Tuesday, November 10, 2020

880: The Birth of Economics

 Let's recapitulate what the theme is of our present project is. The final observation will be that we awake from a neoliberal dream


and the assumption will be that it isn't a pleasant awakening and that we have to develop a new perspective on our economic position.


But we still have a long way to go to get to that point. First, we have to discover how we got into this neoliberal situation.


It began in 1689 with the Two Treatises of John Locke. He created the narrative of what a citizen is or should be.


We are all free and equal, governed by the law of reason and endowed with natural rights, of which the core is the right to own things.


The main goal of the state then became the protection of the possessions of its citizens. These possessions weren't only material things.


You also are the owner of your life, your right to a free opinion, the right to vote,  including the right to discard of a government that misbehaved regarding your rights.


This line of thinking created a state of individuals, the state as a guardian of the possessions of a collective of individuals and the main focus was on the individual.


This can be regarded as the cradle of liberalism as we know it. Almost a hundred years later the definition of the individual in the state was expanded in a significant way by Adam Smith (1723 -1790).


Moreover, he links up with Locke's already discussed thinking on several points. This applies, for example, to the idea that all economic value derives from human labor. 


Locke defined property as the result of the labor a man can put into a parcel of land in one day. That land he was entitled to call his property.

Only Smith adds an important element: it comes down to the most efficient organization of that work.


He gives the famous example of a factory in which the making of pins is divided into eighteen specific operations, all performed by different workers, 


with the result that many more pins are made annually than in the old artisan production method. 


On this basis, Smith formulated a general law: division of the labor process leads to a proportional increase in labor productivity in every industry. 


This benefits both the companies involved and the country as a whole. The increase in national prosperity depends on two things. 


Firstly, the increase in the number of workers in a country, secondly, the increase in their productivity.


This is only reinforced when one switches to machine production on a large scale. All in all, better machines, 


greater skills and an increasing division of labor lead to a growth of the national economy to the benefit of everyone.


Can you imagine that in 1776, more than 300 years ago, Adam Smith was the man who in fact formulated the basic principles of the Industrial Revolution and mass production?


And he revealed the economic mechanisms behind this whole process. We'll discuss that next lecture.....


Thank you for your attention again...

The Discussion

[13:18] Gemma (gemma.cleanslate): Henry Ford must have read Smith

[13:18] Particle Physicist Bejiita (bejiita.imako): indeed

[13:18] andrea (andromedaprime): producing pins more efficiently is fine if you have a demand for pins

[13:18] herman Bergson: Wouldnt surprise me Gemma

[13:18] Gemma (gemma.cleanslate): He perfected that in cars

[13:18] Particle Physicist Bejiita (bejiita.imako): that is the production line idea there

[13:19] Particle Physicist Bejiita (bejiita.imako): the only downside is work become monotone

[13:19] herman Bergson: That will be the subject of the next lecture Andrea ^_^

[13:19] andrea (andromedaprime): and the profits were and are not shared

[13:19] Particle Physicist Bejiita (bejiita.imako): at my factory i do all steps from CAD to delivery and I find myself quite efficient but also we are a small company, not a giant factory and there is no real stress involved wither

[13:19] Gemma (gemma.cleanslate): but seems more fair tho

[13:20] herman Bergson: As you see...Smith paved the way for shareholders capitalism....

[13:20] Particle Physicist Bejiita (bejiita.imako): but i move on between machines as fast ic an

[13:20] andrea (andromedaprime): and the benefits may be at the cost of quality of life and environment

[13:20] Particle Physicist Bejiita (bejiita.imako): hmm

[13:20] Gemma (gemma.cleanslate): true

[13:21] Gemma (gemma.cleanslate): no stress is worth it bej

[13:21] herman Bergson: I guess we all know that by now Andrea...indeed

[13:21] andrea (andromedaprime): or even perilous to the survival of life on the planet!

[13:21] herman Bergson: The question of this project therefore is...how did we get into this mess and what now? :-)

[13:22] Particle Physicist Bejiita (bejiita.imako): hmm

[13:22] andrea (andromedaprime): what mess - Trump tells us all is great :-)

[13:22] .: Beertje :. (beertje.beaumont): maybe a basic income for everyone so that we can do the work we like

[13:22] Particle Physicist Bejiita (bejiita.imako): that is because Trump IS the mess

[13:22] andrea (andromedaprime) giggles

[13:22] Particle Physicist Bejiita (bejiita.imako): at least a big part of it now

[13:23] herman Bergson: Yes Beertje....there are a number of solutions...

[13:23] CB Axel: It is great for hin.

[13:23] andrea (andromedaprime): yep

[13:23] Lente (lentelies.anatine) is offline.

[13:23] andrea (andromedaprime): we got into this mess because the carrot of wealth is attractive

[13:24] Particle Physicist Bejiita (bejiita.imako): aa

[13:24] Particle Physicist Bejiita (bejiita.imako): true

[13:24] herman Bergson: YEs, but not everyone gets a nice carrot....

