Lecture #6 "GDP Per Capita History" (09/14/11)

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            The lecture started talking about the history of our world in economic aspects. We view how they were three stages that mark history's development. The first one was consider as the "Dark Ages" then "Renascence" and finally the "Industrial Revolution".
           Our world saw a super slow rate of progressing or even no advance for a period of thousand of years. They had grow rate of 0.0012% when then in a period of 200 years we saw a tremendous advance of 4,000%. Just to give us an idea if we had continue with that same rate we had in 1500 right now an american will have the same amount of money the poorest country in the world has.

• Rule of 72: Divide by 72 the grow rate to get the number of years it will take for the GDP to double. 
• Development stages: Hunting-Farming-Industrial Revolution

Economists and other people can calculate based on how the grow rate has behave that in 2046 our income will doubly every week. Furthermore in 2040 the grow rate will go from 3% to 6&!! Is it really possible to double every 2 weeks with the nano-nanotechnology, space, 3D printer and more....?

Population
2010 = 6.86 Billion persons
Fact: 

• All the world can live together in Texas and they will be living in the same population density as people in Boston or NYC. 
• There is no concern for population at all! We will use maybe just 4% of the land in the world to live. 
• If we had stayed with the same population rate as in 1,000BC right now the whole world will be the USA population. 
• Since before they only had extensive growth. Extensive Growth is when living standards don't improve because the new income was used to feed and transport this new person. (Intensive Growth) 
• Today is 65 trillion usd and in 1800 was 1 trillion usd. 
• Poverty has Decrease!
• 80% of reduction in extreme poverty in the past 40 years. 
• 27% of population lived with $1 usd per day in 1970 now.....just 6%. 
• You thought that Asian countries were destined to live in poverty forever. Right now South Korea is almost - Taiwan as - Singapore s more....  richer as the USA. 

Random Question: If somebody earns 10 times more than you....Is he really richer and enjoys more than you? 

Lecture #5 "I, Pencil's 4 concepts Points....but now I, Coffee" (09/112/2011)

We read "I,Pencil" last week and had some explanations about it. However, after understanding completely the reading Rizzo decide to retake the reading for the last time to explain the 4 main points of the essay comparing them to the scenario of being a coffee instead of a pencil. 

Four main Points of "I, Pencil/Coffee) 

(i) Impersonality: 

         It was shown in the essay how no one actually knew names or the persons that were involve in doing the pencil. You can have an example as the one Rizzo said which states that everyday he wakes up and gets a coffee in the same exact place without remembering the name of anybody in the coffee shop. Furthermore, no one in the coffee shop knows him. Most of the things in our life are personal but we do have some that are personal like the class emails which you could actually establish a conversation with somebody and not knowing him or remembering his name. 

(ii) Self-Interest: 

Who really does their job or task in order to obtain a coffee? The answer is no one. Every single person involve in the process of making coffee makes it for their own interest. Maybe the interest is just to give do their job in order to obtain money in give food to their family. Moreover, the guy driving the truck in the field or the lawyer settling everything for the real state have their own interest as well. An example could be a professor that gives class not with the final objective of main stuendest learn but just earn some money to buy a car. Everybody has their own self-interest and at the end they end up creating the coffee all together. 

(iii) Cognitive Issue:

This point can be explained short and briefly by stating that their is not a single person that can actually do the coffee all the way from the seed to delivering the coffee in a shop to the final consumer. Now, imagine somebody that could....Would he do it for just $1.49? The answer is clear. Is not something simple it is complex and it requires a big team. 

(iv) Who gives the orders? 

In reality their is no central office of coffee or a super policeman telling every single person involve in the process to deliver the coffee to Rizzo every morning. No orders involve. What happens is a vas inter-connecting web and all the efforts together in order to deliver a final product that maybe people at the beginning of the process don't even know. 

2 Main Terms or Concepts

1) Invisible Hand: Described as the possibility of people to cooperate without without coercion and provoking a collective/creative energy. 

2) Tacit Knowledge: The ability of individuals to know .... and know how to use it. 

Modern Market Economies: 

What is this think that makes the people work impersonal together on a market economy? Price Systems!

Price Systems are the terms of exchange.....Who sets them? No one! Sellers don't set prices. 

