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107 Lec 1 - 1 teammate-res EC 0N OMICS 10 JJ"th...

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Unformatted text preview: ' 1' teammate-res; EC 0N OMICS 10? JJ "th tea!" .3 JJ' JJJ Copyri gh t: 2'0 0.9 | . I PROFESSOR MURPHY i SET # l . . . I _ Monday, January 5, 2-009 5.. Prof M. gives .theA-i- only to students that _ have identified themselves to him as-potentia] A+ ANNOUNCEMENTS 1. Your grade will be determined by a midterm of 50 multiple choice questions worth 50 points—and a final worth 100 points. The final caters material introduced during the course after the midterm, and consists of 50 multiple choice qilestions and two essays Out ol'a choice of six. 2. Details of the grading system that will be used in- the class are contained in the course syllabus. 3. If you miss a class and nfis‘s-.getting_that day’s handouts, there will be .a file bucket-outside Prof. M’s olfice, Bunche 8248, with cupies of all handouts in it. If ProfM is not on campus, and if it is not there, there will be a sign givingthe times of'lhe next opportunity to get materials from it. 4. There will he 7 homework assignments during the course of the term. Homework is optional. Your grade for the course will be out of 108 points. Each homework, it well done, earns; a single bonus point. Homework could, thus, earn-a total of 7 points. This is a valuable-bonus given the course grading scale. You may repeat Homewofks ] and 2 as many times as you wish. Prof M. is-El-teen that you get the basic ideas involved. Grades given for this homework are “U Got it!” or “Redo”. You may NOT repeat Homeworkls #3 toil 7 which are graded on-a scale consistent with the course grade standards. A+ gets 1 point. A gets .8. A-JIH gets .7. B- }Cc+ gets .6 C gets .5 Such points are cumulated and then divided by .8. Each .8 earns a point on the 100 scale. We do not? round up in this process. ' GRADING SCALE -IIEIIEl-- -ummm . -nmmm mm - mum IRE-m annulus “mun “HIE ”nun Bonus points will be added to your E3“ score and your lirnal rade will be determined b’ those 5 ores. students during the course of “reform, so if you are working towards an A3 ask questions in class, attend office hours, ask questions in review sessions, etc. 6. There will be-ASUCLA Lecture. Notes for this class and these will be routinely available in the early afternoon of Mondays during the term, unless Prof M. announces otherwise. ‘7. Do read the description of Class Policies on your Syllabus-as Prof. M. does follow these policies. 8. Copies of the Book of Readings for this course are currently available in Ackerman. 9. Prof M, introduced the class to the little book of the renewned moral philosopher, Harry G. Frankfurt, Professor of Philosophy Emeritus at Princeton: 0:: Bullshit. As the term “bullshit” has- been used in philosophical dischurse , Prof M. feels free to use the term duringEcon 107. ll}. Marschak coiloqulm. Prof M. will routinely announce upcoming talks in-th'e 'Marschak colloquium series. The upcoming seminar is: January 16: John Bragin, Lecturer and Academic Coordinator, UCLA Human Complex Systems Program. Topic: “Cities as Complex Adaptive Sytems.” Where: Anderson, Entrepreneurs Hal] \3'“ floor,.Ro.om (1301. COVERAGE OF THE COURSE. The catalog entry for this course is 10'? History of Economic Thought. [4) Lecture. three hours. Requisite course 1 or 100. Survey of economic analysis from Grecian antiquity to the early 20" century. concentrating on the 13‘" and 19‘“ centuries; special attention to seleeted writers. includingAristotle, mercantilists. Physiocrats, Hume, Smith. Malthus. Ricardo. Marx. marginalists, and Marshal. This course description at. UCLA goes back unchanged to the postwar period. And it has implicit in it a particular view of the development of Economics. Basically-lines viewed, .by those teaching the course, that Adam Smith spelledbut the basic econo-e paradigm in his Wealth ofNah'ons, 1776.. It took to the end-an the nineteenth century to put that paradigm