
The Economy - Turukawa
http://www.core-econ.org/the-economy/book/text/0-3-contents.html
======
niuzeta
I find it very dubious that the "Income Inequality" sits at the very first
section, and "Supply-and-demand" at the eighth. I'm no established economist,
but my understanding is you start at the foundational idea then move on to the
its ramifications and symptoms.

Why does the income inequality deserve the first seat? It definitely is one of
the greatest(if not the greatest) issues of our generation, but must it
precede foundations?

Skimming through the "Income Inequality" section did not make it better -
first exercise asks "What do you _think_ the figure would've looked like in
14th century - I imagine it's to highlight how it's "unfair" now compared to
the previous history? It talks about the 90/10 ratio and the word "richest"
appears 21 times in the first page alone. "richest 10%" being 11 of them.

I understand the study of economics is more about interpretation of the data
and interpolation of trends based on (often seemingly ideological) school of
thought, but this first look betrays a specific narrative.

~~~
michaelt
I guess the parts you skimmed didn't include the introduction, eh?

It says:

    
    
      We want to change the way economics is taught [...]
      Students in economics all over the world were asking,
      just as I had asked a few years previously: ‘Why has the
      subject of economics become detached from our experience
      of real life?’
      [...]
      we have tried an experiment in classrooms around the
      world. We ask students: ‘What is the most pressing
      problem that economists should address?’
    

...and the that experiment said inequality. At least according to students at
three universities and professional economists at two central banks.

If you want to write a book that starts with motivations before delving into
the nuts and bolts, and you ask customers what they think is most important
and they all say the same thing, it seems reasonable enough to put that first.

~~~
robotresearcher
> We ask students: ‘What is the most pressing problem that economists should
> address?’

What should we ask Computer Science students?

I can try it on a couple of hundred tomorrow and get back to you. I don't know
what they will say.

~~~
JoshTriplett
> What should we ask Computer Science students?

"What is the most important problem (of policy, not of specific technology
development) that Computer Scientists should be addressing and currently are
not?"

(The parenthetical is to forestall nearly-content-free responses like "We
should do more with AI!" and similar.)

~~~
majewsky
> What is the most important problem (of policy, not of specific technology
> development) that Computer Scientists should be addressing and currently are
> not?

My answer would be: the problem that we always do "introducing a new
technology" and "thinking about the consequences of it" in the wrong order.

------
achou
The book touches lightly upon advertising and how it can affect demand:

[http://www.core-econ.org/the-
economy/book/text/07.html#711-p...](http://www.core-econ.org/the-
economy/book/text/07.html#711-product-selection-innovation-and-advertising)

This strikes me as a very important subject, one that I heard little about in
my (limited) economics courses. Anyone know of good references to how
economics treats the ability of firms to affect demand?

Nearly every company has a marketing department. Some of the largest companies
on the planet make all their money from other firms' desire to influence
demand.

Is there any work at the intersection of evolutionary psychology, economics,
and advertising?

~~~
roymurdock
You're entering the world of behavioral economics and heuristics, championed
most extensively by Kahneman and Tversky. Here's an overview:

[https://www.behavioraleconomics.com/introduction-
behavioral-...](https://www.behavioraleconomics.com/introduction-behavioral-
economics/)

------
dcgudeman
Positioning this "course" like an objective treatment of economics is the kind
of subtle academic dishonesty that breeds anti-intellectualism. Most people
recognize the difference between this and a real textbook even if they can't
articulate it. They just end up distrusting academics in general which hurts
us all.

~~~
jimmytidey
This is a real text book.

It is written by a wide range of eminent economists from world leading
institutions, with the aim of instructing students.

A book created by experts in their field with a view to teaching students
about the issues that concern them most is not anti intellectual.

I can only assume wrongly believe yourself to be in possession of an objective
understanding of economics which disagrees with this text book (which you've
read, right?).

Sorry to go so mad on this one, but it really is just a different view on
economics. It ought to be welcomed.

~~~
jnordwick
This book is definitely created with an agenda and trying to force a point of
view to lead readers to be left wing economists. It seems more like an
indoctrination attempt especially when you read the leading questions asked in
the text.

~~~
jimmytidey
What about all the other economics text books that are absurdly naive about
markets' ability to efficiently allocate resources?

Aren't they an attempt indoctrinate students to become right wing economists?

------
jasode
For added context about _core-econ.org_ , there was a recent related
discussion (not a dupe):
[https://news.ycombinator.com/item?id=15222819](https://news.ycombinator.com/item?id=15222819)

------
anon1385
Simon Wren-Lewis has written a bit about this here:
[https://mainlymacro.blogspot.co.uk/2017/09/the-core-
economic...](https://mainlymacro.blogspot.co.uk/2017/09/the-core-
economicscurriculum-designed.html)

He's broadly supportive but points out that section 14.8 isn't correct.

