Formal economics

natural law

Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776)
    18th century corn laws in England
    forestalling (holding)
    engrossing (transporting for sale)

Of forestallers he writes:
"By making them [consumers] feel the inconveniences of a dearth somewhat earlier than they might otherwise do, he prevents their feeling them afterwards so severely as they certainly would do, if the cheapness of price encouraged them to consume faster than suited the real scarcity of the season"

Value:  i. labor   ii. exchange

On the value of self-interest:
"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow citizens."

"Every individual generally neither intends to promote the public interest, nor knows how much he is promoting it . . . he intends only his own gain, and he is in this led by an invisible hand to promote an end which was no part of his intention."

Economics is not a zero-sum game
    cf. notions of "limited good"

David Ricardo
private property
labor as source of value
freedom of choice
*individuals act to maximize economic gain (utilitarian principle)
*equilibrium is the natural state of economics

leads us to notions of equilibrium in supply and demand
    http://ecedweb.unomaha.edu/Dem_Sup/econqui2.htm
    the Veblen effect

ration choice assumptions: humans are motivated by self-interest and so act to maximization their utility by making rational choices based on weighing costs and benefits

utility
    marginal utility
maximization

elasticity
economies of scale + specialization

bounded rationality

information
    Joseph Stiglitz, Nobel Prize, work on asymmetrical information

Development anthropology
World Bank, IMF: Bretton Woods institutions, "Washington consensus"

appropriate, sustainable development
        the Grameen Bank (Amartya Sen)  http://www.grameen-info.org/ 
        Kayapo resistance in Brazil

green revolution

problems with the GDP measure (GNP v. GDP)
        Amartya Sen, Nobel prize
        HDI   http://www.undp.org/hdr2001/back.pdf HDI

CAFTA, FTAA, NAFTA, GATT, WTO

A Third Way
    Wilk's 3 models: self-interested (classic liberal), social (marxist), moral (cultural)
    redefining formal economic concepts: all about choice and decision-making
 

01.16.03