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Economics Simply Explained
The essays listed in this index were written to inform, educate, and amuse non-economists. For those looking for a free-wheeling introduction to basic economics, we suggest starting with these general topics:
- The nature of money: 44 – 73 – 74 – 136 – 92 – 108 – 113 – 136
- Corporations and business: 28 – 34 – 44 – 67 – 81 – 87 – 135
- Economic misinformation debunked: 17 – 18 – 61
- Free trade, free markets, and morality: 7 – 35 – 36 – 39 – 45 – 50 – 78 – 80
- Development, aid, and foreign debt: 20 – 31 – 46 – 51 – 99 – 102
- Macroeconomics and national accounts: 144
- Interest, discount rates, and uncertainty: 136 – 146
- Externalities and environmental concerns: 142
- Behavioral and neuro-economics: 153
7: The California Energy Crisis, by Jack Powelson
"First, a bit of homespun philosophy. I believe that we in the United States want more than we are willing to pay for. This explains the explosion in consumer debt. But it also applies to how we use government..."
17: The World Trade Organization, by Jack Powelson
"Misinformation about the WTO that is currently making the rounds claims that..."
18: What is Seen and Not Seen, by Jack Powelson
"Frédéric Bastiat died of tuberculosis at age 49. But in the two hundred years since his birth (1801), his simple philosophies of economics have turned up time and again..."
20: The International Monetary Fund, by Jack Powelson
"Back in 1950, the gag was "How do you get to Washington?" Answer: "Go to Harvard and turn left." So I did just that..."
28: The Disintegrating Corporation, by Jack Powelson
"Peter Drucker tells us that the corporation is disintegrating. Drucker is a widely-consulted management expert, possibly the brainiest in the world..."
31: Will the USA follow Argentina? by Jack Powelson
"If you were an impartial observer in, say, 1890, you would not easily guess which country — the United States or Argentina — would be the dominant economic power in the Western Hemisphere a century later..."
34: Enron and Corporate Culture, by Jack Powelson
"Economists have long known that corporations do not necessarily seek the greatest profit. Instead, each officer within the company wishes to acquire the greatest power and wealth that he or she can..."
35: What is a Classic Liberal? Part 1, by Jack Powelson
"In a classic liberal society, those harmed by Enron would take Enron to court. Such a society would require a new national outlook, in which individuals and groups take care of themselves instead of entrusting their 'protection' to government. It would beef up labor unions..."
36: What is a Classic Liberal? Part 2, by Jack Powelson
"In the classic liberal society, power is distributed among "low-level" people and groups. It is not concentrated in king, shogun, emperor, or democratic government..."
39: What is Economics? by Jack Powelson
"I have always been part of the family I will call 'progressives,' because I love them and feel at home with them. Progressives are people who care about the environment, who want to improve conditions of the poor, and who want a more just world. My problem is, that most of the progressives that I know and love have never studied economics..."
44: Profits, by Jack Powelson
"Are profits the life blood of the economy, or do they reflect greed? My answer: Both of these..."
45: Economics Distorted, by Jack Powelson
"The economic system becomes distorted when gimmicks are used to alter not only profits but the income from land and labor as well..."
46: Slavery and the Mystery of Capital, by Jack Powelson
"The greatest imperialists of twenty centuries were Rome, Russia, Spain, Portugal, Ottoman Turkey, Mongolia, the Incas, the Aztecs, and the Islamic countries. None of these experienced an industrial revolution. Britain and France were also imperialists and slave holders, but to a much lesser degree. Rather, their wealth correlates more closely with inventiveness, innovation, and trade..."
50: Why did the Soviet Union Collapse? by Russell Nelson
"Any mathematician could have told us why — or should have been able to predict the collapse as far back as the 1930s..."
51: The Great Ship, by Jack Powelson
"Once upon a time a great ship plied the oceans. Resplendent in their glittering uniforms, the officers occupied the top deck. They ate gourmet foods and drank expensive wines in their luxurious dining room, served by a waitstaff dressed in livery..."
61: Misinformation, by Jack Powelson
"How can so much misinformation be believed by so many people? Get ready to have your beliefs shaken..."
67: Who Rules the Economy, Consumers or Producers? by Asa Janney
"Many Friends do not believe that consumers are in charge. I hear Friends say that instead of making up our minds independently, we are slaves of large corporations, who 'persuade' us by advertising their products..."
73: The Nature of Money, by Jack Powelson
"We know that if the Federal Reserve wants to prod the economy into prosperity, it lowers the interest rate. If it wants to cut off inflation, it increases it. Who is this Federal Reserve, and what interest rate does it raise or lower? And why is Alan Greenspan so powerful? ..."