------
Nokinside
Quickly skimming the book, it seems mixed back.

First complaint is that online eBook without search and links for definitions
seems to remove value from the book.

It seems like the authors are trying to insert current interests and advances
in economics into introductory level book. Sometimes it succeeds, sometimes it
fails. The goal is admirable.

I think this book might be good on the side when reading more conventional
book if it had good search function, and links to terms and definitions and
links in the glossary.

------
beebmam
Keep in mind this is absolutely a political text, and should be criticized as
such.

We should be skeptical of the claims in this document, just as we are
skeptical of Marx's work.

~~~
wwweston
What are you/we skeptical about in Marx's work?

~~~
MarkPNeyer
As a historical deterministic, he doesn't believe in or account for risk.

The labor necessary to create an object needs to include all the failed
attempts to create objects. If you're a determinist, risk loses meaning, and
thus capital seems to serve no purpose.

~~~
wwweston
Interesting and plausible criticism. I suspect it's not accurate to
characterize Marx as a total determinist either in a sociopolitical sense (I
think his "inevitable victory" rhetoric is largely cheerleading and IIRC he
acknowledges class warfare could end badly for _everybody_ ) or an economic
sense, where his observations and criticisms about economic dynamics are no
more deterministic than any other economic model (and in fact derived from
accepted models).

But I honestly haven't thought much about whether he fully appreciates the
risk-bearing role of capital and that seems like an interesting insight worth
exploring. You know of any texts/places where people discuss that?

------
soVeryTired
Nice to see an economics textbook get money creation more or less right for
once. On the other hand they haven't been able to shake off the classical view
of the consumer as a utility-maximising robot (where utility is conveniently
unobservable). So a step in the right direction but a lot further to go.

~~~
goialoq
Hmm? Even among fans of the book, the book's incorrect explanation of money
creation is the main criticism:

[https://mainlymacro.blogspot.co.uk/2017/09/the-core-
economic...](https://mainlymacro.blogspot.co.uk/2017/09/the-core-
economicscurriculum-designed.html)

~~~
soVeryTired
I was really just referring to the fact that in section 10.8 they ditched the
fractional reserve / money multiplier story that you find in eg. Mankiw's
book. I honestly don't know enough about government budget constraints to
comment on the mainly macro post, or other aspects of MMT in general.

~~~
neffy
The standard fractional reserve/money multiplier story is provably wrong, in
several different ways. With a pen and paper for example, work through what
happens when loans are repaid with that cascade of banks.

They missed a note that money is destroyed when the capital is repaid, and it
wouldn't have hurt to discuss loan defaults, but as set out, it is definitely
an improvement on the old incorrect description. (Which appears to have
originated as a copy and paste error from Keynes original description in the
Macmillan report.)

------
amelius
I like how they want to change the way economics is taught.

However, I'd like to see more assumptions to be made explicit. For example,
why is money the way it is? Why is it simply a scalar, that is transferred
from one person to the next? What other constructs can we come up with for
money?

~~~
pzone
It's a very basic introductory level text. If you want more detailed answers
to questions like that, ask a professor or do a bit more study.

Anyway "why don't we have vector money" is a fairly interesting brain teaser.
The way I'd think about that sort of question theoretically is: suppose we
tried to actually implement a system like that. Why would people find it
annoying / inefficient and go back to the way things were before?

Here's how I imagine it going. First, there would have to be an exchange rate
between a_dollars and b_dollars, just like for any currency where you want to
trade goods priced in one currency for different goods priced in another
currency. Then, because it's inconvenient to hold a_dollars and b_dollars,
people would just choose to hold onto whichever one was more convenient for
them, and make exchanges when necessary. This means whole geographical areas
would just use the same currency, because it's just simpler and easier to
discard whichever currency is unused. At this point, we enter into the
question of optimal currency areas - and basically the whole situation
collapses to entire country using a single currency.

------
wslh
Is it available in EPUB or MOBI formats? I cannot find any reference to Kindle
or any other ebook devices or format.

------
WalterBright
> In 1973 and 1974, OPEC countries imposed a partial oil embargo in response
> to the 1973–4 Middle East war

George Reisman in "Capitalism" writes that the oil price shocks were due to
Nixon placing price controls on oil. More evidence for this view is that when
Reagan signed an Executive Order eliminating them, gas lines disappeared
overnight and did not return.

[http://www.presidency.ucsb.edu/ws/?pid=43912](http://www.presidency.ucsb.edu/ws/?pid=43912)

~~~
dredmorbius
Gas lines were not extant continuously from 1973 - 1982. They existed,
briefly, at the height of both the original Arab Oil Embargo induced oil
shock, and after the Iranian Revolution when Iranian exports to the US were
curtailed.

