http://www.tutor2u.net/economics/presentations/ukeconomymay2011/player.html
This presentation has 75 slides (!) but don't be scared - it really is all worth looking through.
Friday, 22 April 2011
No 197: ESSENTIAL Presentation about the UK Economy
THIS links to a tutor2u presentation about the current UK economic situation:
http://www.tutor2u.net/economics/presentations/ukeconomymay2011/player.html
This presentation has 75 slides (!) but don't be scared - it really is all worth looking through.
http://www.tutor2u.net/economics/presentations/ukeconomymay2011/player.html
This presentation has 75 slides (!) but don't be scared - it really is all worth looking through.
Tuesday, 22 March 2011
Sunday, 13 March 2011
No 194: Spot of Economics' Economics News
EXCITING news! At great expense, Spot of Economics has started a TV news station......
GoAnimate.com: Economics news 1st march by spottygao
Like it? Create your own at GoAnimate.com. It's free and fun!
Deadly Tsunami Stops Japanese Economy
http://www.guardian.co.uk/world/2011/mar/13/japan-economy-recession-earthquake-tsunami
Report Argues for Big Changes in Public Sector Pensions
http://www.telegraph.co.uk/comment/columnists/alasdair-palmer/8378195/The-pensions-gravy-train-in-the-public-sector-has-to-be-derailed.html
European Union Holds Crisis Meeting Over National Debt
http://www.bbc.co.uk/news/business-12711183
Mervyn King Makes Attack on Banks
http://www.qfinance.com/blogs/ian-fraser/2011/03/07/boe-govenor-mervyn-king-and-the-case-for-reforming-britains-banks
Chinese Inflation Increases Again
http://www.telegraph.co.uk/finance/economics/8375605/Chinas-inflation-rises-to-4.9pc-in-February.html
World Has Most Billionaires Ever, According to New Report
http://www.forbes.com/wealth/billionaires
http://blogs.forbes.com/luisakroll/2011/03/09/the-worlds-billionaires-2011-inside-the-list/
GoAnimate.com: Economics news 1st march by spottygao
Like it? Create your own at GoAnimate.com. It's free and fun!
Deadly Tsunami Stops Japanese Economy
http://www.guardian.co.uk/world/2011/mar/13/japan-economy-recession-earthquake-tsunami
Report Argues for Big Changes in Public Sector Pensions
http://www.telegraph.co.uk/comment/columnists/alasdair-palmer/8378195/The-pensions-gravy-train-in-the-public-sector-has-to-be-derailed.html
European Union Holds Crisis Meeting Over National Debt
http://www.bbc.co.uk/news/business-12711183
Mervyn King Makes Attack on Banks
http://www.qfinance.com/blogs/ian-fraser/2011/03/07/boe-govenor-mervyn-king-and-the-case-for-reforming-britains-banks
Chinese Inflation Increases Again
http://www.telegraph.co.uk/finance/economics/8375605/Chinas-inflation-rises-to-4.9pc-in-February.html
World Has Most Billionaires Ever, According to New Report
http://www.forbes.com/wealth/billionaires
http://blogs.forbes.com/luisakroll/2011/03/09/the-worlds-billionaires-2011-inside-the-list/
No 193: Internet Buttons - Improved!
SOME of you know that I have used a website called "Internet Buttons" to, well, make some internet buttons leading to websites you need to check out.
To get there, go to www.internetbuttons.org . Then log in with Username: bellerbys / Password: bellerbys
You should then see something like this:
The buttons are colour coded according to the type of site they link to.
BLUE is for Economics and Business News.
GREEN is for Economics Blogs.
YELLOW is for Comment Articles by well-known economics writers. Reading these is now essential for A2 students.
ORANGE is for sites with Economics Revision Materials.
If there is another site you use and like, you can add a button too!
To get there, go to www.internetbuttons.org . Then log in with Username: bellerbys / Password: bellerbys
You should then see something like this:
The buttons are colour coded according to the type of site they link to.
BLUE is for Economics and Business News.
GREEN is for Economics Blogs.
YELLOW is for Comment Articles by well-known economics writers. Reading these is now essential for A2 students.
ORANGE is for sites with Economics Revision Materials.
If there is another site you use and like, you can add a button too!