[13:24] Particle Physicist Bejiita (bejiita.imako): ITS ALL ABOUT THE MONEY! ITS ALL ABOUT THE DUMDUMDUMDADADUM!

[13:24] Particle Physicist Bejiita (bejiita.imako):

[13:24] andrea (andromedaprime): yep

[13:24] herman Bergson: Many only get the leftovers

[13:24] andrea (andromedaprime): yep

[13:24] Particle Physicist Bejiita (bejiita.imako): sadly yes

[13:25] Particle Physicist Bejiita (bejiita.imako): a few takes everything

[13:25] andrea (andromedaprime): profit before people

[13:25] Gemma (gemma.cleanslate): hopes it will change some with Biden

[13:25] herman Bergson: At least this is related to the basic idea of ownership of property, on which Locke based his ideas about society

[13:25] Particle Physicist Bejiita (bejiita.imako): indeed Gemma

[13:25] andrea (andromedaprime): nah - look at who sponsors Biden - not ordinary people :-(

[13:26] Gemma (gemma.cleanslate): will tax those earning over 400000 more

[13:26] Gemma (gemma.cleanslate): and corporations more

[13:26] Particle Physicist Bejiita (bejiita.imako): aaa

[13:26] Gemma (gemma.cleanslate): I support him Andrea

[13:26] andrea (andromedaprime): yep - better than Trump

[13:26] Particle Physicist Bejiita (bejiita.imako): the bosses should not have everything

[13:26] andrea (andromedaprime): yes I know you support him Gemma ;)

[13:26] Gemma (gemma.cleanslate): :-)

[13:27] herman Bergson: How much does your boss take Bejiita? :-)

[13:27] Gemma (gemma.cleanslate): I support anyone who rides the train back and forth from Washington to home all the time

[13:27] Gemma (gemma.cleanslate) GIGGLES!!

[13:27] Gemma (gemma.cleanslate): ...LOL...

[13:27] Gemma (gemma.cleanslate): KNOWS the people

[13:27] Particle Physicist Bejiita (bejiita.imako): i don't know but he is a more normal boss, not a high mogul in a castle

[13:28] Particle Physicist Bejiita (bejiita.imako): plus he is an expert at BBQ

[13:28] Particle Physicist Bejiita (bejiita.imako): YUM!

[13:28] Particle Physicist Bejiita (bejiita.imako):

[13:28] herman Bergson: Well..in a small company...people feel that they need each other, I guess

[13:28] Gemma (gemma.cleanslate): small business owner yes

[13:28] andrea (andromedaprime): i suspect we face a much bigger economic crisis than anyone has seen before

[13:28] Gemma (gemma.cleanslate): true

[13:28] Gemma (gemma.cleanslate): especially after covid

[13:28] Particle Physicist Bejiita (bejiita.imako): indeed here i feel like one of the team and not just like another ant in a stack

[13:29] Gemma (gemma.cleanslate): will take a while to overcome

[13:29] Gemma (gemma.cleanslate): that is what happens

[13:29] andrea (andromedaprime): adding a few taxes on the rich isn't anywhere near sufficient

[13:29] Gemma (gemma.cleanslate): teh republicans lower taxes cause a mess added to by covid mess and dems clean it up!

[13:29] herman Bergson: We have to wait and see,....

[13:29] Gemma (gemma.cleanslate): xactly what Obama did

[13:29] Gemma (gemma.cleanslate): and trump takes credit

[13:30] andrea (andromedaprime): yep

[13:30] Gemma (gemma.cleanslate): sigh

[13:30] Gemma (gemma.cleanslate): Did Adam smith realize what he was causing?

[13:30] andrea (andromedaprime): but it's the old messing with the Titanic deckchairs when the iceberg looms

[13:30] Gemma (gemma.cleanslate): love that analogy

[13:31] herman Bergson: At least we have disclosed the origins of this liberal thinking and the introduction of the belief in economic growth today

[13:31] andrea (andromedaprime): economic growth is sacred to them isn't it?

[13:31] herman Bergson: I assume that Smith believed that his ideas were for the benefit of all, Gemma

[13:31] Gemma (gemma.cleanslate): think so

[13:32] Particle Physicist Bejiita (bejiita.imako): he did not account for the greed factor

[13:32] Gemma (gemma.cleanslate): and probably some of it was

[13:32] herman Bergson: See is from his historical perspective.....

[13:32] Particle Physicist Bejiita (bejiita.imako): it was a good idea from start but then

[13:32] Particle Physicist Bejiita (bejiita.imako): ran out of control i. guess

[13:33] herman Bergson: there was huge poverty in his time....so any material improvement was welcomed

[13:33] Particle Physicist Bejiita (bejiita.imako): aaa

[13:34] herman Bergson: In fact we don't need any increase of material wealth anymore...

