[bigqueue_qlewis]

Not to be a killjoy, but the greatest influence on becoming wealthy is the desire to accumulate wealth. The problem that most people have is that they simply consume. They do not consider investment. Investment starts with, and continues with the desire to “save” and “grow”. Even thinking about your consumption with an eye toward investing is how wealth is built.

No one will argue that spending on college in order to get the knowledge to get into a good paying field is an investment. But going to college “just to go and experience the college life” without the above aim is just consumption.

Buying a car is probably always a matter of consumption (unless you are a taxi driver) But even buying a car can have an “investment” angle to it if you consider perhaps fuel economy or the ability to buy one large enough so your family doesn’t need two. It is all consumption, but with an eye toward saving money so you can “put it away”. (not so you can buy more beer)

So yes, the intricacy of how the wealthy can take advantage of “new money” is a driver….but if you don’t have money (savings) or mindset to even “play in the investment game”, then you can change the rules on investment and nothing short of wholesale redistribution plans will give aid to those not taking care of their own business.

[bigqueue_qlewis]

Hi Bob,

I don’t think of people as mindless, but I do think they tend to follow particular incentives that they are biologically biased toward. Akin to the seven deadly sins that Catholics talk about, there are certain common themes that all humans tend move to.

Human populations are too complex to be modeled in simple equations, and economies are probably almost as complex. But we so is the weather, and no one will say we will ever totally model our ecosystem so as to be able to predict weather with 100% certainly…but it can be very helpful to “try” because we do get something out of it.

Sliding into even further into an off-topic point, I believe strongly in God, and I think of God as a creator of great order. Even the disorder of the weather has a purpose, as does the disorder of humans. This is a crazy thought, but I think God created a system of wonderful laws, rules and equations. As we discover the laws of science and nature (and humans) we slowly lift the veil on those equations…..but I think they are so complex that we probably don’t fully appreciate the “truths” that we think we currently have mastered.

— SOAP BOX MODE OFF —- 🙂

[bigqueue_qlewis]

I once again thank you for the pointer to the book….I did listen to about 7 chapters on my 3.5 hour ride back to home from Conway and this is definitely a book I would do better to read, or listen to with the ability to pause and re-listen. There were many moments I needed to stop and consider what he had just said….I needed to internalize it a lot more than I can with a straight listen.

Anyways…thanks again for your suggestion, and all the time you put into this class and your responses here.

-Quentin Lewis

[bigqueue_qlewis]

You don’t “need” to spend the resources to give value to the metals…..the work / cost of making them into coins was a sort cost of “insurance / simplifier” that made them more “reliable”…..the coins were more “difficult” to replicate (so less likely to be fake material) and as coins that them more reliably reflect a specific weight (value) of metal……so to me the coining was not required except to make use easier and more reliable.

You could very well offered up to everyone a small chemistry set for material purity testing and an accurate triple beam balance…..but I suspect that no have done the job quite as well.

I might have to read his reasons just for kicks…..he is the type of guy who has been seen crushing high school drop-outs in debates.

[bigqueue_qlewis]

First of all, thank you for the link to the Misis book Theory and History. I am in NH right now and traveling back to central Mass tonight, and I downloaded the audiobook version that I will begin to listen to on my way home. This will make the ride enjoyable.

As for my comments on fear, I can appreciate what you say about the boundaries that economists feel they must operate in…..so stopping at the point where one begins delving into psychology seems like a perfect point of demarcation.

Having said that, I will also say that I have gone back and am listening to this class a second time (again on my trips up and down between Ma and NH) and I think I can appreciate how one’s emotion can affect the future value speculation that might go on in both the entrepreneur (supplier) as well as in the consumer. (several hundred years ago, humans treated their crops with great care and went to great lengths to pickle/dry/preserve every bit of crop because this was it until the next harvest….unlike today where it is all readily available…..but that human nature to store and conserve would quickly come back if the conditions that existed back them did as well….and to a point even if people “believe” they might be coming)

<soap box mounted>
As an Electrical Engineer, I suppose I am a bit of a “bull in a china closet” in that I don’t always mentally color within the lines, mixing together/up and blurring the lines between scientific disciplines…..but then, I suppose I am not so much interested in pushing the boundaries of knowledge, as to understand the world so that I might survive and thrive in what might be a very uncertain future. <soap box mode off>

BTW: Your explanation and treatment of the material is excellent. I really enjoy your care with in using the correct terms, and doing it so consistently that it makes my appreciation for the lessons so much better. (I myself use the english language in such an awkward and clumsy way, that I really appreciate your systematic and careful treatment. I also really enjoy your apparent interest in certain goods like Toyota Tundra trucks and Apple iPad products as you sprinkle references to them throughout many of your situation examples. I am not sure why that makes me smile, but I do enjoy it. Thank you for all that you do.

