Saturday Feb. 9, 2008 - 7th annual ASET conference - Ethics, Economics and Freedom: The Morality of Markets
The conference as an amazing experience. This 7th annual conference of the Arizona Society for Economics Teachers was attended by over 100 Arizona educators and 50 students of economics. Co sponsored by the Arizona Council on Economic Education the morning was packed with three powerful presentations.
Up first was Dwight Lee who kicked off the day's discussion with an historical overview of freedom, markets and Milton Friedman. Lee's eloquent (and humorous) description of the struggle between Keynes and Friedman was reminiscent of Yergin and Stanislaw's The Commanding Heights as Lee showcased Friedman's intellectual journey.
Lee described the seminal work of Friedman, his work analyzing the role of money, the Phillips curve and the controversy over the role of the government. He concluded his well thought overview of economics and freedom, by outlining Milton Friedman's legacy as a Freedom Fighter:
Advocate for individual liberty
Freedom as an ultimate value
Freedom as an instrumental value
Lee ended with a quote from Adam Smith:
" The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it." (WN: B.IV, Ch.2, Of Restraints upon the Importation from Foreign Countries in paragraph IV.2.10)
Our next speaker, John Morton, provided an overview of the latest NCEE publication
Teaching the Ethical Foundations of Economics.
Co written with Jonathan Wight this book contains 10 lessons that reintroduce an ethical dimension to economics in the tradition of Adam Smith, who believed ethical considerations were central to life. Utilizing these innovative instructional materials your students will learn about the important role ethics and character play in a market economy and how, in turn, markets influence ethical behavior. Click here to read Jonathan's introduction.
Our closing speaker David Schmidtz integrated philosophy with the previous discussion of freedom and teaching economics.
Professor of Philosophy and Joint Professor of Economics David Schmidtz conducts the Program in the Philosophy of Freedom. The aims of the program in the philosophy of freedom are
To provide undergraduate students with a two-course sequence in Philosophy of Freedom, PHIL 320a and PHIL 320b.
To have visiting professors give lectures topics related to Philosophy of Freedom.
To provide workshops for alumni of the University of Arizona Philosophy graduate program.
To give current graduate students fellowship opportunities that advance their teaching and research.
David began with a reminder that, as educators, our role is to empower our students to participate in the complex real world and that role will demand that we provide authentic opportunities to develop critical thinking skills and demonstrate the results of their thinking. He ended his introduction by sharing a transferable teaching tidbit, one that I will certainly incorporate.
David uses the following incentive in his large (300 student) undergraduate class. At random, he selects a student and asks if they are in attendence. If not, the student will have one point deducted from their final grade. If they are present, the student is asked to summarize the key point from the previous class. The student is free to pass. If this is the case, no points are deducted. However, if the student provides an acceptable summary, the student is awarded 1 point and the process proceeds to the "bonus" round. Here another student is selected at random and asked to summarize the current class. Essentially this checks preparation, asking the student the key points from the required reading. If the student successfully answers, 5 bonus or extra credit points are awarded to the student. An incorrect answer or silence is not penalized.
Schmidtz went on to organize his presentation around the familiar economic concept of the gains from trade.
After contrasting a zero sum view of interaction with a positive sum view, Schmidtz presented the underpinning or preconditions needed to realize the gains from trade - voluntarism and property rights. With these in place, specialization leads to collaboration which widens the sphere of benefit to the agents in society. Following Adam Smith, the increasing size of the market allowed for increases in specialization and increases in benefit.
At this point, Schmidtz shared a second transferable teaching tidbit. This in the form of a story about Thomas Edison. Schmidtz asked if Edison had endowed a charitable foundation. (I was unable to determine if Edison did). Schmidtz then asked, would the world have been a better place, had he donated his wealth to charity. Then Schmidtz asked if Edison had paid taxes and repeated his previous question, would the world be better off if he had paid taxes.
The conclusion - Edison's contribution to improving society, raising standards of living and stimulating growth was the light bulb. This invention has far more lasting and important positive consequences that would a charitable contribution or a payment of up to 100 per cent in taxes.
As you can tell, we have a wonderful day and many thanks are due to ASET president Dr. Alice Temnick and Arizona Council on Economic Education Program Director Ashlay Hall.
The program ended with the recognition of Brett Haglin as Arizona Economics Teacher of the Year and Elizabeth Volard as recipient of the John C. Morton service award.
Please feel free to leave comments, share your reaction to the conference, or leave questions for ASET, ACEE or the 2008 participants at this blog.
Saturday, February 9, 2008
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41 comments:
Through listening to Dr. Dwight Lee at the ASET conference I learned a lot about the famous economist Milton Friedman and some of his belief and theories especially those concerning freedom. I learned about his negative income tax proposal and his positive stance in the debate over the legalization of drugs such as marijuana. I am now more familiar with his theory of consumption which plays a large role in Economics today. I was also enlightened on the trade off between unemployment and inflation and now understand recessions such as the great depression a bit better. Dr Dwight Lee did an excellent job speaking, humoring his audience and answering questions, I am glad to have had the opportunity to attend this conference. When is the next ASET Conference?
Austin Pare
I recently attended a speech by Dr. Dwight Lee a professor at the university of Georgia. The main economic concept discussed in his speech was free market economics, Milton Freedman and the government’s flaws in the economy. The issue was the government’s policies regarding the poor. He believes this policy is ineffective. The biggest issue he discussed however was Milton Freedman. Milton Freedman was a very liberal economist who affected the world’s economy in many ways. He believed in freedom and that drugs should be legal, he fought to eliminate wage and price control as well as the draft. He was also opposed to Kainiasm and believed that it was incorrect.
I learned many things from this speech the biggest being Milton Freedman’s affects on the modern economy. I also learned a lot about the depression and why we were in one for so long. I will apply my knowledge of these subjects in my daily life by reflecting on the complete side of economic issues and trying to find what Freedman would have thought on the issues. I also learned that recession is a good thing and it will sort itself out over time because a recession will cause price drops which in turn will stimulate the economy out of recession. I learned the government believed that the way out of the recession was to keep prices high and tried to do this with many strange methods such as burning pigs and not using their meat.
