Knowledge is [personal] power

The education I got was in economics, that's not to say that I learned nothing else, but what I pulled away from school with was a profound grasp of economics. I feel like I understand economics at a level more than the average college graduate, mainly because I took more classes and was highly interested in it. Now that I am no longer taking classes in it I find my myself talking about it with people alot. I think this is for two reasons. #1 is to continue learning about economics. #2 is because the things are learned are not set in stone. They are written on paper (or in Word these days), and yes this is purely metaphorical. Everything I learned about economics (and what everyone has learned about just about everything) is up for debate. The more i talk with people the more I see that interpretation in what defines what we know. After reading a couple of The Economist articles on wikipedia I learned two things that still shock me. If Americans alone didn't watch TV and instead contributed what they know to wikipedia we would have a data source 20,000x larger than the wikipedia we have right now. Also the creator of wikipedia views the world through an objectivist lens, a la Ayn Rand. Which is humorous for the simple fact that Ayn Rand believed that reality exists through an individuals perception, and wikipedia is just a collection of peoples perceptions and therefore a collection of other people truths, and no real truth. I've heard that wikipedia is democratic knowledge, I think wikipedia is meant to be democratic reality. Finally coming around to my point, there are many sources of information (college, wikipedia, the fellow bar hoppers, personal experience, etc) and you can collect all of the information in the world and still not have any truth. Your best bet is to go out there and collect knowledge any way possible, take it all with a grain of salt, find something (anything) you believe and keep striving for more information. If someone doesn't agree with you, that doesn't mean that they are wrong, or that you are wrong. Don't be afraid to be challenged to challenge others, and please for the love of all things [holy?] don't force your views on anyone, they already have their own which is correct for them.

The State of my Economics Education

As my second to last semester in my undergraduate studies comes to an end I am compelled to check on the status of my education. What have I discovered? I LOVE industrial organizations. Hopefully I can do some sort of graduate school for this. I think I enjoy it so much because it feels applicable and relevant. Also the subject matter is more fun than basically any other class I have taken. I don't know of another class where you get to play games (albeit game theory), or discover why monopolists act the way they do. The only other classes I like are my labor economics class and economic development class. I am endlessly excited to do econometrics next semester. I get to pick one other economics class to take before they cut me off from econ classes, I registered for topics in microeconomics since I am partial to micro. I have debated taking money and banking systems but I think topic in micro will help me put perspective on what I have learned. On a note different from economics, I'm taking a class called the social construction of sexuality which I have heard numerous good things about. Also my brother and I may take an elective together, it should be fun.

At this point the debate of whether to go to grad school or not is still undecided.

Are we rational or irrational?

It seems as though there is a conflict in world of economics. As an economist in the making I have been taught that for economic models to be effective we must first make assumptions about what we are attempting to model. Constantly I have been reading or watching or listening about information on economics and most of the time they start with talking about the assumption of rationality (or irrationality). It seems entirely unclear as to whether the economic community believes that humans are rational thinkers and actors or if they are irrational. I think it changes from time to time, and from subject to subject. It seems the more I research the more I find that the 20th century was full of assumptions of irrationality, but that is the only time when such assumptions were widespread. Even now, not even a decade later than that time period it seems that we have moved back into the realm of assuming people act rationally. What is to the cause of such changes? I certainly have no definitive answer, I'm not that well versed in economics... yet. If I had to give it a guess I would say it has to do with the political climate and the perceived ability of humans to do the right thing. It could also be linked with whether people are acting selfishly (a sign of rationality) or as a whole the society in question is acting selflessly (a sign of irrationality). This bring into question how do we measure the true selfishness/selflessness of a persons actions. Tangent aside, I suppose the whole rationality debate is based on opinion and the only way to find the solution is to make models (possibly with both assumed) and see if they hold up.

To fund pro-positive or anti-negative externalities and more

The other day in my political economy of the middle east class we were talking about externalities. The professor asked us whether it was smarter to subsidize negative or positive externalities. I answer with negative and at the same time another students says positive. The conventional answer is that governments should subsidize positive externalities so that there is incentive for people to do good things. I then took the opportunity to rationalize my thought. Here is my argument: positive externalities have a built in or intrinsic value to the "offender" while negative externalities are usually driven by selfishness and a lack of care of anything other than the immediate interest of the "offender." In this sense it would make sense to subsidize or more accurately give an incentive for people perpetuating negative externalities to no longer partake whatever it is they are doing. Positive externalities will continue to be acted out based on the benefit that the "offender" and all of society gains. Obviously my point relies on the assumptions that people have feelings of benevolence and that the "offender" is aware of the externalities which they are putting forth. Although in a more strict sense of the term selfishness it would seem as though most negative externalities are perpetrated out of laziness or thoughtlessness than that of pure selfishness.

On a related note to this argument which I coincidently didn't even end up knowing about until I randomly stumbled across it on the internet last night, There is a BBC documentary by Adam Curtis called The Trap: What Happened To Our Dream Of Freedom. I have only watched the first episode but it is an interesting look at game theory applied to the real world. It is related in the sense of the politicians basis of action: selfishness. Ok, so it isn't exactly related by there is a psuedo-similar general topic there. And the video has a very interesting concept even if it is difficult to believe.

What is this?

Blogging is the new trendy thing to do. So I figured I would jump on the ship before it sails and something newer and more trendy comes into port. This is economSTAR. It is named as such because in some search engines typing econom* will bring up results of econom with different suffixes, allowing the search for basically all things economics related. I found this an apt title since I want this to be things that I see, read, hear, or come up with relating to economics in every sense. Be warned I will talk about things from my classes, I read economics blogs everyday and may borrow some of their stories, and I do come up with some strange stuff, if you don't know something and are curious ask, or just wikipedia it. This is my first attempt at blogging so we will see how it all pans out.

PS - I am far more interested in microeconomics than I am macroeconomics but the two are interrelated so I hope to be able to blog about both.