into mathematical form with Marshall doing that in partial equilibrium analysis ahd Walras-in general equilibrium analysis. The Greek contribution was minor, and for _ the most part the mercantilists were on the wrong track. investigations to-see'how lunch-of Nature they can explain with a particular pattetn. - ' AN ASSOCIATED CANON The. diagram .on the next page also includes a “canon” or a list of those considered to have made important contributions of the d'eveiopment of the paradigm [The photographs of these authors ‘ -are shown at the top and bottom of the paradigmin the diagram. on page 3.] A DIFFERENT FRAMEWORK Prof M. will cover "the. thought of most of the economists in thediagramon page 3. But he Would prefer to flame his discussion not in terms of standard paradigm He believes that he sh'onl study the natural history of economic-thinking and make conclusions ahoutthe program of thought from mt; study. Any-form o'l'sys'tematic' thinking that'was used to-atl'ectfigroup decision- malo'ng is worthy of our study. Ifas economists you and I are interested in. assembling a “hog- tools" that we will employ in our economic _‘ yses ofpresent issues,wewill hemore likelytoco ourselves to-the standard paradigm and canon. But Prof'M. is interested in why and how did economic thinking emerge, and wherein us its developments "atithe monien‘L- As history 11 aids itself what can we expect in'th'e development 0 the discipline. Thus his approach is more philosophical and sociological than technical but we certainly will talk about-the “hag irritants”. ***t At‘thiis point, MM; threw a paperback copy ' of Joseph Aiois Schnmpeter’s-z Emory ofii'coaomic Analysis on thefloor. It weigh§s"'3 pounds and so it landed With a thud. ' . ProfM. asked thedasa: f‘What happened then? There was uo’reply-from the class, so Pr'o'fM...sugg that they were observing grafity at work. ProiM. “Where did'we'get the’id'ea of gravity from?” . Student: “Newton” _ ' ' This illustrates that we have a context that explains falling objects to us'. This context tram hack-until 1687. People earlier on might have used the Arislofleian context that different objectshad a difiereut gem TI-IE REMEMBERED PRESENT. It Is-to-draw. attention to the-nature of present consd'ouSness, Ethel-Gerald 'M. Edelman in a lovely litfle book Wider than the sky, thepitenomenal gift of consciousness [Kale University Frets, 2004]-asserts that we all live in the “remembered present.” Out-fire senses'piclt' lip-signals for the world of external reality and our hraiusgirocess the signals whilehlending that information with past memories. W Footnote: Gerald Edelman is a Professor-at 'Scripps Research Institute, and received the Nobel Prize for Physiology J Medicine. He has lectured-at UCLA in the Marsch'alt Colloquium. This latter colloquium meets-on Friday afternoons in the Anderson School and .Proyides a steady flow of information about'ne‘w and exciting resenreh using mathematical and ' Statistical reassign: are interested in an academic career,makesm~eyouvisit oneofthecolloqtfia—they are very inspiring. % CONTEXTS It‘we reflect on the two examples. something happened, and we fidien put our experience ofits happeningintoone ofourpersonal contents to make semeof fie happening. Weiorm oursontexts over our flares as our education-as new information ' comes-to ustnnieutally organize, andesour- new THE BRAIN _ Edelman writes: “The human brain weighsahout three pounds. It's most prominent ' feature is the overlying wrinkled and convoluted structure knowsias the cerebral cortex. Which is. plainlyvisibleinpicturesoffliehrain...dffie cerebral cortex. here unfolded (make the gyri, its promsions,.and the sulci, it's deem, disappear it would have the wand thickness. of a large tahle napkin. It-woulii contain at lent 30 billion 1mm, or net-ye cells, and Imillion billion connections-or synapses. lfyou started counting ' these-synapsesright nowat themeeof'oneper second, you Wound finish counting them 32 mili'om years-hum no'wJ’ [pp. 15-6] Edelman continues'to point; out that COPYRIGHTED MATERIAL-DO NOT DUPLICATE mews nszfi'monio imdecmaimfluye cn' 1a .