I was wondering if you agreed with the speaker, and would you consider the acts of the government during the depression to be fascism also with presidents day approaching who would you consider your favorite president.
http://econlog.econlib.org/archives/2008/02/antifascism.html
http://www.adamsmith.org/blog/tax-and-economy/common-error-no.-35-20080215908/
It hasn't been approved yet, but here's what I wrote.
It is:
I really like the points that you bring up in your post. A government imposed “Death Tax” does, in fact, seem very unfair. It doesn’t seem fair that after working and paying taxes on what is earned, you have what you earned taken from you at death. This certainly does remove much of the motivation behind working to get ahead, and probably discourages saving once an individual reaches an age he or she deems as “old.”
Of course the government tries to provide equity but ends up causing disparity. It is an interesting situation to see how the government’s good intentions to help create equity end up hurting the middle class. It makes sense that the middle class would not have the means or time to plan ahead and secure any wealth for their posterity or other interests, but the rich undoubtedly do. It sounds like this would eventually hurt economic growth because of the possible effects on productivity and a government stimulated increase in disparity between low and upper classes.
Although I’m not entirely surprised by the situation that is described in Britain (rather the effects that this death tax is having in Britain), but I wonder if you could point me to an article or other material that would support what you are describing in your article. I am especially interested in what is described in the final paragraph about the effect that the tax is having on the middle class and the country’s economy.
In any case, I hope that common error number 35 isn’t prevalent among all people.
Thank you,
Todd
http://www.adamsmith.org/blog/tax-and-economy/common-error-no.-35-20080215908/
Austin Pare
I recently attended a speech by Dr. David Schmidtz. The main economic issue in his speech was gains of trade. Our textbook defines trade policy as a government policy that directly influences the quantity of goods and services that a country imports or exports. Trade is an essential part of our existence and has benefited mankind more than any other aspect. Dr Shmidtze agrees that it is what keeps our society balanced. He stated that trade is the only way to become more wealthy and saves people a lot of trouble in their daily lives. Trade is also what keeps countries from killing each other because as long as a country focuses on being useful to countries around them they will have no problems. He stated just by arriving at work you are giving back to the entire community. Unemployment however cannot be stopped because there is simply not enough to be done at any given time.
I learned a lot from his speech especially on countries need for trade and how it works. I also learned not to take what I have for granted and that a lot of work goes into even the little things I have.
I was wondering if you agree with these views, and if you had any of your own on this topic, also with presidents day approaching who was or in the unlikely case is your favorite president?
http://cafehayek.typepad.com/hayek/2008/02/silly-stats.html?cid=102262458#comment-102262458
We cannot depend upon the Federal Reserve to continue lowering the interest rates without any inflationary consequences. A new Home Owners’ Loan Corporation would be a very good idea with the current house market state being one of the large contributors to our near recession. Increased global regulations will also help stimulate our economy considering within the past couple of decades our balance of trade has switched to a trade deficit mainly from China. Income inequality definitely needs to be fought in order to encourage more spending than saving. Having an estimated $50 trillion debt to social welfare programs like welfare needs to be paid attention to before future generations are denied supposedly guaranteed financial support. FICA which helps to pay for social security and Medicare; and other payroll taxes which act as tax incidences, or the manner in which the burden of a tax is shared among participants in a market. Congress decided that FICA’s tax incidence should be shared between the firm and employees half and half, but research shows that lawmakers cannot so easily determine the distribution of tax burdens. In all, our economy will bounce back as long as precautions are followed correctly and future decisions considered with economic consequences in mind.
- This shows the need for a president which believes in a free market, which has been proven to lead to more economic growth
Paul Serrano
I believe that people should be free to buy or sell what they what, and do what they want as long as it doesn’t hurt others. Leave the middle class alone! It’s true that free market economies need lots of freedom to work. The more freedom a market economy gets the better it does. Also, government involvement is good and bad. The government can severely hurt the economy or boost the economy, but a market economy can usually fix itself. Like Dr. Dwight said, “People don’t understand that recessions are good… the economy sometimes needs bed rest.” The concepts spoken about in Dr. Dwight’s lecture effects us in many ways, some of the concepts were fiscal policy, which government spending is how we get schools, roads, buildings, programs, etc. Furthermore that equilibrium prices are what our products in the United States should be sold for. Price ceilings and floors hurt business more than they help by creating surpluses and shortages in supply of the products they’re enforced on. So I suggest we do nothing because doing something always causes problems. Who cares if the middle class is shrinking; only you do. It’s not like you know exactly what to do, do you? Let life play out.
February 10, 2008
American Consumption
Don Boudreaux
http://cafehayek.typepad.com/hayek/2008/02/american-consum.html#comments
Hans Seggelke
I have studied and know many people of different origins; All in all where they come from and what nationality, race, religion or household they come from has nothing to do with why or why not someone will go forward to pursue a goal/avenue. Immigration is the key in all of this, without immigration there would be no goal or avenue to exploit (e.g. someone coming to US).
I myself come from a different country other then the United States. I come here because having a degree/experience based out of the United States says more then majority of any other country. I choose to wake up every morning and futher my knowledge because I want to support a family and have a distinguished life. Some people believe this and others may not. If one person wishes to further themselves they are not going to do it half-way(or at least I would hope). This is the personal aspect of moving forward in life to be successful.
I have had the great pleasure of having friends from many different cultures as noted above. I do not agree that nationality, race, religion or type of household that someone may come from; Depicts what they are ambitious about in life at all. I have a Jewish friend that has no effort in life or goals, a American friend that just cannot seem to make up his mind on what he wants to do in life, last a middle eastern friend that does not much of anything. Still all of them seem to get by and have a great life, just because someone is not following the path of their nationality, race, religion or household does not mean that it is because they refuse to or cannot. They simply could just not have a drive to do so.
