Vilfredo Pareto

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The Haves and the Have-Nots by Branko Milanovic

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Berlin Wall, Branko Milanovic, colonial rule, crony capitalism, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, endogenous growth, Fall of the Berlin Wall, financial deregulation, full employment, Gini coefficient, high net worth, illegal immigration, income inequality, income per capita, Joseph Schumpeter, means of production, open borders, Pareto efficiency, Plutocrats, plutocrats, purchasing power parity, Simon Kuznets, very high income, Vilfredo Pareto, Washington Consensus, zero-sum game

For Pareto, born at 10 rue Guy-de-la Brosse, in the Fifth Arrondissement, see Pier Carlo Ferrera, “Appunti e precisazioni su alcuni aspetti della biografia di Vilfredo Pareto,” Paretiana, no. 160. For Marx, living from June 3 to August 24, 1849, at 45 rue de Lille, in the Seventh Arrondissement, see Saul K. Padover, Karl Marx: An Intimate Biography (New York: Meridian, 1980), 359-360. For Tocqueville, see his Souvenirs (Paris: Gallimard, 1999), 239. I am grateful to Andrea Brandolini for the information on Pareto. 5 Raymond Aron, Main Currents in Sociological Thought (New York: Pelican, 1967), 2:176. 6 Vilfredo Pareto, Manual of Political Economy, translated by Ann S. Schwirr (New York: Augustus M.

Vignette 1.5 - Was Socialism Egalitarian? Vignette 1.6 - In What Parisian Arrondissement Should You Live in the ... Vignette 1.7 - Who Gains from Fiscal Redistribution? Vignette 1.8 - Can Several Countries Exist in One? Vignette 1.9 - Will China Survive in 2048? Vignette 1.10 - Two Students of Inequality: Vilfredo Pareto and Simon Kuznets CHAPTER 2 Vignette 2.1 - Why Was Marx Led Astray? Vignette 2.2 - How Unequal Is Today’s World? Vignette 2.3 - How Much of Your Income Is Determined at Birth? Vignette 2.4 - Should the Whole World Be Composed of Gated Communities? Vignette 2.5 - Who Are the Harraga?

This way of looking at income distribution through the prism of social classes did not change much with the key turning point in the history of economics, the replacement of classical “political economy” by the “marginalist revolution” that started around 1870 and focused on individual optimization rather than on broad economic evolution of social classes, nor did it change later with the synthesis of the two strands (classical and marginalist) under the title of “neoclassical Marshallian economics” (from the Cambridge economist Alfred Marshall) and its establishment in the mainstream position. It was only in the early 1900s that the distribution of income among individuals (not among classes) attracted the attention of Vilfredo Pareto, a Franco-Italian economist who taught at the University of Lausanne in Switzerland. (His contribution is highlighted in Vignette 1.10.) It was around the same time that the data on personal income distribution became available for the first time. This went hand in hand with economic development (countries becoming richer) and a broader fiscal role of the state.


pages: 364 words: 101,286

The Misbehavior of Markets by Benoit Mandelbrot

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Albert Einstein, asset allocation, Augustin-Louis Cauchy, Benoit Mandelbrot, Big bang: deregulation of the City of London, Black-Scholes formula, British Empire, Brownian motion, buy low sell high, capital asset pricing model, carbon-based life, discounted cash flows, diversification, double helix, Edward Lorenz: Chaos theory, Elliott wave, equity premium, Eugene Fama: efficient market hypothesis, Fellow of the Royal Society, full employment, Georg Cantor, Henri Poincaré, implied volatility, index fund, informal economy, invisible hand, John Meriwether, John von Neumann, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, market bubble, market microstructure, Myron Scholes, new economy, paper trading, passive investing, Paul Lévy, Paul Samuelson, Plutocrats, plutocrats, price mechanism, quantitative trading / quantitative finance, Ralph Nelson Elliott, RAND corporation, random walk, risk tolerance, Robert Shiller, Robert Shiller, short selling, statistical arbitrage, statistical model, Steve Ballmer, stochastic volatility, transfer pricing, value at risk, Vilfredo Pareto, volatility smile

International Economic Review 1: 79-106. • Reprint: Mandelbrot 1997a.• Reprint: Vilfredo Pareto: Critical Assessments. Edited by John C. Wood and Michael McLure. London: Routledge, 1999, IV, 155-182. • Reprint: Income Distribution, Edited by Michael Sattinger. The International Library of Critical Writings in Economics. Series Editor: Mark Blaug. Edward Elgar, Cheltenham, UK 2000. Mandelbrot, Benoit B. 1961. Stable Paretian random functions and the multiplicative variation of income. Econometrica 29: 517-543. • Reprint: Chapter E11 of Mandelbrot 1997a. • Reprint: Vilfredo Pareto: Critical Assessments. Edited by John C. Wood and Michael McLure.

Journal of the American Statistical Association 67: 807-812. Pandey, G., S. Lovejoy, and D. Schertzer. 1998. Multifractal analysis of daily river flows including extremes for basins of five to two million square kilometers, one day to 75 years. Journal of Hydrology 208: 62-81. Pareto, Vilfredo. 1896. Cours d’économie politique. Reprinted in Oeuvres Complètes, 1966, Vol.I. Geneva: Librairie Droz. Pareto, Vilfredo. 1909. Manuel d’économie politique. Traduction française sur l’édition italienne par Alfred Bonnet (revue par l’auteur). Paris : Marcel Giard & Brière. Reprinted in Oeuvres Complètes, 1966, Vol VII. Geneva: Librairie Droz. Patel, Navroz. 2001.

If the side doubles, the area quadruples; if the side triples, the area rises nine-fold. Another example: Gravity weakens by the inverse power of two with distance. If a spaceship doubles its distance from Earth, the gravitational pull on it falls to a fourth its original value. In economics, one classic power law was discovered by Italian economist Vilfredo Pareto a century ago. It describes the distribution of income in the upper reaches of society. That power law concentrates much more of a society’s wealth among the very few; a bell curve would be more equitable, scattering incomes more evenly around an average. Now we reach one of my main findings.


pages: 296 words: 78,227

The 80/20 Principle: The Secret to Achieving More With Less by Richard Koch

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Albert Einstein, always be closing, barriers to entry, business process, delayed gratification, fear of failure, income inequality, inventory management, Johann Wolfgang von Goethe, knowledge worker, profit maximization, rolodex, Ronald Reagan, Vilfredo Pareto, wage slave

Cotter’s The 20% Solution (Chichester: John Wiley, 1995) provides in its introduction the right answer: “Figure out the 20% of what you do that will contribute the most to your success in the future, then concentrate your time and energy on that 20%” (p. xix). Cotter refers in passing to Pareto (p. xxi), but neither Pareto nor the 80/20 Principle (under any name) is mentioned outside the introduction, and Pareto does not even appear in the index. Like many writers, Cotter is anachronistic in attributing the 80/20 formulation itself to Pareto: “Vilfredo Pareto was a French-born economist who observed 100 years ago that 20% of the factors in most situations account for 80% of what happens (that is, 20% of a company’s customers generate 80% of its profits). He called it Pareto’s Law” (p. xxi). In fact, Pareto never used the expression “80/20” or anything like it.

The British publisher who had commissioned the work, a man well known for looking on the gloomy side, faxed me (remember faxes?) to say that despite the PR fiasco, the book was “selling very well.” In fact, the book has sold more than 700,000 copies worldwide and been translated into twenty-four languages. More than a century since Vilfredo Pareto noted the consistently lopsided relationship between inputs and outputs, and a decade since this book reinterpreted Pareto’s principle, I think we can now say that the principle has stood the test of time. There has been massive feedback, mainly positive, from readers and reviewers. Throughout the world, a large number of individuals, perhaps hundreds of thousands, have found the principle useful, at work and in their careers, and increasingly in the whole of their lives.

Eighty percent of the energy is wasted in combustion and only 20 percent gets to the wheels; this 20 percent of the input generates 100 percent of the output!3 Pareto’s discovery: systematic and predictable lack of balance The pattern underlying the 80/20 Principle was discovered in 1897, about 100 years ago, by Italian economist Vilfredo Pareto (1848–1923). His discovery has since been called many names, including the Pareto Principle, the Pareto Law, the 80/20 Rule, the Principle of Least Effort, and the Principle of Imbalance; throughout this book we will call it the 80/20 Principle. By a subterranean process of influence on many important achievers, especially business people, computer enthusiasts and quality engineers, the 80/20 Principle has helped to shape the modern world.


pages: 261 words: 103,244

Economists and the Powerful by Norbert Haring, Norbert H. Ring, Niall Douglas

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accounting loophole / creative accounting, Affordable Care Act / Obamacare, Albert Einstein, asset allocation, bank run, barriers to entry, Basel III, Bernie Madoff, British Empire, central bank independence, collective bargaining, commodity trading advisor, corporate governance, creative destruction, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, diversified portfolio, financial deregulation, George Akerlof, illegal immigration, income inequality, inflation targeting, information asymmetry, Jean Tirole, job satisfaction, Joseph Schumpeter, Kenneth Arrow, knowledge worker, labour market flexibility, law of one price, light touch regulation, Long Term Capital Management, low skilled workers, mandatory minimum, market bubble, market clearing, market fundamentalism, means of production, minimum wage unemployment, moral hazard, new economy, obamacare, old-boy network, open economy, Pareto efficiency, Paul Samuelson, pension reform, Ponzi scheme, price stability, principal–agent problem, profit maximization, purchasing power parity, Renaissance Technologies, rolodex, Sergey Aleynikov, shareholder value, short selling, Steve Jobs, The Chicago School, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, ultimatum game, union organizing, Vilfredo Pareto, working-age population, World Values Survey

It is worth explaining exactly how these came about, for they introduced the depersonalization of economics such that we no longer consider the rich and the poor as the British economists of the nineteenth century did: now we aim to maximize output, measured in a rather particular but seemingly objective way, above all else. Power and accolades flow to those who can think of any way of increasing output still further – whether or not it is feasible, or for that matter wise. The story begins with the Italian economist Vilfredo Pareto who, after an exhaustive empirical study of individual rich and poor families, attacked the notion that one could compare and sum up individual utilities to arrive at a judgment about societal welfare. He argued that rich people and poor people might have such fundamentally different tastes that it would be impossible to compare their utilities.

These workers will want to buy more goods, which in turn means higher prices for goods and a higher value of using additional labor. Thus using more labor might raise instead of lower the value of the marginal product of labor, in which case the determinacy of the theory breaks down (Keen 2001/2008). One of the pioneers of neoclassical economics, Vilfredo Pareto, already pointed out that the mainstay of the neoclassical theory of income distribution among labor and capital was rather fragile. He noted that it would break down if competition was less than perfect and if the amount of labor to be employed with each unit of capital could not be varied freely (e.g. as in the case of the bus and bus drivers where you cannot use a bus efficiently at any given time without a driver, or with more than one driver) (Fonseca 2009).

New York: Macmillan. . 1936. 100% Money. New York: Adelphi. . 1936/2009. 100 Money and the Public Debt. Thai Sunset Publications. FitzRoy, Felix and Kornelius Kraft. 2005. “Co-determination, Efficiency and Productivity.” British Journal of Industrial Relations 43: 233–47. Fonseca, Gonzalo L. 2009. “Vilfredo Pareto, 1848–1923.” The History of Economic Thought website. http://homepage.newschool.edu/~het/profiles/pareto.htm (accessed February 27, 2011). Foster, Julia, John Haltiwanger and Chad Syverson. 2010. “The Slow Growth of New Plants: Learning about Demand?” Working paper. Frank, Robert H., Thomas D.


pages: 247 words: 43,430

Think Complexity by Allen B. Downey

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Benoit Mandelbrot, cellular automata, Conway's Game of Life, Craig Reynolds: boids flock, discrete time, en.wikipedia.org, Frank Gehry, Gini coefficient, Guggenheim Bilbao, mandelbrot fractal, Occupy movement, Paul Erdős, peer-to-peer, Pierre-Simon Laplace, sorting algorithm, stochastic process, strong AI, Thomas Kuhn: the structure of scientific revolutions, Turing complete, Turing machine, Vilfredo Pareto, We are the 99%

, Connected Graphs, Connected Graphs, Dijkstra marking, Connected Graphs source node, Dijkstra visiting, Connected Graphs noise, Zipf, Pareto, and Power Laws, Spectral Density non-linear system, The Axes of Scientific Models normal accident theory, SOC, Causation, and Prediction normal distribution, Continuous Distributions NumPy, Implementing CAs, Fractal CAs O Obama, Barack, Analysis of Algorithms object-oriented design, Hashtables objective truth, A New Kind of Thinking objectivity, Explanatory Models observable, Explanatory Models one, two, many, The Axes of Scientific Models optional parameters, Representing Graphs order of growth, Order of Growth, FIFO Implementation, Cumulative Distributions, Implementing CAs, Spectral Density os module, Summing Lists overrides, Representing Graphs P paradigm shift, Paradigm Shift? parameters, Watts and Strogatz, Zipf’s Law, Continuous Distributions, Pareto Distributions, Thomas Schelling, Traffic Jams, Boids Pareto distribution, Pareto Distributions Pareto World, Pareto Distributions Pareto, Vilfredo, Pareto Distributions path length, Watts and Strogatz paths, What’s a Graph?, What’s a Graph?, Connected Graphs peer-to-peer architecture, A New Kind of Engineering perception, Realism percolation, Percolation performance error, FIFO Implementation period, Randomness, Turmites Perrow, Charles, SOC, Causation, and Prediction phase chance, Paul Erdős: Peripatetic Mathematician, Speed Freak philosophical realism, Realism philosophy, What Is This Book About?

Write a function called plot_ccdf that takes a list of values and the corresponding list of probabilities and plots the CCDF on a log-y scale. To test your function, use expovariate from the random module to generate 100 values from an exponential distribution. Plot the CCDF on a log-y scale, and see if it falls on a straight line. Pareto Distributions The Pareto distribution is named after the economist Vilfredo Pareto, who used it to describe the distribution of wealth; see http://en.wikipedia.org/wiki/Pareto_distribution. Since then, people have used it to describe phenomena in the natural and social sciences, including sizes of cities and towns, of sand particles and meteorites, and of forest fires and earthquakes.


pages: 151 words: 38,153

With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don't Pay Enough by Peter Barnes

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Alfred Russel Wallace, banks create money, basic income, Buckminster Fuller, collective bargaining, computerized trading, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, diversified portfolio, en.wikipedia.org, Fractional reserve banking, full employment, hydraulic fracturing, income inequality, Jaron Lanier, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, land reform, Mark Zuckerberg, Network effects, oil shale / tar sands, Paul Samuelson, profit maximization, quantitative easing, rent-seeking, Ronald Coase, Ronald Reagan, Silicon Valley, sovereign wealth fund, the map is not the territory, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, Tyler Cowen: Great Stagnation, Upton Sinclair, Vilfredo Pareto, wealth creators, winner-take-all economy

They develop policies for housing, education, the environment, and so on, but treat our economic system itself—in which every silo affects every other—as off-limits. Wealth distribution is a particularly systemic phenomenon, a result of how all parts of our economy interact. It can’t be understood without viewing it at that level, nor can it be fixed without treating it at that level. The Italian economist Vilfredo Pareto was among the first to notice that something in modern economies consistently concentrates wealth at the top. Early in the twentieth century, he observed that about 20 percent of the people in Italy owned about 80 percent of the land.1 Looking further, he saw the same pattern throughout Europe.

See Jobs Occupy Wall Street, 13–14 Offsets to carbon capping, 103–105 Oil. See also Alaska model dividends in countries with, 130 Oregon, wind energy dividends in, 128 O’Reilly, Bill, 86 Organization for Economic Cooperation and Development, 95 Orszag, Peter, 102 Outsourcing, 16–17 P Paine, Thomas, 1, 3, 7–9, 39, 70, 137 Palin, Sarah, 75, 76, 94 Pareto, Vilfredo, 30–31 Parijs, Philippe van, 130 Patents, rent from, 144 Peabody Energy, 102 Pelosi, Nancy, 109 Pensions as deferred wage, 27 defined-benefits pensions, 123 Perkins, Frances, 38 Pigou, Arthur, 63–64, 113 Pitt, William, 8 Pollin, Robert, 143 Pollution. See also Carbon capping carbon pollution permits, 93 co-owned wealth and, 88 externalities and, 63 Pollution, Property & Prices (Dales), 98 Poverty Alaska model and, 74 job training and, 25 Powell, Colin, 130 Power law, 30–31 Pragmatism, 121 Pre-distribution of wealth, 125–127 Price-setting, 63–64 Private wealth, 49 Privileges, rent and income from, 52–53 “The Problem of Social Cost” (Coase), 98–99 Progress and Poverty (George), 51 Property rights.


pages: 252 words: 73,131

The Inner Lives of Markets: How People Shape Them—And They Shape Us by Tim Sullivan

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Airbnb, airport security, Al Roth, Alvin Roth, Andrei Shleifer, attribution theory, autonomous vehicles, barriers to entry, Brownian motion, centralized clearinghouse, Chuck Templeton: OpenTable, clean water, conceptual framework, constrained optimization, continuous double auction, creative destruction, deferred acceptance, Donald Trump, Edward Glaeser, experimental subject, first-price auction, framing effect, frictionless, fundamental attribution error, George Akerlof, Goldman Sachs: Vampire Squid, Gunnar Myrdal, helicopter parent, information asymmetry, Internet of things, invisible hand, Isaac Newton, iterative process, Jean Tirole, Jeff Bezos, Johann Wolfgang von Goethe, John Nash: game theory, John von Neumann, Joseph Schumpeter, Kenneth Arrow, late fees, linear programming, Lyft, market clearing, market design, market friction, medical residency, multi-sided market, mutually assured destruction, Nash equilibrium, Occupy movement, Pareto efficiency, Paul Samuelson, Peter Thiel, pets.com, pez dispenser, pre–internet, price mechanism, price stability, prisoner's dilemma, profit motive, proxy bid, RAND corporation, ride hailing / ride sharing, Robert Shiller, Robert Shiller, Ronald Coase, school choice, school vouchers, sealed-bid auction, second-price auction, second-price sealed-bid, sharing economy, Silicon Valley, spectrum auction, Steve Jobs, Tacoma Narrows Bridge, technoutopianism, telemarketer, The Market for Lemons, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, transaction costs, two-sided market, uranium enrichment, Vickrey auction, Vilfredo Pareto, winner-take-all economy

Karl Marx’s thousands of pages of passionate argumentation included extended technical discussions that, as economic historian Robert Heilbroner put it, are argued “to a point of mathematical exhaustion.” His contemporary, the Frenchman Léon Walras, identified economics as, fundamentally, a mathematical discipline, and Vilfredo Pareto, an Italian engineer and sometime economist, used his mathematical background to further the discipline as well. But, as Gérard Debreu, a Nobel Prize–winning economist and president of the American Economics Association, wrote in 1991, it was only with the closing of World War II that “economic theory entered a phase of intensive mathematization that profoundly transformed [the] profession.”2 In 1940, less than 3 percent of the refereed pages of the thirtieth volume of the American Economic Review “ventured to include rudimentary mathematical expressions.”

These early economists aimed to tackle big questions about how the economy worked (and whether it could be made to work better), weighing in on such important matters as market function (and dysfunction), the origin of value, business cycles, and unemployment. It was set in motion by Smith and carried on for one hundred years thereafter by the classical economists—David Ricardo, Thomas Malthus, Karl Marx, Vilfredo Pareto, among others. It was continued for nearly one hundred years more by neoclassical economists like Thorstein Veblen, John Maynard Keynes, and an enduring hero of free-market proponents, Joseph Schumpeter. Pareto, who lived from 1848 until 1923, is emblematic of both the worldliness and precision of these towering figures in the history of economic thought.

