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The Origins of our Economic View

The Origins of our Economic View. Bernardo Aguilar-Gonz á lez. Questions on Who’s Counting. What main problems does this movie identify in the traditional economic paradigm? Why can we say that, according to this movie, the “science” of economics is a social construction?

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The Origins of our Economic View

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  1. The Origins of our Economic View Bernardo Aguilar-González

  2. Questions on Who’s Counting • What main problems does this movie identify in the traditional economic paradigm? • Why can we say that, according to this movie, the “science” of economics is a social construction? • Why is that realization important?

  3. How did we get here?

  4. Evolution of “Power Laden” Western Thought Kelsen’s Pyramid

  5. Economists-Moral Philosopers Adam Smith-The Wealth of Nations Karl Marx-Das Kapital Frederich Engels-The Origins of Family, Private Property and the State

  6. Evolution of “Power Laden” Western Thought

  7. The Classics • Adam Smith • David Ricardo • Thomas Malthus • John Stuart Mill • Karl Marx

  8. Adam Smith • Economy as a Closed System

  9. Adam Smith • Invisible Hand

  10. Adam Smith • Invisible Hand – Assumptions: • Our preferences are consistent • We act based on self-interest • Individual Good adds up to Social Good

  11. Adam Smith • Invisible Hand – Assumptions: • Enough buyers and sellers as for there not to be a monopoly

  12. Invisible Hand – Assumptions: • Perfect Information that backs up our economic decisions

  13. Invisible Hand – Assumptions: • No Externalities

  14. Thomas Malthus Population Growth vs. Available Resources

  15. Relative Point (Fig. 3) Acres of Land (1) Human-Days of Work (2) Food Production (GNP) (3) Salary in Food per Day (4) Rent of Land in Food per Acre (6) A 1000 500 501 4000 4008 8 0 A' 1000 1000 1001 8000 8008 8 0 B 1000 3000 3001 20000 20005 5 5 E 1000 6000 6001 33600 33604.2 4.2 8.4 Z 1000 8000 8001 39000 39000 0 39 Table 1- Relation Between Production, Labor and Land.

  16. David Ricardo F

  17. The Classics-Ethical Justification of the Industrial Revolution and Early Capitalism Adam Smith-------------------------------------------Societal welfare is the sum of individual welfares. The free market solves this problem through the invisible hand. Continuous growth is necessary. Robert Malthus--------------------------------------- Population control is necessary. David Ricardo---------------------------------------- Law of decreasing Returns. Technological change will enable overcoming a no growth situation. John Stuart Mill-------------------------------------- A steady state is desirable. Freedom of markets should extend to all dimensions, including gender. Human freedom blossoms in free markets. John Stuart Mill-also states the steady state as desireable

  18. How did we get to…? "how many conservative economists does it take to change a light bulb?" Answer: "If the light bulb needed changing, market forces would have changed it."

  19. But first… So…how is it that, as you are saying Mr. Smith, if value is originating in labor (therefore we need more workers and division of labor-population growth and economic growth), all of the profit is kept by factory owners?

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