All in all I have to agree with you that Thomas Sowell's Ethnic America. Is far better and gives a deeper intake for people. He covers a broad band of immigrants such as Africans, Germans, Italians, Japanese, Puero Ricans, Mexicans and Jews.
http://econlog.econlib.org/mt/mt-comments.cgi?entry_id=3358
Matt Webb
Overall, I enjoyed Dr. Dwight Lee’s talk about Melton Freedman and other relating Economic issues. I especially enjoyed learning about how he disproved many of the Keynesian Theories. One thing about the talk that did confuse me a little bit was that Dr. Dwight Lee talked about how Milton Freedman was against Free Market Economics but than he went on to list all of the aspects of individual liberty that Milton Freedman believed in. From the facts that Dr. Lee mentioned it seemed as if Milton Bradley is more in favor of free market economics than not in favor. I feel that he is partly in favor of it. For example, he believes that people can use drugs, alcohol, or any other substance they wish in their home, as long as they don’t go driving down the street while impaired. Whereas free market economists would believe in complete freedom that people can do as they please. I guess that the topic of freedom is controversial. What is actual freedom? I think that the best definition of freedom using economic terms would be, “Freedom is being free to act and choose as the invisible hand instructs.”
How did America become so dominant in the world? Is it because we have the most freedom?
Matt Webb
Throughout Dr. David Schmidt’s talk, I learned a lot of interesting things but the thing that struck me the most was when he said, “Showing up for work is the main contribution that people can make to Society and the Economy.” He proposed the question, “Did Thomas Edison pay taxes?” Nobody really knew the answer and nobody really cared. The reason being that no one really cared if he paid taxes, was because his contribution was so monumental that he paying taxes was of no importance to us. Dr. Schmidt than compared Thomas Edison to the average working person. The best thing that we can do is to show up for work and give honest labor so that we can earn money. Once the money is earned than it can go and be spent thus making the economy better off. He then closed his address with a very profound statement that will help me personally when I start to do business. He said, “Don’t confuse catching a subsidy with doing honest work.” I agree completely with Dr. Schmidt’s views and I enjoyed his talk.
Dr. Schmidt says the best way to contribute to the economy is to do an honest work, is there a way where people doing dishonest work can also have a good effect on the economy?
Brandi Rios
Dwight Lee was our guest speaker for the first lecture. His main topic was Milton Freedman, a well known economist and freedom fighter. In the 1930’s he compared consumption and income. He saw that the percentage of savings went up as income was increased. This meant that the market could not go up and move forward anymore due to the depression. He saw that there was a constant connection. This theory influenced his book “Theory of Consumption Function”. Friedman also wrote extensively on public policy, always with a primary emphasis on the preservation and extension of individual freedom. Friedman originally was a Keynesian supporter of the New Deal and advocate of high taxes. He moved away from the idea of central control in the 1950s, along with his close friend George Stigler who once said “Milton wanted to change the world; I only want to understand it”. People often referred to him as a free market economist, although he denied this label. He believed that there was a good market and a bad market, in his opinion there was no free market. Before the 1970s their advocacy of free markets was a minority view among economists. His political philosophy stressed the advantages of the marketplace and the disadvantages of government intervention. He adamantly argued that if economic freedom, is introduced into countries governed by totalitarian regimes, political freedom would tend to result. His views of monetary policy, taxation, privatization and deregulation informed the policy of governments around the globe, especially the administrations of Ronald Reagan in the U.S. He also thought that the Fiscal Policy was second to the Monetary Policy As Friedman grew older he reversed himself from being for Keynesian. He believed in individual liberty; expanding individual freedom was always his goal in mind. Some of the following ideas were ones that he favored. Such as school vouchers, eliminating the draft, legalizing drugs for the privacy of your own home, he opposed welfare programs, he also opposed wage and price control. Milton Friedman was one of the most well know economists of our time and it was due to the fact that he never was afraid to take a position, no matter how unpopular it was. During this lecture I learned a lot about how the economy truly runs. I learned that it takes money to make money and that we all need to spend money in order to keep the economy good. Although the lecture was short I did get a lot of information about Milton Friedman. He is normally someone I probably would have never know so much about if I hadn’t gone to the lecture. So with that I am glad that I obtained the information on what such an interesting economist did to try and help our countries economy. When will the next Lecture be held at MCC?
Brandi Rios
David Schmidtz gave the second lecture which was all about gains from trade. He related a lot back to Adam Smith and the connection between Philosophy and economics. Why do people create wealth? Why do the rich get richer and the poor get poorer? Which are ethical and which are not? These are all some examples of the statements that combined the two ideas. Adam Smith was both and economist and a philosopher. Some of his ideas were the invisible hand and the division of labor. He was accused of being a “cheerleader” for the market when he was actually a realist. Schmidtz also talked about how trading by consent makes our society more contributable. He talked about the litigation of property rights which helps people in society trust one another. We can draw boundary lines for our property and know that no one will cross that line of conduct. Then he moved on to talk about what the U.S. market does for us referring to it as “the tide that lifts all boats”. I definitely learned more about Adam Smith and his idea of the “invisible hand” and how they lead consumers and sellers to where they desire to be. I would like to understand more about gains and trades it self though. How does trading benefit a society as a whole?
The topic of the speaker Dr. David was gains from trade. Which is basically means working or import/export. In rich societies most people make there money by trade, they also spend more time helping there enemies, not hurting. In poor societies the people or society stays poor because they are all focused on themselves, and they call that Capitalism. In rich ones everyone helps each other. He also talked about Adam Smith who was a really sophisticated economist, the invisible hand, and his own teaching methods.
Dr. David’s economic views were Presupposed Voluntarism. “People aren’t trying to benefit the Economy just trying to maximize their income.” Voluntary trade is mutually beneficial. When you have spill over there is no guarantee that Voluntarism is mutually beneficial. Anyone can give back or contribute to society by trade or just showing up for work.
Joey Angell
I agree that it is not up to economic commentators to decide what level of wealth will make people happy. There are many people that I know who are rich and happy and many others that are poor and happy. True happiness is not dependent upon ones financial status, though financial problems can cause undo stress in ones life. I also have seen that when people have very little in the way of wealth a change in their wages or position is highly thought of and brings great rewards. This is not so true for people how have a lot of money it takes a bigger increase of money to have the same reaction. I guess it is similar to something Milton Friedman said about the percent in spending habits between the poor and the rich. The poor are more likely to react to an increase in income than the rich, and will spend a higher percentage of their income. This applies to people today the poor react more to an increase in income and feel better about their standings then the rich do. So if we continue to have economic growth the value returned for the growth is less each time. I still hold it that happiness is not truly related to wealth though. I do not have a lot of money and yea I do feel better when I get a little more money but I am just as happy when I had lots of money (before I got married) as I have been ever since. I also agree that people what to be challenged and to work for something. If the economy continues to grow more and more people will have a chance to challenge themselves and to make more of themselves that will if nothing else boost self esteem.
