Questions for Menger's Principles of Economics (Chapter 1)
One of my long-range goals in life is to gain a solid understanding of economics. Part of that involves reading many of the important works of the great economists. Right now I'm reading Carl Menger's classic Principles of Economics
. As a means of solidifying my understanding of Menger's work, I'm developing questions for each chapter of the book (since I couldn't find any on the internet when I looked).
I've just finished the questions for Chapter 1, which I'm posting here. Comments are welcome, especially from any readers who have read the book. I'll be posting my answers to these questions in a couple of days.Chapter 1: The General Theory of the GoodSec. 1 The General Theory of the Good
Sec. 2 The Causal Connections Between Goods
- Why does Menger make the distinction between "useful things" and "goods"? What is an example of something that is a "useful thing" but not a "good"? (pg. 52)
- What four prerequisites does Menger list for a thing to "acquire goods-character"? (pg. 52)
- If you had an automobile, but no gasoline, would that the automobile still be a good, according to Menger? Why not?
- What makes something an imaginary good? List some examples of imaginary goods. (pg. 53)
Sec. 3 The Laws Governing Goods-CharacterPart A
- What distinguishes a "good of the first order" from a "good of the second order"? Give some examples of both, and of higher "order" goods.
- Are some goods inherently "higher" order than others? Why or why not? Can some goods function at multiple levels in the "causal nexus" of goods? Give an example.
- Menger writes, "it is never in our power to make use of any particular good of higher order for the satisfaction of our needs unless we also have command of the other (complementary) goods of higher order." Why not? (pg. 59)
- If one possesses some higher order goods for the production of an automobile, but not all, do the higher order goods necessarily lose their good-character? If not, why?
- Menger writes, "The question of the dependence of the goods-character of goods of higher order than the second upon the availability of complementary
goods is more complex." This would imply that possession of a good of the fifth order, and its complementary goods of the fifth order needed to produce a good of the fourth order, would not by itself establish their goods-character. Why is this so? (pg. 60)
Sec. 4 Time and Error
- If a human need disappears, a good of the first order which could only satisfy that need would lose its goods-character; is such a loss necessarily applicable to goods of second, third and nth order? Why or why not?
Sec. 5 The Causes of Progress In Human Welfare
- What three factors does Menger stress in relation to uncertainty (and the possibility of error) in production?
Sec. 6 Property
- Why does Menger contrast the division of labor in a primitive collecting economy with the division of labor in a more advanced economy? If both economies are arranged around the division of labor, what explains the superior productive powers of the advanced economy?
POSTED BY THE GENERAL AT 6:18 AM
- What does Menger mean when he states that, "all the goods an economizing
individual has at his command are mutually interdependent
with respect to their goods-character..."? (pg. 75)
Well, it's Saturday, so that means that IEAPD (or as Gus Van Horn
recommended, International Eat an Animal For PETA Week
) is nearly over. In true carnivore style, I'm preparing a delectable stew to cook in the crock pot while I slave away at work this morning. Seven hours of cooking, and the delicious meat taken of the ribs ("lifter" meat, as we affectionately call it) will be tender and full of flavor. I can't wait.
Not being a speciest, I opened the menu up beyond cows. I've had some tuna fish sandwiches this week, and salmon fillets for dinner as well. What can I say, I'm an equal-opportunity eater of animals! Note to self: pick up some pork chops when you go shopping tonight :)
POSTED BY THE GENERAL AT 5:16 AM
Quote of the Day
Here is a great quote from Carl Menger's outstanding treatise, Principles of Economics
, on the division of labor when men are rational.