., 22 Liu, Qihong, 128–129 Lyft car service, 173 MAD (doctrine of nuclear deterrence by mutually assured destruction), 26 mail-in-bids, for auctions, 83–84 “The Market for Lemons” (Akerlof), 44–51, 64 market frictions, 169–174 market fundamentalists, 16–17 market insights, 14–15 market makers, 107–110, 118–121 markets 18th-century book, 90–91 competitive, 35, 124–126, 172–174, 180–181 design, 133, 137–142 dysfunction of, 36, 75–77, 143 economics of platform, 107–112 equilibrium, 33 fixed-price versus auctions, 96–97 food bank system, 154–160 image problem of, 152–153 labor, 48, 64–66 lemon, 44–51, 58–59, 64, 112 multisided, 108–112, 118–124 one-sided, 108–112 in POW camps, 4, 7–13, 175–177 rules for platform, 112–117 school choice in Sweden, 151–152 selfishness in, 177–179 technology and, 169–173 trade with uninformed parties, 166–169 transformation of, 13–17 two-sided, 108–112, 118–124 See also auctions; economics; platforms Marx, Karl, 20, 23 matching problems middle school dance partners, 131–132, 134, 137–140 student to school, 138–139, 141–142, 143–149 mathematics algebraic topology, 44–45 economic theory transformed by, 15, 19–27 game theory, 136 general equilibrium model, 29, 31–34, 36–37, 40, 45, 76 kidney exchange algorithm, 163–165 models, 20, 24–25, 30 in real world economics, 35–37 Samuelson connecting economics and, 28–29 Shapley-Gale algorithm, 137–140 Matsuzaka, Daisuke, 79–81, 87–89 Maxwell, James Clark, 24 McManus, Brian, 73–75 mechanism design, 133, 134 medical residency programs, 140 merchant from Prato, 105–107 middle school dance-matching, 131–132, 134, 137–140 Milgrom, Paul, 70–71, 98, 102–103 mobile market platform, 116 modeling applied theory, 45, 50, 75–76 competition, 35, 166, 172–173 congestion pricing, 86, 94 dysfunction of, 75–77 economic, 15, 24–29 mathematical, 20, 24–25, 30 reality-based economic, 35–37, 45, 49–51, 141 models auction, 82–84 eBay, 43, 46, 48 general equilibrium, 31–34, 36–37, 40, 76 lemons, 44–51, 58–59, 64, 112 Solow, 35 See also platforms; signaling model Moldovanu, Benny, 90–91 money burning costs, 70–71 money-back guarantees, 69–71 Morals & Markets: The Development of Life Insurance in the United States (Zelizer), 153 Morgenstern, Oskar, 25–27 mortality rates, of Japanese vs German POW camps, 10–13 MS-13 gang, 67 multisided markets, 108–112, 118–124 multisided platform, 14 multiunit Vickrey auction, 93 Murphy, Frank, 9 Nasar, Sylvia, 29 Nash, John, 32 National Archives’ World War II Prisoners of War Data File, 11 network externalities, 121–124 New England Program for Kidney Exchange, 164–165 New York Department of Education, 143–144, 145, 149 Nobel Prize in Economics, 34 See also Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel noncustomers, paying, 123–124 Nordstrom’s return policy, 69–70 no-risk money-back guarantees, 69–71 normal good, 180 no-trade rule, Japanese POW camps, 10–13 nuclear deterrence, 26 Omidyar, Pierre, 39–40 one-sided markets, 108–112 online retail, 41–43, 52–55 optimized efficiency, 85–86, 133 organ sales, 160–161 organizations, sick, 142–143 out-of-town bids, for auctions, 83–84 Pareto, Vilfredo, 20, 21–22 Pareto efficiency, 22 Penny Black stamp, 82–84 Percy P. Woods store, 1–2 person’s life, value of, 166–167 philanthropic commitments, 72–75 Pillow Pets, 128–129 platforms babysitting, 121 Champagne fairs as, 126–128 competition, 124–126 credit card, 113–116 economics of, 107–112 greed in, 128–129 mobile market, 116 multisided, 14 rules for, 112–117 video game system, 116 See also economics Podolny, Joel, 39, 43 poker, bluffing in, 26 See also chess; Cold War Pontiff, Jeffrey, 11–12 posting system, 79–81, 100–101 POW camps, 7–13, 175–177 power law distributions, 22 practice, market, 14–15 Prendergast, Canice, 154–160 “Price and Advertising Signals of Product Quality” (Milgrom and Roberts), 70–71 price discovery, 83 priceless, when something is, 132–133 prisoners’ dilemma game, 178–179 property, expected value of, 56 Radford, R.


pages: 484 words: 136,735

Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis by Anatole Kaletsky

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bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Black Swan, bonus culture, Bretton Woods, BRICs, Carmen Reinhart, cognitive dissonance, collapse of Lehman Brothers, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, Edward Glaeser, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, F. W. de Klerk, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, George Akerlof, global rebalancing, Hyman Minsky, income inequality, information asymmetry, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, laissez-faire capitalism, Long Term Capital Management, mandelbrot fractal, market design, market fundamentalism, Martin Wolf, money market fund, moral hazard, mortgage debt, new economy, Northern Rock, offshore financial centre, oil shock, paradox of thrift, Pareto efficiency, Paul Samuelson, peak oil, pets.com, Ponzi scheme, post-industrial society, price stability, profit maximization, profit motive, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, statistical model, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, Vilfredo Pareto, Washington Consensus, zero-sum game

Although he organized his economic theory in Principles of Political Economy (1848) around the idea of this hyperrational being, the term Homo Economicus originated in the writing of Mill’s late nineteenth-century critics. See Joseph Persky, “Retrospectives: The Ethology of Homo Economicus,” The Journal of Economic Perspectives 9:2 (Spring, 1995): 221-231. 2 Named after the Italian mathematician Vilfredo Pareto, who first explicitly formulated this definition. See John Cunningham Wood and Michael McLure, eds., Vilfredo Pareto: Critical Assessments, 331. 3 The period of phenomenal technological and economic progress based on the development of electrical, chemical, steel, and petroleum industries from 1865 to 1900 is often described as the Second Industrial Revolution.

Morgan Stanley Morris, Charles Mortgage market reform Mudd, Daniel Myths burdening grandchildren national bankruptcy Naisbitt, John National Association of Realtors’ monthly index of home resale prices New Asian Hemisphere, The (Mahbubani) New Deal New Normal New Paradigm for Financial Markets, The (Soros) Newton, Sir Isaac Nixon, Richard Northern Rock collapse/response, Britain Obama, Barack/administration Capitalism 4.0 and critics of economic policies economic recovery and fiscal stimulus plan health care reform and hope and See also Economic recovery/2009 government response OECD (Organisation for Economic Co-operation and Development) Oil use/industry dependence on oil and environment and government role in reduction oil shock (2008) OPEC reduction taxes and theory of peak oil true costs/benefits and unearned rent and See also Energy issues Opinions/polls O’Rourke, P. J. Outsourcing Ozone layer Pareto, Vilfredo Pareto Optimality Paris Commune Pascal, Blaise/Wager Paulson, Henry/financial crisis (2007-09) blunders by comparison to Andrew Mellon description/personality Fannie Mae/Freddie Mac seizure Goldman Sachs reputation and market fundamentalism and personal tax exemption post-crisis debate and short sellers and TARP and See also Bush, George W./ administration; Lehman Brothers collapse Pension/health entitlements People’s Daily, China Personalities importance Petronius, Gaius Phelps, Edmund Planck, Max Platform Companies (Platco) Plato “Policy Ineffectiveness Proposition” (Sargent/Wallace) Prince, Charles Protectionism Protestant Ethic and the Spirit of Capitalism, The (Weber) Public Choice theory Rajan, Ranghuram Ramo, Joshua Rand, Ann Rational Expectations Hypothesis (REH) Rationality concept Reagan, Ronald See also Thatcher-Reagan revolution Reflexivity description See also Theory of Reflexivity Reich, Robert Reinhart, Carmen Ricardian Equivalence theory, Barro Ricardo, David Robinson, Joan Rogoff, Kenneth Roosevelt, Franklin Rowthorn, Robert Rumsfeld, Donald Samuelson, Paul Sargent, Thomas Sarkozy, Nicolas Savings Schumpeter, Joseph Seabright, Paul Sen, Amartya Shakespeare Shiller, Robert Short sellers Simon, Herbert Simon, John Singh, Jaswant Skidelsky, Robert Slaughter, Anne-Marie Smith, Adam Capitalism 1 and ideas/impact “invisible hand” of competitive markets concept Smith, Vernon Solow, Robert Sorkin, Andrew Ross Soros, George boom-bust cycles and boom-bust cycles/Theory of Reflexivity “market fundamentalism” term/concept South Sea Bubble/effects Sovereign wealth funds Specialization Spence, Michael Stagflation 1970s causes/conditions for description threat of Stiglitz, Joe Stimulus.

The late nineteenth century economists were able to show that this process of endless calculation could theoretically produce, through the magic of perfectly competitive markets, not only a general equilibrium in which all workers, machines, and resources were full employed, but also, under some restrictive (and unrealistic) assumptions, an optimum, or efficient, allocation of resources that offered the maximum amount of satisfaction, or utility, for society as a whole. The notion of optimality used by economists from the late nineteenth century onward had limited practical relevance, but a huge ideological significance. Proposed by the Italian statistician Vilfredo Pareto, who later became an inadvertent hero of the Italian fascist movement, this concept stated merely that no one in society could be made better off without someone else suffering a loss. Pareto Optimality2 deliberately and consciously ignored the critical questions of interpersonal comparisons: Could the world be improved in some sense by taking a crust of bread from Rockefeller and giving it to a starving child?


pages: 500 words: 145,005

Misbehaving: The Making of Behavioral Economics by Richard H. Thaler

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3Com Palm IPO, Albert Einstein, Alvin Roth, Amazon Mechanical Turk, Andrei Shleifer, Apple's 1984 Super Bowl advert, Atul Gawande, Berlin Wall, Bernie Madoff, Black-Scholes formula, capital asset pricing model, Cass Sunstein, Checklist Manifesto, choice architecture, clean water, cognitive dissonance, conceptual framework, constrained optimization, Daniel Kahneman / Amos Tversky, delayed gratification, diversification, diversified portfolio, Edward Glaeser, endowment effect, equity premium, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, George Akerlof, hindsight bias, Home mortgage interest deduction, impulse control, index fund, information asymmetry, invisible hand, Jean Tirole, John Nash: game theory, John von Neumann, Kenneth Arrow, late fees, law of one price, libertarian paternalism, Long Term Capital Management, loss aversion, market clearing, Mason jar, mental accounting, meta analysis, meta-analysis, money market fund, More Guns, Less Crime, mortgage debt, Myron Scholes, Nash equilibrium, Nate Silver, New Journalism, nudge unit, Paul Samuelson, payday loans, Ponzi scheme, presumed consent, pre–internet, principal–agent problem, prisoner's dilemma, profit maximization, random walk, randomized controlled trial, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, Silicon Valley, South Sea Bubble, statistical model, Steve Jobs, technology bubble, The Chicago School, The Myth of the Rational Market, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, ultimatum game, Vilfredo Pareto, Walter Mischel, zero-sum game

Conclusion: What Is Next? Notes Bibliography List of Figures Acknowledgments Index The foundation of political economy and, in general, of every social science, is evidently psychology. A day may come when we shall be able to deduce the laws of social science from the principles of psychology. —VILFREDO PARETO, 1906 PREFACE Before we get started, here are two stories about my friends and mentors, Amos Tversky and Daniel Kahneman. The stories provide some hints about what to expect in this book. Striving to please Amos Even for those of us who can’t remember where we last put our keys, life offers indelible moments.

His discounted utility model with exponential discounting became the workhorse model of intertemporal choice. FIGURE 5 It may not be fair to pick this particular paper as the tipping point. For some time, economists had been moving away from the sort of folk psychology that had been common earlier, led by the Italian economist Vilfredo Pareto, who was an early participant in adding mathematical rigor to economics. But once Samuelson wrote down this model and it became widely adopted, most economists developed a malady that Kahneman calls theory-induced blindness. In their enthusiasm about incorporating their newfound mathematic rigor, they forgot all about the highly behavioral writings on intertemporal choice that had come before, even those of Irving Fisher that had appeared a mere seven years earlier.

“Procrastination in Preparing for Retirement.” In Henry Aaron, ed., Behavioral Dimensions of Retirement Economics, 125–56. Washington, DC: Brooking Institution, and New York: Russell Sage Foundation. ———. 2003. “Studying Optimal Paternalism, Illustrated by a Model of Sin Taxes.” American Economic Review 93, no. 2: 186–91. Pareto, Vilfredo. (1906) 2013. Manual of Political Economy: A Variorum Translation and Critical Edition. Reprint edited by Aldo Montesano et al. Oxford: Oxford University Press. Peter, Laurence J., and Raymond Hull. 1969. The Peter Principle: Why Things Always Go Wrong. New York: William Morrow. Pope, Devin G., and Maurice E.


pages: 226 words: 59,080

Economics Rules: The Rights and Wrongs of the Dismal Science by Dani Rodrik

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airline deregulation, Albert Einstein, bank run, barriers to entry, Bretton Woods, butterfly effect, capital controls, Carmen Reinhart, central bank independence, collective bargaining, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Donald Davies, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, Everything should be made as simple as possible, Fellow of the Royal Society, financial deregulation, financial innovation, floating exchange rates, fudge factor, full employment, George Akerlof, Gini coefficient, Growth in a Time of Debt, income inequality, inflation targeting, informal economy, information asymmetry, invisible hand, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labor-force participation, liquidity trap, loss aversion, low skilled workers, market design, market fundamentalism, minimum wage unemployment, oil shock, open economy, Pareto efficiency, Paul Samuelson, price stability, prisoner's dilemma, profit maximization, quantitative easing, randomized controlled trial, rent control, rent-seeking, Richard Thaler, risk/return, Robert Shiller, Robert Shiller, school vouchers, South Sea Bubble, spectrum auction, The Market for Lemons, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, trade liberalization, trade route, ultimatum game, University of East Anglia, unorthodox policies, Vilfredo Pareto, Washington Consensus, white flight

More precisely, under the stated assumptions of the theorem, the market economy delivers as much economic output as any economic system possibly could. There is no way to improve on this outcome, in the sense that no reshuffling of resources could possibly leave someone better off without making some others worse off.* Note that this definition of efficiency—Pareto efficiency, named after the Italian polymath Vilfredo Pareto—pays no attention to equity or other possible social values: a market outcome in which one person receives 99 percent of total income would be “efficient” as long as his losses from any reshuffle exceeded the gains that would accrue to the rest of society. Distributional complications aside, this is a powerful result—one that is not obvious.

.: CCT program in, 4 congestion pricing and, 2–3 New York Times, 136 Nobel Prize, 31, 32, 33, 49n, 50, 69, 131, 136, 154, 157, 203, 208 North, Douglass, 98 Obama, Barack, 135, 152 offshoring, 141 Ohlin, Bertil, 139 oil industry: OPEC and, 130–31 price controls in, 94–97 supply and demand in, 14, 99 value theory and, 119–20 Ollion, Etienne, 79n, 200n “On Exactitude in Science” (Borges), 43–44 Oportunidades, 4, 105 opportunity costs, 70 Organization for Economic Co-operation and Development (OECD), 109, 164 Organization of Petroleum Exporting Countries (OPEC), 130 Ostrom, Elinor, 203n output, economic, business cycles and, 126 outsourcing, 149, 194 Oxford University, 197n, 198 Pakistan, 106 panics, financial, 155 parables, models and, 20 Pareto, Vilfredo, 48 Pareto efficiency, xiii, 14, 48 partial-equilibrium (single market) analysis, 56, 58, 91 Passions and the Interest, The (Hirschman), 195 patents, 151 path dependence, 42, 43 Pauli, Wolfgang, 80 perfectly competitive market models, 21, 27, 28, 47, 69n, 71, 122, 180 personal distribution of income, 121 Peterson Institute, 159 Pfleiderer, Paul, 26 “Physicist Experiments with Cultural Studies, A” (Sokal), 79n physics, theories and, 113 pluralism, economics and, 196–208 political science, mathematics and, 30–31, 34 Pollin, Robert, 77 pollution, carbon emissions and, 188–90, 191–92 Portugal, 207 comparative advantage principle and, 52–53 positive spillovers, 100 positivism, 81 Posner, Richard, 152 possibilism, 210n–11n “Possibilism: An Approach to Problem-Solving Derived from the Life and Work of Albert O.


pages: 545 words: 137,789

How Markets Fail: The Logic of Economic Calamities by John Cassidy

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Albert Einstein, Andrei Shleifer, anti-communist, asset allocation, asset-backed security, availability heuristic, bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Black-Scholes formula, Bretton Woods, British Empire, capital asset pricing model, centralized clearinghouse, collateralized debt obligation, Columbine, conceptual framework, Corn Laws, corporate raider, correlation coefficient, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, Daniel Kahneman / Amos Tversky, debt deflation, diversification, Elliott wave, Eugene Fama: efficient market hypothesis, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, full employment, George Akerlof, global supply chain, Gunnar Myrdal, Haight Ashbury, hiring and firing, Hyman Minsky, income per capita, incomplete markets, index fund, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Nash: game theory, John von Neumann, Joseph Schumpeter, Kenneth Arrow, laissez-faire capitalism, Landlord’s Game, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, margin call, market bubble, market clearing, mental accounting, Mikhail Gorbachev, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Myron Scholes, Naomi Klein, negative equity, Network effects, Nick Leeson, Northern Rock, paradox of thrift, Pareto efficiency, Paul Samuelson, Ponzi scheme, price discrimination, price stability, principal–agent problem, profit maximization, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, RAND corporation, random walk, Renaissance Technologies, rent control, Richard Thaler, risk tolerance, risk-adjusted returns, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, shareholder value, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, statistical model, technology bubble, The Chicago School, The Great Moderation, The Market for Lemons, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, unorthodox policies, value at risk, Vanguard fund, Vilfredo Pareto, wealth creators, zero-sum game

Newton, Isaac New York Cotton Exchange New Yorker, The New York Mets baseball team New York State Common Retirement Fund New York Stock Exchange New York Times, The Book Review New York University (NYU) Stern School of Business New York Yankees baseball team Nightingale, Florence “NINJA” mortgage loans Nixon, Richard Nobel Prize noise traders Nordhaus, William Northern Rock Norway Nothaft, Frank Obama, Barack Objectivist Newsletter, The October Revolution oligopoly “On an Economic Equation System and a Generalization of the Brouwer Fixed Point Theorem” (von Neuman) O’Neal, Stan On Liberty (Mill) Only Yesterday (Allen) “On the Economic Theory of Socialism” (Lange) “On the Impossibility of Informationally Efficient Markets” (Grossman and Stiglitz) Organisation for Economic Cooperation and Development Organization of Petroleum Exporting Countries (OPEC) O’Rourke, Kevin O’Toole, Bob Ove Arup Ownit Mortgage Solutions Oxford University Pacific Investment Management Company Padilla, Mathew paradox of thrift Pareto, Vilfredo Pareto efficiency Parker Brothers Pasternak, Boris Paulson, Henry “Hank” Pearl Harbor, Japanese attack on Pender, Kathleen Penn Square Bank Pennsylvania, University of, Wharton School of Business Pentagon Papers, The Pericles Phelps, Edmund Philadelphia 76ers basketball team Philippines Phillips, A.

Rather than confining myself to expounding the arguments of Friedrich Hayek, Milton Friedman, and their fellow members of the “Chicago School,” I have also included an account of the formal theory of the free market, which economists refer to as general equilibrium theory. Friedman’s brand of utopian economics is much better known, but it is the mathematical exposition, associated with names like Léon Walras, Vilfredo Pareto, and Kenneth Arrow, that explains the respect, nay, awe with which many professional economists view the free market. Even today, many books about economics give the impression that general equilibrium theory provides “scientific” support for the idea of the economy as a stable and self-correcting mechanism.

In Britain, in the second half of the century, scholars such as William Stanley Jevons, Francis Ysidro Edgeworth, and Alfred Marshall began to apply the methods of calculus in a more systematic fashion, developing formal theories—or “models”—of how consumers and firms behave, many of which are still taught today. Most of these theories applied to individual firms and businesses. Building on the Tableau Economique (Economic Table) that François Quesnay, the eighteenth-century philosopher, had constructed, Léon Walras and Vilfredo Pareto, who both taught at the University of Lausanne, set out to create a coherent mathematical theory of the entire economy. Walras was born in northern France in 1834 and died in 1910. After trying his hand at fiction, journalism, and mine engineering, he followed the advice of his father, an economist, and devoted himself to economics.


pages: 285 words: 86,174

Twilight of the Elites: America After Meritocracy by Chris Hayes

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affirmative action, Affordable Care Act / Obamacare, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, carried interest, circulation of elites, Climategate, Climatic Research Unit, collapse of Lehman Brothers, collective bargaining, creative destruction, Credit Default Swap, dark matter, David Brooks, David Graeber, deindustrialization, Fall of the Berlin Wall, financial deregulation, fixed income, full employment, George Akerlof, Gunnar Myrdal, hiring and firing, income inequality, Jane Jacobs, jimmy wales, Julian Assange, Kenneth Arrow, Mark Zuckerberg, mass affluent, mass incarceration, means of production, meta analysis, meta-analysis, money market fund, moral hazard, Naomi Klein, Nate Silver, peak oil, Plutocrats, plutocrats, Ponzi scheme, Ralph Waldo Emerson, rolodex, The Spirit Level, too big to fail, University of East Anglia, Vilfredo Pareto, We are the 99%, WikiLeaks, women in the workforce

So while the history of enfranchisement moves steadily—if slowly—in the direction of inclusion, the social contract must also accommodate the fact that management of affairs of state and market grow evermore complex and specialized. The result is a cycle of populism, anti-elite revolt, and oligarchic retrenchment, with each new ruling elite displacing its predecessor. “History,” as the Italian political economist Vilfredo Pareto once said, “is the graveyard of aristocracies.” And so it was for the Eastern Establishment that Mills chronicled. Its hold on power was thoroughly (and forever) disrupted by a number of social upheavals that culminated in the 1960s. As famously chronicled in David Halberstam’s The Best and the Brightest, Vietnam permanently destroyed the credibility of the “Wise Men” who straddled the upper echelons of both private business and public service.