Friday, 11 March 2011
No 192: Some suggested reading from Other Teachers
SOME of the teachers in the Economics Department suggested to me that the following articles would be very useful for you to read.
Firstly Mr Bowen passed on this very interesting interview with Mervyn King, the Governor of the Bank of England. He gives his views on the Credit Crunch, and what he thinks about the current economic situation. He also does not seem to like the Banks much!
Notice the picture of Merv on the left - let me know if you can think of a good title for it!
http://www.telegraph.co.uk/finance/economics/8362959/Mervyn-King-interview-We-prevented-a-Great-Depression...-but-people-have-the-right-to-be-angry.html
Next, Mr Gray has suggested this article written by the Nobel Prize winning economist, Paul Krugman. In it he presents a moderate Keynesian view criticising the effect of austerity measures on economic recovery. It's very readable and very relevant!
As you can see, the person who wrote the title to this picture on the right, doesn't quite agree with Mr Krugman's views......
http://www.nytimes.com/2011/03/04/opinion/04krugman.html?_r=2
Notice the picture of Merv on the left - let me know if you can think of a good title for it!
http://www.telegraph.co.uk/finance/economics/8362959/Mervyn-King-interview-We-prevented-a-Great-Depression...-but-people-have-the-right-to-be-angry.html
Next, Mr Gray has suggested this article written by the Nobel Prize winning economist, Paul Krugman. In it he presents a moderate Keynesian view criticising the effect of austerity measures on economic recovery. It's very readable and very relevant!
http://www.nytimes.com/2011/03/04/opinion/04krugman.html?_r=2
Thursday, 10 March 2011
No 191: AS Summary for Government Spending as a Part of AD
THIS is the summary I wrote for AS students about G.
Notice that this is a good topic to bring in some information about the arguments between Keynesian and Free Market economists.
Government Spending as a Part of Aggregate Demand
We studied the component of AD that measures government demand for goods and services, known as government spending (G). This contributes somewhere between 15 and 20% to UK Aggregate Demand.
Various factors influence the amount of G in the economy. These include the demand for merit and public goods, the current stage of the economic cycle, the amount of tax revenue, and technological progress in merit and public goods.
However, another extremely important factor is the economic and political ideology of the government. Free market economists believe that government spending is wasteful, inefficient, and can endanger the economy by too much borrowing. Government interventionists believe a relatively high level of government spending is necessary to correct market failures (especially inequality) and that government spending is the only way to boost the economy in a recession.
This idea (called demand management) was first suggested by the great economist John Maynard Keynes. He said that governments should borrow and spend more in a recession to help the economy. In a boom, they should spend less and try to save money (to be used during a recession).
However, free market critics argue that it is too difficult for governments to correctly decide how much and when to increase or cut spending, and therefore demand management may in fact make the situation worse. They also argue that while many governments during the Credit Crunch spent and borrowed more, very few saved money during the good times. Hence many countries have a huge amount of government debt now, which can cause many problems.
But, for many Keynesian economists, government spending is the most important part of AD, particularly in a recession. Furthermore, the effect of government spending is increased by the multiplier effect. In other words, an increase in G will lead to larger change in the national income of the country.
However, free market economists respond to this by arguing that because government spending is so wasteful, little of it actually gets to households, meaning that the value of the multiplier is in fact quite low.
In summary, this was yet another exciting class on Mr Spottiswoode’s economic course.
Wednesday, 9 March 2011
No 190: UK Trade in Goods and Services 1955-2010
THIS graph shows the UK balances for trade in goods, services, and goods and services put together.
There should be some clear trends you can see here.....
There should be some clear trends you can see here.....
Sunday, 6 March 2011
No 189: Very expensive luxuries!!!
THE picture below shows the most expensive handbag in the world, costing £2.35 million pounds.
It is covered with 4517 diamonds. It took 10 workers four months to make.
The handbag is produced by the House of Mouawad, a jewellry company from Dubai.
One of their previous products was a bra which cost £7 milllion!
(for more about the handbag click here)
The next picture shows an I phone, which has an actual Tyrannosaurus Rex tooth inside its cover - from over 65 million years ago (would have been hard to have got good network coverage back then.....)
However, this product "only" costs $65,000.
In other words, you could buy the handbag above or, for the same money, 59 T Rex Iphones.
As long as enough dinosaur teeth were available....
