Keith,
"Man seeks to satisfy his desires with the least exertion." The Classicals did not regard Labor as simply "muscular effort". Exertion refers to both physical and mental exertion. I am not sure you can separate them. If John comes up with a new idea called the wheel, which reduces hauling effort by 95%, will not Ted immediately grab hold of this device and use it in his own production? (Even though he may not have come up with a new idea in his whole life?) Of course he will, for whether he knows it or not he tries to satisfy his desires with the least exertion -- just as you or I would do. And we do not have to know neuroscience in order to act this way. If there is innovation, it comes from the mental and physical exertion of Labor. Making it a separate Factor of Production merely confuses the simplicity of production. The same can be said of "management". Some people can brilliantly make tools, but are hopeless at managing things. Others are good at managing things but could not make a tool if their lives depended on it. People find their places and the pressure always is to satisfy their desires with the least possible exertion. I knew a painter who would never get a Nobel prize but he would use a brush in each of his hands to paint at the same time. He would get the job done in half the time. You will recall that I thought that time should be added to exertion as something to avoid (time is added to my courses). The other assumption is "Man's desires are unlimited." While one can suggest that survival is the first desire, from thereon the Classicals do not try to say what other desires may be. Status would certainly be high up on the Hierarchy of Desires as Ayn Rand called it. The most usual fourth Factor of Production is the entrepreneur. I rather think he came along because market economists needed someone to get profit. Profit has had a bad press. It is always unfair and exorbitant. So, they invented someone to earn profit -- the entrepreneur. In Classical Political Economy the term 'profit' is not used. When the three returns are paid (Rent, Wages, Interest) there is nothing left. Where did economic profit came from? One of the problems of modern economics is they have merged into their discipline accountancy terms. When an accountant finds more income than outgo, he called it a profit. More outgo than income and it is a loss. Economists grab hold of things like this no doubt to pad out their courses. Before long they had more than one "profit" but that is to be expected. "As we understand economics today" -- are you sure that anyone understands modern economics. Certainly, its track record is incredibly bad. Harry From: Keith Hudson [mailto:[email protected]] Sent: Wednesday, May 26, 2010 11:31 AM To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION; Harry Pollard Subject: Re: [Futurework] Conservative take: EU A coalition of irresponsibility Harry, Your second assumption: "Man seeks to satisfy his desires with the least exertion." is not true! And it certainly doesn't explain progress. If you mean that most people tend whenever possible to being passive rather than active, it's true enough. But energy-saving methods don't happen automatically unless they're simple and routine. Significant savings (and progress generally) only occur when innovative minds spend time thinking about possibilities. Even then, they might require much further energy spent in experimentation and development before final success is assured. The classical economists were not aware of neuroscience, in particular of the frontal lobes of our brain which, in some individuals, spend a vast amount of time and energy (brain matter being a large consumer of blood sugar and oxygen) in strenuous activity to find answers to problems. So in today's world there's a fourth factor of production: Land, labour, capital + innovation Then again the classical economists were not aware of evolutionary biology, in particular of one of the strongest instincts of all (besides food and sex). This is the desire for status (particularly in males). And because of status aspirations some individuals take on leadership and others yield to them. So we have a fifth factor of production which, if absent, means that otherwise there'd be no progress either. Thus: Land, labour, capital + innovation + management It's no use saying that innovation and management are aspects of labour because they weren't -- at least as classsical economists understood and used the term "labour". They were only thinking of labour as muscular effort, because that was the only energy available in pre-industrial times. (There was, of course, energy supplied by pack or draught animals and ships' sails -- but the concept of energy in such varied forms wasn't known to classical economists either.) Hats off to the classical economists, of course. but they hadn't reached the end of the story as we understand economics today. Keith At 09:06 26/05/2010 -0700, you wrote: The two Basic Assumptions of Classical Political Economy are: "Man's desires are unlimited." "Man seeks to satisfy his desires with the least exertion." The first assumption explains why Man exerts, the second explains why there is progress. (For the sake of political correctness, I use 'People' in my courses rather than Man!) Your point is not well taken. It is a quibble. Getting a greater return for less exertion is the hallmark of economic progress. Doing something this way rather than that way is the way we have hauled ourselves up from our beginnings. So, you invest some exertion in seeking in order to save a lot more exertion later. How do I know this Assumption is valid? Because this is the way you and I behave. Harry -----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Sandwichman Sent: Saturday, May 22, 2010 1:52 PM To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION Subject: Re: [Futurework] Conservative take: EU A coalition of irresponsibility "People seek to satisfy their desires with the least exertion." Except the phrase is inherently contradictory. Seek is more exertion than not seek. On 5/22/10, Harry Pollard <[email protected]> wrote: > "People seek to satisfy their desires with the least exertion." > > --- Or how Classical Economics begin. > > Harry > > -----Original Message----- > From: [email protected] > [mailto:[email protected]] On Behalf Of Steve > Kurtz > Sent: Tuesday, May 18, 2010 6:50 AM > To: Futurework > Subject: [Futurework] Conservative take: EU A coalition of > irresponsibility > > There is a predisposition to conserve calories - offload work/effort > onto machines, draft animals, other people. Survival and reproduction > favored conserving extra food, fuel, water (yes, in caves) and saving > ones energy/strength. Those who had insufficient reserves had > decreased chances of passing genes fwd. As surpluses of food from > agriculture permitted leisure, the game changed. The hierarchy of > hunter/protector did (as Chris > thinks) branch out into warlords, landlords, traders, politicians... > > ======================================= > Please: this is not my exact position. It is a conservative pundit. > > Steve > > http://www.washingtonpost.com/wp-dyn/content/article/2010/05/14/AR2010 > 051404 > 279.html > > > > _______________________________________________ > Futurework mailing list > [email protected] > https://lists.uwaterloo.ca/mailman/listinfo/futurework > > > > _______________________________________________ > Futurework mailing list > [email protected] > https://lists.uwaterloo.ca/mailman/listinfo/futurework > -- Sandwichman _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework Keith Hudson, Saltford, England
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