During the late nineteenth century and into the twentieth, as democratic experiments spread throughout Europe, a group of theorists set themselves to the task of analyzing how it was that a small subset of citizens could retain de facto control over a society despite the downward pressures of democratization. One of those theorists was Robert Michels, whose Iron Law of Oligarchy offered a model for how to think about our own meritocracy. Michels’s fellow theorists of the elite—Vilfredo Pareto, Gaetano Mosca, and José Ortega y Gasset—shared a similar descriptive analysis, though because they were hostile to egalitarianism, they viewed this as a feature rather than a bug. To them the “elite” was made up of both those with the most power and also those who deserved the most power. Central to their theories was a kind of proto-meritocratic vision of cream rising to the top, a conception of rule by the best, brightest, and noblest that stretches all the way back to the vision of the Greeks.

Political Parties: A Sociological Study of the Oligarchical Tendencies of Modern Democracy. Translated by Eden and Cedar Paul. New York: The Free Press, 1962. Mills, C. Wright. The Power Elite. New York: Oxford University Press, 1956. Moynihan, Daniel Patrick. Secrecy: The American Experience. New Haven, Conn.: Yale University Press, 1998. Pareto, Vilfredo. The Rise and Fall of Elites: An Application of Theoretical Sociology. 1968. Reprint, New Brunswick, N.J.: Transaction Publishers, 1991. Putnam, Robert D. The Comparative Study of Political Elites. Englewood Cliffs, N.J.: Prentice Hall, Inc., 1976. Schleef, Debra J. Managing Elites: Professional Socialization in Law and Business Schools.


pages: 330 words: 77,729

Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes by Mark Skousen

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Albert Einstein, banking crisis, Berlin Wall, Bretton Woods, business climate, creative destruction, David Ricardo: comparative advantage, delayed gratification, experimental economics, financial independence, Financial Instability Hypothesis, full employment, Hernando de Soto, housing crisis, Hyman Minsky, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, laissez-faire capitalism, liberation theology, liquidity trap, means of production, microcredit, minimum wage unemployment, money market fund, open economy, paradox of thrift, Pareto efficiency, Paul Samuelson, price stability, pushing on a string, rent control, Richard Thaler, rising living standards, road to serfdom, Robert Shiller, Robert Shiller, rolodex, Ronald Coase, Ronald Reagan, school choice, secular stagnation, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, unorthodox policies, Vilfredo Pareto, zero-sum game

It is the toolbox economists employ today to analyze and illustrate a theory of consumer and firm behavior. The European Wizards of Economics: Walras, Pareto, and Edgeworth Marshall's work was followed up by the work of others in Europe and America who helped professionalize economics. Leon Walras (1834-1910) from France, Vilfredo Pareto (1848-1923) from Italy, and Francis Edgeworth (1845-1926) from Ireland introduced sophisticated mathematical methods and attempted to validate Adam Smith's invisible hand doctrine in mathematical form. The invisible hand idea, that laissez-faire leads to the common good, has become known as the first fundamental theorem of welfare economics (as noted in chapter 1).

., 64 q, 69 See also Exchange; Gold; Monetary Paradox of thrift, 173-174, 179, 208 models and policy; Money, quantity Paradoxes theory of diamond-water, 50-51, 108«1-109«1 Money, Interest and Prices (Patinkin), 178 thrift, 173-174, 179, 208 Money, quantity theory of value, 108 Fisher's, 126-127 Pareto, Vilfredo, 115-116 Friedman vs. Keynes, 196-197 Pareto optimality, 116-117 Hume's views of, 44 Patinkin, Don, 178 Smith's view of, 36 Pendulum, ix-x Monopoly, 30-31, 86 Peuchet, Jacques, 73 Montesquieu, Charles de Secondat, 39, Phillips, A.W„ 187 40-41 Phillips curve, 187, 197-198 Monthly Review, 101 Phrenology, 77-78 Moral behavior, 30 Pigou, Arthur C., 178 Multiplier Pin factory, 10 balanced budget, 172, 176 Plato, 38-39 Friedman on, 197 Player, The (Marx), 72 full employment, 160-162 Poetry savings, 180 about Marx, 71 Musgrave, Richard, 209-210 Marx's, 72-73 Pollution fees, 214 National debt, 176-177 Poor people National income, 171-172, 182, 197 benefit from capitalism, 32-34 Natural liberty, 7, 10-11 Yunus and,204-205 Keynes' critique of, 149 Popper, Karl, 96-97 principles of, 11, 18 Population studies, 51-52 standard of living and, 31-32 Positive Theory of Capital (Bohm-Bawerk), See also Classical model 112 Natural rate Poverty of Philosophy (Marx), 96 interest, 130 Price unemployment, 197 determined by demands, 109 Neoclassical economics.


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The Complacent Class: The Self-Defeating Quest for the American Dream by Tyler Cowen

affirmative action, Affordable Care Act / Obamacare, Airbnb, Alvin Roth, assortative mating, Bernie Sanders, Black Swan, business climate, circulation of elites, clean water, David Graeber, declining real wages, deindustrialization, desegregation, Donald Trump, drone strike, East Village, Elon Musk, Ferguson, Missouri, Francis Fukuyama: the end of history, gig economy, Google Glasses, Hyman Minsky, Hyperloop, income inequality, intangible asset, Internet of things, inventory management, knowledge worker, labor-force participation, labour mobility, low skilled workers, Marc Andreessen, Mark Zuckerberg, medical residency, meta analysis, meta-analysis, obamacare, offshore financial centre, Paul Samuelson, Peter Thiel, purchasing power parity, Richard Florida, security theater, sharing economy, Silicon Valley, Silicon Valley ideology, Skype, South China Sea, Steven Pinker, Stuxnet, The Great Moderation, total factor productivity, Tyler Cowen: Great Stagnation, upwardly mobile, Vilfredo Pareto, working-age population, World Values Survey

Matching and assortative mating—connecting one well-off family to another—may make this all the less likely. And thus we can see some very natural reasons why income mobility, across the generations, is often either stagnant or declining over time. To use the language of early twentieth-century Italian economist Vilfredo Pareto, over time, the “circulation of elites” will naturally decline, at least compared to earlier situations of poverty and chaos. And indeed in China today, the special privileges held by children of prominent Communist Party members have become a major social issue and source of complaint. In other words, the richer, more stable, and happier your society is, the harder it is to generate high or rising levels of income mobility over time.

music industry Musk, Elon neo-Nazi movement Newton, Huey P. Nigeria NIMBY (Not In My Backyard) mentality North Africa Obama, Barack Obamacare. See Affordable Care Act Occupy Wall Street movement oil industry oil price shock (1973) On the Road (Kerouac) outsourcing pantheism Pareto, Vilfredo patents Patriot Act pets philanthropy Pinker, Steven Pissarides, Christopher play, outdoor polarization policing political science poverty and mobility and segregation Princeton University prison riots productivity and cities diffusion problem firm-specific productivity and innovation and the internet and matching and mobility productivity per worker hour total factor productivity (TFP) worker productivity profiling progress and the Complacent Class and democracy and innovation and mobility model of history and segregation progressivism protests.


pages: 827 words: 239,762

The Golden Passport: Harvard Business School, the Limits of Capitalism, and the Moral Failure of the MBA Elite by Duff McDonald

activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Albert Einstein, barriers to entry, Bayesian statistics, Bernie Madoff, Bob Noyce, Bonfire of the Vanities, business process, butterfly effect, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collateralized debt obligation, collective bargaining, commoditize, corporate governance, corporate raider, corporate social responsibility, creative destruction, deskilling, discounted cash flows, disintermediation, Donald Trump, family office, financial innovation, Frederick Winslow Taylor, full employment, George Gilder, glass ceiling, Gordon Gekko, hiring and firing, income inequality, invisible hand, Jeff Bezos, job-hopping, John von Neumann, Joseph Schumpeter, Kenneth Arrow, London Whale, Long Term Capital Management, market fundamentalism, Menlo Park, new economy, obamacare, oil shock, pattern recognition, performance metric, Peter Thiel, Plutocrats, plutocrats, profit maximization, profit motive, pushing on a string, Ralph Nader, Ralph Waldo Emerson, RAND corporation, random walk, rent-seeking, Ronald Coase, Ronald Reagan, Sand Hill Road, Saturday Night Live, shareholder value, Silicon Valley, Skype, Steve Jobs, survivorship bias, The Nature of the Firm, the scientific method, Thorstein Veblen, union organizing, urban renewal, Vilfredo Pareto, War on Poverty, William Shockley: the traitorous eight, women in the workforce, Y Combinator

Mayo’s description of the unconscious mind echoed Freud, his ideas about “reveries” and “passive obsessions” came straight from the French psychoanalyst Pierre Janet, and his celebration of spontaneous collaboration echoed the idealist British philosophers of the time. Finally, he co-opted Italian sociologist Vilfredo Pareto’s view that responsibility for preserving social order lay with the elite. Adding it together, though, Mayo had arrived at an idea all his own. The solution to workplace strife, he argued, was a kind of therapeutic human relations, a soft alternative to the “bossism” of Frederick Taylor’s scientific management.

Over the next twenty years, a river of Rockefeller money—$1.5 million—flowed into Mayo’s program at the School. (It still stands as one of the most generously funded programs in the history of the social sciences. For Donham, who called fundraising an “almost intolerable burden,” it must have seemed like manna from heaven.) Once there, Mayo found another devotee of Vilfredo Pareto, Dr. Lawrence J. Henderson, a member of the Harvard Medical School faculty and a biochemist of international repute. An actual doctor in the company of self-appointed medics to the human soul, Henderson had pretensions in the other direction, and thought he could build a bridge between Pareto’s theories of societal equilibrium and the homeostasis of the human body itself.

Recalled Barnard: “In this case, and in countless others, men talk and fight about what they do not want, because they must talk about something, and they even convince themselves that they believe what they say.”3 The making of those enlightened gestures, along with a few other psychological manipulations thrown in for good measure, was pretty much all it took. The strike was over, and everyone went home peacefully. In one sense, Chester Barnard was Vilfredo Pareto dressed in a Brooks Brothers suit. Like Pareto, Barnard saw organizations as “systems” analogous to the human bodies seeking equilibrium. To get there, an organization needed both effectiveness (the ability to meet goals) and efficiency (the ability to satisfy the individuals who worked for it).


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Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy by Francis Fukuyama

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Affordable Care Act / Obamacare, Andrei Shleifer, Asian financial crisis, Atahualpa, banking crisis, barriers to entry, Berlin Wall, blood diamonds, British Empire, centre right, clean water, collapse of Lehman Brothers, colonial rule, conceptual framework, crony capitalism, deindustrialization, Deng Xiaoping, double entry bookkeeping, Edward Snowden, Erik Brynjolfsson, European colonialism, facts on the ground, failed state, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Frederick Winslow Taylor, full employment, Gini coefficient, Hernando de Soto, Home mortgage interest deduction, income inequality, information asymmetry, invention of the printing press, iterative process, knowledge worker, land reform, land tenure, life extension, low skilled workers, manufacturing employment, means of production, Menlo Park, Mohammed Bouazizi, Monroe Doctrine, moral hazard, new economy, open economy, out of africa, Peace of Westphalia, Port of Oakland, post-industrial society, Post-materialism, post-materialism, price discrimination, quantitative easing, RAND corporation, rent-seeking, road to serfdom, Ronald Reagan, Scientific racism, Scramble for Africa, Second Machine Age, Silicon Valley, special economic zone, stem cell, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, too big to fail, trade route, transaction costs, Tyler Cowen: Great Stagnation, Vilfredo Pareto, women in the workforce, World Values Survey, zero-sum game

This view was first articulated by Gaetano Mosca, who stated that the different regime types—monarchy, aristocracy, democracy—made little difference to actual life because all were in the end controlled by elites. The “political class” maintains itself in power under a wide variety of institutions and will simply use democratic ones to do the same. Even “Communist and collectivist societies would beyond any doubt be managed by officials.” The economist Vilfredo Pareto (familiar to economics students as the inventor of the Pareto optimum) made a similar case for continuing elite domination regardless of the type of regime. Based on his statistical studies of income distribution, he formulated a “Pareto’s law,” which argued that 80 percent of wealth was held by 20 percent of the population across time and space.

Hirschman, The Rhetoric of Reaction: Perversity, Futility, Jeopardy (Cambridge, MA: Belknap Press, 1991), p. 20. 11. Walter Bagehot, The English Constitution (New York: Oxford University Press, 2001), p. 186. 12. Ibid., pp. 4–5, 32. 13. Gaetano Mosca, The Ruling Class (New York: McGraw-Hill, 1939); Vilfredo Pareto, Sociological Writings (New York: Praeger, 1966). See the discussion of Mosca and Pareto in Hirschman, Rhetoric of Reaction, pp. 50–57. 14. On scientific racism, see Stephen Jay Gould, The Mismeasure of Man (New York: Norton, 1981). 15. Bruce E. Cain, Regulating Politics? The Democratic Imperative and American Political Reform (New York: Cambridge University Press, 2014). 16.

O’Toole, Randal. 1988. Reforming the Forest Service. Washington, D.C.: Island Press. Paige, Jeffery M. 1997. Coffee and Power: Revolution and the Rise of Democracy in Central America. Cambridge, MA: Harvard University Press. Pappas, Takis S. 1999. Making Party Democracy in Greece. New York: St. Martin’s Press. Pareto, Vilfredo. 1966. Sociological Writings. New York: Praeger. Parris, Henry. 1969. Constitutional Bureaucracy: The Development of British Central Administration Since the Eighteenth Century. New York: Augustus M. Kelley. Pasquino, Gianfranco, James L. Newell, and Paolo Mancini, eds. 2013. The Future of the Liberal Western Order: The Case of Italy.


pages: 411 words: 108,119

The Irrational Economist: Making Decisions in a Dangerous World by Erwann Michel-Kerjan, Paul Slovic

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Andrei Shleifer, availability heuristic, bank run, Black Swan, Cass Sunstein, clean water, cognitive dissonance, collateralized debt obligation, complexity theory, conceptual framework, corporate social responsibility, Credit Default Swap, credit default swaps / collateralized debt obligations, cross-subsidies, Daniel Kahneman / Amos Tversky, endowment effect, experimental economics, financial innovation, Fractional reserve banking, George Akerlof, hindsight bias, incomplete markets, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, iterative process, Kenneth Arrow, Loma Prieta earthquake, London Interbank Offered Rate, market bubble, market clearing, money market fund, moral hazard, mortgage debt, Pareto efficiency, Paul Samuelson, placebo effect, price discrimination, price stability, RAND corporation, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, source of truth, statistical model, stochastic process, The Wealth of Nations by Adam Smith, Thomas Bayes, Thomas Kuhn: the structure of scientific revolutions, too big to fail, transaction costs, ultimatum game, University of East Anglia, urban planning, Vilfredo Pareto

And influential laissez-faire economist Michel Chevalier negotiated the free-trade agreement between the U.K. and France in 1860—the same year he became a senator in the French Congress. This long history of prominent economists influencing policy has continued. For instance, the Italian economist Vilfredo Pareto made important contributions to the study of income distribution and the analysis of individuals’ choices; but he was also a militant laissez-faire liberal who battled for free trade. And of course John Maynard Keynes, the very influential British economist, served in several key government posts during the twentieth century.

Newton, Isaac Nixon, Richard: environmental issues and Normative approach Northridge earthquake Nuclear waste Nudge (Thaler and Sunstein) Nurius, Paula Objectives short-term/long-term Oklahoma City bombing Olson, Mancur Onay, Selcuk Öncüler, Ayse Organization theory Outcomes achieving actions and ambiguous desirability of policy severity of surprise bad underestimation of Overseas Highway Pan Am 103 catastrophe. See also Lockerbie disaster Pandemics Pareto, Vilfredo Patt, Anthony Pauly, Mark Peace of mind Plague, The (Camus) Plato Policy changes decisions understanding structure of Policy makers decision sciences concepts and research and social scientists and Pollution Poor insurance for weather extremes and Possible selves, theory of Poverty Power, Samantha Prayer Precautionary principle Predictions Preferences choices and social stable-over-time, orderly Premiums, insurance changes in climate change and Prescriptive solutions Prevention.


pages: 340 words: 91,387

Stealth of Nations by Robert Neuwirth

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accounting loophole / creative accounting, big-box store, British Empire, call centre, collective bargaining, corporate governance, full employment, Hernando de Soto, illegal immigration, income inequality, informal economy, invisible hand, Jane Jacobs, jitney, joint-stock company, Joseph Schumpeter, megacity, microcredit, New Urbanism, pirate software, profit motive, Shenzhen was a fishing village, Simon Kuznets, special economic zone, The Wealth of Nations by Adam Smith, thinkpad, upwardly mobile, Vilfredo Pareto, yellow journalism

Twenty percent of the customers, Ethan said, produce 80 percent of the profits, yet most Chinese businesses were honed in on the 80 percent of the customers who produce only 20 percent of the profits. This, Ethan continued, had exposed most Chinese businesses to an endless course of rising costs and falling profits. (Having never studied economics in school, Ethan probably didn’t know that the 80/20 conundrum was one of the famous observations of Vilfredo Pareto, an influential conservative economist from the early twentieth century.) “Our way out is to focus on the other twenty percent”—the people who produce the real profits, Ethan said. “The problem is making enterprises change their strategies from low price to high service. I think this is a very important development stage for Chinese companies.”

., 10.1, 10.2, 12.1 Olusosun, Lagos, Nigeria, 3.1, 3.2, 3.3 Onyeyirim, Prince Chidi, 3.1 Onyibo, Remi, 3.1 Organisation for Economic Co-operation and Development (OECD), 2.1, 2.2, 9.1 organ trafficking, 2.1 organized crime accusations of System D’s connections to, 2.1, 5.1, 12.1 excluded from System D statistics, 2.1 state as an entity of, 9.1 Oshodi destruction of, 10.1 policing of, 3.1–3.2 products sold at, 3.1 Other Path, The (de Soto), 11.1–11.2 outsourcing, 9.1 Owonifari Electronics Market, 3.1–3.2 Paraguay bribery in, 6.1, 11.1 business tax breaks in, 11.1–11.2 economic activity in, 6.1, 6.2, 11.1 Lebanese population in, 12.1, 12.2 population of, 6.1 smuggling from, 1.1, 2.1, 6.1–6.2, 6.3–6.4, 11.1, 11.2, 11.3, 11.4 System D’s importance to, 2.1–2.2 see also Ciudad del Este, Paraguay Paraguayan American Chamber of Commerce, 12.1 Paraguay Vende, 11.1, 11.2 Pareto, Vilfredo, 5.1 Paris, France, street economy in, 8.1 parks and green space, 10.1 patent medicines, 12.1 Paulo Roberto, 1.1–1.2, 1.3, 1.4, 2.1 Payless, 10.1 PC Tronic, 6.1–6.2 peddlers as early globalizers, 4.1–4.2 in London, 8.1–8.2 in New York, 8.1–8.2 in U.S. Revolutionary War, 12.1 morality of, 8.1–8.2, 12.1 war profiteering of, 6.1–6.2, 12.1–12.2 Pedro I, Emperor of Brazil, 1.1 Pemex, 6.1 Penner, Reinaldo, 11.1, 11.2, 11.3, 11.4, 12.1 Pepto-Bismol, 12.1 Peru book piracy in, 5.1–5.2 formalization of firms and squatter communities in, 11.1–11.2 Peters, Segun “Satin,” 3.1 PharmAccess Foundation, 12.1 pharmaceutical industry, 6.1–6.2 see also herbal medicines Philippines, System D in, 12.1 Photoshop, 5.1 Piepowder, 12.1–12.2 piracy, 5.1–5.2, 12.1–12.2 benefits of, 5.1–5.2, 9.1 child labor and, 12.1 in American business, 5.1–5.2 in Brazil, 1.1–1.2, 6.1 piracy (cont.)


pages: 274 words: 93,758

Phishing for Phools: The Economics of Manipulation and Deception by George A. Akerlof, Robert J. Shiller, Stanley B Resor Professor Of Economics Robert J Shiller

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Andrei Shleifer, asset-backed security, Bernie Madoff, Capital in the Twenty-First Century by Thomas Piketty, collapse of Lehman Brothers, corporate raider, Credit Default Swap, Daniel Kahneman / Amos Tversky, dark matter, David Brooks, en.wikipedia.org, endowment effect, equity premium, financial intermediation, financial thriller, fixed income, full employment, George Akerlof, greed is good, income per capita, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, late fees, loss aversion, Menlo Park, mental accounting, Milgram experiment, money market fund, moral hazard, new economy, Pareto efficiency, Paul Samuelson, payday loans, Ponzi scheme, profit motive, publication bias, Ralph Nader, randomized controlled trial, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, Silicon Valley, the new new thing, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, theory of mind, Thorstein Veblen, too big to fail, transaction costs, Unsafe at Any Speed, Upton Sinclair, Vanguard fund, Vilfredo Pareto, wage slave

The Hidden Persuaders: What Makes Us Buy, Believe—and Even Vote—the Way We Do. Brooklyn: Ig Publishing, 2007. Original edition New York: McKay, 1957. Paltrow, Scot J. “Executive Life Seizure: The Costly Comeuppance of Fred Carr.” Los Angeles Times, April 12, 1991. Accessed May 1, 2015. http://articles .latimes.com/1991-04-12/business/fi-342_1_executive-life. Pareto, Vilfredo. Manual of Political Economy: A Critical and Variorum Edi­ tion. Edited by Aldo Montesano, Alberto Zanni, Luigino Bruni, John S. Chipman, and Michael McClure. Oxford: Oxford University Press, 2014. “The Path to Prosperity.” Wikipedia. Accessed December 15, 2014. http:// en.wikipedia.org/wiki/The_Path_to_Prosperity.

