By Yanis Varoufakis
Foundations of Economics breathes lifestyles into the self-discipline via linking key financial options with wider debates and matters. by means of bringing to gentle pleasant mind-teasers, philosophical questions and exciting politics in mainstream economics, it can provide to brighten up an in a different way dry path when inspiring scholars to do well.The e-book covers all of the major financial techniques and addresses intimately 3 major areas:* intake and selection* construction and markets* executive and the State.Each is mentioned by way of what the normal textbook says, how those principles built in old and philosophical phrases and whether they make feel. Assumptions approximately economics as a self-discipline are challenged, and several other pertinent scholars' anxieties ('Should I be learning economics?') are mentioned.
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Extra resources for Foundations of Economics: A Beginner's Companion
Example text
Eventually prices will tend to hover just above costs and as a result no one will be able to make a profit just by trading. This should, according to Smith’s logic, help capitalists focus their mind on how to create profit. The first thing they will think of is how to squeeze more for less out of their workers. Well, provided they all squeeze more or less the same, no one will be in a position to make money just by pushing hourly wages down to its lowest level. Smith presumed that the wages have a lower limit and if employers try to push them further down, workers will simply quit (or starve to death) —the so-called subsistence wage.
The gist of this answer is that even though no one tried to coordinate the demand and the supply of shoes, or indeed of other commodities, the market will act to ensure that the exact quantity of each good produced will equal the quantity required by consumers. The beauty of this result is that no one intends it! Just like the farmers in the silly example above, none of whom intended to increase the productivity of the soil when they dug it up (even though they all benefited from it in the end), no consumer or producer ever intended to help the market equilibrate demand and supply.
The change in the distribution of economic power meant that some low ‘caste’ people could now afford to raise an army against those, like the royals, holding political power. ) No one could point the finger at anyone. History moved in unpredictable ways impervious to the wishes of rulers and subjects alike. It was as if there were hidden, dark forces behind people’s backs changing life as it was hitherto known. Some other explanation became painfully necessary: economic theory. 2 The moral philosopher: Adam Smith Examples of unintended consequences Negative consequences: you are at a concert.