After this last concepts Rizzo open a 150 slide PP that basically will cover the next three lectures. 

PowerPoint Presentation

• Economy: Is the Study of how the world emerges and the consequences that come with it. 
• Not everything that is produces is valuable.
• Not everything valuable is produced. 
• We have learned that for a period of 10 thousand years that world saw not advance at all or a very slow one. 

Interesting Fact: In 15 years we can be twice as rich. 

EWOT Goggles #1 - "Is the 9/11 giving an economical benefit to the USA?"

      9/11....  
      10 years ago the United States of America as we all knew it transform. It trasform due to a historical terrorism attack to the Twin Towers in New York City. A horrofic event that trasform all of our lives and have a terrible economical effect in the USA as in the world. A lot of works were lost as well as lives. Insurance companies so a massive lost which was greater than the one they saw after Hurican Andrew in 1935, airlines throught the USA were damage since a lot of flights were cancelled so airlines have to refund all of the lost ticket as well as the price of shares plummeted, tourism in NYC went to the floor provoking more people to loose their jobs and the costs of airport security that were implemented after that as well. All this was maybe a short and very brief summary of the economical effets with the 9/11 compared to stats that could show in numbers the money that the USA lost.

So today 10 years have past since this accident and I have observe something this week that calls my attention. Today NFL games and any other sport that is played gave a minute of silence dedicated to all of the lives that were lost that day. In my rugby game yesterday we all went on our knees and dedicated the minute of silence as well. Big movements and ceremonies around the United States were performed in order to commemorate those people that died. Big Television companies televised and show the all of the united states citizens this movement. Television shows this events and special programs of what happened 10 years ago indirectly gives economical benefit to all the television companies that actually take the rights to televised. Today in my dorms some of the students that had T.V were watching this special programs dedicated to the 9/11 and some actually went to restaurants or other places where they can watch it. Without exaggerating a student on my friend's school, who suffer a lost of family members in the 9/11, decided to buy a television with his roommate in order to watch this special program that was going to be dedicated to the 9/11 tragedy. He felt not watching was not an option.

All those companies like the ones televising the special programs, the restaurants that are visited to watch  the programs as well as the companies that maybe sold TVs or radios maybe are being benefited from the 9/11 tragedy.

So is the 9/11 giving an economical benefit to the USA after 10 years? You could answer this by yourself because I already did.....

Reading Analysis #1: "I, Pencil" (Week #1)

Analysis

• A)

Throughout your middle school and high school you read a couple of books and articles in order to pass your class. However I been in this course for less than a month and I just read an article that transforms or in a fact affects how I see normal products you see in a every day basis.

"I,Pencil" started first giving me a feeling of confusion about why would somebody dedicate a essay or their time in analyzing how a pencil is done. Or not even that but trying to convince people that actually nobody understands this product. I kept on reading and then start realizing about stuff I would not have thought before. How a pencil, the simplest thing, is form by materials all around the world and with such complexity. Something that throughout your life you can forget in a classroom, throw to a friend or even brake just for fun had taken thousands of hands, effort and a lot of things to be as how you see it. After I read this essay I talked to my parents in Skype and asked all of my family if somebody understanded the process of creation of the pencil or from where does it come from. Everybody answered "From a tree". And they could never imagine the graphite from Sri Lanka, the oil from Indonesia or the wood from California that all got together with many others to combine and create a simple pencil.

Maybe that part of the essay got my attention but it wasn't the part that really shock me. The part of this essay that is surprising is that all these people talking different languages, different cultures and all of them doing different things don't know that they are helping to create a pencil.  "No one knows" really describes how it doesn't really need a higher power or somebody to tell everybody that they are creating a pencil in order to actually creating it. Every person that took part in this creation was only doing what they where doing to obtain their own needs and wants not a pencil. No one actually wants this pencil to be done or are interested in the termination of this. How can this happened? Read only needed to use the pencil as an example to show everybody how something as simple as that couldnt actually be understanded by any one.
      A pencil, a handwriting instrument, that fulfills the need of the educational system for students to have something to write on but actually also fulfills the need of thousand of people that took part in the process of. After reading this article I could take the liberty to say that after asking 10 persons about the creation of a pencil none could get not even close to what is behind this little instrument.

