ostwareconomists naturally thought of an economic problem con-sisting of allocating key resources, such as steel and oil,among alternative uses, primarily aircraft, warships, andbattle tanks.
This in some ways is still the same as modern economics. Key resource allocation is still a principal development.
He knows that his breakfast depends upon workerson the coffee plantations of Brazil, the citrus groves ofFlorida, the sugar fields of Cuba, the wheat farms ofthe Dakotas, the dairies of New York; that it has beenassembled by ships, railroads, and trucks, has beencooked with coal from Pennsylvania in utensils madeof aluminum, china, steel, and glass.
To me this symbolizes how one nation's economic growth depends on many other nations through trade.
“Filling in Frameworks” wrestles with the misconceptionthat economics is a science. This section looks at the difficul-ties that economists face in trying to adopt scientific methods. Isuggest that economics differs from the natural sciences in thatwe have to rely much less on verifiable hypotheses and muchmore on hard-to-verify interpretative frameworks. Economicanalysis is a challenge, because judging interpretive frame-works is actually harder than verifying scientific hypotheses.
I find it interesting that Kling has pointed out in this section the difference between natural sciences and the complexity of economics. Noting that economics is largely interpretative and not always subject to the same verifiable scientific methods of study.
Companies try to develop new products, and more efficientproduction systems.
Kling also acknowledges this in his text.
Remember that having a product that’s differentiated in the minds of consumers isa key source of competitive profit. Companies try to create this differentiation inways that are wasteful, useless, or even destructive: massive (and often misleading)advertising, excess packaging (to make products look “bigger”), and artificialobsolescence
I find that smaller businesses tend to steer away from such tactics, why is that? Would it not also give them a more competitive advantage when competing with bigger companies?
New technology The invention of steam power, semi-automated spinningand weaving machines, and other early industrial technologies dramaticallyincreased productivity. Also, these technologies needed completely new waysof organizing work: in larger-scale factories which required more complex(and expensive) equipment. And they implied new structures of ownership:the machinery (and associated costs of raw materials and other necessaryinputs) was too expensive for individuals or small groups of workers tofinance on their own. An owner was needed to finance the large up-frontinvestments necessary to get the factories working
Technological advances have added to the advancement of the economy. I often hear that being said but are there instances where they have impacted the economy negatively?
I once attended a dinner speech given by the then-Secretary-General of theOrganization for Economic Cooperation and Development (OECD), whichis an international association of developed capitalist countries. He waspromoting the concept of “economic literacy.” He argued that if more peoplein society understood the fundamentals of economic theory (like supply anddemand, competition, and free trade), then they would more readily acceptpolicy “reforms” implemented by their governments – even if those reformswere painful.
Does anyone else agree with this statement? If so, to what extent? From my own experience, I find that when people are presented with pertinent information on a given subject matter, they aren't always willing to accept new policies. It's only when they see and understand the benefits of those policies and how it relates to them that they are willing to change.