Tag Archives: History

Oldie of the Month: Dumb History – Ricardo Was Wrong

The first name that an Economics student is likely to encounter is Adam Smith. The second name is usually David Ricardo, the proponent of Comparative Advantage.

As a quick summary, Comparative Advantage states that even if a country makes every possible good more efficiently than other countries, it should still concentrate on the goods it is best at producing and engage in trade to supply itself with the rest.

The example Ricardo gave was the trade between Portugal and England of Wine and Cloth. Ricardo said that it was easier to produce both wine and cloth in Portugal than it was in England, but it was beneficial to both countries for Portugal to concentrate on wine, while England produced cloth (due to relative costs), and they subsequently could trade with each other. The problem with this theory is that it was 100% wrong.

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The Importance of History

We at Dumbagent tend to deal primarily with Economics, but we have never ceased to believe in the importance of History. While Science and Math are in vogue, and languages are popular these days, history seems to have been neglected at every turn: the Economist reports that only 47% of American students scored “basic” on a national history test (while 69% achieved that score in math).

Aside from the usual “Those who don’t know history are doomed to repeat it” adages about learning from the past, which are all true, history is a truly essential part of any person’s education. And we’re not talking in the “fluffy know-your-culture-and-appreciate-others” sense either. For one, it is easy to see how Tea Party goers have twisted and turned various aspects of history to suit their own needs (thought they are by no means the only ones, as the Occupy Wall Street people should notice). Counting on the fact that most americans are not well versed in history, politicians like Michelle Bachmann can make statements like “America’s Founding Fathers worked tirelessly until slavery was no more” while Sarah Palin can distort Paul Revere’s story, both confident that many people will take them at their word.
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The Language We Never Would Have Known

Have you ever wondered what English would sound like if it had not been so influenced by other languages such as Latin, Gaelic, Norse, French, etc.? Neither have we. But some people have indeed thought long and hard about it and have created The Anglish Moot, a website dedicated to “English without words borrowed from other languages”.*

Suddenly, the United States of America becomes the “Banded Folkdoms of Americksland” and the first three books of the Bible are: Beginning, Afaring and Of the Attached (instead of Genesis, Exodus and Leviticus).

So why are we featuring this, apart from allowing us to find funny terms? Because, quite simply, it ties into the fact that we believe if English were spoken in this manner, and if it hadn’t let itself be influenced by other languages, it would not be nearly as widespread as it is today and, more likely than not, this article would have been written in another language (possibly French or Spanish).

You can read our earlier article about language evolution, but the basic gist is that English has become as widespread as it is because it is as flexible as it is. The fact that it incorporated so many terms and structures from other languages means that it has become possibly the most expressive language in the world (with 4 times the amount of vocabulary that French has). If it had never done so, another language might have very easily taken its place (for example, when William the Conqueror came from France, his Norman French might have replaced English, rather than become integrated with it).

In other words, the strength of the English language is due in great part because – rather than protect itself against other influences – it has welcomed terminology from other languages as its own. Something to keep in mind when other languages fight to protect themselves against English words. Indeed, something to keep in mind when countries try to protect themselves against foreign goods, services, people and/or ideas.

* We have a problem with this statement, in that English was originally an archaic form of Frisian, brought over to England by the Angles, Saxons and Juttes. This language obviously gave english its first words and terminology. We should also not forget that Frisian itself had many latin words and much German terminology. We should also note that any original English would probably still use suffixes according to case, such as genitive and dative.

HT to Heidi Kim for bringing this extremely interesting website to my attention

Bringing Sexy Back to Economics… on Amazon!

Drum roll please….

Our new book is finally on Amazon! Wave goodbye to the tweed jackets, bow ties and thick-rimmed glasses because we’re bringing Sexy Back to Economics!

Our Book, Full

And since it took so long to get approved, we’ve been able to add 7 new chapters (seriously)!

Of course, for those of you with Kindle, you can still download our book to your device right here. And yes, we’ve updated the Kindle version to include our 7 new chapters as well.

If you want more details about just how we’re bringing sexy back, check out our information page right here.

OK… you can stop the drum roll now actually.

What California has NOT done wrong

Alex Alexiev of the National Review has penned an article lambasting illegal immigration and blaming it for many, if not all, of California’s woes. More precisely, he mentions the lower educational achievements of Californians as of late, the crippling economy, and the fact that many Californians are leaving for other states, then he continues:

“In short, we are witnessing a highly advanced and prosperous state, long endowed with superior human capital, turning into the exact opposite in just one generation. What can be done to stop this race to the bottom? The answer is simple: California and Washington need to enforce existing immigration law.”