By these reasons is why I consider this reading completely counterintuitive to society. How could expect all this complexity out of a pencil? Logically this massive complexity of process to create it and the fact that no one knows it not even the ones that take part in the creation makes it even more interesting that I thought it was.

"Readings can transform your way of viewing the world....read more and more and more"

• B) 

1. It has been said in the essay that "A Higher Power" takes part of the creation of the pencil since trees are not created by humans. Does that mean that humans are yet not self-sufficient of the products they create?

2. Since humans don't create trees and this is a material that is used everyday in order to create pencils, wouldn't that say that there would be a moment that we could finish the trees and will be obligated to plant more and more on our own? So can trees and oil be related since both are not created by humans but used only?

3.  Sri Lanka and Indonesia are both in South Asia. If you could establish a mass production company in South Asia and be in charge of the distribution of this around the world. Monopolizing the pencil market? Can that be a business opportunity for someone or is not even possible?

4. Since the products to create this product are in several countries. Is there a possibility that the United States can start creating this material in their own land? If there is now think about the economical booming that it will cause to the economy? If is not possible, are we talking about an eternal dependence of USA pencil companies to this countries?

5. Do you think you now understand what a pencil stands for.......?

• C) 

This reading was chosen for several reasons but I can describe 3:

• It is our first reading in this course and this course is the first one in our major. "I, Pencil" is the reading that will open our eyes to realize how we have much more to learn and how they are many things out there people don't understand. "I, Pencil" shall be remember as the first step we are having inside economics.
• Everything in this world has a reason and can be analyzed without just saying that becomes somethings seems hard to explain it was caused by a higher power. 
• In my opinion,  this reading is a prove of how Rizzo has told us several times that economics is not just about the money and wall street but also about social, religious or political factors. A big social factor in this essay is how society thinking of knowing a lot doesn't even know or understand the creation of something that might seem simple. Read, a great economist, analyse this factors and didn't mention financial or monetary factors in his essay proving that economics is more than that..

P.D. Great reading can't wait for all of the new ones upcomming. 

Lecture #4 "I,Pencil / Why Economics?" (09/09/2011)

       Today's lecture now took into topic something we might asked ourselves when we were deciding whether or not to major in Economics. In my opinion, a very interesting and important topic was touched today in class which was "Why Economics?". However before getting into that topic he talked to us about the I,Pencil, which is a very transcendental essay in economists study.

"I,Pencil" 
 I would not explain or give a brief explanations of this since I will dedicate a blog to the analysis and observations of this piece of literature. However it is important to me to say that it was touched and mention in our lecture this past Friday. Something that Rizzo actually established was that this will be the last time we will spent time in class discussing our readings. However I might state something that it is interesting to me and is the fact that there is no presence of a invisible hand or a higher power. A group of millions of people completing their maybe infinitesimal tasks will sum up together to create something that might seem simple or even impossible.

Economics?
Everyday and I could say every second our world is on the move. What do I mean? Every moment that yo might spent eating, sleeping, studying or attending your economics class all the world is progressing. Things like technology, social factors or any other go fast and people sometimes don't realize what is really happening outside their cities or the reason for a lot of things. For me and for what I have been learning as well of what I heard this past lecture economics is this link or binoculars that you use to look at what is happening at the world but not only look at it but also understand it. Economists are those who are not only looking at what 's happening or the reasons of why things are going either right or wrong but also those individuals that look forward and try to see things before they happen.

What those Economics covers?
Let us open our eyes and realize that economics is not just about the money or other factors that link money. Economics is about everything that happens and I might be consider too extreme by saying that economics can cover the creation of new products, social movements, political issues, financial crisis and even people daily's decisions that affect the worlds rotation.  People's social or even religions desicions might affect the way the world moves or how business shall act and then how politicians shall decide. I have concluded and understood out of the lecture that economists is about knowing how to understand those factors and not just talking without first thinking, analyzing, investigating and then talking with some kind of backup information and having a stronger argument.

Economics is a social science that could superficially analyze the others to complement itself. I shall also say out loud that our world and economy is now better that before. Also people should not complain about costs and other factors without knowing how much delivering or giving that service might have cost.

What is economics......
More than you could think of. 

-Rizzo

Daniel "Danny Boy" Gaona