Mike Delgado
I enjoyed the speech by Dr. Lee, was very informative. He mainly talking about Milton Freedman.
Milton said one of the reasons was “Consumptions from the people could not keep up with the growths.” When people rushed to the banks to withdraw their savings, the money supply collapsed. Milton published a book in 1967 called the Theory of the Consumption Function. Dr. Lee said that the government instead of letting prices and inflation drop; they tightened the supply of good, to keep prices high. In hopes that the high prices would re-stimulate the economy. As history tells us, this didn’t happen. Friedman was for individual freedom. Dr. Dwight-Lee stated in his speech “Freedom is instrumental in creating and producing wealth.”
I gained a greater insight into the world of an economist. What issues are important and also the view on freedom in the markets. The speaker did a good job on providing examples and his views on the markets. I knew before that the government had put in place programs to assist, but to the extent they went to was unknown to me. I always thought in a period of high inflation. It was better to open the supply of goods in the market, in order to reduce the inflation present. Over all I thought it was a pretty good speech.
http://cafehayek.typepad.com/hayek/2008/02/living-beyond-o.html?cid=103162246#comment-103162246
Jennifer Wolf
This topic is very similar to what Dr. Schmidtz a professor oh economics at UofA came to my school to speak about. I learned a lot from that speaker about the real world and the impact we all have on the economy. I found it highly interesting when he said “ the greatest contribution a single person can do is to show up to work and make a difference to all those people.” It kind of makes you think about how powerful each person is and that things can change if each of us made a difference just at our jobs.
Do you personally think working more might be good or bad?
http://cafehayek.typepad.com/hayek/2008/02/living-beyond-o.html#comments
Phuong Tran
When the Great Depression happened, people panic. The Federal Reserve wasn’t prepared for this. Money supply dropped, runs on the banks, and banks failed because people try to get money out at the same time. People did not have enough money to continue what they are buying at the old price, but panics did not last long because correction kicked in and prices dropped. People buy as much as they can before. I’m glad the Great Depression happened in the early 1900s then today because the Federal Reserve is now prepared to prevent something like the Great Depression to occur again, I hope.
I recently attended Dr. Dwight Lee’s speech. What I learned about Dr. Dwight Lee’s speech is how the government is trying to do good for the economy, but instead making the economy worse because they don’t think far ahead of what will happen if things occur such as inflation. The government is trying to pump up the economy by giving money away through rebates to get people to spend more, but doesn’t understand it’s really reducing spending when inflation happens or when people save their money. Me personally, I don’t care if the economy is going down or up. I’m just glad my pocket is going to get fatter. Whether inflation occurs or if I save my money on future use, the money comes in handy and I’m glad the government is giving us extra money to spend. What do you think will happen to the economy after rebate checks get mail out?
http://cafehayek.typepad.com/hayek/2008/01/i-worry-much-le.html#comments
Ryan Kelly writes:
I wanted to talk about the free market economists Milton Friedman. I learned a lot from an economist named Dr. Lee’s presentation. I had heard about Milton Friedman in other economics classes but I had never really understood what he was about or just how much he meant to the economists way of thinking today. He contested a theory that had stood up and was believed by most high level and respected economists. He stood up for what he believed in and when he argued on a point he had enough intellect to change many peoples way of thinking, which in turn changed the economy. Dr. Lee put it in perfect words, “Milton Friedman took the road less traveled on.”
Milton Freidman contested Keynsian theory after starting out his career as Keynsian supporter. It takes a lot for a person to go against something that he has grown up through school and through life learning and agreeing with. In order to do this you must be a master of the subject you are stating your opinion about and have an argument for every question that somebody asks you. If you are stumped about something that the other theories may be able to explain then what you are arguing for would probably go out he window. In my opinion Milton Freidman changed more about ecomics in the world today the Franklin Roosevelt ever could have done as president. Being President of the United States you have a lot of power over the economy but Milton Friedman was a normal person and influenced more people his time than FDR did in his term as president.
Posted February 19, 2008 11:18 PM
Erick J. Camacho
In this economics conference event I learned and reinforce many concepts and terms that helped me to better understand macroeconomics and the economy in the United States. Even though I’m taking macroeconomics, I realized that Dr. Dwight Lee was talking more about microeconomics. Microeconomics refers more to a local economy. I also learned some historical events such as the Great Depression and what actions were taken by Americans and government. These helped me understand the concepts of opportunity costs and equilibrium, which involves supply and demand. Back to the term of freedom, I extremely agree with that. This country has a Free Market Economy, which allows us to be a great and wealthy nation. It’s just a matter of liberty. The fact that we do business and exercise our rights makes us more successful in business because we are able to offer any goods and/or services to our American society. Finally, I believe that Dr. Dwight Lee’s speech was not boring at all since he kept making interesting comments and let people ask questions at the end of the session.
http://freakonomics.blogs.nytimes.com/2008/02/14/the-macroeconomics-of-love-a-valentines-day-analysis/#comment-473843
Can you really measure love like you measure tangible economic objects like GDP or money? If you have a dollar, you have a dollar. If you are in a good mood and you have a dollar, you still have a dollar. If you are in a bad mood and you have a dollar, you still have a dollar. A dollar no matter what is 100 pennies. When it comes to love it is not as clear cut. If a person is having a bad day it is not unlikely that they do not feel that they have a lot of "love." It is also very hard to define a word such as love, especially in different countries. You can say a dollar translates into so many euro's but how can you translate the meaning of love from one country to another? Is love thought to be the same thing in countries where there are things like arranged marriages? I don't believe that this research will prove useful because i don't believe that it will prove accurate.