Santos, “Endowment Effect in Capuchin Monkeys,” Philosophical Transactions of the Royal Society B: Biological Sciences 363, no. 1511 (December 2008): 3837–44. 16. Adam Smith, The Wealth of Nations (New York: P. F. Collier, 1909; originally published 1776), p. 19. Emphasis added. 17. For a version of Pareto’s original writings, see Vilfredo Pareto, Man­ ual of Political Economy: A Critical and Variorum Edition, ed. Aldo Montesano et al. (Oxford: Oxford University Press, 2014). This edition derives from Manuale di Economia, published in Italy in 1906, and also a later edition in French. NOTES Akerlof.indb 209 209 6/19/15 10:24 AM 18.


pages: 317 words: 87,566

The Happiness Industry: How the Government and Big Business Sold Us Well-Being by William Davies

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1960s counterculture, Airbnb, business intelligence, Cass Sunstein, corporate governance, dematerialisation, experimental subject, Exxon Valdez, Frederick Winslow Taylor, Gini coefficient, income inequality, intangible asset, invisible hand, joint-stock company, lifelogging, market bubble, mental accounting, nudge unit, Philip Mirowski, profit maximization, randomized controlled trial, Richard Thaler, road to serfdom, Ronald Coase, Ronald Reagan, science of happiness, selective serotonin reuptake inhibitor (SSRI), sentiment analysis, sharing economy, Slavoj Žižek, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, Steve Jobs, The Chicago School, The Spirit Level, theory of mind, urban planning, Vilfredo Pareto

Following Jevons’s death in 1888, economists began to distance themselves from his psychological theories or methods.23 In place of Jevons’s theory stating that each pleasure and pain has its own discernible quantity, a theory of preferences was introduced in its place. As economists such as Marshall and Vilfredo Pareto saw it, economists have no need to know how much pleasure a pizza gives me, but only whether I would prefer to have a pizza or a salad. The way I spend my money is determined by my preferences, and not by my actual subjective sensations. Gradually economists discovered that they could say less and less about what goes on in the minds of consumers, to the point where it’s enough to simply observe their use of money and assume the rest.

., 119 McNamara, Robert, 235 measurement apparatus of as continually growing, 242 bodily-tracking devices, 240 of experienced utility, 64 happiness measurement, 6, 11, 36–7, 38, 251, 260 of human optimality, 274 as indicating quantity not quality, 146 mass psychological measurement, 217 no single measure of happiness and well-being, 241 objective psychological measurement, 268 of ourselves, 232 of pain, 33, 249 of pleasure, 22, 33, 249 of politics, 145 of positivity, 165 psychic measurement, 59, 60 of punishment, 22 quality of life measures, 126 of speed of mental processes, 77 measurement tools, eighteenth century inventions in, 22–3 Mechanics’ Institutes/Institutions, 47, 48 meditation, 32, 38, 68, 112, 260 Menger, Carl, 54 mental health/mental illness, 107, 108, 126, 127, 252, 254 mental optimization, 242 mental processes, measuring speed of, 77 mental resilience, 135 Merck, 164 metaphysics, 31, 37, 78, 86, 89, 92 Meyer, Adolf, 93, 169 Meyerian psychiatry, 169, 290–291n30 Microsoft, 159 ‘Middletown in Transition’, 99 ‘Middletown Studies’, 98, 100, 101 Miliband, Ed, 191 Mill, John Stuart, 49, 53 mind, 7, 56, 57, 62, 68, 96 mind–body problem, 28 mindfulness, 32, 35, 259, 260, 265, 273 mind-reading technology, 33, 75–6 Minerva Research Initiative (Pentagon), 257 misery, 108, 115, 271 MIT Affective Computing research centre, 221 money, 25–6, 27, 37, 39, 46, 51, 52, 57, 59, 61, 65, 66, 67, 69 monism, 21, 29, 33, 34, 129, 131, 136, 176, 241, 274 monopolies, 155, 158, 159 mood, use of term, 231 mood tracking, 5, 6, 228 Moodscope (app), 228 Moreno, Jacob, 197–205, 207, 208, 210, 214, 264 motivation, 37, 112, 183 Munsterberg, Hugo, 84 Muntaner, Carles, 250, 254 Murdoch, Rupert, 213 Myspace, 213 mysticism, 259, 261 narcissism, 197, 204, 207, 220, 222 National Charity Company, 35, 109 National Health Service (NHS), 111, 247 National Institute of Mental Health, 169 national well-being, 4, 146, 245 Natural Elements of Political Economy (Jennings), 50 natural environment, 247 neo-classical economists/economics, 113, 123, 181 neo-Kraepelinians, 169 neoliberal socialism, 212, 214 neoliberalism, 10, 34, 141, 144, 148, 149, 153, 154, 160, 161, 177, 179, 210, 211, 213, 223, 246, 258, 274 neurasthenia, 116 neurochemicals, 67, 68 neurological monitoring, 38 neurological reward system, 66 neuromarketing, 73, 76, 97, 102, 104, 188, 256, 262 neuropsychology, 68 neuroscience, 4–5, 20–1, 73, 103, 176, 205, 255, 257, 259 new age mysticism, 260 new age religions, 38 new age thinker, Fechner as, 28 New York Training School for Girls, 202 NHS (National Health Service), 111, 247 Nietzsche, Friedrich, 5, 84 Nike, 221 nucleus accumbens, 67 Nudge (Sunstein and Thaler), 88 Nudge Unit (UK), 235, 237 nudging/nudges, 90, 183 Obama, Barack, 255 Obama BRAIN Initiative, 255 occupational health, 132, 134, 254 O’Leary, Michael, 185 online advertising, 96 opinion-polling, 9, 101, 223 optimization definition, 243 human optimality/optimization, 5, 129, 274 managerial cult of, 137 mental optimization, 242 psychic optimization, 177 self-optimization, 213 social optimization, 181–214 well-being optimization, science of, 136 Osheroff, Raphael, 291n32 Osheroff Case, 291n32 outdoors, 245 oxytocin, 195, 256 pain, 19–20, 33, 50, 55, 66, 74, 249, 262, 263 Paine, Thomas, 17 PANAS (Positive and Negative Affect Scale), 228 Pareto, Vilfredo, 61 passivity, 249 paternalism, 90 pay-it-forward, 181–2, 184, 188, 191 Penn Resilience Project, 277n5 Pentagon, 255, 257 performance-related pay, 182 pharmaceutical industry/big pharma, 170, 171, 177, 178, 256, 271 physical activity, 247 physiological monitoring, 38 physiology, 195 Pinkser, Henry, 174 placebos, 290n22 pleasure, 21, 22, 33, 55, 65, 66, 249 pleasure principle, 29 political authority, 34, 63 political economy, 50, 56 politics, 18, 23–6, 32, 37, 76–7, 88, 145, 155, 259 polls, 9, 101, 146–7, 223 polymaths, 33, 121 pop behaviourism, 257 pop-economics, 152 positive affect, 175 positive psychology, 4, 6, 9, 11, 38, 74, 114, 165, 175, 194, 196, 208, 209, 210, 247, 250, 254, 259, 260 positivity, 11, 112, 165 Predictably Irrational (Ariely), 238 predictive shopping, 239 preferences, theory of, 61 price theory, 151, 152, 154 Priestley, Joseph, 13, 14, 47 The Principles of Scientific Management (Taylor), 118 ‘The Problem of Social Cost’ (Coase), 156 Prozac, 163 psychiatric scales, 165 psychic energizers, 164 psychic maximization, 177 psychic measurement, 59, 60 psychic optimization, 177 psychological knowledge, 266 psychological management, 38, 141 psychological surveillance, 219, 223, 228 The Psychological Corporation, 86 psychology in America as having no philosophical heritage, 85, 86 application of American psychology to business problems, 85 association with philosophy, 80, 81 behavioural psychology, 97, 234 as being modelled on physiology or biology, 264 clinical psychology, 250, 254 community psychology, 250, 254 consumer psychology, 74, 85 economics divorce from, 61, 69 experimental psychology, 81 Fechner as key figure in development of, 28 first laboratory for, 77–9 first labs in American universities, 84 group psychology, 124, 125 neuropsychology, 68 positive psychology.


pages: 313 words: 95,077

Here Comes Everybody: The Power of Organizing Without Organizations by Clay Shirky

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Andrew Keen, Berlin Wall, bioinformatics, Brewster Kahle, c2.com, crowdsourcing, en.wikipedia.org, hiring and firing, hive mind, Howard Rheingold, Internet Archive, invention of agriculture, invention of movable type, invention of the printing press, invention of the telegraph, jimmy wales, Kuiper Belt, liberation theology, lump of labour, Mahatma Gandhi, means of production, Merlin Mann, Metcalfe’s law, Nash equilibrium, Network effects, Nicholas Carr, Picturephone, place-making, Pluto: dwarf planet, prediction markets, price mechanism, prisoner's dilemma, profit motive, Richard Stallman, Robert Metcalfe, Ronald Coase, Silicon Valley, slashdot, social software, Stewart Brand, supply-chain management, The Nature of the Firm, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, transaction costs, ultimatum game, Vilfredo Pareto, Yogi Berra

In Wikipedia article edits, for example, you would expect the second most active user to have committed only half as many edits as the most active user, and the tenth most active to have committed one-tenth as many. This is the shape behind the so-called 80/20 rule, where, for example, 20 percent of a store’s inventory accounts for 80 percent of its revenues, and it has been part of social science literature since Vilfredo Pareto, an Italian economist working in the early 1900s, found a power law distribution of wealth in every country he studied; the pattern was so common that he called it “a predictable imbalance.” This is also the shape behind Chris Anderson’s discussion in The Long Tail; most items offered at online retailers like iTunes and Amazon don’t sell well, but in aggregate they generate considerable income.

See New York City Police Department O’Keefe, William Omidyat, Pierre one-to-many communications tools one-to-one communications tools open source software O’Reilly, Tim organizations. See also institutional dilemma Catholic Church collapse of barriers to group action diagramming hierarchies hierarchies and transaction costs railroads running vs. self-assembly symmetrical participation transaction costs in Paquet, Seb Pareto, Vilfredo Partido Popular Perl programming language phones. See mobile phones; telephones photographers. See also Flickr photos, high dynamic range (HDR) political expression Belarus protest Dean presidential campaign flash mobs and in Leipzig in Philippines protest against Putin Porter, Rev.


pages: 416 words: 106,582

This Will Make You Smarter: 150 New Scientific Concepts to Improve Your Thinking by John Brockman

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23andMe, Albert Einstein, Alfred Russel Wallace, banking crisis, Barry Marshall: ulcers, Benoit Mandelbrot, Berlin Wall, biofilm, Black Swan, butterfly effect, Cass Sunstein, cloud computing, congestion charging, correlation does not imply causation, Daniel Kahneman / Amos Tversky, dark matter, data acquisition, David Brooks, delayed gratification, Emanuel Derman, epigenetics, Exxon Valdez, Flash crash, Flynn Effect, hive mind, impulse control, information retrieval, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, Jaron Lanier, John von Neumann, Kevin Kelly, lifelogging, mandelbrot fractal, market design, Mars Rover, Marshall McLuhan, microbiome, Murray Gell-Mann, Nicholas Carr, open economy, Pierre-Simon Laplace, place-making, placebo effect, pre–internet, QWERTY keyboard, random walk, randomized controlled trial, rent control, Richard Feynman, Richard Feynman, Richard Feynman: Challenger O-ring, Richard Thaler, Satyajit Das, Schrödinger's Cat, security theater, selection bias, Silicon Valley, stem cell, Steve Jobs, Steven Pinker, Stewart Brand, the scientific method, Thorstein Veblen, Turing complete, Turing machine, Vilfredo Pareto, Walter Mischel, Whole Earth Catalog, zero-sum game

These figures are always reported as shocking, as if the normal order of things had been disrupted, as if the appearance of anything other than a completely linear distribution of money or messages or effort were a surprise of the highest order. It’s not. Or rather, it shouldn’t be. The Italian economist Vilfredo Pareto undertook a study of market economies a century ago and discovered that no matter what the country, the richest quintile of the population controlled most of the wealth. The effects of this Pareto distribution go by many names—the 80/20 rule, Zipf’s law, the power-law distribution, winner-take-all—but the basic shape of the underlying distribution is always the same: The richest or busiest or most connected participants in a system will account for much, much more wealth or activity or connectedness than average.

., 6–8 naming and labeling, 62–64, 190–91 natural selection, 2, 7, 16, 25, 34, 44, 84, 99, 109, 136, 137–38, 172, 196, 243 sexual, 228, 353–54 nature vs. nurture, 154, 156 negative capability, 225 nervous system, 130, 346, 373 cycles in, 171–72 networks: collective intelligence and, 257–58 neural, 188–90, 258 social, 82, 262, 266 neural networks, 188–90, 258 neuroeconomics, 208 neurons, 82, 129, 130, 149, 172, 395 entanglement of, 330 synapses and, 164 neuroplasticity, 250–51 neuroscience, 208, 250 neurotransmitters, 229–30, 279, 346 Newton, Isaac, 9, 34, 64, 72, 109, 192–93 nexus causality, 34–35 Niesta, Daniela, 150 Nisbett, Richard, 120–23 nominal fallacy, 62, 64 nonlinearity, 184–85 Nonzero (Wright), 97 Nørretranders, Tor, 226–28 Novum Organum (Bacon), 395 Nowak, Martin, 99 nuclear bomb, 185–86 nuclear transfer, 56 numbers, rounded, 182 Obama, Barack, 204 Obrist, Hans Ulrich, 118–19 Ockham’s razor, 324–27 O’Donnell, James, 127–28 Oedipus, 33 oil industry, 209 Olber’s paradox, 301 Olson, Randy, 269 On the Origin of Species (Darwin), 359 openness, 232–33 open systems, 86–87 opinions, 267, 268, 270 ordinariness, in dual view of ourselves, 32 Origgi, Gloria, xxviii, 318–20 Ortega y Gasset, José, 229 Orwell, George, 33 Osler, William, 109 otherness, 292–93 Otto, Nikolaus, 170 oxytocin, 230 Pagel, Mark, 340–42 Paine, Robert, 174 Pakistan, 20 Panofsky, Erwin, 247–48 Papuans, 361–62 paradigms, 242–45 paradoxes, 301–2 parallelism in art and commerce, 307–9 Pareto, Vilfredo, 198–99 Pareto Principle, xxvii, 198–200 Parkinson’s disease, 63 particles: entangled, 330–31 wave duality, 28, 296–98 path dependence, 285–88 pattern finding, 105, 107, 394 Paul, Gregory, 268–70 Pauling, Linus, 269 Pauly, Daniel, 90 PDFs (partially diminished fractions), 206 Peirce, Charles Sanders, 112, 113, 114, 222 Pepperberg, Irene, 160–61 perception, 43, 133 cognition and, 133–34 see also senses PERMA, 92–93 personality, 229, 230–31 character traits in, 229 insanity and, 232–34 temperament dimensions in, 229–31 pessimistic meta-induction from the history of science, 30–31 Pettenkofer, Max, 338, 339 phase transitions, 371–72 philosophy, 271, 275 phlogiston, 360 physicians, 36 physics, 221, 222–23, 234, 277, 322 supervenience and, 364 see also quantum mechanics Pickover, Clifford, 109–11 Pinker, Steven, xxv, xxx, 94–97 Pizarro, David, 394 placebo and placebo effects, 379, 381–85 Plato, 9, 34, 221–22 Platonism, 222 Poe, Edgar Allan, 301 political systems, 157–58, 159 politicians, 50 polywater, 243 Pondicherry, 389–90 Pöppel, Ernst, 395–97 positive-sum games, 94–97 powers of 10, 162–64 pragmamorphism, 115 predictability, 103–4 randomness and, 105–8 predictions, 261 predictive coding, 132–34 prions, 240 priors, 219 privacy, 262 probability, 52, 65–67, 147, 149, 356, 378, 379 risks and, 68–71 problems, wicked, 203–5 procrastination, 209–10 projective thinking, 240–41 prokaryotic cells, 157 proof, 355–57 Provine, Robert R., 84 Prusiner, Stanley, 240 psychiatry, 232, 233–34, 235, 279 psychotherapy, 41–42 public policy, 93 experiments in, 26, 273–74 uncertainty and, 54, 56 QED moments, 355–57 quantum gravity, 297–98 quantum mechanics, 25, 114, 192–93, 234, 322, 356 entanglement in, 330–32 “many worlds” interpretation of, 69–70 thought experiments in, 28 wave-particle duality in, 28, 296–98 quantum tunneling, 297 quarks, 190–91, 297 Quaternary mass extinction, 362 QWERTY keyboards, 285–86 Ramachandran, V.


pages: 403 words: 111,119

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth

3D printing, Asian financial crisis, bank run, basic income, battle of ideas, Berlin Wall, bitcoin, blockchain, Branko Milanovic, Bretton Woods, Buckminster Fuller, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, choice architecture, clean water, cognitive bias, collapse of Lehman Brothers, complexity theory, creative destruction, crowdsourcing, cryptocurrency, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, dematerialisation, Douglas Engelbart, Douglas Engelbart, en.wikipedia.org, energy transition, Erik Brynjolfsson, ethereum blockchain, Eugene Fama: efficient market hypothesis, experimental economics, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, Financial Instability Hypothesis, full employment, global supply chain, global village, Henri Poincaré, hiring and firing, Howard Zinn, Hyman Minsky, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of writing, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, land reform, land value tax, Landlord’s Game, loss aversion, low skilled workers, M-Pesa, Mahatma Gandhi, market fundamentalism, Martin Wolf, means of production, megacity, mobile money, Mont Pelerin Society, Myron Scholes, neoliberal agenda, Network effects, Occupy movement, off grid, offshore financial centre, oil shale / tar sands, out of africa, Paul Samuelson, peer-to-peer, planetary scale, price mechanism, quantitative easing, randomized controlled trial, Richard Thaler, Ronald Reagan, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Simon Kuznets, smart cities, smart meter, South Sea Bubble, statistical model, Steve Ballmer, The Chicago School, The Great Moderation, the map is not the territory, the market place, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, Torches of Freedom, trickle-down economics, ultimatum game, universal basic income, Upton Sinclair, Vilfredo Pareto, wikimedia commons

While Karl Marx argued that incomes would tend to diverge, with the rich getting richer while workers were kept poor, Alfred Marshall claimed the opposite: that incomes across society would tend to converge as the economy expanded. In the 1890s, however, the Italian engineer-turned-economist Vilfredo Pareto stepped back from theoretical debate and searched for a pattern in the data. Having gathered income and tax records from England and from German states, from Paris and Italian towns, he plotted them on a graph and saw a curiously striking pattern emerge. In each case, he found, around 80% of national income was in the hands of just 20% of people, while the remaining 20% of income was spread among 80% of people.