(to read more about the T Rex phone click here)
The handbag is produced by the House of Mouawad, a jewellry company from Dubai.
One of their previous products was a bra which cost £7 milllion!
(for more about the handbag click here)
The next picture shows an I phone, which has an actual Tyrannosaurus Rex tooth inside its cover - from over 65 million years ago (would have been hard to have got good network coverage back then.....)
In other words, you could buy the handbag above or, for the same money, 59 T Rex Iphones.
As long as enough dinosaur teeth were available....
(to read more about the T Rex phone click here)
No 188: Pound Dollar Exchange Rate 1976-2010
FROM timetric via tutor2u, comes the first of a series of useful interactive graphs I will be posting in the next few weeks.
In recent homework, the answers to the graph question from Data Response have, to be honest, not been very good, so one way to use this graph is to practice for the exam by picking out key features.
Another use is to use your knowledge of UK economic history and to see what was happening to the £ / $ exchange rate during those periods.
In recent homework, the answers to the graph question from Data Response have, to be honest, not been very good, so one way to use this graph is to practice for the exam by picking out key features.
Another use is to use your knowledge of UK economic history and to see what was happening to the £ / $ exchange rate during those periods.
Friday, 4 March 2011
No 187: AS Summary of Investment
DOES exactly what it says on the tin!
Investment as a Part of AD
We studied the component of AD that measures firms’ demand for capital goods, called investment. It forms about 15% of UK AD.
There are a number of factors that influence it, including interest rates, business confidence, depreciation of capital goods, future sales and demand, the expected rate of return, changes in costs, indirect taxes and subsidies, and technological changes in capital goods.
It could be argued that investment is the most important part of AD, since as well as leading to actual economic growth, it can also increase potential economic growth. We can show the former by a shift in the AD curve increasing Real GDP from Y1 to Y2, and the latter by a shift out in the PPF curve.
However, investment is also the most volatile part of AD. This is because businesses quickly cut investment in a downturn, both due to falling profits (reducing money available for investment) and less need to increase productive capacity. On the other hand, in a recovery it increases quickly, due to rising profit and more need to expand production to meet increasing consumer demand.
In summary, this was yet another exciting class on Mr Spottiswoode’s economic course.
Investment as a Part of AD
We studied the component of AD that measures firms’ demand for capital goods, called investment. It forms about 15% of UK AD.
There are a number of factors that influence it, including interest rates, business confidence, depreciation of capital goods, future sales and demand, the expected rate of return, changes in costs, indirect taxes and subsidies, and technological changes in capital goods.
It could be argued that investment is the most important part of AD, since as well as leading to actual economic growth, it can also increase potential economic growth. We can show the former by a shift in the AD curve increasing Real GDP from Y1 to Y2, and the latter by a shift out in the PPF curve. However, investment is also the most volatile part of AD. This is because businesses quickly cut investment in a downturn, both due to falling profits (reducing money available for investment) and less need to increase productive capacity. On the other hand, in a recovery it increases quickly, due to rising profit and more need to expand production to meet increasing consumer demand.
In summary, this was yet another exciting class on Mr Spottiswoode’s economic course.
No 186: Mr Bowen's Weekly Questions (2)
HERE they are, especially useful for micro topics this week.(Not sure who Green Lung Free Rider is...)
All information is taken from The Daily Telegraph.
I've kept Mr Bowen's original typing style!
1.WHAT IS IPR?
2. HOW IMPORTANT ARE THE CREATIVE INDUSTRIES IN THE UK AS A PROPRTION OF GDP?
3.WHY DOES JEREMY WARNER THINK THE GOVERNMENT HAS GOT THIS IPR REFORM OF COPYRIGHT LAW COMPLETELY WRONG?
4.WHY DOES THE LEADER ARTICLE THINK THAT THE UK GOVERNMENT HAS BEEN TOO OBLIGING TO NEWS INTERNATIONAL?
5. WHY WAS THE INDUSTRY SECRETARY[THE USUAL MINISTER FOR MERGER REFERRALS] NOT INVOLVED? DOES THIS MATTER?
6.IN WHAT WAYS WERE THE USUAL PROCEDURES FOR EVALUATING MERGERS COMPLETELY IGNORED.?
7.WHY DOES THE PROSOED MERGER CAUSE WORRIES FOR OTHER MEDIA GROUPS?