[bigqueue_qlewis]

I don’t mean to beat a dead horse, but just one more question….please feel free to ignore me.

My title focuses on FEAR, but I guess I wonder how the more general affects of emotion
are modeled in economic principles. Say in terms of a demand curve. (or even a supply curve when considering the emotion of the maker)

I imagine that there is a particular product demand curve equation that emotion might push it in or out along the qty (x) axis depending upon how that emotion affects that person’s “feelings” about perhaps future availability or affordability of a good or perhaps just of another more valued good. I believe the “wealth affect” and any of the “calming” words used to make unexpected events seem “OK” are a play against emotions causing market uncertainly……but then, what you say about uncertainly causing some to get conservative, while others just start getting interested and step up to the challenge. (and the range of reaction is indeed wide)

So the direct question is, how is individual or crowd emotion modeled / considered?

Thanks for your patience with me…….I find the mentality of the mob, and work done to control and/or use and direct it to be fascinating.

-Quentin (and I am sorry and admit to horse abuse)

[bigqueue_qlewis]

No problem….I just wanted you to know that some of us were paying attention to what you say / write and we are genuinely interested in your works here. Thank you so much for these courses.

[bigqueue_qlewis]

Lie isn’t my point, but if they for example think that the choice is Chocolate and Vanilla, they might like them both very similarly, but enjoy chocolate just a tad more and so select it.

But lets now say that the choice of Strawberry were thrown into the mix….what if it was generally known that when there are these three “candidates” in the running that the population preferences were very closely split between Strawberry and Vanilla with Chocolate being a distant third…..and if they did not like Strawberry nearly as much as either Chocolate or Vanilla (which between the two, they only slightly favored Chocolate)…..they might very well change their selection to vanilla knowing that doing so is more likely to get them some thing they desire vs something they do not.

I know what you said…..they are not “voting”, but if they realize that are taking part in some sort of selection process, vote or not, they will operate in a manner that get them what is in their self-interest.

I suppose I am mixing apples and oranges…..or maybe just polluting a theoretical over simplistic scenario with what I think are more typical real-world issues…..but I suppose this is my problem with economic theory as far as I understand it…..it seems to rely on static calculus….to me there seems to be a very large component effecting things from the “moving parts” and how fast and far they move. (working on speculation, fear, greed and the like)

That is why I made a comment a while back about simulating things more like electronic circuits….for example, to me the economy is always adjusting…..so either it is always in equilibrium or it is NEVER actually in equilibrium…..I think the former, unless the change comes from some sort of genuine shock, and I don’t exactly know how to “quantify” that sort of stimulus.

[bigqueue_qlewis]

The secret is that the definition only applies to movement OUT of a state…..it optimal is defined by “leaving” the optimal state…..defined by the negative. So moving INTO a state is irrelevant when the state you left was sub-optimal. Also….once in a place (state) called Pareto Optimal….that does not mean that this state is the BEST place for any one of the people…there may in fact be individuals where this OPTIMAL state is the worst, so coming from any other would represent a “downgrade”…….so while the other states the society may move to might make their life better, if could also make ANYONE other individual worst, therefore this state would be by definition Pareto Optimal….

I don’t think that was clear…..but to me, the key is that the Paredo optimal designation only relies on current to next state transitions…in fact, as Bob said, it is really defined by the negative…..that is, the transition OUT of Optimal.

[bigqueue_qlewis]

Professor Birzer,

I finished the class, and I have to say it was most excellent. I did feel as though I was drinking from a firehose, but it was a good feeling as I was hearing so much that held together well and really made sense.

This is a class I will certainly listen to two or three times more. (it is that good)

Thank you for your doing this,
-Quentin

[bigqueue_qlewis]

I will second this comment in every way. I am not one to read fiction, and I know Professor Birzer made a comment about folks like me….but I find the insights into
these classic writers and their works to be fantastic.