., 6 micro-businesses, 9, 173, 178 microeconomics, 132–4 microgrids, 187–8 Micronesia, 153 Microsoft, 231 middle class, 6, 46, 58 middle-income countries, 90, 164, 168, 173, 180, 226, 254 migration, 82, 89–90, 166, 195, 199, 236, 266, 286 Milanovic, Branko, 171 Mill, John Stuart, 33–4, 73, 97, 250, 251, 283, 284, 288 Millo, Yuval, 101 minimum wage, 82, 88, 176 Minsky, Hyman, 87, 146 Mises, Ludwig von, 66 mission zero, 217 mobile banking, 199–200 mobile phones, 222 Model T revolution, 277–8 Moldova, 199 Mombasa, Kenya, 185–6 Mona Lisa (da Vinci), 94 money creation, 87, 164, 177, 182–8, 205 MONIAC (Monetary National Income Analogue Computer), 64–5, 75, 142, 262 Monoculture (Michaels), 6 Monopoly, 149 Mont Pelerin Society, 67, 93 Moral Consequences of Economic Growth, The (Friedman), 258 moral vacancy, 41 Morgan, Mary, 99 Morogoro, Tanzania, 121 Moyo, Dambisa, 258 Muirhead, Sam, 230, 231 MultiCapital Scorecard, 241 Murphy, David, 264 Murphy, Richard, 185 musical tastes, 110 Myriad Genetics, 196 N national basic income, 177 Native Americans, 115, 116, 282 natural capital, 7, 116, 269 Natural Economic Order, The (Gessel), 274 Nedbank, 216 negative externalities, 213 negative interest rates, 275–6 neoclassical economics, 134, 135 neoliberalism, 7, 62–3, 67–70, 81, 83, 84, 88, 93, 143, 170, 176 Nepal, 181, 199 Nestlé, 217 Netherlands, 211, 235, 224, 226, 238, 277 networks, 110–11, 117, 118, 123, 124–6, 174–6 neuroscience, 12–13 New Deal, 37 New Economics Foundation, 278, 283 New Year’s Day, 124 New York, United States, 9, 41, 55 Newlight Technologies, 224, 226, 293 Newton, Isaac, 13, 15–17, 32–3, 95, 97, 129, 131, 135–7, 142, 145, 162 Nicaragua, 196 Nigeria, 164 nitrogen, 49, 52, 212–13, 216, 218, 221, 226, 298 ‘no pain, no gain’, 163, 167, 173, 204, 209 Nobel Prize, 6–7, 43, 83, 101, 167 Norway, 281 nudging, 112, 113, 114, 123–6 O Obama, Barack, 41, 92 Oberlin, Ohio, 239, 240–41 Occupy movement, 40, 91 ocean acidification, 45, 46, 52, 155, 242, 298 Ohio, United States, 190, 239 Okun, Arthur, 37 onwards and upwards, 53 Open Building Institute, 196 Open Source Circular Economy (OSCE), 229–32 open systems, 74 open-source design, 158, 196–8, 265 open-source licensing, 204 Organisation for Economic Co-operation and Development (OECD), 38, 210, 255–6, 258 Origin of Species, The (Darwin), 14 Ormerod, Paul, 110, 111 Orr, David, 239 Ostrom, Elinor, 83, 84, 158, 160, 181–2 Ostry, Jonathan, 173 OSVehicle, 231 overseas development assistance (ODA), 198–200 ownership of wealth, 177–82 Oxfam, 9, 44 Oxford University, 1, 36 ozone layer, 9, 50, 115 P Pachamama, 54, 55 Pakistan, 124 Pareto, Vilfredo, 165–6, 175 Paris, France, 290 Park 20|20, Netherlands, 224, 226 Parker Brothers, 149 Patagonia, 56 patents, 195–6, 197, 204 patient capital, 235 Paypal, 192 Pearce, Joshua, 197, 203–4 peer-to-peer networks, 187, 192, 198, 203, 292 People’s QE, 184–5 Perseus, 244 Persia, 13 Peru, 2, 105–6 Phillips, Adam, 283 Phillips, William ‘Bill’, 64–6, 75, 142, 262 phosphorus, 49, 52, 212–13, 218, 298 Physiocrats, 73 Pickett, Kate, 171 pictures, 12–25 Piketty, Thomas, 169 Playfair, William, 16 Poincaré, Henri, 109, 127–8 Polanyi, Karl, 82, 272 political economy, 33–4, 42 political funding, 91–2, 171–2 political voice, 43, 45, 51–2, 77, 117 pollution, 29, 45, 52, 85, 143, 155, 206–17, 226, 238, 242, 254, 298 population, 5, 46, 57, 155, 199, 250, 252, 254 Portugal, 211 post-growth society, 250 poverty, 5, 9, 37, 41, 50, 88, 118, 148, 151 emotional, 283 and inequality, 164–5, 168–9, 178 and overseas development assistance (ODA), 198–200 and taxation, 277 power, 91–92 pre-analytic vision, 21–2 prescription medicines, 123 price-takers, 132 prices, 81, 118–23, 131, 160 Principles of Economics (Mankiw), 34 Principles of Economics (Marshall), 17, 98 Principles of Political Economy (Mill), 288 ProComposto, 226 Propaganda (Bernays), 107 public relations, 107, 281 public spending v. investment, 276 public–private patents, 195 Putnam, Robert, 76–7 Q quantitative easing (QE), 184–5 Quebec, 281 Quesnay, François, 16, 73 R Rabot, Ghent, 236 Rancière, Romain, 172 rating and review systems, 105 rational economic man, 94–103, 109, 111, 112, 126, 282 Reagan, Ronald, 67 reciprocity, 103–6, 117, 118, 123 reflexivity of markets, 144 reinforcing feedback loops, 138–41, 148, 250, 271 relative decoupling, 259 renewable energy biomass energy, 118, 221 and circular economy, 221, 224, 226, 235, 238–9, 274 and commons, 83, 85, 185, 187–8, 192, 203, 264 geothermal energy, 221 and green growth, 257, 260, 263, 264, 267 hydropower, 118, 260, 263 pricing, 118 solar energy, see solar energy wave energy, 221 wind energy, 75, 118, 196, 202–3, 221, 233, 239, 260, 263 rentier sector, 180, 183, 184 reregulation, 82, 87, 269 resource flows, 175 resource-intensive lifestyles, 46 Rethinking Economics, 289 Reynebeau, Guy, 237 Ricardo, David, 67, 68, 73, 89, 250 Richardson, Katherine, 53 Rifkin, Jeremy, 83, 264–5 Rise and Fall of the Great Powers, The (Kennedy), 279 risk, 112, 113–14 Robbins, Lionel, 34 Robinson, James, 86 Robinson, Joan, 142 robots, 191–5, 237, 258, 278 Rockefeller Foundation, 135 Rockford, Illinois, 179–80 Rockström, Johan, 48, 55 Roddick, Anita, 232–4 Rogoff, Kenneth, 271, 280 Roman Catholic Church, 15, 19 Rombo, Tanzania, 190 Rome, Ancient, 13, 48, 154 Romney, Mitt, 92 Roosevelt, Franklin Delano, 37 rooted membership, 190 Rostow, Walt, 248–50, 254, 257, 267–70, 284 Ruddick, Will, 185 rule of thumb, 113–14 Ruskin, John, 42, 223 Russia, 200 rust belt, 90, 239 S S curve, 251–6 Sainsbury’s, 56 Samuelson, Paul, 17–21, 24–5, 38, 62–7, 70, 74, 84, 91, 92, 93, 262, 290–91 Sandel, Michael, 41, 120–21 Sanergy, 226 sanitation, 5, 51, 59 Santa Fe, California, 213 Santinagar, West Bengal, 178 São Paolo, Brazil, 281 Sarkozy, Nicolas, 43 Saumweder, Philipp, 226 Scharmer, Otto, 115 Scholes, Myron, 100–101 Schumacher, Ernst Friedrich, 42, 142 Schumpeter, Joseph, 21 Schwartz, Shalom, 107–9 Schwarzenegger, Arnold, 163, 167, 204 ‘Science and Complexity’ (Weaver), 136 Scotland, 57 Seaman, David, 187 Seattle, Washington, 217 second machine age, 258 Second World War (1939–45), 18, 37, 70, 170 secular stagnation, 256 self-interest, 28, 68, 96–7, 99–100, 102–3 Selfish Society, The (Gerhardt), 283 Sen, Amartya, 43 Shakespeare, William, 61–3, 67, 93 shale gas, 264, 269 Shang Dynasty, 48 shareholders, 82, 88, 189, 191, 227, 234, 273, 292 sharing economy, 264 Sheraton Hotel, Boston, 3 Siegen, Germany, 290 Silicon Valley, 231 Simon, Julian, 70 Sinclair, Upton, 255 Sismondi, Jean, 42 slavery, 33, 77, 161 Slovenia, 177 Small Is Beautiful (Schumacher), 42 smart phones, 85 Smith, Adam, 33, 57, 67, 68, 73, 78–9, 81, 96–7, 103–4, 128, 133, 160, 181, 250 social capital, 76–7, 122, 125, 172 social contract, 120, 125 social foundation, 10, 11, 44, 45, 49, 51, 58, 77, 174, 200, 254, 295–6 social media, 83, 281 Social Progress Index, 280 social pyramid, 166 society, 76–7 solar energy, 59, 75, 111, 118, 187–8, 190 circular economy, 221, 222, 223, 224, 226–7, 239 commons, 203 zero-energy buildings, 217 zero-marginal-cost revolution, 84 Solow, Robert, 135, 150, 262–3 Soros, George, 144 South Africa, 56, 177, 214, 216 South Korea, 90, 168 South Sea Bubble (1720), 145 Soviet Union (1922–91), 37, 67, 161, 279 Spain, 211, 238, 256 Spirit Level, The (Wilkinson & Pickett), 171 Sraffa, Piero, 148 St Gallen, Switzerland, 186 Stages of Economic Growth, The (Rostow), 248–50, 254 stakeholder finance, 190 Standish, Russell, 147 state, 28, 33, 69–70, 78, 82, 160, 176, 180, 182–4, 188 and commons, 85, 93, 197, 237 and market, 84–6, 200, 281 partner state, 197, 237–9 and robots, 195 stationary state, 250 Steffen, Will, 46, 48 Sterman, John, 66, 143, 152–4 Steuart, James, 33 Stiglitz, Joseph, 43, 111, 196 stocks and flows, 138–41, 143, 144, 152 sub-prime mortgages, 141 Success to the Successful, 148, 149, 151, 166 Sugarscape, 150–51 Summers, Larry, 256 Sumner, Andy, 165 Sundrop Farms, 224–6 Sunstein, Cass, 112 supply and demand, 28, 132–6, 143, 253 supply chains, 10 Sweden, 6, 255, 275, 281 swishing, 264 Switzerland, 42, 66, 80, 131, 186–7, 275 T Tableau économique (Quesnay), 16 tabula rasa, 20, 25, 63, 291 takarangi, 54 Tanzania, 121, 190, 202 tar sands, 264, 269 taxation, 78, 111, 165, 170, 176, 177, 237–8, 276–9 annual wealth tax, 200 environment, 213–14, 215 global carbon tax, 201 global financial transactions tax, 201, 235 land-value tax, 73, 149, 180 non-renewable resources, 193, 237–8, 278–9 People’s QE, 185 tax relief v. tax justice, 23, 276–7 TED (Technology, Entertainment, Design), 202, 258 Tempest, The (Shakespeare), 61, 63, 93 Texas, United States, 120 Thailand, 90, 200 Thaler, Richard, 112 Thatcher, Margaret, 67, 69, 76 Theory of Moral Sentiments (Smith), 96 Thompson, Edward Palmer, 180 3D printing, 83–4, 192, 198, 231, 264 thriving-in-balance, 54–7, 62 tiered pricing, 213–14 Tigray, Ethiopia, 226 time banking, 186 Titmuss, Richard, 118–19 Toffler, Alvin, 12, 80 Togo, 231, 292 Torekes, 236–7 Torras, Mariano, 209 Torvalds, Linus, 231 trade, 62, 68–9, 70, 89–90 trade unions, 82, 176, 189 trademarks, 195, 204 Transatlantic Trade and Investment Partnership (TTIP), 92 transport, 59 trickle-down economics, 111, 170 Triodos, 235 Turkey, 200 Tversky, Amos, 111 Twain, Mark, 178–9 U Uganda, 118, 125 Ulanowicz, Robert, 175 Ultimatum Game, 105, 117 unemployment, 36, 37, 276, 277–9 United Kingdom Big Bang (1986), 87 blood donation, 118 carbon dioxide emissions, 260 free trade, 90 global material footprints, 211 money creation, 182 MONIAC (Monetary National Income Analogue Computer), 64–5, 75, 142, 262 New Economics Foundation, 278, 283 poverty, 165, 166 prescription medicines, 123 wages, 188 United Nations, 55, 198, 204, 255, 258, 279 G77 bloc, 55 Human Development Index, 9, 279 Sustainable Development Goals, 24, 45 United States American Economic Association meeting (2015), 3 blood donation, 118 carbon dioxide emissions, 260 Congress, 36 Council of Economic Advisers, 6, 37 Earning by Learning, 120 Econ 101 course, 8, 77 Exxon Valdez oil spill (1989), 9 Federal Reserve, 87, 145, 146, 271, 282 free trade, 90 Glass–Steagall Act (1933), 87 greenhouse gas emissions, 153 global material footprint, 211 gross national product (GNP), 36–40 inequality, 170, 171 land-value tax, 73, 149, 180 political funding, 91–2, 171 poverty, 165, 166 productivity and employment, 193 rust belt, 90, 239 Transatlantic Trade and Investment Partnership (TTIP), 92 wages, 188 universal basic income, 200 University of Berkeley, 116 University of Denver, 160 urbanisation, 58–9 utility, 35, 98, 133 V values, 6, 23, 34, 35, 42, 117, 118, 121, 123–6 altruism, 100, 104 anthropocentric, 115 extrinsic, 115 fluid, 28, 102, 106–9 and networks, 110–11, 117, 118, 123, 124–6 and nudging, 112, 113, 114, 123–6 and pricing, 81, 120–23 Veblen, Thorstein, 82, 109, 111, 142 Venice, 195 verbal framing, 23 Verhulst, Pierre, 252 Victor, Peter, 270 Viner, Jacob, 34 virtuous cycles, 138, 148 visual framing, 23 Vitruvian Man, 13–14 Volkswagen, 215–16 W Wacharia, John, 186 Wall Street, 149, 234, 273 Wallich, Henry, 282 Walras, Léon, 131, 132, 133–4, 137 Ward, Barbara, 53 Warr, Benjamin, 263 water, 5, 9, 45, 46, 51, 54, 59, 79, 213–14 wave energy, 221 Ways of Seeing (Berger), 12, 281 Wealth of Nations, The (Smith), 74, 78, 96, 104 wealth ownership, 177–82 Weaver, Warren, 135–6 weightless economy, 261–2 WEIRD (Western, educated, industrialised, rich, democratic), 103–5, 110, 112, 115, 117, 282 West Bengal, India, 124, 178 West, Darrell, 171–2 wetlands, 7 whale hunting, 106 Wiedmann, Tommy, 210 Wikipedia, 82, 223 Wilkinson, Richard, 171 win–win trade, 62, 68, 89 wind energy, 75, 118, 196, 202–3, 221, 233, 239, 260, 263 Wizard of Oz, The, 241 Woelab, 231, 293 Wolf, Martin, 183, 266 women’s rights, 33, 57, 107, 160, 201 and core economy, 69, 79–81 education, 57, 124, 178, 198 and land ownership, 178 see also gender equality workers’ rights, 88, 91, 269 World 3 model, 154–5 World Bank, 6, 41, 119, 164, 168, 171, 206, 255, 258 World No Tobacco Day, 124 World Trade Organization, 6, 89 worldview, 22, 54, 115 X xenophobia, 266, 277, 286 Xenophon, 4, 32, 56–7, 160 Y Yandle, Bruce, 208 Yang, Yuan, 1–3, 289–90 yin yang, 54 Yousafzai, Malala, 124 YouTube, 192 Yunnan, China, 56 Z Zambia, 10 Zanzibar, 9 Zara, 276 Zeitvorsoge, 186–7 zero environmental impact, 217–18, 238, 241 zero-hour contracts, 88 zero-humans-required production, 192 zero-interest loans, 183 zero-marginal-cost revolution, 84, 191, 264 zero-waste manufacturing, 227 Zinn, Howard, 77 PICTURE ACKNOWLEDGEMENTS Illustrations are reproduced by kind permission of: archive.org


pages: 298 words: 43,745

Understanding Sponsored Search: Core Elements of Keyword Advertising by Jim Jansen

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AltaVista, barriers to entry, Black Swan, bounce rate, business intelligence, butterfly effect, call centre, Claude Shannon: information theory, complexity theory, correlation does not imply causation, en.wikipedia.org, first-price auction, information asymmetry, information retrieval, intangible asset, inventory management, life extension, linear programming, megacity, Nash equilibrium, Network effects, PageRank, place-making, price mechanism, psychological pricing, random walk, Schrödinger's Cat, sealed-bid auction, search engine result page, second-price auction, second-price sealed-bid, sentiment analysis, social web, software as a service, stochastic process, telemarketer, the market place, The Present Situation in Quantum Mechanics, the scientific method, The Wisdom of Crowds, Vickrey auction, Vilfredo Pareto, yield management

Weight follows a normal distribution, whereas wealth follows a power law distribution. With distribution of weight, average has meaning. With distribution of wealth, average has little meaning. Potpourri: This distribution of wealth was one of the first observations of the power law distribution, known now as the Pareto principle. The Italian economist Vilfredo Pareto observed in 1906 that 80 percent of the land in Italy was owned by 20 percent of the population. This was the basis for the 80–20 rule, which has cropped up in a variety of disciplines, including real estate (80 percent of the houses are sold by 20 percent of the realtors), quality control (80 percent of the problems are a result of 20 percent of the causes), sales (80 percent of the revenue is generated by 20 percent of the employees), and information retrieval (80 percent precision means 20 percent recall).

., 116 motives, 92–93 Murphy, Jamie, 19 Mustang, Ford, 124 Nash equilibrium, 196–198, 211, 213 navigational, 2, 44–45, 89, 96, 213, 223–224 Nelson, Paul, 39 Nielsen, Arthur, 152 Nielsen BuzzMetrics, 152 Nielsen Company, 152 Nielsen//NetRatings, 152 Nielsen ratings, 152 the normal distribution, 50 Norman, Don, 74 north, 22, 24, 190 nurture, 124 observer bias, 161 observer effect, 161 Ogilvy, David, 85 Onsale, 179 OpenText, 9, 11–12, 15 outcomes, 20, 47, 92–93, 100, 113, 115–116, 128, 150 Overture, 13–15, 179 P&G, 126 Page, Larry, 206 Palmer, Volney B., 122 papyrus, xii Pareto, Vilfredo, 51 Parisian Love, 186 Park, Daehee, 19 pay-for-impression, 19 pay-per-action, 19 pay-per-call, 19 pay-per-click, x, 3–4, 14, 19 Pedersen, Jan, 44 Pemberton, J. M., 70 Penniman, D., 151 Perception, 66, 117 perceptual process, 65 perfect information, 179–180, 184, 189, 197 personalization, 184, 226 Persuasive communication, 122 Pirolli, Pete, 44 Popper, Karl, 203 position impact, 74 positioning advertising, 126 power law, 49–55, 91, 104, 136, 211 prestige pricing, 133 primacy effect, 74–75 principle of least effort, 42–43, 49, 53–55, 58, 66–67, 70–72, 91, 96, 100, 114, 211, 213–214 privacy concerns, 223 Procter and Gamble, 11 prominence, 125 psychohistory, 47 Psychological needs, 125 quality score, 14, 184, 190–193, 196, 198, 200, 221 Quantum mechanics, 204 query length, 23, 41, 48–49 rational actor, 96, 100, 106 Real time content, 224 recency effect, 72, 74–75, 212–213 relevance, 10, 14, 20–21, 37, 64, 74, 76–77, 112–113, 118, 163, 184, 191, 211, 213 reliability, 141, 150, 164, 166, 171 Renaudot, Théophraste, 122 Resnick, Marc, 20, 118 RFM analysis, 104 right rail, 22 Rose, Dan, 44 Saracevic, Tefko, 44 satisficing, 42, 70, 92, 96 Schmidt, Eric, 177 Schrödinger’s cat paradox, 204 Schultz, C., 113, 116 Schwab, Victor O., 68, 100, 120, 165 screen real estate, 3–4, 21, 64, 120, 178, 199 search determinants, 92 Search Engine Marketing Professional Organization.


pages: 543 words: 147,357

Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society by Will Hutton

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Andrei Shleifer, asset-backed security, bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, capital controls, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, choice architecture, cloud computing, collective bargaining, conceptual framework, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, debt deflation, decarbonisation, Deng Xiaoping, discovery of DNA, discovery of the americas, discrete time, diversification, double helix, Edward Glaeser, financial deregulation, financial innovation, financial intermediation, first-past-the-post, floating exchange rates, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Akerlof, Gini coefficient, global supply chain, Growth in a Time of Debt, Hyman Minsky, I think there is a world market for maybe five computers, income inequality, inflation targeting, interest rate swap, invisible hand, Isaac Newton, James Dyson, James Watt: steam engine, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, liberal capitalism, light touch regulation, Long Term Capital Management, Louis Pasteur, low-wage service sector, mandelbrot fractal, margin call, market fundamentalism, Martin Wolf, mass immigration, means of production, Mikhail Gorbachev, millennium bug, money market fund, moral hazard, moral panic, mortgage debt, Myron Scholes, Neil Kinnock, new economy, Northern Rock, offshore financial centre, open economy, Plutocrats, plutocrats, price discrimination, private sector deleveraging, purchasing power parity, quantitative easing, race to the bottom, railway mania, random walk, rent-seeking, reserve currency, Richard Thaler, Right to Buy, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, Rory Sutherland, Satyajit Das, shareholder value, short selling, Silicon Valley, Skype, South Sea Bubble, Steve Jobs, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, unpaid internship, value at risk, Vilfredo Pareto, Washington Consensus, wealth creators, working poor, zero-sum game, éminence grise

If you are powerful and well connected, that provides a platform for becoming even better connected and more powerful – and this virtuous circle becomes a vicious circle in the other direction for the poor. In airport networks Heathrow and JFK in New York are growing hubs; in banking networks the big banks grew ever bigger. The Italian economist Vilfredo Pareto calls this a ‘power curve’.50 He concludes that throughout history and across all societies, human organisation has been less of a social pyramid in which the gradation from one class to the next is gradual, and more of a ‘social arrow’. There has always been an enormous base at the bottom, occupied by the majority, and a very thin top.