8.WHAT IS PREDATORY PRICING?
9. WHAT IS A PRICE WAR?
10. HOW COULD MURDOCH USE THESE CONCEPTS TO ELIMINATE THE COMPETITION?
11. WHAT IS PRICE FIXING? HOW DOES IT OPERATE FOR E BOOKS? IS THIS A PROBLEM?
Wednesday, 2 March 2011
No 185: Summary of PED
FOR AS classes, I have been giving them short summaries as we finish each important topic.
Here is the summary about Price Elasticity of Demand.
Price Elasticity of Demand
We studied the measurement of how much a change in price will then lead to a change in the quantity demanded, called price elasticity of demand.
We calculate the percentage changes in Qd and in P, and then use them in a formula to calculate a PED value. All PED values are negative, due to the negative (or inverse) relationship between price and demand, called the law of demand.
If a change in price leads to no change in demand, the PED value is 0, and this is called perfectly inelastic demand. If a change in price leads to a lesser change in demand, the PED value is between 0 and -1, and this is called inelastic demand. If a change in price leads to the same amount of change in demand, the PED value is 1, and this is called unit elastic demand. If a change in price leads to a larger change in demand, the PED value is more than -1, and this is called elastic demand. Differently sloped demand curves can also be drawn to show different PED values.
The PED of a particular product is affected by a number of factors. Firstly, the width of definition of the product needs to be decided (for example, are we discussing milk sold at Bellerbys Brighton, milk sold in the UK, all of the milk sold in the world….?). This is important to decide because it also helps us to decide the number of substitutes for the product. Next, we decide if the product is a necessity or a luxury, how addictive it is, and what percentage of income it takes to buy it. Putting all that information together, we can then say if we think the product will have elastic or inelastic demand, and predict a possible PED value for it.
Knowing the PED value of a product is especially important for firms, who can know whether it is better for them to have a higher or lower price. Firms with inelastic demand will gain more revenue from a higher price, while those with elastic demand get more revenue from a lower price.
In summary, this was yet another exciting class on Mr Spottiswoode’s economic course.
Price Elasticity of Demand
We studied the measurement of how much a change in price will then lead to a change in the quantity demanded, called price elasticity of demand.
We calculate the percentage changes in Qd and in P, and then use them in a formula to calculate a PED value. All PED values are negative, due to the negative (or inverse) relationship between price and demand, called the law of demand.
If a change in price leads to no change in demand, the PED value is 0, and this is called perfectly inelastic demand. If a change in price leads to a lesser change in demand, the PED value is between 0 and -1, and this is called inelastic demand. If a change in price leads to the same amount of change in demand, the PED value is 1, and this is called unit elastic demand. If a change in price leads to a larger change in demand, the PED value is more than -1, and this is called elastic demand. Differently sloped demand curves can also be drawn to show different PED values.
The PED of a particular product is affected by a number of factors. Firstly, the width of definition of the product needs to be decided (for example, are we discussing milk sold at Bellerbys Brighton, milk sold in the UK, all of the milk sold in the world….?). This is important to decide because it also helps us to decide the number of substitutes for the product. Next, we decide if the product is a necessity or a luxury, how addictive it is, and what percentage of income it takes to buy it. Putting all that information together, we can then say if we think the product will have elastic or inelastic demand, and predict a possible PED value for it.
Knowing the PED value of a product is especially important for firms, who can know whether it is better for them to have a higher or lower price. Firms with inelastic demand will gain more revenue from a higher price, while those with elastic demand get more revenue from a lower price.
In summary, this was yet another exciting class on Mr Spottiswoode’s economic course.
Sunday, 27 February 2011
No 184: Mr Bowen's Weekly Questions (1)
AS you will know if you are in Mr (or Captain?) Bowen's class, he produces a very helpful list of weekly questions relating to those issues you should really be reading and thinking about.Here is the list for last week. It would be an excellent idea to spend some time testing what you already know, and filling in the gaps in your knowledge if necessary.
- Why does inflation pose a great threat to global growth?
- Is there anything governments could or should about this threat?
- Why does the world economy need "rebalancing"?
- What is the PFI? Evaluate its recent performance.
- Why has the IMF lowered its growth forecast for the global economy?