-Carlene Sweeney
Erick J. Camacho
One question that I wanted to ask is:
Do you think that the U.S. economy will actually grow with the program that the U.S. government is trying to apply by giving money to citizens?
Mallory Shields
I enjoyed the presentation Dr. Schmidtz gave because of his explanation of the government. While I personally may not agree how and why the government works all of the time, I can see the logic behind issues mentioned in the lecture. I learned that people really do need a government not only to help them personally but to help shape our economy. He made Adam Smith’s invisible hand theory very clear and applied it to decisions made by the government and society today. However, I felt like his presentation was more geared to be presented to a group of teachers rather than students. A good portion of his lecture was how he presented things in class and different tactics he uses to involve and encourage his students at ASU. While this was interesting to hear what a classroom (or lecture hall) was like from a teacher’s prospective, I personally gained more from the actual economic ideas discussed. He had touched on a topic I found interesting, and that was the abuse on government provided health care, specifically in the United States. He stated that people who receive government health insurance tend to abuse the system, which I see over and over again working in a pharmacy. How do we stop this? With the help of technology, I know from at least a pharmacy prospective, we can track medications and things like that, however it is rare to see a doctor who will cut a state-aided patient off their medication. They can guarentee that their bills will be paid if the invoice is going straight to the state. So do we hold the doctors responsible, or the pharmacists, to mediate every patients profile? What about patient responsiblity? Because some patients abuse the system do we cut everyone off? Or do we keep condoning the actions of the abusers by supplying these services?
Mallory Shields
I felt that Dr. Dwight Lee’s presentation was very enlightening, and helped me to understand economics in our country. Dr. Lee’s connection between concepts we discuss in class and examples in when things like that took place helped me to tie things together. His connections to the Great Depression helped me understand key terms like stagflation and fiscal policy with a real life example. Also, with him laying out a timeline, I learned just how quickly our economic state can, and does, change. I also learned about Milton Friedman and how his ideas and actions helped shape today’s economy. I think that Dr. Dwight Lee was an excellent presenter by leading interesting lecture that encouraged deeper questioning into economic ideas. He also spoke several times about freedom. He stated, “You don’t need a coordinator to tell people what to do and how to do it.” However, what about the people who do need more direction? Can we have a completely free country with people who don’t follow their own actions, but perhaps the ideas or actions of others? Does this qualify as complete freedom if you opt out of exercising your rights?
Aarin Tunstall
aarin writes:
Instead of reading an article for this periodical analysis I attended the 7th annual ASET conference. At the conference there were several speakers, I listened to one of the speakers Dr. Dwight Lee. During his presentation about economics he talked the Fiscal Policy which is the setting of the level of government spending and taxation by government policymakers. Lee mentioned the “Invisible Hand” which is known as individual freedom. Lee also talked a lot about the Great Depression because of it being one of the most important events in economic history. But the main focus of Lee’s presentation was about Milton Friedman. He talked about how Friedman was a “freedom fighter” and the contributions he made toward economics and the different theories.
Lee discussed many different economic concepts throughout his speech. Even though he never put it into these terms, Lee talked a lot about the 9th and 10th principles of economics. The 9th principle is prices rise when the government prints too much money. This principle mainly explains the different examples of inflation and how inflation develops. “What causes inflation? In almost all cases of large or persistent inflation, the culprit is growth in the quantity of money” (Principles of Macroeconomics). The 10th principle is society faces a short-run trade-off between inflation and unemployment. This principle is about how raising prices and more hiring means lower unemployment. Lee when talking about Friedman believing in the stagnation theory which is an increase in both employment and inflation at the same time. Lee states that, “when prices drop the economy starts to grow again after a recession” “Dr. Dwight Lee”
At first to be completely honest I just attended the conference for extra credit but in the end actually liked the speaker I listened to. Lee talked about things that I was learning in class which made me look at things in a different perspective than what I had read in the book. Lee’s style and the way he presented him self was interesting for several reasons. I felt that Lee would explain theories and talked about Milton Friedman in a story way. I also liked the way that Lee would give out a lot of information but then break it up with a joke or remark to kind of reset your way of thinking so that you wanted to keep listening to what he had to say instead of staring off into space.
What are any thoughts about taxation by government policymakers?
Like Milton Friedman do you believe in individual freedom?
Posted February 18, 2008 01:42 PM
http://econlog.econlib.org/mt/mt-comments.cgi?entry_id=3358
I thought Dr. Lee's presentation was very interesting. He kept it funny, but at the same time was getting his point across. His presentation made me realize that I have an influential power of the price of a good that I want to purchase and to benefit me I want prices to be as low as possible. The lower teh prices the more money I can save meaning the less money I will spend.
Written by: Amanda Wilson
I did my blog on an article that had to do with global warming, so here is my summary of my opinion and the link. In my opinion the aspect of global warming is a natural pattern of the earth not an excessive amount of emissions of CO2 being processed into the atmosphere by humans. Based on my own research and readings on the topic it has been proven that global warming is a pattern that earth has gone thru several times. The opinion that global warming is human caused is a forced statement from scientists who are influenced by the government. The government is using the fear of a global warming to create an increase of demand from consumers to purchase environment safe transportation such as luxury vehicles and to fly with commercial airlines. They are also using the U.S. economy as their endorser for the studies of alternate fuels such as E-85, and the many different types of jet fuel. Therefore, the attempts for cleaning up the atmosphere are based on what the government wants you to believe and not scientific fact.
http://freakonomics.blogs.nytimes.com/2008/02/13/global-warming-and-the-minefield-of-unintended-consequences/
Kevon O'Rear
On a Saturday morning there was a economic educators conference held at 7 o'clock in the morning. Sprinkled in a crowd of well dressed economists were barely awake college students bribed with extra credit. Being one of them I expected a boring speech mirroring that of what comes on CNBC's Squawk Box about economic principles that seem more interesting coming out of a text book than somebody's mouth. All joking aside, I was pleasantly surprised when Dr. Dwight Lee took the stage and said he was going to talk about a well known economist, Milton Friedman. I had no idea who this man was he was going to speak about, but this only intrigued me more. I felt like I was all alone in a packed conference room when Dr. Lee started saying things like consumption function, balance budget multiplier, and Phillips curve. So when I got home from the conference I decided on would lookup Milton Friedman on the Holy Grail of college research, otherwise known as Wikipedia. Bash it all you want but it is efficient in times like these. As I read more and more about Friedman I began to realize that he was not your cookie-cutter economist, his views were different from the other economists of his time but he also did not consider himself a free market economist. He made simple observations, if somebody is making more money it does not necessarily mean that they will spend that much more, but savings is increased by a substantial margin. If nothing else, after this saturday morning experience, if someone asks me if I have ever heard of Milton Friedman I can say "yes".