., 311 mergers and takeovers, 8, 21, 33, 92, 245, 251, 258, 259, 388 Merkel, Angela, 381–2 Merrill Lynch, 150, 170, 175, 192 Merton, Robert, 169, 191 Meucci, Antonnio, 221 Mexico, 30, 385 Meyer, Christopher, 332 Michalek, Richard, 175 Microsoft, 71, 114, 136, 253, 254, 258–9 Milburn, Alan, 273 Miles, David, 186–7 Milgram, Stanley, 200 millennium bug, 319 Miller, David, 70, 76, 77 minimum wage, 142, 278 Minsky, Hyman, 183, 185 Mirror newspapers, 319, 329 Mlodinow, Leonard, 72–3 MMR vaccine, 327 mobile phones, 30, 134, 143, 229, 349 modernity, 54–5, 104 Mokyr, Joel, 112 monarchy, 15, 312, 336 Mondragon, 94 monetary policy, 154, 182, 184, 185, 208, 362, 367 monopolies, 74, 102, 103, 160, 314; history of, 104, 113, 124, 125–6, 130–4; in the media, 30, 317, 318, 331, 350; modern new wave of, 35, 135–6, 137–8, 201–2, 258–9; ‘oligarchs’, 30, 65, 104 Monopolies and Mergers Commission, 258, 318 Moody’s (credit-ratings agency), 151, 175 morality, 16–27, 37, 44–54, 70, 73; see also desert, due, concept of; fairness; proportionality; debt and, 351–4, 357, 360–1 Morgan, JP, 67 Morgan, Piers, 329 Morgan Stanley, 150 Mulas-Granados, Carlos, 367 Murdoch, James, 389 Murdoch, Rupert, 317–18, 320, 327 Murphy, Kevin, 62, 63 Murray, Jim ‘Mad Dog’, 321 Myners, Paul, 340 Nash bargaining solution, 60 National Audit Office, 340 National Child Development Study, 289–90 national ecosystem of innovation, 33–4, 65, 103, 206, 218, 221, 239–44, 255–9, 374; state facilitation of, 102, 219–22, 229–30, 233, 251–2, 258–66, 269–70, 392 National Health Service (NHS), 21, 27, 34, 92, 265, 277, 336, 371–2; popular support for, 75, 77, 283 national insurance system, 81, 277, 302 national strategy for neighbourhood renewal, 278 Navigation Acts, abolition of, 126 Neiman, Susan, 18–19 neo-conservatism, 17–18, 144–9, 387–90 network theory, 199–201, 202–4, 206; Pareto curve and, 201–2 New Economics Foundation, 62 New Industry New Jobs strategy, 21 New Labour: budget deficit and, 224, 335, 360, 368, 369; business friendly/promarket policies, x–xi, 139–40, 142, 145, 146–7, 162, 198–9, 382; City of London and, x–xi, 5, 19, 22, 142–3, 144–5, 355; decline of class-based politics, 341; failure to challenge elites, x–xi, 14, 22, 388, 389–90; general election (1992) and, 138, 140–1, 144, 148, 277; general election (2005) and, 97; general election (2010) and, 20, 271, 334, 374, 378; light-touch regulation and, 138, 145, 146–7, 162, 198–9; New Industry New Jobs strategy, 21; one-off tax on bank bonuses, 26, 179, 249; record in government, 10–11, 19, 20–2, 220, 276–80, 302, 306, 334–6, 366–7, 389–90; reforms to by ‘modernisers’, 141; responses to newspaper campaigns, 11 New York markets, 140, 152, 162; Asian and/or OPEC capital surpluses and, 169, 171, 354; London/New York axis, 149, 150–1, 157–8, 160, 188, 202 Newsweek, 174 Newton, Isaac, 31, 127, 190 NHS Direct, 372 Nicoli, Eric, 13 non-executive directors (NEDs), 249–50 Nordhaus, William, 260 Nordic countries, 262; Iceland, 7, 138; Norway, 281; Sweden, 264, 281 North, Douglas, 113, 116, 129–30 Northern Rock, 9, 156, 157, 158, 186, 187–8, 202, 204, 251, 340–1 Norton Publishing, 93 Nozick, Robert, 234, 235 nuclear non-proliferation, 226, 384, 394 Nussbaum, Martha, 79 Obama, Barack, 18, 183, 380, 382–3, 394–5 the Observer, 141, 294, 327 Office for Budget Responsibility, 360 Office of Fair Trading (OFT), 257, 258 OFSTED, 276 oil production, 322; BP Gulf of Mexico disaster (2010), 216–17, 392; finite stocks and, 230, 384; OPEC, 149, 161, 171; price increase (early 1970s), 161; in USA, 130, 131, 132 Olsen, Ken, 29 Olympics (2012), 114 open markets, 29, 30, 31, 40, 89, 92, 100–1, 366, 377, 379, 382, 384; see also ‘open-access societies’; as determinants of value, 51–2, 62; fairness and, 60–1, 89–91, 94–6; ‘reference prices’ and, 94–6 ‘open-access societies’, 134, 135, 258, 272, 273, 275, 276, 280–1, 394; Britain as ‘open-access society’ (to 1850), 124, 126–7; democracy and, 136, 314; Enlightenment and, 30–1, 314–15, 394; innovation and invention in, 109–13, 114, 116–17, 122–3, 126–7, 131, 136, 315; partial political opening in, 129–30; US New Freedom programme, 132–3 opium production, 102 options, 166, 188, 191 Orange County derivatives losses, 167 Organisation for Economic Co-operation and Development (OECD), 180, 337, 373 Orwell, George, 37 Osborne, George, 147, 208, 224, 245, 302, 338 Overend, Gurney and Co., 156–7 Oxbridge/top university entry, 293–4, 306 Oxford University, 261 Page, Scott, 204 Paine, Tom, 347 Pareto, Vilfredo, 201–2 Paribas, 152, 187 Parkinson, Lance-Bombardier Ben, 13 participation, political, 35, 86, 96, 99 Paulson, Henry, 177 Paulson, John, 103, 167–8 pay of executives and bankers, 3–4, 5, 6–7, 22, 66–7, 138, 387; bonuses, 6, 25–6, 41, 174–5, 176, 179, 208, 242, 249, 388; high levels/rises of, 6–7, 13, 25, 82–3, 94, 172–6, 216, 296, 387, 393; Peter Mandelson on, 24; post-crash/bail-outs, 176, 216; in private equity houses, 248; remuneration committees, 6, 82, 83, 176; shared capitalism and, 66, 93; spurious justifications for, 42, 78, 82–3, 94, 176, 216 pension, state, 81, 372, 373 pension funds, 240, 242 Pettis, Michael, 379–80 pharmaceutical industry, 219, 255, 263, 265, 267–8 Phelps, Edmund, 275 philanthropy and charitable giving, 13, 25, 280 Philippines, 168 Philippon, Thomas, 172–3 Philips Electronics, Royal, 256 Pimco, 177 piracy, 101–2 Plato, 39, 44 Player, Gary, 76 pluralist state/society, x, 35, 99, 113, 233, 331, 350, 394 Poland, 67, 254 political parties, 13–14, 340, 341, 345, 390; see also under entries for individual parties political system, British: see also democracy; centralised constitution, 14–15, 35, 217, 334; coalitions as a good thing, 345–6; decline of class-based politics, 341; devolving of power to Cardiff and Edinburgh, 15, 334; expenses scandal, 3, 14, 217, 313, 341; history of (to late nineteenth-century), 124–30; lack of departmental coordination, 335, 336, 337; long-term policy making and, 217; monarchy and, 15, 312, 336; politicians’ lack of experience outside politics, 338; required reforms of, 344–8; select committee system, 339–40; settlement (of 1689), 125; sovereignty and, 223, 346, 347, 378; urgent need for reform, 35, 36–7, 218, 344; voter-politician disengagement, 217–18, 310, 311, 313–14, 340 Pommerehne, Werner, 60 population levels, world, 36 Portsmouth Football Club, 352 Portugal, 108, 109, 121, 377 poverty, 278–9; child development and, 288–90; circumstantial causes of, 26, 283–4; Conservative Party and, 279; ‘deserving’/’undeserving’ poor, 276, 277–8, 280, 284, 297, 301; Enlightenment views on, 53, 55–6; need for asset ownership, 301–3, 304; political left and, 78–83; the poor viewed as a race apart, 285–7; as relative not absolute, 55, 84; Adam Smith on, 55, 84; structure of market economy and, 78–9, 83; view that the poor deserve to be poor, 25, 52–3, 80, 83, 281, 285–8, 297, 301, 387; worldwide, 383, 384 Power2010 website, 340–1 PR companies and media, 322, 323 Press Complaints Commission (PCC), 325, 327, 331–2, 348 preventative medicine, 371 Price, Lance, 328, 340 Price, Mark, 93 Prince, Chuck, 184 printing press, 109, 110–11 prisoners, early release of, 11 private-equity firms, 6, 28–9, 158, 172, 177, 179, 205, 244–9, 374 Procter & Gamble, 167, 255 productive entrepreneurship, 6, 22–3, 28, 29–30, 33, 61–2, 63, 78, 84, 136, 298; in British history (to 1850), 28, 124, 126–7, 129; due desert/fairness and, 102–3, 105–6, 112, 223, 272, 393; general-purpose technologies (GPTs) and, 107–11, 112, 117, 126–7, 134, 228–9, 256, 261, 384 property market: baby boomer generation and, 372–3; Barker Review, 185; boom in, 5, 143, 161, 183–4, 185–7, 221; bust (1989-91), 161, 163; buy-to-let market, 186; commercial property, 7, 356, 359, 363; demutualisation of building societies, 156, 186; deregulation (1971) and, 161; Japanese crunch (1989-92) and, 361–2; need for tax on profits from home ownership, 308–9, 373–4; property as national obsession, 187; residential mortgages, 7, 183–4, 186, 356, 359, 363; securitised loans based mortgages, 171, 186, 188; shadow banking system and, 171, 172; ‘subprime’ mortgages, 64, 152, 161, 186, 203 proportionality, 4, 24, 26, 35, 38, 39–40, 44–6, 51, 84, 218; see also desert, due, concept of; contributory/discretionary benefits and, 63; diplomacy/ international relations and, 385–6; job seeker’s allowance as transgression of, 81; left wing politics and, 80; luck and, 73–7, 273; policy responses to crash and, 215–16; poverty relief systems and, 80–1; profit and, 40, 388; types of entrepreneurship and, 61–2, 63 protectionism, 36, 358, 376–7, 378, 379, 382, 386 Prussia, 128 Public Accounts Committee, 340 Purnell, James, 338 quantitative easing, 176 Quayle, Dan, 177 race, disadvantage and, 290 railways, 9, 28, 105, 109–10, 126 Rand, Ayn, 145, 234 Rawls, John, 57, 58, 63, 73, 78 Reagan, Ronald, 135, 163 recession, xi, 3, 8, 9, 138, 153, 210, 223, 335; of 1979-81 period, 161; efficacy of fiscal policy, 367–8; VAT decrease (2009) and, 366–7 reciprocity, 43, 45, 82, 86, 90, 143, 271, 304, 382; see also desert, due, concept of; proportionality Reckitt Benckiser, 82–3 Regional Development Agencies, 21 regulation: see also Bank of England; Financial Services Authority (FSA); Bank of International Settlements (BIS), 169, 182; Basel system, 158, 160, 163, 169, 170–1, 196, 385; big as beautiful in global banking, 201–2; Big Bang (1986), 90, 162; by-passing of, 137, 187; capital requirements/ratios, 162–3, 170–1, 208; dismantling of post-war system, 149, 158, 159–63; economists’ doubts over deregulation, 163; example of China, 160; failure to prevent crash, 154, 197, 198–9; Glass-Steagall abolition (1999), 170, 202–3; light-touch, 5, 32, 138, 151, 162, 198–9; New Deal rules (1930s), 159, 162; in pharmaceutical industry, 267–8; as pro-business tool, 268–70; proposed Financial Policy Committee, 208; required reforms of, 267, 269–70, 376, 377, 384, 392; reserve requirements scrapped (1979), 208; task of banking authorities, 157; Top Runner programme in Japan, 269 Reinhart, Carmen, 214, 356 Repo 105 technique, 181 Reshef, Ariell, 172–3 Reuters, 322, 331 riches and wealth, 11–13, 272–3, 283–4, 387–8; see also pay of executives and bankers; the rich as deserving of their wealth, 25–6, 52, 278, 296–7 Rickards, James, 194 risk, 149, 158, 165, 298–302, 352–3; credit default swaps and, 151, 152, 166–8, 170, 171, 175, 176, 191, 203, 207; derivatives and see derivatives; distinction between uncertainty and, 189–90, 191, 192–3, 196–7; employment insurance concept, 298–9, 301, 374; management, 165, 170, 171, 189, 191–2, 193–4, 195–6, 202, 203, 210, 354; securitisation and, 32, 147, 165, 169, 171, 186, 188, 196; structured investment vehicles and, 151, 165, 169, 171, 188; value at risk (VaR), 171, 192, 195, 196 Risley, Todd, 289 Ritchie, Andrew, 103 Ritter, Scott, 329 Robinson, Sir Gerry, 295 Rogoff, Ken, 214, 356 rogue states, 36 Rolling Stones, 247 Rolls-Royce, 219, 231 Rome, classical, 45, 74, 108, 116 Roosevelt, Franklin D., 133, 300 Rothermere, Viscount, 327 Rousseau, Jean-Jacques, 56, 58, 112 Rousseau, Peter, 256 Rowling, J.K., 64, 65 Rowthorn, Robert, 292, 363 Royal Bank of Scotland (RBS), 25, 150, 152, 157, 173, 181, 199, 251, 259; collapse of, 7, 137, 150, 158, 175–6, 202, 203, 204; Sir Fred Goodwin and, 7, 150, 176, 340 Rubin, Robert, 174, 177, 183 rule of law, x, 4, 220, 235 Russell, Bertrand, 189 Russia, 127, 134–5, 169, 201, 354–5, 385; fall of communism, 135, 140; oligarchs, 30, 65, 135 Rwandan genocide, 71 Ryanair, 233 sailing ships, three-masted, 108 Sandbrook, Dominic, 22 Sands, Peter (CEO of Standard Chartered Bank), 26 Sarkozy, Nicolas, 51, 377 Sassoon, Sir James, 178 Scholes, Myron, 169, 191, 193 Schumpeter, Joseph, 62, 67, 111 science and technology: capitalist dynamism and, 27–8, 31, 112–13; digitalisation, 34, 231, 320, 349, 350; the Enlightenment and, 31, 108–9, 112–13, 116–17, 121, 126–7; general-purpose technologies (GPTs), 107–11, 112, 117, 126–7, 134, 228–9, 256, 261, 384; increased pace of advance, 228–9, 253, 297; nanotechnology, 232; New Labour improvements, 21; new opportunities and, 33–4, 228–9, 231–3; new technologies, 232, 233, 240; universities and, 261–5 Scotland, devolving of power to, 15, 334 Scott, James, 114–15 Scott Bader, 93 Scott Trust, 327 Second World War, 134, 313 Securities and Exchanges Commission, 151, 167–8 securitisation, 32, 147, 165, 169, 171, 186, 187, 196 self-determination, 85–6 self-employment, 86 self-interest, 59, 60, 78 Sen, Amartya, 51, 232, 275 service sector, 8, 291, 341, 355 shadow banking system, 148, 153, 157–8, 170, 171, 172, 187 Shakespeare, William, 39, 274, 351 shareholders, 156, 197, 216–17, 240–4, 250 Sher, George, 46, 50, 51 Sherman Act (USA, 1890), 133 Sherraden, Michael, 301 Shiller, Robert, 43, 298, 299 Shimer, Robert, 299 Shleifer, Andrei, 62, 63, 92 short selling, 103 Sicilian mafia, 101, 105 Simon, Herbert, 222 Simpson, George, 142–3 single mothers, 17, 53, 287 sixth form education, 306 Sky (broadcasting company), 30, 318, 330, 389 Skype, 253 Slim, Carlos, 30 Sloan School of Management, 195 Slumdog Millionaire, 283 Smith, Adam, 55, 84, 104, 112, 121, 122, 126, 145–6 Smith, John, 148 Snoddy, Ray, 322 Snow, John, 177 social capital, 88–9, 92 social class, 78, 130, 230, 304, 343, 388; childcare and, 278, 288–90; continued importance of, 271, 283–96; decline of class-based politics, 341; education and, 13, 17, 223, 264–5, 272–3, 274, 276, 292–5, 304, 308; historical development of, 56–8, 109, 115–16, 122, 123–5, 127–8, 199; New Labour and, 271, 277–9; working-class opinion, 16, 143 social investment, 10, 19, 20–1, 279, 280–1 social polarisation, 9–16, 34–5, 223, 271–4, 282–5, 286–97, 342; Conservative reforms (1979-97) and, 275–6; New Labour and, 277–9; private education and, 13, 223, 264–5, 272–3, 276, 283–4, 293–5, 304; required reforms for reduction of, 297–309 social security benefits, 277, 278, 299–301, 328; contributory, 63, 81, 283; flexicurity social system, 299–301, 304, 374; to immigrants, 81–2, 282, 283, 284; job seeker’s allowance, 81, 281, 298, 301; New Labour and ‘undeserving’ claimants, 143, 277–8; non-contributory, 63, 79, 81, 82; targeting of/two-tier system, 277, 281 socialism, 22, 32, 38, 75, 138, 144, 145, 394 Soham murder case, 10, 339 Solomon Brothers, 173 Sony, 254–5 Soros, George, 166 Sorrell, Martin, 349 Soskice, David, 342–3 South Korea, 168, 358–9 South Sea Bubble, 125–6 Spain, 123–4, 207, 358–9, 371, 377 Spamann, Holger, 198 special purpose vehicles, 181 Spitzer, Matthew, 60 sport, cheating in, 23 stakeholder capitalism, x, 148–9 Standard Oil, 130–1, 132 state, British: anti-statism, 20, 22, 233–4, 235, 311; big finance’s penetration of, 176, 178–80; ‘choice architecture’ and, 238, 252; desired level of involvement, 234–5; domination of by media, 14, 16, 221, 338, 339, 343; facilitation of fairness, ix–x, 391–2, 394–5; investment in knowledge, 28, 31, 40, 220, 235, 261, 265; need for government as employer of last resort, 300; need for hybrid financial system, 244, 249–52; need for intervention in markets, 219–22, 229–30, 235–9, 252, 392; need for reshaping of, 34; pluralism, x, 35, 99, 113, 233, 331, 350, 394; public ownership, 32, 240; target-setting in, 91–2; threats to civil liberty and, 340 steam engine, 110, 126 Steinmueller, W.


pages: 338 words: 106,936

The Physics of Wall Street: A Brief History of Predicting the Unpredictable by James Owen Weatherall

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Albert Einstein, algorithmic trading, Antoine Gombaud: Chevalier de Méré, Asian financial crisis, bank run, beat the dealer, Benoit Mandelbrot, Black Swan, Black-Scholes formula, Bonfire of the Vanities, Bretton Woods, Brownian motion, butterfly effect, capital asset pricing model, Carmen Reinhart, Claude Shannon: information theory, collateralized debt obligation, collective bargaining, dark matter, Edward Lorenz: Chaos theory, Edward Thorp, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial innovation, fixed income, George Akerlof, Gerolamo Cardano, Henri Poincaré, invisible hand, Isaac Newton, iterative process, John Nash: game theory, Kenneth Rogoff, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, martingale, Myron Scholes, new economy, Paul Lévy, Paul Samuelson, prediction markets, probability theory / Blaise Pascal / Pierre de Fermat, quantitative trading / quantitative finance, random walk, Renaissance Technologies, risk-adjusted returns, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Sharpe ratio, short selling, Silicon Valley, South Sea Bubble, statistical arbitrage, statistical model, stochastic process, The Chicago School, The Myth of the Rational Market, tulip mania, V2 rocket, Vilfredo Pareto, volatility smile

(Banks weren’t necessarily interested in this specific question; rather, the idea was to use Mandelbrot’s research as proof of concept, to demonstrate how efficient a computer could be at number-crunching financial data.) Income distribution had been studied before, most famously by a nineteenth-century Italian engineer, industrialist, and economist named Vilfredo Pareto. A strong believer in laissez-faire economics, Pareto was obsessed with the workings of the free market and the accumulation of capital. He wanted to understand how people got rich, who controlled wealth, and how resources were doled out by market forces. To this end, he gathered an immense amount of data on wealth and income, drawing on such diverse sources as real estate transactions, personal income data from across Europe, and historical tax records.