- Why is the MPC split over the future of UK interest rates?
- Argue as a dove then argue as a hawk. Present both arguments and try to resolve them.
- "The history of the UK economy since the war seems to indicate that devaluation and inflation have been the policy options that have been mostly unsuccessful. Yet we seem to be doing the same." Comment on this view.
- What is causing the current high level of inflation?
10. What is happening with Barclays Bank's profits and UK tax payments?
No 183: The Provinces of China Compared to Countries
THIS infographic from "The Economist" compares Chinese provinces with similar countries, in terms of GDP, GDP per capita, population and trade.
(To see a similar map about the USA see Post 37).
(To see a similar map about the USA see Post 37).
Thursday, 24 February 2011
No 182: World Economic News
HERE ARE the latest economic news stories from some of your countries.
Please email me or add a comment if your country is not included here and you find a story of interest to us.
You can also try to answer some of the questions at the end of this post, if you like!
Russian Inflation Problems
Import tariffs on food have been removed, and there is a good chance that the central bank interest rate will be increased, in order to fight inflation. Government spending will also be tightly controlled this year.
The rate of inflation was 8.4% in 2010, but 2.4% just in January alone (which would work out as an annualised rate of more than 25% if repeated throughout 2011). The government inflation target is 7%.
http://www.bbc.co.uk/news/business-12560719
Strong Growth in Hong Kong in 2010
The Hong Kong economy grew by 6.8% in 2010. Much of this was due to the expanding property market, and particularly from people from other areas of China investing their money into Hong Kong.
However, this has raised fears that there is a speculative bubble that might burst with disastrous results not just for Hong Kong but also the rest of China. Increased property prices are also affecting the general price level, leading to fears about rising inflation.
The Hong Kong government is trying to cool down the property market by making sure there is a supply of new land and new houses for sale - difficult in such an crowded place! Other measures include a 20% tax if owners sell a property within 2 years of buying it, and restrictions that stop buyers of luxury properties borrowing more than 50% of the sale price.
http://www.bbc.co.uk/news/business-12548766
Vietnam Government Raises Interest Rates
The Vietnamese government is taking measures to fight inflation, which is currently 12%. The base rate of interest has gone up from 11% to 12%.
There are further fears of increased inflation since electricity prices are due to rise 15% on March 1. There are also criticisms that government itself has contributed to inflation through its devaluation of the currency of 8.5% earlier this month. This was done because of Vietnam's 2010 trade deficit of over $12 billion.
http://www.bloomberg.com/news/2011-02-22/vietnam-premier-to-push-central-bank-to-fight-inflation.html
Bad News and Bad News in Japan
In a surprising development, Japan has posted its first trade deficit in 2 years.
http://www.bbc.co.uk/news/business-12548277
Also this week, Moodys - an agency which rates how safe it thinks different countries' government bonds are - downgraded Japanese government bonds from AA to AA-. This is due to worries about government borrowing and spending. Japan has the world's 2nd highest government debt to GDP ratio, with 196%.
http://www.bbc.co.uk/news/business-12533405
QUESTIONS FOR EXTRA ANALYSIS
1. Why is the Russian government especially worried about the food supply at the moment?
2. Find out more about the Russian government's inflation target: how long has it been 7%? Is there any room for error? What happens if the central bank fail to achieve the target?
3. Find evidence to support the view that the Hong Kong property market is a bubble dangerously close to bursting. Find evidence against this view.
4. Do you think the Hong Kong government's measure will work?
5. Who decides prices of utilities such as electricity in Vietnam?
6. What are the possible positive effects for Vietnam of its currency devaluation?
7. What contributed to Japan's recent trade deficit? Why was it a surprise?
8. Why has government spending and borrowing recently increased again in Japan?
9. From the stories above, what seem to be the common economic problems affecting different countries at the moment?
Please email me or add a comment if your country is not included here and you find a story of interest to us.
You can also try to answer some of the questions at the end of this post, if you like!
Import tariffs on food have been removed, and there is a good chance that the central bank interest rate will be increased, in order to fight inflation. Government spending will also be tightly controlled this year.
The rate of inflation was 8.4% in 2010, but 2.4% just in January alone (which would work out as an annualised rate of more than 25% if repeated throughout 2011). The government inflation target is 7%.
http://www.bbc.co.uk/news/business-12560719
The Hong Kong economy grew by 6.8% in 2010. Much of this was due to the expanding property market, and particularly from people from other areas of China investing their money into Hong Kong.