http://cafehayek.typepad.com/hayek/2008/02/creating-wealth.html#comments
Milton Friedman was an amazing economist. He severly discredited the Keynesian model of economics. Friedman used sound data and research in his quest to fully understand economics. According to Dr. Dwight Lee, Friedman was more concerned with the accuracy of his analysis then he was with the actual outcome. However, Milton Friedman did not start out opposing Keynesian economics, in fact, he was initially a proponent of Keynesian theory. Friedman was a very talented economist, was there anything the man couldn't do?
http://freakonomics.blogs.nytimes.com/2006/11/16/sad-news-milton-friedman-has-died/#comment-475196
Jenna Innes
blog response by Kenya Clark
In your blog posting you ask the question “So why suppose that any of their “plans” to create innovative industries and jobs are anything more than the cheap-to-dream- up fantasies of self- important politicians accustomed to spending other people’s money? I think it’s ridiculous to suggest that because someone may not have the experience in creating a business that means they are not capable of handling the financial issues that come with running a country. Basic common sense and a basic knowledge of the issues are what counts and what matters. Experience is helpful but not absolutely necessary. I think the candidates mentioned are perfectly capable of developing plans for the economic issues of the country that will satisfy workers, and industry concerns.
In response to you suggesting the candidates mentioned in the your post (Barack Obama and Hilary Clinton) have cheap to dream up fantasies as plans for the economy, I think if your going to say that then you should provide specific examples from their plans to back up that suggestion. Yes they are willing to spend billions of taxpayer dollars on government projects that will eventually lead to job growth in their projections, but billions of dollars is not that much when you weigh the consequences of not improving unemployment, job growth and our economy. There are problems with the current state of the economy because of frivolous spending in other areas, the millions and billions of dollars spent by our government on; for instance the war in Iraq in the past 6 years is money that could be going elsewhere or put back into our economy to help with job growth. Both Clinton and Obama have pledged to end the war in Iraq which would provide them the financial capabilities to spend money in order to reach their projected objectives not fantasies.
The Challenge is to Create, Not Jobs, but Wealth
Don Boudreaux
Today I sent this letter to the Washington Times:
Like economic alchemists, Senators Clinton and Obama peddle plans to spend billions of taxpayer dollars on various government projects that will create millions of jobs ("Obama's economic plan," February 20).
Creating jobs - creating demand for workers - is no challenge. Vandals and arsonists do so routinely. What is a challenge is to create opportunities for workers to earn good incomes while producing real value for others, where value is confidently measured by the amounts that buyers voluntarily pay for what is produced. As far as I know, Sens. Clinton and Obama (and, for that matter, McCain) have never created a business whose success relied upon producing outputs efficiently and then selling these outputs at prices attractive to consumers.
So why suppose that any of their "plans" to create innovative industries and jobs are anything more than the cheap-to-dream-up fantasies of self-important politicians accustomed to spending other people's money?
Sincerely,
Donald J. Boudreaux
http://cafehayek.typepad.com/hayek/
With everything you have said about the government and their spending i almost have to fully agree with you. President Bush has really hurt our economy and has gone a long way to bring us into more national debt. Dr Dwight Lee spoke freely and
loudly about the government’s involvement in the economy. He said during his speech, “I think these guys are more interested in stimulating the voter then they are the economy.” He was referring to the government and how we as a society should be receiving stimulus from the government. The government only worries about themselves, and how they can milk more money from hard working people like us. Milton Friedman talks about the fiscal policy and says it best when he says "Friedman thought that fiscal policy wasn’t important, and that private production equaled private consumption." I
understand now how the great depression really affected us. I never understood the reason our economy went down was because our supply went down, but when Dr Lee explained that because we couldn’t produce enough money we couldn’t buy things at their normal price, therefore the prices had to drop and our economy had to suffer. I also learned that freedom comes at the price of wealth. That was a thought that would have never
crossed my mind of not for Dr Lee. My question for you is how can the young kids of the future help change our nationals debt, and how can we get the government to decrease spending and save our economy?
Jason Karpel
What Senator Obama and Senator Clinton are further affirming to me from what I have read in this article is that politicians really should not play a major role in shaping our economy and the way business works in America. Do we need the United States to have some sort of governmental watch dog to make sure that businesses are operating in a legal and ethical manner? Emphatically yes. Do we need people like Barack Obama and Hillary Clinton (two people who are a far cries from being economy whizzes) creating what Don Boudreaux has called "cheap-to-dream-up fantasies" to manipulate how businesses do business? NO! I am still not sure why we as a society seem to trust government official to set the rules and come up with the ideas for how to boost our economy. After all, these politicians are not trained in the art of economics, they are trained in the art of making you believe whatever the heck they want you to. Why do you we not leave the economy to economy gurus? Does this not make sense? I wouldn't go to a doctor to get bodywork done on my car and I wouldn't go to a carpenter to ask advice about a cavity. Why then, do we put so much trust in government officials to make sure our economy is on track.
I am studying Macroecomics in Mesa, Arizona with a Professer who celebrates sweet liberty. He feels, as do I, that our economy is self-perpetuating. If we look historically, there are few instances where it seems that government intervention has proved to be the smart thing to do. Let the economy be free. Business people are not stupid, they are in business to make money, and if the government would leave them alone long enough they will always find a way as a whole to do precisely that, without government intervention.
In summary, just because Washington CAN do something, doesn't always mean they SHOULD. I think it is time people like Obama and Clinton should leave money issues to the money people and use their time doing something where maybe they can actually make a positive impact.