‘ranr - fie abordar Ias seesaw Brew-stem. hypothalamus, Con-elation In sebum, arrrrgdala', kiwi-nous. etc. "Me: Special vahleééaiteqor‘r l'nemfiry- ln'-'l'ron_tl.l. temporal, and ' padeta‘l mes Figure 12. Evolution aim—ode: commas. 'BEHERENOW BaokinthenfidfiflgfiofManflhis wife did a number‘ol' “comciousuess raising” 13w Rosa involved a ropes course-rappellln'g down j 150 cliff, crossings canyon-hungh-oma ropeand Film: Emmafld goingout-on a plank, gl-lillli%i;lfl roller, and zipping-down a slanting rope til-the . ' somelsorool below. Alsosilflngonlhetopsof j_ mountains. in contemplation. Allel- uweek ol'smh uerdses one’sexperienmdldseem more vivid. A tree wasfireallree.” ButmuseEdelmsufspMsle weresliilin'llle WWW” We-knewa treewheuwe'sowmm-llle-buswewmg__' home inpassedoihuuhidmweremembendwhzmey wm..MWenmmberedwemin(3-ififoruin,goiug south. _ Badmlly-our hodi'esreceivesignalsfmmthe Univmandourcoguifivesystmwfldiwe _ , mmaMmmmwmm-wmgmmke sanctum-presentm- governments with useful advice, but advice that also will foster-the interests of. cartel members. Audi'bec‘ause we have -a- set of Contexts, our behavior becomes more social and predictable. When you sit-in Rolfe 120.0, you do not work out your behavion-momeal by 1110an No one in the class, unfortul'lately, is going to get up and give us a brillia'litren‘dering of “Nana Dal-ma” or “Sah eiu' knabe eiu fosclein stelm”. We are not all going to recess to the nearest Ladies Lavatory to discuss ' ' what: Objama will douext. On your way to campus on a- has you do notsay'to the {male bus driver: ‘Mildreih pulli over and give me ten minute's tutoring on the calculus of variations.” Nor do we go over the the Chancellor’s residence to cadge two bucks for lunch. COGNITIVE STABILITIES. As individuals we also get exposed to the opinions, writings, lectures, theories, etc. of others, Thus contemporary economies hasfea paradigm-and a oauou as we have. seen. Thus when wea'tte'mpt-as individuals to understand any issue; that attempt will be-meai'ete'd‘ - by coute'irlsnnjd mgnitive slabitifies; All will be in a rememberellpreoent. | . End oflecture'ii****************m******'“** COPYRIGHTED MATERIlilj-DO NOT DUPLICATE Wednesday, January 7‘", 2009. In the last class we went over organizational matters and then introduced the concepts of | _ contexts, paradigms, and muons. I If we look at the University catalog, tbegdesu-ipdon of Economics 107' is: "Survey of economic analysis from Grecian antiquity to the early I concentrating on the 18ml and IlltJl centuries: special attention to selected writers, including Aristotle, mercantilists, Ph'ysiocl'als,-.Hume, Smith, Malthus, Marx, marginslists, and Marshall.” This is a fairly typical organization of Economics denies and textbooks. It is assumed that Adam Smith sketched .out the economics paradigm and that this got fleshed out in the 18" and 19* centuries. And the diagram on the preceding page in broadly accepted canon of development of economic thought. Wewill cover the syllabus, the implied paradigm and canon, but Proi M. wants to take a wider View of the development of economlc thought and analysis. He would like to fit this into the natural history of man in early times, and then look at the development of all forms of economic thinking within the canon and without. Today, we will do a very brief coverage of the natural history of the rise of economic thought-and analy-s, and then consider economic thinldng of the first humans. ll‘economic analysis truly started with Adam Snith, and If we consider the fact that the Earth was formed ina Big Bang 13.7 billion years ago plus or minus .2 billion, it took an extraordinarily long time for economic reasoning to emerge. Yet this is true of science-generally because economic analysis is part and parcel oi'the fise'ol'sdentificjthlnlcl-ng from the 11'“ century AD. onwards. _ Carl Sagan in the Dragons ofEden fits the development ofhuman phenomenon