In its most primitive form, a collecting economy is confined to gathering those goods of lowest order that happen to be offered by nature. Since economizing individuals exert no influence on the production of these goods, their origin is independent of the wishes and needs of men, and hence, so far as they are concerned, accidental. But if men abandon this most primitive form of economy, investigate the ways in which things may be combined in a causal process for the production of consumption goods, take possession of things capable of being so combined, and treat them as goods of higher order, they will obtain consumption goods that are as truly the results of natural processes as the consumption goods of a primitive collecting economy, but the available quantities of these goods will no longer be independent of the wishes and needs of men. Instead, the quantities of consumption goods will be determined by a process that is in the power of men and is regulated by human purposes within the limits set by natural laws. Consumption goods, which before were the product of an accidental concurrence of the circumstances of their origin, become products of human will, within the limits set by natural laws, as soon as men have recognized these circumstances and have achieved control of them. The quantities of consumption goods at human disposal are limited only by the extent of human knowledge of the causal connections between things, and by the extent of human control over these things. Increasing understanding of the causal connections between things and human welfare, and increasing control of the less proximate conditions responsible for human welfare, have led mankind, therefore, from a state of barbarism and the deepest misery to its present stage of civilization and well-being, and have changed vast regions inhabited by a few miserable, excessively poor, men into densely populated civilized countries. Nothing is more certain than that the degree of economic progress of mankind will still, in future epochs, be commensurate with the degree of progress of human knowledge.
POSTED BY THE GENERAL AT 12:55 AM
Carl Menger, Principles of Economics, pg. 73-74
The Purpose Driven Life
Many speculated when Brian Nichols murdered a judge, court stenographer, sheriff (all three in the span of a few minutes) and still
escaped, that he would not be taken alive. I confess to being party to such speculation. So when he emerged earlier this week alive
, in the custody of police, one of the first questions on everyone's mind was: why did he surrender? What made him give up his utter contempt for life and bloodshed?
Ashley Smith, the hostage he had taken, had an answer when she appeared before the press. She told them that, "an excerpt of the book [The Purpose Driven Life] that she read to the suspect, Brian Nichols, during the seven hours he held her hostage was a turning point in ending her captivity..." (Mention of 'Life' book in crisis drives up sales
The Purpose Driven Life, written by Rick Warren, is already a bestseller. Before having received this latest burst of publicity, the book had already sold in excess of 20 million copies since it was published in 2002. Before Mr. Nichols capture, the book was ranked 54th on Amazon.com; today, it is 2nd, beaten only by the newest book in the Harry Potter series.
The book seeks to answer a question which plagues many people today; as the subtitle of the book asks, "What on earth am I here for?" Unfortunately, the answer the book gives is pernicious, and sabotages the very people who need purpose
the most in their lives. The author, an evangelical Christian, dismisses outright the possibility of any this-worldly
purpose in man's life. For Mr. Warren, purpose can only come from God, and obeying His
purpose is one's most important duty.
Mr. Warren begins his book with a quote (with which he completely agrees) from the philosopher Bertrand Russell: "Unless you assume a God, the question of life's purpose is meaningless." Using that as his springboard, Mr. Warren wastes no time in getting to the heart
of his thesis:
It's not about you.
The purpose of your life is far greater than your own personal fulfillment, your peace of mind, or even your own happiness. It's far greater than your family, your career, or even your wildest dreams and ambitions. If you want to know why you were placed on this planet, you must begin with God. You were born by his purpose and for his purpose.
The search for the purpose of life has puzzled people for thousands of years. That's because we typically begin at the wrong starting point-ourselves. We ask self-centered questions like What do I want to be? What should I do with my life? What are my goals, my ambitions, my dreams for my future? But focusing on ourselves will never reveal our life's purpose.
This is the worst
kind of advice that someone seeking a purpose
could be given. It is not from too much focusing on the self
that people are left feeling empty, with lives that seem to have no meaning and never add up to anything. Rather, it is precisely because they never cared about their self
in the first place.
A large part of this problem stems from religion, which has worked since the beginning of time to eliminate the possibility of selfishness as a good thing. Sacrifice others to yourself, or yourself to others; be as Judas or as Jesus, for there is nothing in between. Nothing could be a better prescription for creating unhappiness and that dreary feeling of helplessness which those who lack a purpose
in their lives experience all too well.
