteaders enough free time and capital to send themselves or at least some their children to school. Achieving basic literacy is what allowed anyone who had the desire to learn as much about any subject as they wanted. This didn't turn everyone into geniuses, but set the stage to allow people to advance to their full academic potential. Once literate, an individual can access the entirety of human knowledge - without it, they're pretty much stuck with trial and error.

To put it in perspective - I might be able to find the area under a curve much faster than Ben Franklin could, but I'll never be as powerful an innovator.