Posted by: Jason Jarvis | Feb 21, 2008 1:26:14 AM
http://cafehayek.typepad.com/hayek/2008/02/creating-wealth.html?cid=103496076#comment-103496076
The blog I read was about the candidates running for the presidency with the focus mainly on Barack Obama and Hillary Clinton. Basically, Don Boudreaux is slamming both of them for coming up with "cheap-to-dream-up" economic policies that really are not up to par. I get the impression that Boudreaux feels that politicians like Clinton and Obama come up with speeches and ideas that sound great to the general public who knows very little about the economy and what is and isn't needed to fix it, but to the savvy economist is found to be quite lacking. I tend to agree with the blog post I read and personally feel like the economy should be left to those most vitally associated with it...business owners, investors, and employees who are running, managing and working for the companies that make up our economy.
Jason Jarvis
William J. Polley
Comments and observations on economics and whatever else catches my eye
Previewing your Comment
Milton Friedman Who?
I recently attended the 7th annual ASET conference titled Ethics, Economics and Freedom: The Morality of Markets. It was an extra credit opportunity for my Economics class and I desperately needed the points. I decided that I was going to wake up early on this given Saturday and attend something I had no interest in, well to my surprise I walked out of there knowing more than I thought was possible to learn about economics in one day. As the guest speaker Dr. Dwight Lee was very humorous and entertaining. He kept the audience engaged and his knowledge on economics radiated. He referenced multiple times to two very important men in economics: Milton Freedman author of Theory of the Consumption Concept and Adam Smith author of Wealth of Nations. He made very important points regarding his views along with Milton Freedman’s on economics. Points he made was the belief that money was far more important than fiscal policy, he referred to the circular flow by acknowledging the fact that people making and spending money stimulates the economy. He went on to speak on how the Federal Reserve System could have prevented declines in the economy and his view on that was that the Federal Reserve just didn’t take the time to think through it. He impacted my way of thinking about the economy and it fascinates me that he has spent so much energy and time learning about this interesting subject. Knowing the opportunity cost of things makes all the difference.
Do you believe America will go into recession soon? In your opinion will this benefit America?
Posted by Adylene Gonzalez at February 21, 2008 12:43 AM
Through out this lecture I learned many things about the life of Milton Friedman. I thought it was interesting that Dr. Lee brought up that there could have been an alternattive to the great depression, and a quicker rebound. I also learned more about stagnation and the Phillip's curve, and the Keynes anaylsis. In addition, that you do not have to choose between freedom and wealth, Dr. Lee also said something about the invisible hand having no force. A question that I have is how can Friedman say that the invisible hand has no force, when in class we discuss that it is used and practice basically everywhere?
Mario Alarcon
I think that by bush going way out of the budget the inflation goes up. As you mentioned that President Bush has increase spending three times the rate that president Clinton did. But really my question is What is Bush doing wrong? We all criticize his budget and compare it to Clintons but Clinton did not have to deal with the wars in Iraq and Afghanistan. I’m aware that Clinton had the economy well stabilized but all that could have changed if he had wars to deal with. Is president Bush a good or a bad president ?
http://cafehayek.typepad.com/hayek/2008/02/uncle-sam-clear.html#comments
Lance Wahl
With Freeman research we find that he cared in the future of this economy. I learned that we the voters and consumers should have the say in what should be sent and what polices should go into effect. Instead of having plans to put money anywhere and everywhere, have plans that teach the economy to save. Just because we have more doesn’t mean we should spend more. I feel if we made more money, and bought the same quantity of products than prices stay low, so more money is saved by us. When more money is saved by us, when prices stay low, and when more is put away, than the government won’t have to lend in a larger hand than needed, and will lower their responsibilities to step in when not needed.
Lance Wahl
"Keynesian economics promotes a mixed economy where both the state and the private sector have important roles. Keynesian economics seeks to provide solutions to what some consider failures of laissez-faire economic liberalism, which advocates that markets and the private sector operate best without state intervention." My questions is: Has the state(government) intervention crippled us(consumer) to the point where we'll never be free or functional without there big hand in the pot? The government has been involved so long, if they did leave it up to the markets and private sector, would we survive?!
Kyle Hines
I recently attended a conference for the Arizona teachers of economics association where Dr. Lee discussed how free market economies are the most successful economies and that Government regulation and limits appear to help in the short term but are often harmful to the nation’s economy in the long term. One very old, but still very true concept that was mentioned several times was the “invisible hand” and how when people are given freedom to run business how they wish both consumers and corporations receive many unintended benefits. The quote that stuck out the most in my mind from Dr. Lee’s speech was “Freedom is a necessity for economies to thrive, government coordinators actually reduce coordination.” He discussed how many times economic troubles will work themselves out in a free market economy, but Politicians panic when people become unhappy, fearing they won’t get reelected and try and solve the problem with a quick fix, such as trying to “stimulate” the economy. Many times these problems could have cleared themselves up if left alone. My question to you is do you think the nations economy could have recovered from the great depression faster if the Government would have resisted intervening?
http://www.adamsmith.org/blog/misc/blog-review-513-20080220941/#jc_writeComment
I noticed you were discussing the benefits and drawbacks to ethanol and it reminds me of an article I wrote in my economics course that talks about oil consumption.
This article was retrieved from the Businessweek magazine and was released on February 10, 2008, and was written by Sandra Sierra. It simply states the highlights of an ongoing international business struggle with crude oil and the free market competitive moves Exxon Mobil are using against its competitors in Venezuela. Exxon Mobil is currently in courts to seize billions of dollars in Venezuelan oil assents. The foreign company under siege is oil company Petroleos de Venezuela SA, and the Venezuelan Administration is not welcoming this challenge. The President of Venezuela Hugo Chavez is threatening to cut off all oil Sales to the US, the only problem is we are their number one client internationally. However, the Oil Minister in Venezuela Rafael Ramirez has states that the court challenge of Exxon Mobil does not affect Venezuelan oil sales. The hit from this occurrence could by substantial seeing as how Venezuelan oil represents the fourth biggest seller here in the United States; the result could be an increase in gas prices.