in terms of'ayear starting with the Big Bang. .On'the Saigon scal'e,_mos't human phenomenon occurred on December 31". Economics appears in the last ten seconds. Earth did not form until 4.5 ln’llion- years ago. Life in its most primitive form of cellsgdid not emerge until 4.0 billion years'ago- .8 billion years ago multi cellular lite emerged. In a recent article in Disc-ova,- November 2004, it wassnggested that human DNA can be traced back to sea'sponges. We think ofonr not sot-emote ancestors [on a time-scale of the'emeiggence oi our planet'to thepraent] as apes. But-we go back to sponges toot - 555-590-mlllion years 'aso [MYA] complex animal life 7-6 MYA A predecessor to. handpick; split away from chimps and bonnhoe. Recent research suggests thathnmans n-aoe backwards to sea sponges and then to original‘single oelied life, through orangutans -Pongopy'g_moeus - a large, long- arrned anthropoid ape that lives in trees and Is. found in Sumatraand Borneo.- 3.5 MYA Hominids emerged. - Footn 2.5.2.52; MYA nauseous-Bevan an..." stone tools. 11 the mannl’ of gig. A Hominids usefire. , A Hominids dis la the a ' symbolic thong;- y hillty to use ohm-och. . 15,000 YA Homo SapieIes Sapi'ens emerged in Africa and spread over the planet. Recent archaeological discoveries in China,_ithaa beenasserted.call liaisingle origin theoryinto guestion. Maybe HSS emerged independently Ill. Cluna ratherthan being part ofanAh-ican diaspora. Recent writers have suggested that the first humans spread act-om the globe-in ismalttdhoats and used'thekelpbedsthatare oca on the coasts of ' ' 11M indium m Inapr conhnents to A Somewhere around this. year glacial period ended. time, a 100,000 l ole.- lce cores extracted in' Greenland have shown a pa of glacial periods-of 100,000 years being succeed by periods of global warning gnome years. 1111510! acne-400,000 years of evidence. Games of this _ patternloonld be due to [11 the physics crate Snn. ‘ There I a centuries-old speculation thatsun spots affect _ I agriculture of theEarth. [2] Additionally the physics-of the rotation of our galaxy could contribute to the pattern. [3] Finally, fliephyfiu of the 'whcle heavenly system could interact-with [1] and {21 to set_ up a 100,900i10.000 year pattern. Prof Mi commuted'on thiS: don’t be [mprmd byaredlord olamillion years. We hayethis incredibly huge nni-vdrse which has had an incredibly long history, so a million years-is a tiny unit. Cnrrently,.ongoing_r‘eie§rch at the south Pole is attempting to sink ice cares that will . provide record for the last when years Some scientists currently at the South Pole even b eve that glaciers will reach down to San Franci by mid-century. [SourcezProt M.’s eldest son whoi as been working at the South Pole for three per-10' t at Succee' 'e". e'previo'us lee Age.- H’UNTER GATHERER‘S: From the emergence of Home Sapierts' Sapiensis until the end of'the last Great Ice Age some 1] TYA, the typical mode of production was hunting and gathering. Below is anartist's depiction of a hunting party 11 TYA in Wyoming. Which'appear'ed in an issue of National Geographic. This-is a careful and accurate depich'on given our present'knowle‘dge of this lime period. The members of the party clearly are part of an economic system albeit 'a very simple and Buy one. All four distinguishing characteristics of an economic system. are present. _ [1] HOW TO PRODUCE. The band of hunters-are in hunter-galherer hand - wally about 15-20 persons in size. They belonged to a kinship g'roap perhaps-of an average size-of 140. But the kinship group only met occasionally during theyear for reasons of trade, social interaction, and_ thromouies. Sud: hands were also engaged in gathering. The evidence seems to suggest that the division of labor was that males-hunted and gathered but the females of the hand largely gathered. After all, the females had children to earéfor. There seems to be growing evidence that the domestication ol’ m1d plants came pfinnrflyby female innm'fion. Femaleswifla' young to bring up bad a strong Interest in refl'ueing.t.he-siz;e..of the search patterns ol' hands. Of course, the small hands would also possess technoIOgiasofieool-dng, preservation of food,-mldng use othid'es, horns, etc. and making weapons. COPYRIGHTED MA ERIAL—DO NOT DUPLICATE ==.I_-:-.,-.