Mandelbrot was a central figure in identifying and exploring these relationships. See Mandelbrot (1997). “Known as the Butcher of Lyon . . .”: For more on Barbie, see Bower (1984) and McKale (2012). “. . . ‘there was no great distinction . . .’ ”: This quote is from Mandelbrot (1998). “. . . and economist named Vilfredo Pareto”: The definitive collection on Pareto and his influence is the three-volume Wood and McClure (1999); see also Cirillo (1979). “. . . it appeared that there was no ‘average’ rate of return”: In other words, it seemed that neither mean nor variance was defined for the distributions of cotton prices.

“Drawing Philosophical Lessons From Perrin’s Experiments on Brownian Motion: A Response to van Fraassen.” British Journal of the Philosophy of Science 62 (4): 711–32. Chapman, Toby. 1998. “Speculative Trading: Physicists’ Forays Into Finance.” Europhysics Notes, January/February, 4. Cirillo, Renato. 1979. The Economics of Vilfredo Pareto. New York: Frank Cass and Company. Coase, Ronald H. 1960. “The Problem of Social Cost.” Journal of Law and Economics III, October, 1–44. Cole, K. C. 2009. Something Incredibly Wonderful Happens: Frank Oppenheimer and the World He Made Up. Boston: Houghton Mifflin Harcourt. Collins, Martin. 1999.


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The 4-Hour Body: An Uncommon Guide to Rapid Fat-Loss, Incredible Sex, and Becoming Superhuman by Timothy Ferriss

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23andMe, airport security, Albert Einstein, Black Swan, Buckminster Fuller, carbon footprint, cognitive dissonance, Columbine, correlation does not imply causation, Dean Kamen, game design, Gary Taubes, index card, Kevin Kelly, knowledge economy, life extension, lifelogging, Mahatma Gandhi, microbiome, p-value, Parkinson's law, Paul Buchheit, placebo effect, Productivity paradox, publish or perish, Ralph Waldo Emerson, Ray Kurzweil, Richard Feynman, Richard Feynman, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, Silicon Valley startup, Skype, stem cell, Steve Jobs, survivorship bias, Thorstein Veblen, Vilfredo Pareto, wage slave, William of Occam

Nutrition Data nuts: Brazil nuts, 22.1, 46.1, 46.2 and cholesterol overeating and testosterone as travel snack O Obama, Michelle obesity, 9.1, 9.2 observer effect Occam’s Protocol adapting the program cardio frequency objective of, 18.1, 18.2 Occam’s feeding, 17.1, 18.1 Occam’s frequency Occam’s prescriptions questions and criticisms slower gains starting weights Occam’s Razor ofuro oil, rancid oligosaccharides OneTaste, 20.1, 20.2, 20.3, 20.4 oral contraceptives orange juice orgasm: and bad science clitoral glans and clitoris, 20.1, 20.2 definition of Doing Method, 20.1, 20.2, 20.3 facilitation of female focused repetition for and grounding and g-spot, 19.1, 20.1 guidelines for beginners and masturbation, 19.1, 20.1 positions practice and how-to precondition the quest questions about vibrator for O’Rourke, Dara Ottey, Merlene Joyce oversimplification Owen (monkey) oxygen-assisted static apnea Ozolin, Nikolay P Pagan, Eben PAGG warnings about Paleolithic “paleo” diet palmitoleic acid Palumbo, Dave “Jumbo,” 150, 13.1, 17.1 Parazynski, Scott Pareto, Vilfredo Pareto’s Law Parisi, Bill Parkinson’s Law partial completeness Paul (testosterone) Pavlina, Steve PC (phosphocreatine) PC (pubococcygeus) muscle Pearl, Bill pear shape peer pressure Penn, B. J. periodization Perls, Tom Phelps, Michael pheromones Phillips, Bill phlebotomy phosphocreatine (PC) phosphoric acid photos, before/after, 6.1, 6.2, 6.3 Picasso, Pablo placebo effect, 29.1, 42.1, 44.1 platelet-rich plasma (PRP) Plato, Peggy, 3.1, 16.1 Plese, Elliott plyometrics Polanyi, John policosanol, 10.1, 10.2 Poliquin, Charles, 16.1, 17.1, 22.1, 25.1, 46.1 Pollan, Michael, 43.1, 48.1 polysomnograms poo, weighing pork belly Portland Marathon Pose Method, 30.1, 30.2, 31.1 potassium Pottenger, Francis M.

As William Gibson, who coined the term “cyberspace,” has said: “The future is already here—it is just unevenly distributed.” The 80/20 Principle: From Wall Street to the Human Machine This book is designed to give you the most important 2.5% of the tools you need for body recomposition and increased performance. Some short history can explain this odd 2.5%. Vilfredo Pareto was a controversial economist-cum-sociologist who lived from 1848 to 1923. His seminal work, Cours d’économie politique, included a then little explored “law” of income distribution that would later bear his name: “Pareto’s Law,” or “the Pareto Distribution.” It is more popularly known as “the 80/20 Principle.”


The Art of Scalability: Scalable Web Architecture, Processes, and Organizations for the Modern Enterprise by Martin L. Abbott, Michael T. Fisher

always be closing, anti-pattern, barriers to entry, Bernie Madoff, business climate, business continuity plan, business intelligence, business process, call centre, cloud computing, combinatorial explosion, commoditize, Computer Numeric Control, conceptual framework, database schema, discounted cash flows, en.wikipedia.org, fault tolerance, finite state, friendly fire, hiring and firing, Infrastructure as a Service, inventory management, new economy, packet switching, performance metric, platform as a service, Ponzi scheme, RFC: Request For Comment, risk tolerance, Rubik’s Cube, Search for Extraterrestrial Intelligence, SETI@home, shareholder value, Silicon Valley, six sigma, software as a service, the scientific method, transaction costs, Vilfredo Pareto, web application, Y2K

System’s tests almost always follow some similar distribution when it comes to the amount or value of information provided. This is because the features are not all used equally, and some are more critical than others. A feature handling user payments is more important than one handling a user’s search for friends, and thus can be tested more vigorously. Vilfredo Pareto Vilfredo Federico Damaso Pareto was an Italian economist who lived from 1848 to 1923 and was responsible for contributing several important advances to economics. One of the most notable insights that almost everyone has heard of today is the Pareto Distribution. Fascinated by power and wealth distribution in societies, he studied the property ownership in Italy and observed in his 1909 publication that 20% of the population owned 80% of the land, thus giving rise to his Pareto Distribution.

See also Leadership; Management; Staffing for scalability; Teams. adding/removing people, 12, 13 aligning with stakeholder interests, 13 boundary conflicts, 15 cost centers, 109 drawbacks, 17 efficient work flow, 15–17 helpful questions, 12 metrics, 12–13 potential conflicts, 17 profit centers, 109 support services business, 109–110 team growth vs. individual productivity, 13–15 technology-as-product business, 109–110 understanding, from the outside, 13 Organizational design, influences on scalability communications, 44 efficiency, 44 ownership, 46 quality, 45 standards, 44–45 Organizational roles and responsibilities. See Roles and responsibilities, organizational. Overall risk, 253–254 Overlapping roles and responsibilities, 40 Overwork, team warning sign, 52 PaaS (Platform as a Service), 427–428 Pareto, Vilfredo, 260 Pareto Distribution, performance testing, 260 Pay by usage, clouds, 431, 434 Peak utilization time, data cost, 413 People. See Roles and responsibilities; Staffing; specific roles. People Always leadership style, 72 People management. See Management, of teams. People vs. mission, 72 Perception by others, leadership, 66–67, 73 Performance (product) calculating, 527–533 cloud computing drawback, 445–446 Performance (product), testing analyzing data, 261–262 as barrier conditions, 275 benchmarks, 258–259 checklist of testing steps, 263.


pages: 168 words: 56,211

The Pleasures and Sorrows of Work by Alain de Botton

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Donald Trump, Isaac Newton, Malacca Straits, mass immigration, Ralph Waldo Emerson, spice trade, supply-chain management, Vilfredo Pareto

Careers ploughed along deep and dedicated furrows: a start at Hula Hoops might be followed by promotion to Ridged Tortillas, a sideways shift to Baked Mini Cheddars, a management role at McVitie’s Fruitsters and a swan-song post at Ginger Nuts. The unremitting division of labour resulted in admirable levels of productivity. The company’s success appeared to bear out the principles of efficiency laid down at the turn of the twentieth century by the Italian economist Vilfredo Pareto, who theorised that a society would grow wealthy to the extent that its members forfeited general knowledge in favour of fostering individual ability in narrowly constricted fields. In an ideal Paretan economy, jobs would be ever more finely subdivided to allow for the accumulation of complex skills, which would then be traded among workers.

They are shopkeepers, builders, cooks or farmers – people whose labour can easily be linked to the visible betterment of human life. As creatures innately aware of balance and proportion, we cannot help but sense that something is awry in a job title like ‘Brand Supervision Coordinator, Sweet Biscuits’ and that whatever the logic and perspicacity of Vilfredo Pareto’s arguments, another principle to which no one has yet given a convincing name has here been ignored and subtler human laws violated. 6. Matters were compounded because, whatever the modesty of the ends at United Biscuits, the means to produce the Moments and their siblings nevertheless required the dedication and self-discipline that might otherwise have been called upon to run a hospital or become a ballerina.


pages: 406 words: 88,820

Television disrupted: the transition from network to networked TV by Shelly Palmer

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barriers to entry, call centre, commoditize, disintermediation, en.wikipedia.org, hypertext link, interchangeable parts, invention of movable type, Irwin Jacobs: Qualcomm, James Watt: steam engine, Leonard Kleinrock, linear programming, Marc Andreessen, market design, Metcalfe’s law, pattern recognition, peer-to-peer, recommendation engine, Saturday Night Live, shareholder value, Skype, spectrum auction, Steve Jobs, subscription business, Telecommunications Act of 1996, There's no reason for any individual to have a computer in his home - Ken Olsen, Vickrey auction, Vilfredo Pareto, yield management

Because the article was well-written and the premise seems to make sense, people started adding the phrase “long tail content” to their PowerPoint decks and using the term to ascribe all kinds of magical attributes to previously unsalable content. Not a disaster, just kind of fun to watch — in a schadenfreude kind of way. In 1906, long before the long tail, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country. He observed that 20 percent of the people in Italy owned 80 percent of the wealth. In the 1940s, Dr. Joseph M. Juran attributed his own observation of “vital few and trivial many” to the 80/20 rule, which he called “Pareto’s Law” or the “Pareto Principle.”

To use Open, the viewer must click the Interactive button on the remote control, which brings up the Open home page offering various categorized selections. Video clips and audio often accompanies most screens alongside clickable data. Paramount A media company owned by Viacom. Pareto’s Law Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country. He observed that 20 percent of the people in Italy owned 80 percent of the wealth. In the 1940s, Dr. Joseph M. Juran attributed his own observation of “vital few and trivial many” to the 80/20 rule, which he called “Pareto’s Law” or the “Pareto Principle.”


pages: 309 words: 91,581

The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It by Timothy Noah

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assortative mating, autonomous vehicles, blue-collar work, Bonfire of the Vanities, Branko Milanovic, call centre, collective bargaining, computer age, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, Deng Xiaoping, Erik Brynjolfsson, feminist movement, Frank Levy and Richard Murnane: The New Division of Labor, Gini coefficient, Gunnar Myrdal, income inequality, industrial robot, invisible hand, job automation, Joseph Schumpeter, low skilled workers, lump of labour, manufacturing employment, moral hazard, oil shock, pattern recognition, Paul Samuelson, performance metric, positional goods, post-industrial society, postindustrial economy, Powell Memorandum, purchasing power parity, refrigerator car, rent control, Richard Feynman, Richard Feynman, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, Stephen Hawking, Steve Jobs, The Spirit Level, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, union organizing, upwardly mobile, very high income, Vilfredo Pareto, War on Poverty, We are the 99%, women in the workforce, Works Progress Administration, Yom Kippur War

The eventual result would be a mature economy that was egalitarian and prosperous. Although he never put it so loftily, Kuznets in effect posited that growing equality of incomes was the mark of an advanced civilization. This conceit was elegant, stirring, and at odds with the existing paradigm, developed by the nineteenth-century French-Italian economist Vilfredo Pareto, that the shape of income distribution did not change over time. Kuznets believed that income distribution did change shape, and he was right.15 But he was wrong in believing that after the initial inegalitarian phase of industrialization incomes would only grow more equal. Or rather, that conclusion is wrong today.

Income Distribution and Poverty in OECD Countries (Paris: Organisation for Economic Co-operation and Development, 2008), 27. 3. I would be remiss if I failed to note here the awkward debt that the science of income and wealth distribution owes to Italian fascism. Gini was president of Italy’s Central Institute of Statistics under Benito Mussolini. Another pioneer in the field was the French-Italian Vilfredo Pareto (1848–1923), inventor of an alternative measure called the Pareto distribution. Pareto was a dedicated Fascist who harbored truly repellant beliefs, but Gini appears to have been much less interested in politics than in statistics. Il Duce was an enthusiastic student of statistical science, presumably in the service of measuring whether the trains were in fact running on time (and other less praiseworthy efficiencies).


pages: 137 words: 36,231

Information: A Very Short Introduction by Luciano Floridi

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agricultural Revolution, Albert Einstein, bioinformatics, carbon footprint, Claude Shannon: information theory, conceptual framework, double helix, Douglas Engelbart, Douglas Engelbart, George Akerlof, Gordon Gekko, industrial robot, information asymmetry, intangible asset, Internet of things, invention of writing, John Nash: game theory, John von Neumann, moral hazard, Nash equilibrium, Norbert Wiener, Pareto efficiency, phenotype, Pierre-Simon Laplace, prisoner's dilemma, RAND corporation, RFID, Thomas Bayes, Turing machine, Vilfredo Pareto

This may seem strange but, no matter what the other prisoner decides to do, each of them always gains a greater payoff by defecting. Since cooperating is strictly dominated by defecting, that is, since in any situation defecting is more beneficial than cooperating, defecting is the rational decision to take (Table 7). This sort of equilibrium qualifies as a Pareto-suboptimal solution (named after the economist Vilfredo Pareto, 1848-1923) because there could be a feasible change (known as Pareto improvement) to a situation in which no player would be worse off and at least one player would be better off. Unlike the other three outcomes, the case in which both prisoners defect can also be described as a Nash equilibrium: it is the only outcome in which each player is doing the best he can, given the available information about the other player's actions.


pages: 662 words: 180,546

Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown by Philip Mirowski

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Alvin Roth, Andrei Shleifer, asset-backed security, bank run, barriers to entry, Basel III, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Swan, blue-collar work, Bretton Woods, Brownian motion, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, constrained optimization, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, dark matter, David Brooks, David Graeber, debt deflation, deindustrialization, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, facts on the ground, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, full employment, George Akerlof, Goldman Sachs: Vampire Squid, Hernando de Soto, housing crisis, Hyman Minsky, illegal immigration, income inequality, incomplete markets, information asymmetry, invisible hand, Jean Tirole, joint-stock company, Kenneth Arrow, Kenneth Rogoff, knowledge economy, l'esprit de l'escalier, labor-force participation, liberal capitalism, liquidity trap, loose coupling, manufacturing employment, market clearing, market design, market fundamentalism, Martin Wolf, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Naomi Klein, Nash equilibrium, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, oil shock, Pareto efficiency, Paul Samuelson, payday loans, Philip Mirowski, Ponzi scheme, precariat, prediction markets, price mechanism, profit motive, quantitative easing, race to the bottom, random walk, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, school choice, sealed-bid auction, Silicon Valley, South Sea Bubble, Steven Levy, technoutopianism, The Chicago School, The Great Moderation, the map is not the territory, The Myth of the Rational Market, the scientific method, The Wisdom of Crowds, theory of mind, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, Tobin tax, too big to fail, transaction costs, Vilfredo Pareto, War on Poverty, Washington Consensus, We are the 99%, working poor

Then, by the 1990s, by construction there was no longer any call for offering courses in philosophy or history of doctrine, since there were no economists left with sufficient training (not to mention interest) in order to staff the courses.20 Economists would periodically be sounding off in the most illiterate registers concerning Karl Marx, Vilfredo Pareto, Hyman Minsky, Adam Smith, or even John Maynard Keynes, because they were confident no one would ever call them to task on their shallow pretenses. Consequently, once the Great Mortification followed in the wake of the collapse of the Great Moderation, those occupying the commanding heights of the profession were bereft of any sophisticated resources to understand their predicament.

See Neoliberal Thought Collective (NTC) Nugent, Ted NYU (New York University) O Obama, Barack Occam’s Razor Occupiers Occupy Handbook Occupy London Occupy Movement Occupy Wall Street (OWS) Odyssey (Homer) Old Thinking Oldham, Taki, Turf Wars Open questions Open Society The Open Society and Its Enemies (Popper) Oracle at Delphi Ordoliberalism Oreskes, Naomi Original Sin O’Rourke, Kevin Orszag, Peter Orwell, George Osborne, George Outsourced Self (Hochschild) OWS (Occupy Wall Street) P Page, Scott Palin, Sarah Pareto, Vilfredo Patterson, Scott, Dark Pools Paul, Ron Paulson, Hank Payday loans Payne, Christopher PBS Peck, Jamie Pecora, Ferdinand Perry, Rick Pesaran, Hashem Pew Economic Policy Group Financial Reform Project Philip Morris Phillips Curve Philosopher’s Stone Pimco Pinochet, Augusto Pinto, Edward Pissarides, Christopher Pity the Billionaire (Frank) Plant, Raymond Plato Plehwe, Dieter Ponzi scheme Poon, Martha Popper, Karl Portes, Richard Posner, Richard Power Auctions Predator Nation (Ferguson) Prediction as red herring Prescott, Edward C.


pages: 578 words: 168,350

Scale: The Universal Laws of Growth, Innovation, Sustainability, and the Pace of Life in Organisms, Cities, Economies, and Companies by Geoffrey West

Alfred Russel Wallace, Anton Chekhov, Benoit Mandelbrot, Black Swan, British Empire, butterfly effect, carbon footprint, Cesare Marchetti: Marchetti’s constant, clean water, complexity theory, computer age, conceptual framework, continuous integration, corporate social responsibility, correlation does not imply causation, creative destruction, dark matter, Deng Xiaoping, double helix, Edward Glaeser, endogenous growth, Ernest Rutherford, first square of the chessboard, first square of the chessboard / second half of the chessboard, Frank Gehry, Geoffrey West, Santa Fe Institute, Guggenheim Bilbao, housing crisis, Index librorum prohibitorum, invention of agriculture, invention of the telephone, Isaac Newton, Jane Jacobs, Jeff Bezos, Johann Wolfgang von Goethe, John von Neumann, Kenneth Arrow, laissez-faire capitalism, life extension, Mahatma Gandhi, mandelbrot fractal, Marchetti’s constant, Masdar, megacity, Murano, Venice glass, Murray Gell-Mann, New Urbanism, Peter Thiel, profit motive, publish or perish, Ray Kurzweil, Richard Feynman, Richard Feynman, Richard Florida, Silicon Valley, smart cities, Stephen Hawking, Steve Jobs, Stewart Brand, technological singularity, The Coming Technological Singularity, The Death and Life of Great American Cities, the scientific method, too big to fail, transaction costs, urban planning, urban renewal, Vernor Vinge, Vilfredo Pareto, Von Neumann architecture, Whole Earth Catalog, Whole Earth Review, wikimedia commons, working poor

Notice that in both these cases there are large deviations for the most frequent entities (“the” for words and New York for cities). (40) Zipf’s law of rank-size distributions of words in the English language: the frequency of occurrence of words is plotted on the vertical axis and their rank plotted on the horizontal. (41) Rank-size distributions of companies in the United States: as in (39), their rank is plotted on the vertical axis and their size (the number of employees) plotted on the horizontal. In economics, Zipf’s law actually predates Zipf. Much earlier it had been discovered by the influential Italian economist Vilfredo Pareto, who expressed it as a frequency distribution of incomes in a population rather than in terms of their ranking. This distribution, which is valid for many other economic metrics like income, wealth, and the size of companies, follows a simple power law with an exponent of approximately -2. When expressed in terms of rankings, this exponent corresponds to Zipf’s law.