Although this particular subject represents a number of economic issues we have discussed in this class, the one I think can describe it most effectively is to label this under market power. By definition market power is the ability of a single economic actor or group of actors to have a substantial impact on market prices. In this situation Exxon Mobil is the group of actors that, if this court decision goes through, will have a formidable effect on market prices. By freezing assets in the billions of dollars in oil assets, something that already is a major economic issue in the United States, the Venezuelans feel as though they will be harmed and in return will harm back. If they cut off oil to us it will most likely have a considerable affect on market prices, in which case they will rise.
At any rate, the move to cut off oil sales to the United States will most certainly have a more destructive impact on them than it will us. The reasons being were all stated in the article; although we buy a considerable amount of oil from them, our fourth largest seller, they sell most of their oil to us. We are the number one consumers and clients of Petroleos de Venezuela SA. If they cut off oil to us they are taking a bigger hit to their economy, for they won’t have the constant stream of US dollars flowing into their economy. One thing I learned from this article and that everyone should know is that we buy oil from many different countries around the world. Right now the oil prices per barrel are rising, due to Iran’s control of a large percent of the oil. Currently the price of oil per barrel is around 90 dollars. Once that price rises to above 150 a barrel it will be more fiscally responsible for the US to start drilling in the large oil deposits deep underground in Canada. Another thing that I learned from this article is the intense market power a few corporations have in the oil industry, it’s a dog eat dog world.
http://www.adamsmith.org/blog/misc/blog-review-517-20080224959/#jc_writeComment
I noticed you were discussing the benefits and drawbacks to ethanol and it reminds me of an article I wrote in my economics course that talks about oil consumption.
This article was retrieved from the Businessweek magazine and was released on February 10, 2008, and was written by Sandra Sierra. It simply states the highlights of an ongoing international business struggle with crude oil and the free market competitive moves Exxon Mobil are using against its competitors in Venezuela. Exxon Mobil is currently in courts to seize billions of dollars in Venezuelan oil assents. The foreign company under siege is oil company Petroleos de Venezuela SA, and the Venezuelan Administration is not welcoming this challenge. The President of Venezuela Hugo Chavez is threatening to cut off all oil Sales to the US, the only problem is we are their number one client internationally. However, the Oil Minister in Venezuela Rafael Ramirez has states that the court challenge of Exxon Mobil does not affect Venezuelan oil sales. The hit from this occurrence could by substantial seeing as how Venezuelan oil represents the fourth biggest seller here in the United States; the result could be an increase in gas prices.
Although this particular subject represents a number of economic issues we have discussed in this class, the one I think can describe it most effectively is to label this under market power. By definition market power is the ability of a single economic actor or group of actors to have a substantial impact on market prices. In this situation Exxon Mobil is the group of actors that, if this court decision goes through, will have a formidable effect on market prices. By freezing assets in the billions of dollars in oil assets, something that already is a major economic issue in the United States, the Venezuelans feel as though they will be harmed and in return will harm back. If they cut off oil to us it will most likely have a considerable affect on market prices, in which case they will rise.
At any rate, the move to cut off oil sales to the United States will most certainly have a more destructive impact on them than it will us. The reasons being were all stated in the article; although we buy a considerable amount of oil from them, our fourth largest seller, they sell most of their oil to us. We are the number one consumers and clients of Petroleos de Venezuela SA. If they cut off oil to us they are taking a bigger hit to their economy, for they won’t have the constant stream of US dollars flowing into their economy. One thing I learned from this article and that everyone should know is that we buy oil from many different countries around the world. Right now the oil prices per barrel are rising, due to Iran’s control of a large percent of the oil. Currently the price of oil per barrel is around 90 dollars. Once that price rises to above 150 a barrel it will be more fiscally responsible for the US to start drilling in the large oil deposits deep underground in Canada. Another thing that I learned from this article is the intense market power a few corporations have in the oil industry, it’s a dog eat dog world.
http://www.adamsmith.org/blog/misc/blog-review-517-20080224959/#jc_writeComment
Shane Landmeier
I posted twice but I forgot my name on the first.
I posted on a blog that was talking about the good aspects of Wal-Mart and how their competive edge just hurts the Mom and Pop stores that are dirty and overpriced that were doomed to fail either way.
http://cafehayek.typepad.com/hayek/2008/04/wal-mart-fact-1.html?cid=113334740#comment-113334740
My comment: When looking at both sides of the argument, I would have to agree and say that Wal-Mart really is not that bad. They, in the long run, offer more opportunities for people, while saving them money. Wal-Mart is just producing a competitive market and stopping the mom and pop stores from overcharging their customers along with providing a greater selection of food, clothes, and your everyday needs all at one convenient location. I actually heard recently from my economics teacher, not too sure on the validity, that the local or state governments are giving Wal-Mart a tax break for them to build a store in certain areas. Wal-Mart like any other business is after a profit so, why wouldn’t they accept deals to persuade their reasoning’s? Also, on average they pay a higher wage rate then most of the leading competitors. I for one do not shop at Wal-Mart, but that’s just personal preference and there is not one that is too close by, but if I need a tee-shirt, TV, and a can of soup at 3a.m. then I know Wal-Mart is there to help, while saving me a little money.
Mario Alarcon
I think that by bush going way out of the budget the inflation goes up. As you mentioned that President Bush has increase spending three times the rate that president Clinton did. But really my question is What is Bush doing wrong? We all criticize his budget and compare it to Clintons but Clinton did not have to deal with the wars in Iraq and Afghanistan. I’m aware that Clinton had the economy well stabilized but all that could have changed if he had wars to deal with. Is president Bush a good or a bad president ?
http://cafehayek.typepad.com/hayek/2008/02/uncle-sam-clear
Previously, I had not put much thought into the cause of the Great Depression. I really learned a lot from this presentation and found the information on the Depression to be quite interesting. Another aspect of Dr. Lee’s talk that I found very interesting is when he was taking about how resilient the market is. Lee compares the market to us and says that, like us, the market also needs a little sick time or bed rest now and again in order to recover from recession. Overall I found the presentation to be really informative and learned more than I expected! Are there many of these types of conferences being held in Mesa? How often do they take place?
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