Thank you for this class, and I think Tom and everyone else for creating a great place that Liberty Classroom is.

-Quentin

[bigqueue_qlewis]

I downloaded the ZIP file and burned the MP3s to a disk and listen to it in my car, and the problem is that the files are read (or burned) in alphabetical order, which means file1, file10, file11, file12…..file19, file2….

I don’t know if this is your issue…..but this is how it works for me with ALL the courses……it would be better for my burner / reader had the classes been numbered / counted up with alpha designators. eg: file_a, file_b, file_c, ….

This at least is my problem.
-Quentin

[bigqueue_qlewis]

Yes, go on….rub it in: “You know who will NOT be on the Contra Cruise!” 🙂
But really….enjoy the cruise and make sure you get into some of the
videos posted with your Karaoke and general hyjinx.

I appreciate you and all the other Liberty Classroom professors who
take your time to spread your knowledge to the rest of us.

I look forward to your “well rested” insights when you get back.

-Quentin

[bigqueue_qlewis]

Hello Professor Herbener,

I just learned a lesson that I thought I learned many years ago regarding “saving often”…..I had just typed up a very long missive in reply to you in this thread, and I hit SUMBIT….or so I thought….and of course, here I am not seeing it posted. (hard lesson learned)

So rather than try and remember the post, or even clone my thoughts, let me just capture the basics of “most” of it.

First, I thank you for pointing me at the above article. It is wonderful, and I have read it twice and need to read it again. I am finding great insight and wisdom in it. (I wish I had more of an appreciation for history when I was growing up)

Second…..I had talked about a point in your lecture where you spoke about the Command Economy not having the price mechanism to signal the economy in order that it allocate resources to serve the needs and preferences of people….that reminded me of some of my friends at work who “escaped” from the USSR back in the 80’s and 90’s….and their description of the black market there, that everyone seemed to participate in. That exactly shows your point of not service needs….but it also shows that people, even when subjected to such an inefficient system, continue to find ways to get their preferences met. Sure, not as efficiently….but then again, their desires did not simply go away…..their desires forced them to create a parallel (albeit illegal) system to help fill them. (thank goodness for this “grand design” we have been created in….it might just lead to fulfillment, no matter the obstacles we set in our own path) So even in our hampered economy, the vestiges of whatever free-market we have will indeed work to serve the preferences / needs of people that “illegal yet still-created” black market did for those in the USSR….so the vision is to open up ALL aspects of the market so we can maximize progress.

Thirdly…..I made comment about using analysis methods from other complex systems in the analysis of others. Weather and electronics are other complex studies….and there are things like network theory and / or piece-wise linear analysis used to study complex responses to complex circuits. I noted how the progress of computer design had sort of stalled until the idea of a RISC (reduced instruction set computer) replaced the CISC (complex instruction set computer) thereby unleashing computer design in dimensions (clock rate and multi-level pipelines) that were not possible using CISC architectures. I suppose that Praxeology of the Austrian School is a similar “tool”, and so I wonder if the science of economics isn’t similar in that it grows to a point where it might perhaps “stall”, until another breakthrough thought helps define the next “step” that will further propel economic thought. (on which is can be built further) Again….it is wonderful to be part of a grand design.

I hope this posts makes it…..I have to CUT-N-PASTE it into a file just in case I botch this one too. 🙂

-Quentin

PS: I finally did a little looking into Grove City College, and you in so far as other things you wrote, and I suppose it was silly for me to be so worried to connect my thoughts on your post to God. (20/20 hindsight) Also, as an aside….I am always fascinated by online websites like “Rate my professor” and how it must feel to have a place where people can publicly comment on you. As an Electrical Engineer, I might have a hard time with it….but as a person who ran for and held local office, it was a part of the territory…oh, and I thought the write-ups were actually very good….when you consider the age of the folks posting, and the situation they might feel having just either succeed or not-so-successfully completed your class….they might not have the emotional depth to make the sort of assessment that themselves might give after a few more years of growth. (but even so…..you seem to be a very good professor)

[bigqueue_qlewis]

Also, please pardon me horrible spelling and grammar of my post. I am typing this in on a small Android phone as I sit in a McDonald’s parking lot. I was literally coming back from my home in New Hampshire back to Massachusetts and I was struck by your comments in this lesson. Thank you very much!

[Author]

Posts