However, this has raised fears that there is a speculative bubble that might burst with disastrous results not just for Hong Kong but also the rest of China. Increased property prices are also affecting the general price level, leading to fears about rising inflation.
The Hong Kong government is trying to cool down the property market by making sure there is a supply of new land and new houses for sale - difficult in such an crowded place! Other measures include a 20% tax if owners sell a property within 2 years of buying it, and restrictions that stop buyers of luxury properties borrowing more than 50% of the sale price.
http://www.bbc.co.uk/news/business-12548766
The Vietnamese government is taking measures to fight inflation, which is currently 12%. The base rate of interest has gone up from 11% to 12%.
There are further fears of increased inflation since electricity prices are due to rise 15% on March 1. There are also criticisms that government itself has contributed to inflation through its devaluation of the currency of 8.5% earlier this month. This was done because of Vietnam's 2010 trade deficit of over $12 billion.
http://www.bloomberg.com/news/2011-02-22/vietnam-premier-to-push-central-bank-to-fight-inflation.html
In a surprising development, Japan has posted its first trade deficit in 2 years.
http://www.bbc.co.uk/news/business-12548277
Also this week, Moodys - an agency which rates how safe it thinks different countries' government bonds are - downgraded Japanese government bonds from AA to AA-. This is due to worries about government borrowing and spending. Japan has the world's 2nd highest government debt to GDP ratio, with 196%.
http://www.bbc.co.uk/news/business-12533405
QUESTIONS FOR EXTRA ANALYSIS
1. Why is the Russian government especially worried about the food supply at the moment?
2. Find out more about the Russian government's inflation target: how long has it been 7%? Is there any room for error? What happens if the central bank fail to achieve the target?
3. Find evidence to support the view that the Hong Kong property market is a bubble dangerously close to bursting. Find evidence against this view.
4. Do you think the Hong Kong government's measure will work?
5. Who decides prices of utilities such as electricity in Vietnam?
6. What are the possible positive effects for Vietnam of its currency devaluation?
7. What contributed to Japan's recent trade deficit? Why was it a surprise?
8. Why has government spending and borrowing recently increased again in Japan?
9. From the stories above, what seem to be the common economic problems affecting different countries at the moment?
Wednesday, 23 February 2011
No 181: What does this picture tell you about current UK unemployment?
I SAW this on Saturday, as I was walking to East Croydon college to attend a Maths class:
Tuesday, 22 February 2011
No 180: BBC TV Show About Ireland
LAST NIGHT'S BBC Panaroma show was about the crash of the Irish economy.
The 30 minute show is really worth watching if you have the time. It details how the bubble in the property market burst leading to economic disaster.
Especially interesting is the interview with an Irish property speculator who refuses to apologise for his behaviour (like most Irish politicians). Mind you, he does personally owe 154 million euros due to the property market crash....
Here is the link to the programme on the BBC I Player:
http://www.bbc.co.uk/iplayer/episode/b00z0fyd/Panorama_How_to_Blow_a_Fortune/
Be quick though, it's only available to watch for 12 months!!!
Especially interesting is the interview with an Irish property speculator who refuses to apologise for his behaviour (like most Irish politicians). Mind you, he does personally owe 154 million euros due to the property market crash....
Here is the link to the programme on the BBC I Player:
http://www.bbc.co.uk/iplayer/episode/b00z0fyd/Panorama_How_to_Blow_a_Fortune/
Be quick though, it's only available to watch for 12 months!!!
Monday, 7 February 2011
No 179: Name the famous economists
BELOW is a screenshot from a quiz about famous economists that can be found here.
Notice the 3 minute time limit.
That means that even Googlers will have to be quick in order to answer in time!
Let us know how long you take to complete it......
Notice the 3 minute time limit.
That means that even Googlers will have to be quick in order to answer in time!
Let us know how long you take to complete it......
Thursday, 3 February 2011
No 177: The first economist and the first economic question
ACCORDING to a book I am currently reading - Dr. Strangelove's Game: A Brief History of Economic Genius - the first person who can be clearly recognised as an economic thinker was Sir William Petty (1623-1687). (This links to a Wikipedia article about him.)
