A New Perspective

I haven’t done a blog post in a while as we have been learning about the economic perspective of both conservatives and liberals and I wanted to wait until we were completely finished and I could formulate something to say about what I have learned overall. I grew up in a pretty democratic area with little patches of extreme conservatism. In school the day Donald Trump was elected the hallways were silent, and for a school of around 1600 kids, that’s extremely unusual. In fact the sole sound of yelling I heard was a group of kids yelling at a kid to take of his MAGA hat as he strutted around the hallway high-fiving the other 25 or so daring souls who wore Trump apparel that day. Needless to say, for the most part, the conservative perspective is not often talked about where I am from. In economics class, we didn’t even look at either side, we simply went over basic theories such as the Keynesian Model and every supply and demand graph you could imagine. As we learned about the conservative response to economic inequality, I realized I knew very little about their actual goals and what most people think should be done, most of what I knew was what a lot of extreme conservatives thought, that essentially, economic inequality doesn’t exist or they just flat out ignore it. I was intrigued by the fact that in reality, the basic ideas of most conservatives and liberals is actually relatively similar. But one of the key differences is, that the conservatives want to raise the bottom, while the liberals would be inclined to bring down the top in order to shorten the ever-growing gap between the upper and lower class. So although yes, some conservatives believe economic inequality is nonexistent, most really just want to improve the lives of those struggling at the bottom. This in particular made me think; I had never honestly thought that conservatives had any desire to help the poor, I had only thought they wanted to have the rich stay rich. However, in theory their real aim is to allow those who have earned money to keep it and to have the people lower able to earn more to support themselves. While I still take issue with the fact that many conservative actions are supported by ideals and theory that don’t actually fit with what is happening in America right now, and the seeming lack of compassion towards those who cannot support themselves when others live in complete luxury and excess, the discussions certainly gave me food for thought and re-enforced that in the end, both sides do want to lower economic inequality (for the most part).

Causes of Inequality

The Causes of Economic Inequality

This is an article I read about the causes of economic inequality, this is a first of a series the institute is doing. The overarching cause that they state is income inequality. Income equality covers a variety of sub-categories including factors that affect your income such as education, gender, growth in technology, and a changing labor market. The other aspect they talked about was the fact that inequality is a “vicious cycle”, where people who have accumulated wealth are the ones who have the resources to invest in or leverage new wealth which makes them able to create new wealth. The cliche they mention is “the rich get richer and the poor get poorer”. This was a brief summary for a brief article, but the main idea is that there really is no one set cause to economic inequality, there are many factors that affect the cycle of inequality, but we can agree that it is a problem caused by a growing income gap.

Economic Concepts

  • Market Economy: economic activity such as determining prices is determined by markets (buyers and sellers)
  • Private Enterprise: all resources in the economy, all means of production, labor, equipment, stores, land, all are owned by private individuals or groups of private individuals
    • Private Ownership:
  • Market economy is an ideal, no government intervention
    • But most have government intervention
  • In a free market economy ones income depends  on
    • Quantity of resources you own (labor, real estate, stocks and bonds)
    • Value market places on resources you own
  • For most: Labor is most important resource you own
  • School enhances value of your labor
  • Wealth vs Income:
    • Wealth includes savings and gifts and inheritance/things you own that are not just money
      • Savings is basis for wealth
  • Net worth: assets minus liabilities
  • Labor market decides income
  • Law of Demand
    • As price increases, demand will decrease/amount customers are willing and able to buy
  • Supply-how much sellers are willing and able to sell
  • Profit is a measure of how valuable a product is
  • Law of Supply
    • Firms supply more if the price and demand are higher
  • Prices come from buyers and sellers
  • Surplus-usually causes prices to drop
  • Shortages-prices rise
  • Equilibrium: only point where plans of buyers and sellers meet

Notes from 9/21/18

Epistemology: the study of how we know what we know
• College is about arguments, not facts
• Argument: a claim, and support
• Argument without support is not a good argument
• Must listen to other argument, summarize other POV, express why you agree or disagree
What is knowledge: facts with interpretation
• Knowledge is a collection of arguments of scholars in a field of study
• Natural selection: good arguments rise to top, become main school of thought
How are arguments evaluated:
• What you believe vs. What experts believe
• Longer you study a topic, more likely your views will fall in line with that of the experts
What is an authority?
• When you are new to a subject, you tend to look to experts (authorities) to find basis for your own thought
• Appeal to authority because showing you know what experts think strengthens your opinion/view
Dualistic Thinking:
• Presumes nearly every questions has a unique, correct answer-no other answer
• Most college students think this way
• Answer is right or wrong, no middle ground
Where does expertise come from: two schools of thought
• Rationalism: logic and thinking
• Experience and empirical evidence- Empiricism
Plato’s Cave:
Allegory

Ragged Dick- Horatio Alger

In discussing the book Ragged Dick by Horatio Alger with peers and two professors, the themes of opportunity and luck were extremely prevalent. An idealistic book that captures the journey of a boy “Ragged Dick” and his rise from a poor boy who shines shoes to scrape by, to a boy with money and education to his name, shows what the author thinks is the American Dream. A portion of the class (FSEM Inequality and the American Dream) felt that Ragged Dick’s rise to “wealth” (in a relative sense) from his impoverished condition was a result of luck, or at least majority luck. The other section disagreed saying that his condition improved because of his determination, morality, and opportunities he seized and worked for. In my opinion, Dick’s ascent was due majority to luck; I am not saying at all that he did not work hard with what he was given, however I see that most of his opportunities were handed to him. He was quite literally handed a five dollar bill that enabled him to start a bank account and find a room to stay in semi-permanently. Without this chance or opportunity handed to him, it is likely he would’ve ended that day with just enough money to get some food for dinner, keeping him in his cycle of poverty. While he did in fact gain an education of sorts at the Sunday School because of his good morals (returning the money he owed a customer), that is also luck that he stumbled upon a customer that was open to helping the boot blacks and was so willing to teach someone who knew close to nothing. This could’ve easily happened to any other boot black boy, or could’ve not happened at all; it is pure luck that he was chosen by this man, not an opportunity that was available to all or an opportunity he created for himself. An overall synopsis of my opinion would be that, although Ragged Dick capitalized on all of the opportunities that came his way, and worked hard with what he was given, most of his rise from “rags to riches” can and should be attributed to luck.