-- in a wonderful book Paul Scabright has this to say: i “Our everyday life is much stranger then we imagine, and rests on fragile foundations. This is the startling message of the-evolutionary history of humankind. Our "teeming, | industrialized networked eiistcnce is. not soro‘e gradual and inevitable outcomc of human dedelopment over millions of years. Instead we owe it to an extraordinary .experiment"isunched a mere ten thousand years ago. No one could have predicted this experiment from observing the course of our previous evolution, but it would forever change the- character oi life on our planet. For around that time, after the end of the last iceiage, one of the most aggressive and elusive bandit species in the entire animal kingdom began to settle down. It was one ol’ the great apes — a rinse coitsin of ' chimpanzees and bonobos, and a tricky survivor of the extinctions that had wipes out several other promising branches of the chimpanzee family. . Like _ the chimpanzee it was. violent, mobile, intensely suspicious oi strangers, and used to I hunting and lighting in close bands of relatives. Yet now, instead of rangiagl'ra search of iood, it began to. keep herds and grow crops,.storiug them in settlements that limited ,the ape’s mobility and exposed it to the attentions of the very strangers it had hitherto fought. or tied. Width a_ few hundred generations - barely a pause for breath in evolutionary time — it had formed social organizations of startling compleaity. Not just village settlements hut cities, armies, empires, corporations, nation states, politial movements, humanitarian organizations, even interact comniunides. sze same shy, murderous ape. that had avoided strangers through its evolutionary history was now living. working and moving - amonut complete strangers in their: millions."F Tire Company ofS’nangers, in]. Seubright_ further notes: .“Some tiiueinthe-la'st twobundredthousand-yaaraaraonm-Ieriesel‘ changes, minuscule to geneticists, east in the space of cultural potential, occurred to maltebuman beings capable of abstract, symbolic thought and communication. Thi changes must have occurred before the. last common ancestor ofhumau beings alive today. This implies that they occurred at least 140,000yearsago. _ TV. 1 . . , _ Footnote: If you want to read a great book on the pumping up in size of the hominid brain which led to the emergence oi’homo sopiens repress, rend Calvin, Ascent ofMiad .... These capabilities seem to have made a move _ toward agriculture and settlement possible once the envir omental conditious'becamefavorable, after the old] oi'the last ice age. Footnhte: Here are two necessary conditions— the pum ng up of the brain so that home supine: sopi s- emerged, and then the end of the Ice Age, 'that to besatislied before economic complelity - ' adva _ ced. Currently there-is some debate about ' just that IceAge ended. Could human econ c activity actually have accelerated that? Wee rselves may he near-to, experiencinga ret'urd of glaciation. And again it is controversial whet er human activities are affecting. the speed of this. pp these latter two topics see Hans Blij, it’ll)- (ii'eogrupby Matters. lodged, the)“: that agriculture ms ingé ndend_‘g invented or least even rim II'I' dose intends, I'll dig . spurts oflhe world snggnrs it was morethon ponfldlcitmojveven hnrebeen insanely infinite.”- |p. 3, ProtM’s italics and underlie] THE rROBLEM OF TRUST. Paul lSeabright points to a central" Issue in the development of economic complexity.ln orderlior complex economic systems to work, trust has to: he built up among members- oftlle system. We aliall see shortly how this came about. THE LMERGENCE OF AGRICULTU...
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