Michael Battalio

Friday, April 04, 2014

Discussions on Wealth (part 1):

This begins our discussion on wealth as mentioned in Serious Conversations parts 53 and 54. We are considering the book The Origin of Wealth by Eric D. Beinhocker. (I do not profit from clicks).

(Ed.: we will be taking the general format of outlining the major points of the chapter and then discussing what we believe to be important or intriguing points.)

Chapter one begins with a general overview of some economic concepts.
-Economic activity increased slowly until the industrial revolution.
-Evolution can describe the economy both metaphorically and scientifically.
-Evolution uses trial-by-error to find solutions, and the human decision-marking process is part of economic evolution. Although human decision-making is intentional, the evolution of the system as a whole is not an intentional or designed process.
-The economy is staggeringly complex, more complex than any other human endeavor, yet it runs in the background without some one looking over it.  (I had never thought about that.  It boggles my mind that it runs relatively smoothly for a large portion of the people on this planet, yet no one pulls the levers.)
-The difference in wealth between a New Yorker and the Yanamamo [an isolated group of people (approx. 35,000) in the Amazon] is not just the few hundred fold difference in “income” but the hundred million fold difference in the choice of what to spend income on.
-By the shirt design example (pg 14-15), even though humans are rational and predictive, the economy is too complex to be designed; it must evolve from an initial set of possibilities.
-Economic evolution is the result of three interlinked processes:  coevolution of physical technologies, social technologies, and business designs
-Four implications if the economy is a complex adaptive system
        1.)  Economist have misclassified the economy
        2.)  we are presented with a new set of tools for explaining the economy
        3.)  wealth is the result of evolutionary precesses
        4.)  there are strong impacts to business and society that will result from this paradigm shift (assuming it is accurate)

It really strikes me how interconnected the disparate disciplines of academia are and how specialization in one provides the tools for understanding in another, as in we will be using the principles of biology to aid in the understanding of economics. Given the applicability of ideas and techniques of some disciplines to other disciplines, it seems like over-specialization is a bad thing.  People would be better at their own disciplines if they have broad knowledge of plenty of other disciplines (Ed.: We will return to this topic later).

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