A number of factors, including US-Saudi relations (cemented after 1973), and
the on-lining of both North Sea and Alaskan North Slope oil, brought down
_global_ oil prices, which would _not_ be responsive to _just_ US actions. See
the BP Annual Statisical Review of Energy for any recent year for a global
price history of oil dating to 1859 in both real and nominal terms.

~~~
WalterBright
Shortages (gas lines) were not caused by price hikes or the Saudis or the
Iranians. They were caused by the US government allocating fixed amount of gas
to each gas station.

Reagan eliminated the allocation system at the stroke of a pen, and the lines
vanished overnight, never to return. He also eliminated the price controls,
which drastically curtailed the Cartel's influence over gas prices, which
never returned, either.

The whole gas problem of the 1970's was something the US imposed on itself.

You are correct that the lines were not there continuously - but they were a
recurring chronic problem, seemingly striking at random. There was also the
peculiar phenomenon of lines in California with simultaneous gluts in Florida.
The DoE proved to be hopelessly inept at allocating gas according to demand.

Note that we still have gas "shocks" today, like a refinery blowing up or
being incapacitated by a hurricane. The result is a modest increase in prices
for a few months, and no lines or shortages whatsoever.

(There were some brief lines when the hurricanes rolled ashore, but those are
cases where the weather cut the supply lines rather than the government.)

------
taysic
I can't speak on how economics is taught as I never took a class on it. But I
can say "Basic Economics" by Thomas Sowell is one of the best books I've read.
It could easily be a textbook.

~~~
dredmorbius
Sowell's version of economics is exceptionally ideological and partisan. As
would be pretty much any other author associated with the Cato Institution (as
is Sowell), or the broader Mont Pelerin movement, including Milton Friedman
and Howard Hazlett.

Their treatments are _popular_ , amongst a certain set. This deosn't make them
_accurate_.

------
ohdrat
There's a bunch of money hidden offshore.

------
misterbishop
Malthus in, Marx out.

------
nolemurs
I looked at the table of contents, and concluded I didn't really need to look
further. This isn't an economics textbook - it's a propaganda piece.

Section 1.1 of an economics textbook should not be about "Income Inequality."
Any sane treatment would first provide some necessary context and theory to
make a discussion of income inequality meaningful. I don't care where you are
on the political spectrum, if your goal is to teach rather than indoctrinate
this isn't how you start.

~~~
goialoq
It's a fair point, but the solution isn't obvious. This book leads with Big
Issues before explaining context and background, making it inaccessible to
people who aren't already versed in the basics. But other (orthodox) intro
books/courses never get to the big issues, leaving students with a stunted
misunderstanding of how economics works in the real world and an
overconfidence that they know how everything works.

I'd like to see a book like this blended with an orthodox textbook.

~~~
jnordwick
But without the context and background people aren't equipped to make up their
own minds in a well reasoned way. The text seems to try to take advantage of
that by feeding the reader how they should believe instead of letting them
make up their own minds.

------
csomar
Is this about economics, macro-economics, micro-economics, finance, or simply
income inequality?

This looks like a "populist" site. It teaches you a "lot" about income
inequality but it doesn't stress on important matters.

This is totally subjective but, for me, the most important concept in the
economics of the 21st century is "banks printing money out of thin air". All
money, in fact, is not the same. Even though, on the small scales it looks
like it is.

The site do talk about it here: [http://www.core-econ.org/the-
economy/book/text/10.html#108-b...](http://www.core-econ.org/the-
economy/book/text/10.html#108-banks-money-and-the-central-bank) But given its
importance, it seems highly buried: Like, hey look there, here is how we print
money. That's it.

The implication of the monetary policy is huge. It explains why our system can
collapse of the mistakes of other people completely non-related to you.

I still find the Khan Academy videos on Economy the best, simplest and most
informative out there on the Internet. Really worth to watch.

------
ChuckMcM
Is this a work of fiction? I was skimming along and this popped out : _"
Street protests erupted in South Africa, and both the European Union and the
World Health Organization announced their support for the South African
government’s position. Al Gore, then US vice president, who had represented
the interests of pharmaceutical companies in negotiations with South Africa,
was confronted by AIDS activists chanting, ‘Gore’s greed kills!’ In September
1999, the US government—previously the drug companies’ strongest ally—said
that it would not impose sanctions on poor countries that are affected by the
HIV epidemic, even if US patent laws were broken, so long as the countries
abided by international treaties governing intellectual property."_

Really? President Gore? Alternate history perhaps?

EDIT: (Yes I know Al Gore was VP but missed the word "vice" when skimming the
content, thanks for the corrections)

~~~
ChuckMcM
Ah yes, the hazards of skimming. We'll just leave this here so that others
don't make the same mistake I did.