Not the best looking man who ever lived, he was called a "bumptious and somewhat unpleasant man."
One reason why he was so important is that he seems to be the first person to have tred to put a monetary value on everything, with what he called "political arithmatiek". This included human life.
In measuring the value of the labour working on his vast lands in Ireland, he valued the worth of each working man at twenty times his annual income.
Doing this was an important development in the history of human thought. Firstly, it made it "possible to calculate the loss to a nation by deaths, especially in times of war and plague" (Dr Strangelove's Game p.21). In addition, a money value for everything "gave a common denominator against which everything could be measured" (p.22).
The true monetary value of a human life is a question economists are trying to answer even now, centuries later.
Some people are very uncomfortable with the idea of trying to do this.
However, if we believe that governments should take all costs and benefits into account before deciding whether or not to spend money on a project, the possible loss of human life must be included. For example, when deciding to build a road, the possible costs of traffic accidents need to be calculated.
This links to a very simplistic yet fun way of calculating your own worth. As you can see, I have tried it:
(If you try it, you need to make sure you click "scan" at the end to see the results.)
The maximum value of $10 would be achieved, according to the site, if you were a male, 33 years old, from Luxembourg, with a perfect body.
When I tried this again, with all the information the same except being a Mrs. Spottiswoode, instead of Mr, my value had fallen to $4.43. So it seems that a British woman is worth about a third less than a British man.........
Of course, this is fairly primative stuff. It's really just to stimulate discussion I think, so please don't take it too seriously!
However, there are of course serious issues here.
For instance, this article talks about how the Environmental Protection Agency (EPA) of the USA, in 2008 reduced its calculation of the value of an American human life from $7.8 million down to $6.9 million.
Critics of this decision speculated that the agency made the change so the Bush government could avoid tougher regulations on air pollution, water pollution, greenhouse gas emissions, and other environmental problems.
This article talks about valuing a year of human life. Doing this is important in assessing whether medical insurance companies should offer to pay for the cost of a new medical treatment or piece of equipment. Previously, insurance companies calculated that to make a treatment worth its cost, it must guarantee one year of "quality life" for $50,000 or less. However, economists from Stanford University have written a report arguing it should go up to $129,000.
It seems then that the issue of the value of human life is as controversial now as it was in Sir William Petty's time.
It also seems that we still very far away from agreeing what that value should be.
One reason why he was so important is that he seems to be the first person to have tred to put a monetary value on everything, with what he called "political arithmatiek". This included human life.
In measuring the value of the labour working on his vast lands in Ireland, he valued the worth of each working man at twenty times his annual income.
Doing this was an important development in the history of human thought. Firstly, it made it "possible to calculate the loss to a nation by deaths, especially in times of war and plague" (Dr Strangelove's Game p.21). In addition, a money value for everything "gave a common denominator against which everything could be measured" (p.22).
The true monetary value of a human life is a question economists are trying to answer even now, centuries later.
Some people are very uncomfortable with the idea of trying to do this.
However, if we believe that governments should take all costs and benefits into account before deciding whether or not to spend money on a project, the possible loss of human life must be included. For example, when deciding to build a road, the possible costs of traffic accidents need to be calculated.
This links to a very simplistic yet fun way of calculating your own worth. As you can see, I have tried it:
(If you try it, you need to make sure you click "scan" at the end to see the results.)
The maximum value of $10 would be achieved, according to the site, if you were a male, 33 years old, from Luxembourg, with a perfect body.
When I tried this again, with all the information the same except being a Mrs. Spottiswoode, instead of Mr, my value had fallen to $4.43. So it seems that a British woman is worth about a third less than a British man.........
Of course, this is fairly primative stuff. It's really just to stimulate discussion I think, so please don't take it too seriously!
However, there are of course serious issues here.
For instance, this article talks about how the Environmental Protection Agency (EPA) of the USA, in 2008 reduced its calculation of the value of an American human life from $7.8 million down to $6.9 million.
Critics of this decision speculated that the agency made the change so the Bush government could avoid tougher regulations on air pollution, water pollution, greenhouse gas emissions, and other environmental problems.
It seems then that the issue of the value of human life is as controversial now as it was in Sir William Petty's time.
It also seems that we still very far away from agreeing what that value should be.
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