His reasons are as follows: “First, the immigrant population is more than double today what it was following the most massive previous immigration wave (that of the late 19th century)”.
Of course, the entire country’s population today is more than triple what is was back then, which renders this point moot (Besides, is he saying the government should decide which immigration population is ideal?).

The article continues: “Second, and much more important, as scholars from the Manhattan Institute have shown, earlier immigrants were much more likely to bring with them useful skills. Some Hispanic immigrants certainly do integrate, but most do not.” These are, of course, two different points, which Alexiev tries to combine, and that go hand in hand with what was said by Senator Ellison Durant Smith of South Carolina:
“Without offense, but with regard to the salvation of our own, let us shut the door and assimilate what we have, [...]—and develop what we have, assimilate and digest what we have into pure Americans, with American aspirations, and thoroughly familiar with the love of American institutions, rather than the importation of any number of men from other countries.”

Of course, Senator Smith said this is 1924, when rallying against immigrants from Southern and Eastern Europe, who he said would never be assimilated. For an article that follows more with our line of thinking, we direct you to “Restriction or Legalization? Measuring the Economic Benefits of Immigration Reform” by Peter B. Dixon and Maureen T. Rimmer of the Cato Institute.

Blogs almost as good as Dumbagent

For today’s article, we endeavored to find blogs and websites that deal with Economics AND other subjects, or that use free markets for unlikely purposes. This proved to be harder than we thought, especially when we decided to start with Economics and History, possibly because these are two very different subjects with very little relation to each other (apart from the fact that economics affects everything in history and history has affected everything we do today). Regardless, we were successful, so we present you with our findings:

History and Economics

Our first finding is a blog called the History of Economics Playground. The design is very uninviting, but the content is interesting, and written by people passionate about both subjects.

While we did avoid blogs that obviously had an agenda or were biased, it was impossible (and not necessarily our aim) to avoid schools of thought. The Austrian Economists follows just that school of thought. While it concentrates much more on Economics than history, it has some gems in there as well.

The Skeptical Liberal, as can be inferred by the name, follows another school of thought. We found, however, that this isn’t obviously the case, and it is refreshingly full of economic references, being written by Ross Emmet, Economics Historian.

Philosophy and Economics

N. Emrah Aydınonat’s blog is precisely about these two subjects, by a man who got a PHD in these two subjects. Highly enlightening in all senses.

Farmers for Free Trade

The Truth About Trade is sensational. Farmers who are against protectionism and pro Free Markets. We need many more of these.

Environment & Free Markets

The Commons Blog and PERC, rather unexpectedly, are pro-free markets and pro environmentalism. Of course, we are pro both as well, only there has been very little use of both by the same people as of late. We highly applaud their efforts.

Dumb History: The Boston Tea Party

In opposition to the Stamp Act and the Townsend Acts, the American colonists decided to boycott tea from the British East India Company. This allowed merchants such as John Hancock to smuggle tea from Holland without paying taxes.

The Crown then decided, in 1773, to do away with any tax on tea and the British East India Company was able to sell tea again to the colonies at a competitive price – underpricing most of the local merchants in the process.

Of course, this removal of the Tea Tax did not benefit the local merchants, so they decided to protest. They threatened the British consignees (those receiving the British tea) through vandalism, and they organized protests when the British East India Company ships started coming into the harbor. After some weeks of a standoff, the owners of the ships agreed to sail back to Great Britain, but the mayor of Boston did not let them. So on December 16, 1773, Bostonians dressed as Narragansett Indians boarded the ships and threw around 45 tons of tea into the harbor.

The fact that this was all done in opposition to a tax removal (and the subsequent loss to local merchants), means that the Boston Tea Party was not in opposition to “Taxation without Representation”, but was actually the United States’ first instance of Anti-Free Trade protectionism.

Dumb History: Ricardo Was Wrong

The first name that an Economics student is likely to encounter is Adam Smith. The second name is usually David Ricardo, the proponent of Comparative Advantage.

As a quick summary, Comparative Advantage states that even if a country makes every possible good more efficiently than other countries, it should still concentrate on the goods it is best at producing and engage in trade to supply itself with the rest.

The example Ricardo gave was the trade between Portugal and England of Wine and Cloth. Ricardo said that it was easier to produce both wine and cloth in Portugal than it was in England, but it was beneficial to both countries for Portugal to concentrate on wine, while England produced cloth (due to relative costs), and they subsequently could trade with each other. The problem with this theory is that it was 100% wrong.

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