I know, because there was a time when I had no purpose in my life. I went through my life day by day, trying to find whatever meager pleasures I could. But they never amounted to much, and only seemed to temporarily dull the constant agony I experienced, the self-doubt and at times self-loathing. But one day all that changed. And it didn't come from self-abnegation or mindless hedonism (both of which I had tried unsuccessfully). It began, when I first read these words:
In the name of the best within you, do not sacrifice this world to those who are its worst. In the name of the values that keep you alive, do not let your vision of man be distorted by the ugly, the cowardly, the mindless in those who have never achieved his title. Do not lose your knowledge that man's proper estate is an upright posture, an intransigent mind and a step that travels unlimited roads. Do not let your fire go out, spark by irreplaceable spark, in the hopeless swamps of the approximate, the not-quite, the not-yet, the not-at-all. Do not let the hero in your soul perish, in lonely frustration for the life you deserved, but have never been able to reach. Check your road and the nature of your battle. The world you desired can be won, it exists, it is real, it is possible, it's yours.
But to win it requires your total dedication and a total break with the world of your past, with the doctrine that man is a sacrificial animal who exists for the pleasure of others. Fight for the value of your person. Fight for the virtue of your pride. Fight for the essence of that which is man: for his sovereign rational mind. Fight with the radiant certainty and the absolute rectitude of knowing that yours is the Morality of Life and that yours is the battle for any achievement, any value, any grandeur, any goodness, any joy that has ever existed on this earth.
-Ayn Rand, Atlas Shrugged, pg. 1069
That was 9 years ago. Every day since then has been a continuous confirmation of the ecstasy I first experienced when I read those lines. You don't have to give your life up, you don't have to become a slave to a "higher" power than yourself. In fact, doing that won't help you, it will only sedate you further with rationalizations as to why you still aren't happy
Your purpose isn't to do what anyone else intended for you; it's to find those things which genuinely make you happy and give you fulfillment. It's to discover a life of productive effort and achievement, and the pride which you'll earn from doing so. The moral purpose of your life is to be happy, to enjoy your life. This earth is so full
of wonderful things, waiting for you
to discover them. What are you waiting for?
If you want to have meaning
in your life (or just get it back), if you want to feel that overwhelming joy which is your birthright
, you should get a copy of Atlas Shrugged
. After that, stop by the Ayn Rand Institute
, where you can continue your journey. The road to a purpose
driven life is just a mouse-click away - why don't you take it?
POSTED BY THE GENERAL AT 11:48 PM
Well, It's Official
I'm an atheist, according to this test:
| You scored as atheism. You are... an atheist, though you probably already knew this. Also, you probably have several people praying daily for your soul.|
Instead of simply being "nonreligious," atheists strongly believe in the lack of existence of a higher being, or God.
Which religion is the right one for you? (new version)
created with QuizFarm.com
Of course, I am somewhat skeptical of the test - had it really
been accurate, I would have scored 100% atheist, and everything else 0%.
POSTED BY THE GENERAL AT 2:04 PM
My Knife and Steel (or, What I Do To Pay the Bills)
In honor of Meryl Yourish's International Eat an Animal for PETA Day
, I thought I would blog about my modest contribution to the day. I probably won't be eating beef or pork on IEAPD, maybe some salmon or meatballs though. But in the real world (as opposed to the Blogosphere) I play a much more pivotal role in this wonderful "holiday".
I am one of the men who makes International Eat an Animal for PETA Day
possible. Five (sometimes six!) days a week, I strap on my scabbard with my three knives (6", 8" and 12"), my handy steel (for keeping an "edge" on the blade) and my chain-mesh glove. In the wee hours of the morning, while most of you are starting to shave, I enter a cold room, and begin to work my magic.