[13:34] herman Bergson: but yet we are victims of consumerism....

[13:34] Particle Physicist Bejiita (bejiita.imako): we already have too much

[13:34] andrea (andromedaprime): oh well the greedy always need more ;)

[13:34] herman Bergson: I"d agree, Bejiita

[13:34] Particle Physicist Bejiita (bejiita.imako): and they bombard us with commercials

[13:34] andrea (andromedaprime): yep

[13:34] Particle Physicist Bejiita (bejiita.imako): BUY BUY BUY MORE MORE MORE!

[13:34] Gemma (gemma.cleanslate): most executives make more than 300% of workers pay

[13:35] andrea (andromedaprime): yep

[13:35] Particle Physicist Bejiita (bejiita.imako): EVEN IF U DONE NEED IT BUY BUY BUY!

[13:35] Gemma (gemma.cleanslate): in the past 1o years

[13:35] Gemma (gemma.cleanslate): 10

[13:35] Gemma (gemma.cleanslate): i think it is

[13:35] herman Bergson: Yes Gemma.....highly unjustified...

[13:35] Gemma (gemma.cleanslate): yes

[13:35] Particle Physicist Bejiita (bejiita.imako): indeed

[13:35] Particle Physicist Bejiita (bejiita.imako): very

[13:35] andrea (andromedaprime): ah but they would say it's the free market

[13:35] herman Bergson: It hase been different in the 1950s

[13:36] .: Beertje :. (beertje.beaumont): but we have a choice we can buy things or not, it's up to us

[13:36] Gemma (gemma.cleanslate): companies still buying back stocks instead of investing in salaries

[13:36] herman Bergson: Then the distance wasn't that large

[13:36] herman Bergson: right....

[13:36] andrea (andromedaprime): yes - that used to be illegal Gemma :-(

[13:36] Particle Physicist Bejiita (bejiita.imako): the free market now is like a runaway chernobyl reactor more or less

[13:36] Gemma (gemma.cleanslate): might be 20 years not sure

[13:36] Gemma (gemma.cleanslate): yes

[13:36] Particle Physicist Bejiita (bejiita.imako): at the moment

[13:36] CB Axel: But Christmas is coming. We MUST buy more.

[13:36] Particle Physicist Bejiita (bejiita.imako): hmm

[13:36] Gemma (gemma.cleanslate) GIGGLES!!

[13:36] Gemma (gemma.cleanslate): ...LOL...

[13:36] Gemma (gemma.cleanslate): right cb

[13:36] andrea (andromedaprime): also Glass-Steagal which Clinton repealed

[13:36] Gemma (gemma.cleanslate): already adverti on

[13:36] Particle Physicist Bejiita (bejiita.imako): i already have lights decorations ect

[13:37] Particle Physicist Bejiita (bejiita.imako): well i could maybe install some lasers to blind my neighbors

[13:37] Gemma (gemma.cleanslate): Thinks no one realized what would happen then yes

[13:37] Particle Physicist Bejiita (bejiita.imako): but thats not nice

[13:37] Particle Physicist Bejiita (bejiita.imako): lol

[13:37] andrea (andromedaprime): Glass-Steagall, sorry

[13:37] herman Bergson: no Bejiita...:-)

[13:37] .: Beertje :. (beertje.beaumont): i use the same decorations for years:) i don't need new stuff

[13:37] Gemma (gemma.cleanslate): SP I think

[13:38] Particle Physicist Bejiita (bejiita.imako): ok maybe a 3d printer would be nice to have and some CNC machine

[13:38] Gemma (gemma.cleanslate): nopt st

[13:38] Particle Physicist Bejiita (bejiita.imako): to make even MORE stuff on

[13:38] Particle Physicist Bejiita (bejiita.imako): lol

[13:38] Particle Physicist Bejiita (bejiita.imako): but i don't have a place for more stuff

[13:39] Gemma (gemma.cleanslate): gifts Bej

[13:39] Particle Physicist Bejiita (bejiita.imako):

[13:39] Gemma (gemma.cleanslate): and food

[13:39] herman Bergson: Well...I guess ..since we are preparing for Xmas shopping it seems, it is a good moment to prepare for the next lecture

[13:39] Gemma (gemma.cleanslate) GIGGLES!!

[13:39] Gemma (gemma.cleanslate): ...LOL...

[13:39] Particle Physicist Bejiita (bejiita.imako): hehe

[13:39] Gemma (gemma.cleanslate): ♥ Thank Youuuuuuuuuu!! ♥

[13:39] Particle Physicist Bejiita (bejiita.imako):

[13:39] herman Bergson: So....thank you all again for your participation....^_^

[13:39] CB Axel: Thank you, Herman.

[13:39] herman Bergson: Class dismissed ....

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