74: Private Money, by Jack Powelson
"Let us think innovatively, centuries ahead. Suppose in 2250 central banks have all been abolished because they operated poorly, creating more money than was needed for civilian purposes..."
78: Interventionists and Freemarketeers, by Jack Powelson
"The West lives in a divided era, in which much of the population prefers a welfare state, where benefits are provided by the government, to be paid for by progressive taxes, of which the rich pay more than the poor. But the West was not always that way..."
80: Regulation, by Jack Powelson
"We do need regulations, but I ask: Who will do the regulating? It is not only the free market that allows people full rein with their selfishness. A government is also selfish..."
81: Governments and Corporations, by Jack Powelson
"Governments are monopolies, but corporations are not. I cannot think of any corporation today that does not fear its competitors..."
87: The Product Cycle and Globalization, by Jack Powelson
"When I was in grad school over fifty years ago, the product cycle was a hot topic for economic history. This cycle is the way products are initiated in one country but then spread to the rest of the world. It stands at the basis of economic development..."
92: Benefits and Costs, by Jack Powelson
"One purpose of The Quaker Economist is to assist Quakers in making this a better world, by avoiding the mistakes of misunderstanding economics... I cannot give you a full economics course in one Letter, but here are a few concepts..."
99: How I Learned Economics, by Jack Powelson
"One day in 1938 I marched in a parade down Boylston Street in Boston, singing 'Solidarity forever, for the union makes us strong.' I may not have known what I was singing, but the union people were very friendly, and I felt sure I was promoting a cause. It was the Roosevelt era, and our great leader was piloting the country out of its worst depression ever — or so I thought..." [29-Mar-04]
102: The European Union, by Jack Powelson
"In 1948-49, as I was tootling back and forth between Frankfurt and Paris, friends on both sides of the border were talking about a "United States of Europe." They had in mind something like the "United States of America," but they had no idea how difficult that would be..." [14-May-04]
108: Microfinance, by JD von Pischke
"Microfinance is currently a popular means of helping the poor in poor countries and in the former planned economies. I have been involved in microfinance for many years..." [22-Sep-04]
113: The Diminishing Dollar, by Jack Powelson
"For a long time, Americans have been able to suck goods from other countries by paying for them in IOUs (dollars). This has been possible because other countries have been willing to keep dollars as their exchange reserves instead of spending them..." [20-Dec-04]
135: Price Gouging and Empathy by Loren Cobb
"Whenever gasoline prices increase dramatically, complaints of price gouging appear, closely followed by thunderous denunciations from politicians. And then, a few days later, we see columns advising us that all of this is just the normal response of a free market. Which is it? Immoral profiteering or normal market operations? ..." [19-Oct-05]
136: Interest and Discounting the Future, by Jack Powelson
"What do interest rates have to do with global warming? Read on and see. In the Middle Ages, paying interest on borrowed money was not approved by the Catholic Church, as also not with the Muslim and Jewish religions. Yet borrowers needing money would go to lenders..." [4-Nov-05]
142: Oil Addiction: The Costs of Petroleum Use, by Loren Cobb
"In his 2006 State of the Union address, President Bush called for an end to the nation's 'addiction to oil.' These were remarkable words, coming from a man whose family fortune came from the petroleum industry...." [11 Feb 06]
144: National Income, National Product, by Jack Powelson
"Income equals product, by definition. What a nation produces is what it gets. We have different measures for each of income and product: gross, net, national, domestic, etc, for which the United Nations and International Monetary Fund have prepared a uniform standard that most counties (including the USA) use. I represented the IMF on the UN committee that prepared the standard method..." [3 Apr 06]
146: Ghosts of the Future, by Loren Cobb
"The news these days is filled with intimations of catastrophe. Will the approaching decline in worldwide petroleum reserves cause wars and famine? Have we caused global warming, and if so, will we suffer unimaginable climate change? These are just two of the ghosts that haunt our misty visions of the future..." [11 May 06]
153: Goodbye to Economic Man: Meditations on Behavioral Economics, by William Rhoads
"In traditional economic theory, "economic man" is a unified self with definite coherent preferences, who maximizes his utility by using complete information to make rational choices. The more choices he is allowed to make, the higher his utility. In religion, the individual is a conflicted self who tries to maintain self-control and not to yield to temptation, usually with the help of a higher power. He has at least a dual self — two selves with different preferences. He seeks to maximize his utility by making a commitment to rule out choices that could mean giving in to temptation, and to accept choices only if they are part of a disciplined long-run commitment to a religious life..." [27 Jan 07]
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