Cutting meat today is a very different profession from the old days. In olden times (say, 30 years ago), most stores received the whole carcass of a cow, and had to engage in the age old process of "breaking" the beef. Thankfully, this tough and strenuous job is now parceled out to various companies, and I get to deal with "block-ready" beef (or pork, or lamb); essentially, all I have to do is trim off undesirable tissue, and gracefully cut a presentable steak or roast. Much easier on the body than moving a 150-350 pound carcass.
It isn't the most glamorous line of work, but it is fun. Each piece of meat presents a unique challenge - how to process it, and end up with a beautiful package that I would proudly stamp my name upon. One of the most fulfilling things about this line of work is the pride
I take in it, and the compliments I receive from my customers. Many of them buy meat exclusively from the company I work for.
And thus I have a particularly rancorous antipathy for the animal rights crowd, and their most conspicuous member, PETA. I proudly declare my endorsement of this tasty day.
As a culinary expert and overall meat aficionado, my recommendation for the day for steak lovers is a boneless ribeye steak - my personal favorite, tender and full of flavor. For pork lovers, try a nice center cut bone-in loin chop; be sure not to cook it too long, pork can dry out quite easily! And for the truly cruel and savage (i.e., lovers of lamb), lamb chops are always nice, maybe a nice rack of lamb.
Lastly, for those of you with a slight tinge of guilty feelings, forget about it! If you don't buy the steak, someone else will. Trust me, the amount of meat I sell in one day
would boggle your mind. At best, you're a drop in the bucket. Besides, they're only animals
POSTED BY THE GENERAL AT 12:55 AM
Kelo v. New London Transcript
The official transcript
of the Kelo case is now available (hat tip: SCOTUSblog
POSTED BY THE GENERAL AT 8:14 AM
Book Review - Our Oriental Heritage
Last week I completed volume I of Will Durant's magnum opus, The Story of Civilization. Our Oriental Heritage
is really three books combined into one. The first book sets the stage, providing Durant's conception of the origin of civilization, and the characteristics which he then focuses on. Book two is really a prequel to his next work in the series, The Life of Greece
; it is a broad survey of the civilizations (from Sumeria to Persia) that preceded ancient Greece. The remaining 60% of the book focuses on India, China and Japan, from ancient times to roughly 1930. This last half of the book is primarily a cursory glance over these civilizations, as the remaining 10 volumes deal exclusively with western civilization. As an aside, it is important to note that this work is not primarily a narrative history of the chronological development of each civilization. Rather it is a thematic history, revealing the major developments and achievements in each civilization.
The primary virtue of the book is the author's ability to highlight the essentials of each civilization, without drudging through endless minutiae. Although he does occasionally slip off onto a tangential issue, he has provided the reader with an indispensable tool for discovering when this has occured. Through the use of a new paragraph formatted with a reduced font, the reader can literally see
when the content is of a more technical nature, and move ahead if he doesn't find it of interest.
On a negative note, there are errors to be found in the text, of a philosophic and economic nature. The author has a certain fondness for the regulation of society by the government. He also suffers from occasional bouts of Marxism, as best exemplified by this passage describing the effects of the industrial revolution upon Asia.
Those forces took the form of the Industrial Revolution. A Europe vitalized and rejuvenated by the discovery of mechanical power and its application to ever-multiplying machinery, found itself capable of producing goods more cheaply than any nation or continent that still relied on handicrafts; it was unable to dispose of all these machine products to its own population, because it paid its workers somewhat less than the full value of their labor; it was forced to seek foreign markets for the surplus, and was driven, by imperialist necessity, to conquer the world. Under the compulsions of invention and circumstance the nineteenth century became a world-wide drama of conflict between the old, mature and fatigued civilizations of handicraft Asia, and the young, jejune, and invigorated civilizations of industrial Europe
The interested reader can find an incomparable refutation of Marxism, imperialism and the doctrine of overproduction in George Reisman's magnum opus, Capitalism
All told this is an accessible book that introduces the intelligent reader to the highlights of the early history of the west and the east.
POSTED BY THE GENERAL AT 1:33 AM