See exponentially expanding socioeconomic urbanized world myth of companies and, 391–93 resource limitation and, 415–24, 417, 421 open systems, 236 optimization, 115–17, 381 Oracle, 183–84 orders of magnitude, 45–47 organ functionality, and age, 195, 197 organizational structure, 381 origins of war, 132–35 Ouroussoff, Nicolai, 258 Oxford University, 71, 364, 382 Big Data Institute (BDI), 442–43 oxidative stress, 200–201 oxygen, 113, 118–19 pace of life, 7, 28, 326–32, 412–13, 425 in cities, 30–31, 326–32 heartbeats and, 204–5 pacifism, 132–33 Page, Larry, 184 Palo Alto, 303, 361 Palo Alto Institute, 184 panspermia, 177–78 Paraceratherium, 156, 158–59 paradigm shifts, 417, 419–20, 421, 424–25, 443, 446–47 parallel mirrors, 128 Pareto, Vilfredo, 312–13 Pareto principle, 312–13 Park Street (Boston), 348–49 “Particle Creation by Black Holes” (Hawking), 403 particle model, 338–39 particle physics, 83–84, 107, 405 patents, scaling curve, 2, 2n, 4, 29, 276, 357, 386 PayPal, 184 percentage growth rate, 217 perpetual motion machines, 14 Perutz, Max, 437–39, 443 petioles, 121 pharmaceutical research, 52–55 phase transitions, 16, 415 philanthropy, 287 Phoenix, 360, 366, 367 phone call data, as detector of human behavior, 337–45, 351–52, 439 physical infrastructure, 29, 251–52, 274–75, 372–73 christalls vs. fractals, 288–95 integrating social networks with, 315–24 road and transport networks, 284, 285, 291, 292–94, 293 physics, 81–84 biology and, 83–84, 105–11 “physics-inspired” theory of cities, 269 Pierce, Chester, 52–53 Pines, David, 436 plant vascular system, 147, 150, 150–51 Pollock, Jackson, 144 pollution, 215, 275, 278 Ponderal index, 59 Popular Mechanics (magazine), 36 population bomb, 231, 232–33, 239–40 Population Bomb, The (Ehrlich), 231 population doubling time, 210, 211, 217–18 population growth, 13, 18, 209–13, 216–22 cities, urbanization, and global sustainability, 213–15 innovation optimists and, 231–33, 234–35 Malthus and neo-Malthusians, 227–30, 414–15 world, 210, 218 population size city rankings and, 356 Zipf’s law, 310–14, 311–12 pornography and free speech, 20 positive feedback mechanism, 299, 415–16 cities and, 323, 327, 329, 344, 368, 378 poverty rate, 231, 355 power laws, 25–26, 91–92, 131, 308 exponent of, 272–73 scaling of conflicts, 134–35 Zipf’s law, 310–14, 311–12 powers of ten, 25–26, 45, 48 “Predators and Prey: A New Ecology of Competition” (Moore), 249 preferential attachment, 368–71 Principia (Newton), 181 principle of least action, 115–16 principle of similitude, 75–78 Pritzker Prize, 248, 258 “Problem of Contiguity, The” (Richardson), 139 protons, 82–83, 445 Pumain, Denise, 250 quality of life, 212, 355–56, 411, 425 quantitative theory of aging and death, 199–203 quantum mechanics, 107–8 quarks, 16, 85 quarter-power scaling law, 26–27, 153–54 circulatory system, 27, 113, 147, 148, 150–51 Kleiber’s law, 26–27, 90–93, 117, 145 network principles and origins of, 103–5, 111–18 optimization, 115–17, 284, 381 respiratory system, 147, 149, 150–51, 204 space filling, 27, 112–13, 129, 201, 284 terminal units, 113–14, 151, 201–2, 284 Quetelet, Adolphe, 55–57 Quetelet index, 55–56 race, 98 Raffles Place (Singapore), 354 railways, 64–66 rankings, 352–53, 355–59 rats, 25–26, 93 Ratti, Carlo, 340–42, 352 Rayleigh, John William Strutt, 3rd Baron, 75–78 reductionism, 429–30 research and development (R&D), 409 Research Experience for Undergraduates (REU), 402 resilience, 19–20, 355 resonance, 299–300 resource limitation, 227, 228–29, 416 open-ended growth and, 415–24, 417, 421 respiratory complexes, 99–102, 101, 204 respiratory system, 99–102, 118–22, 327 diseases, 193, 193 quarter-power scaling, 147, 149, 150–51, 204 returns to scale, 18, 19, 275–76, 378 revenue with inflation deflator, 393, 394 major U.S. companies, 393, 394 Richardson, Lewis Fry, 131–42, 152, 291, 364 Richardson scale, 133–35 rich get richer, 368–69 Richter scale, 45–47 “Rime of the Ancient Mariner, The” (Coleridge), 361–62 risk management, 315 River Avon Gorge Bridge, 61, 64, 65 Road, The (McCarthy), 425 road and transport networks, 284, 285, 291, 292–94, 293 Robert H.


pages: 202 words: 62,199

Essentialism: The Disciplined Pursuit of Less by Greg McKeown

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Albert Einstein, Clayton Christensen, Daniel Kahneman / Amos Tversky, deliberate practice, double helix, en.wikipedia.org, endowment effect, Isaac Newton, iterative process, Jeff Bezos, Lao Tzu, loss aversion, Mahatma Gandhi, microcredit, minimum viable product, North Sea oil, Peter Thiel, Ralph Waldo Emerson, Richard Thaler, Rosa Parks, side project, Silicon Valley, Silicon Valley startup, sovereign wealth fund, Steve Jobs, Vilfredo Pareto

Yet at a certain point, more effort causes our progress to plateau and even stall. It’s true that the idea of a direct correlation between results and effort is appealing. It seems fair. Yet research across many fields paints a very different picture. Most people have heard of the “Pareto Principle,” the idea, introduced as far back as the 1790s by Vilfredo Pareto, that 20 percent of our efforts produce 80 percent of results. Much later, in 1951, in his Quality-Control Handbook, Joseph Moses Juran, one of the fathers of the quality movement, expanded on this idea and called it “the Law of the Vital Few.”2 His observation was that you could massively improve the quality of a product by resolving a tiny fraction of the problems.


pages: 166 words: 49,639

Start It Up: Why Running Your Own Business Is Easier Than You Think by Luke Johnson

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Albert Einstein, barriers to entry, Bernie Madoff, collapse of Lehman Brothers, corporate governance, corporate social responsibility, creative destruction, credit crunch, Grace Hopper, happiness index / gross national happiness, high net worth, James Dyson, Jarndyce and Jarndyce, Jarndyce and Jarndyce, mass immigration, mittelstand, Network effects, North Sea oil, Northern Rock, patent troll, Plutocrats, plutocrats, Ponzi scheme, profit motive, Ralph Waldo Emerson, Silicon Valley, software patent, stealth mode startup, Steve Jobs, Steve Wozniak, The Wealth of Nations by Adam Smith, traveling salesman, tulip mania, Vilfredo Pareto, wealth creators

Richard Branson tells the story of how in the early days his Virgin Atlantic airline got into problems, and he arrived home one Saturday morning to find the Coutts Bank manager on his doorstep demanding that Virgin’s entire overdraft be immediately repaid – which could have forced his business to cease trading. Branson worked the phones for the next twenty-four hours and repaid the bank on Monday morning. ‘Give me the fruitful error any time, full of seeds, bursting with its own corrections. You can keep your sterile truth for yourself’ Vilfredo Pareto Similarly, early in his career as a manufacturer of drugs in France, one Thursday Jimmy Goldsmith faced the certainty of receivership for his fledgling commercial empire the following day. But luckily for him – remember, this was Paris – there was a bank strike the next day, so no one called in his loans, and he was able to use the time to scrape together enough money to survive and eventually become a billionaire, like Branson.


pages: 1,351 words: 385,579

The Better Angels of Our Nature: Why Violence Has Declined by Steven Pinker

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1960s counterculture, affirmative action, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, Albert Einstein, availability heuristic, Berlin Wall, Bonfire of the Vanities, British Empire, Broken windows theory, California gold rush, Cass Sunstein, citation needed, clean water, cognitive dissonance, colonial rule, Columbine, computer age, conceptual framework, correlation coefficient, correlation does not imply causation, crack epidemic, cuban missile crisis, Daniel Kahneman / Amos Tversky, David Brooks, delayed gratification, demographic transition, desegregation, Doomsday Clock, Douglas Hofstadter, Edward Glaeser, en.wikipedia.org, European colonialism, experimental subject, facts on the ground, failed state, first-past-the-post, Flynn Effect, food miles, Francis Fukuyama: the end of history, fudge factor, full employment, George Santayana, ghettoisation, Gini coefficient, global village, Henri Poincaré, Hobbesian trap, humanitarian revolution, impulse control, income inequality, informal economy, Intergovernmental Panel on Climate Change (IPCC), invention of the printing press, Isaac Newton, lake wobegon effect, libertarian paternalism, long peace, loss aversion, Marshall McLuhan, mass incarceration, McMansion, means of production, mental accounting, meta analysis, meta-analysis, Mikhail Gorbachev, moral panic, mutually assured destruction, open economy, Peace of Westphalia, Peter Singer: altruism, QWERTY keyboard, race to the bottom, Ralph Waldo Emerson, random walk, Republic of Letters, Richard Thaler, Ronald Reagan, Rosa Parks, Saturday Night Live, security theater, Skype, Slavoj Žižek, South China Sea, statistical model, stem cell, Steven Levy, Steven Pinker, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, theory of mind, transatlantic slave trade, transatlantic slave trade, Turing machine, ultimatum game, uranium enrichment, V2 rocket, Vilfredo Pareto, Walter Mischel, WikiLeaks, women in the workforce, zero-sum game

Nobel, Alfred Noble Savage myth nonstate societies: cooperation in data sources of deaths from warfare in emergence of fighting in violence rates in norepinephrine normal distribution norms: of civilized society and crime rates of etiquette evaluation of informal internalized and morality in 1960s counterculture of nonviolence of purity social tacit territorial integrity of war as immoral see also etiquette; moral sense; taboos North Korea noses: blowing cutting off Nuclear Nonproliferation Treaty nuclear peace theory nuclear taboo nuclear terrorism nuclear threat nuclear weapons Nunberg, Geoffrey Nunn, Sam Nuremberg Trials nursery rhymes Nurture Assumption Nussbaum, Martha Oatley, Keith Obama, Barack obedience; see also Milgram, Stanley Odysseus Oklahoma City bombing Olds, James Oneal, John One Flew Over the Cuckoo’s Nest (film) openness to experience Operation Ceasefire Opium Wars Oppenheimer, Robert opponent-process theory of emotion optimal foraging orientation, long- vs. short-term Orwell, George Otterbein, Keith Ottoman Empire Ötzi the Iceman overconfidence Owen, Wilfred oxytocin Oz, Amos Pacification Process civilization human societies introduction of concept logic of violence use of term violence in human ancestors violence in state and nonstate societies Pacific Northwest pacifism Pacifist’s Dilemma and empathy and feminization and gentle commerce and Leviathan and reason Pakistan Al Qaeda in and India and terrorism Pale of Settlement Palestine Panksepp, Jaak Papua New Guinea; see also New Guinea Parachini, John paramilitaries Pareto, Vilfredo Pareto Principle Parker, Theodore Parks, Rosa Pascal, Blaise pastoralism Pate, Amy Patrick, Saint patrilocal societies Patterson, Orlando Patz, Etan Pauling, Linus Paul IV, Pope Payne, James L. peacekeepers, international peace negotiations peace theories capitalist democratic Kantian liberal nuclear pedomorphy Peel, Sir Robert Peloponnesian War Pepys, Samuel Perry, William personality; see also antisocial personality disorder; attention deficit hyperactivity disorder; borderline personality disorder; empathy; narcissistic personality disorder; openness to experience; psychopaths perspective-sympathy hypothesis perspective-taking; see also empathy; mentalizing; theory of mind Peru Peter, Saint Pforspundt, Heinrich von Philadelphia Philippines Piaget, Jean Pillay, Navanethem Pinker, Steven: The Blank Slate How the Mind Works The Stuff of Thought Pipes, Richard piracy pituitary gland Pizarro, David Plato plausible deniability pluralistic ignorance Plutarch Podhoretz, Norman pogroms; see also ethnic riots, deadly Poincaré, Henri poison, repugnance about poison gas; see also chemical weapons Poisson, Siméon-Denis Poisson process Poland polarization police states, use of term political correctness political discourse, sophistication of Political Instability Task Force (PITF) political murder; see also assassinations; despotism; regicide politicide; see also genocide politics, psychology of; see also liberalism, and conservatism; norms; taboos Polity Project Pol Pot polygamy polygyny Pope, Alexander population growth populism pornography Portugal positive illusions; see also overconfidence positive-sum games; see also gentle commerce postmodernism Potts, Malcolm poverty Powell, Colin power-law distributions and coalitions 80:20 rule of genocides scale-free nature of of terrorism thick tails of of wars practical violence, see predatory violence praetorian regimes; see also anocracy Pran, Dith Pratto, Felicia predatory violence cause of war against groups introduction of concept means-end reasoning and overconfidence predictions of science statistical predictions, erroneous: abolishing capital punishment as increasing violence abolishing debt bondage as doom of capitalism abortions as leading to infanticide and child abuse African American terrorism crime boom in 1990s democracy as obsolescent 9/11-style attacks weekly nuclear arms race in East Asia nuclear attacks during Cold War nuclear nations by the dozen nuclear terrorism by 2005 victories in war wars with assorted countries war with Iran World War III as inevitable World War IV as inevitable preferential attachment; see also Matthew Effect Price, Richard Princip, Gavrilo printing press PRIO Battle Deaths Dataset Prisoner’s Dilemma Iterated Pacifist’s Dilemma and Public Goods game sequential Tit for Tat and Ultimatum game violence as probability Profumo, John proletarianization Promise Keepers proportionality prosperity prostitution Prudentius Prunier, Gérard psychological hedonism psychology: age of awareness of cognitive evolutionary folk; see also mentalizing; theory of mind philosophy vs.

And hundreds of thousands have frequencies far less than one in a million, like kankedort, apotropaic, and deliquesce. FIGURE 5–8. Probabilities of wars of different magnitudes, 1820–1997 Source: Graph from Cederman, 2003, p. 136. Another example of a power-law distribution was discovered in 1906 by the economist Vilfredo Pareto when he looked at the distribution of incomes in Italy: a handful of people were filthy rich, while a much larger number were dirt-poor. Since these discoveries, power-law distributions have also turned up, among other places, in the populations of cities, the commonness of names, the popularity of Web sites, the number of citations of scientific papers, the sales figures of books and musical recordings, the number of species in biological taxa, and the sizes of moon craters.57 The second remarkable thing about power-law distributions is that they look the same over a vast range of values.


pages: 212 words: 68,754

Thinking in Numbers by Daniel Tammet

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Albert Einstein, Alfred Russel Wallace, Anton Chekhov, computer age, dematerialisation, Edmond Halley, four colour theorem, Georg Cantor, index card, Isaac Newton, Paul Erdős, Searching for Interstellar Communications, Vilfredo Pareto

Economists have found that x in most developed countries equates to a number in the region of 80, meaning that eighty per cent of the society’s fortune pads the pockets of only twenty per cent of its members. Naturally,the share will vary from person to person. Money is fickle, always changing owners. That different people have dissimilar wealth is not surprising. What surprises is the scale and constancy of the divide. The economist and mathematician Vilfredo Pareto, who first observed (at the end of the nineteenth century) that twenty per cent of Italians owned eighty per cent of the nation’s wealth, found nearly identical results when he studied the historical data from many other parts of Europe. The distribution of wealth in Paris since 1292, he discovered, had hardly moved at all.


pages: 935 words: 267,358

Capital in the Twenty-First Century by Thomas Piketty

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accounting loophole / creative accounting, Asian financial crisis, banking crisis, banks create money, Berlin Wall, Branko Milanovic, British Empire, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, central bank independence, centre right, circulation of elites, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation coefficient, David Ricardo: comparative advantage, demographic transition, distributed generation, diversification, diversified portfolio, European colonialism, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, German hyperinflation, Gini coefficient, high net worth, Honoré de Balzac, immigration reform, income inequality, income per capita, index card, inflation targeting, informal economy, invention of the steam engine, invisible hand, joint-stock company, Joseph Schumpeter, Kenneth Arrow, market bubble, means of production, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, open economy, Paul Samuelson, pension reform, purchasing power parity, race to the bottom, randomized controlled trial, refrigerator car, regulatory arbitrage, rent control, rent-seeking, Robert Gordon, Ronald Reagan, Simon Kuznets, sovereign wealth fund, Steve Jobs, The Nature of the Firm, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade liberalization, very high income, Vilfredo Pareto, We are the 99%, zero-sum game

In Chapter 7, I discussed the Italian statistician Corrado Gini and his famous coefficient. Although the Gini coefficient was intended to sum up inequality in a single number, it actually gives a simplistic, overly optimistic, and difficult-to-interpret picture of what is really going on. A more interesting case is that of Gini’s compatriot Vilfredo Pareto, whose major works, including a discussion of the famous “Pareto law,” were published between 1890 and 1910. In the interwar years, the Italian Fascists adopted Pareto as one of their own and promoted his theory of elites. Although they were no doubt seeking to capitalize on his prestige, it is nevertheless true that Pareto, shortly before his death in 1923, hailed Mussolini’s accession to power.

See also Canada; United States North Iowa Community College, 447 Norwegian sovereign wealth fund, 455, 626–­627n39 Obama, Barack, 310, 313, 473 Obiang, Teodorin, 446 Occupy Wall Street movement, 254 OECD (Or­ga­ni­za­tion for Economic Cooperation and Development) reports and statistics, 220, 267–­268 Ohlsson, Henry, 614n27, 645n37 Oil prices, 6–­7, 459. See also Petroleum Oligarchic divergence, 463–­465, 514, 627n49 Output. See Income and output; Per capita output growth Paine, Thomas, 197, 644n34 Palan, Ronen, 628n56 Pamuk, Orhan, 109 Pareto, Vilfredo, theory of, 364–­368, 610n19, 614nn25,30,32 Parsons, Talcott, 384, 621n55 Partnerships, 203 Pasinetti, Luigi, 231 Passeron, Jean-­Claude, 486 Patrimonial capitalism, 173, 237, 473 Patrimonial society: middle class and, 260–­262, 346–­347, 373; metamorphoses of, 339–­343; classic, 411–­414 “Pay for luck,” 335 PAYGO systems, 487–­490, 633n45, 648n13, 652n42, 653n50 Pension funds, 391–­392, 478, 487–­490, 627n47, 630n15 Per capita income, 106, 122, 590n31, 590–­591n8,9 Per capita output growth, 72–­74, 97, 510; stages of, 86–­87; purchasing power and, 87–­90; diversification of lifestyles and, 90–­93; end of, 93–­95; social change implications of 1 percent, 95–­96; in postwar period, 96–­99; bell curve of global, 99–­102; inflation and, 102–­103; monetary systems and, 103–­109 Père Goriot (Balzac), 104, 106, 113–­115, 238–­240, 343, 412, 440 Perfect capital market, 214 Persuasion (Austen), 362 Petroleum: investments and, 455–­460, 462, 627n49; rents, redistribution of, 537–­538 Petty, William, 56, 590n1 Phelps, Edmund, 651n40 Philip, André, 615n35 Pierson, Paul, 640n52 P90/P10 ratio, 267–­269 Po­liti­cal economy, 3–­5, 574 Poll tax, 495, 634n3 Pop­u­lar Front, 286, 649n25 Population.


pages: 385 words: 111,807

A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

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Affordable Care Act / Obamacare, Albert Einstein, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, corporate raider, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Gunnar Myrdal, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, information asymmetry, intangible asset, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land reform, liberation theology, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, Pareto efficiency, Paul Samuelson, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Vilfredo Pareto, Washington Consensus, working-age population, World Values Survey

The conclusion is, as in Classical economics, that capitalism – or, rather, the market economy, as the school prefers to call it – is a system that is best left alone, as it has a tendency to revert to the equilibrium. This laissez-faire conclusion of the Neoclassical school was further intensified by a critical theoretical development in the early twentieth century, intended to allow us to judge social improvements in an objective way. Vilfredo Pareto (1848–1923) argued that, if we respect the rights of every sovereign individual, we should consider a social change an improvement only when it makes some people better off without making anyone worse off. There should be no more individual sacrifices in the name of the ‘greater good’. This is known as the Pareto criterion and forms the basis for all judgements on social improvements in Neoclassical economics today.6 In real life, unfortunately, there are few changes that hurt no one; thus the Pareto criterion effectively becomes a recipe to stick to the status quo and let things be – laissez faire.


pages: 378 words: 110,518

Postcapitalism: A Guide to Our Future by Paul Mason

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Alfred Russel Wallace, bank run, banking crisis, banks create money, Basel III, basic income, Bernie Madoff, Bill Gates: Altair 8800, bitcoin, Branko Milanovic, Bretton Woods, BRICs, British Empire, business process, butterfly effect, call centre, capital controls, Cesare Marchetti: Marchetti’s constant, Claude Shannon: information theory, collaborative economy, collective bargaining, Corn Laws, corporate social responsibility, creative destruction, credit crunch, currency manipulation / currency intervention, currency peg, David Graeber, deglobalization, deindustrialization, deskilling, discovery of the americas, Downton Abbey, drone strike, en.wikipedia.org, energy security, eurozone crisis, factory automation, financial repression, Firefox, Fractional reserve banking, Frederick Winslow Taylor, full employment, future of work, game design, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, knowledge economy, knowledge worker, late capitalism, low skilled workers, market clearing, means of production, Metcalfe's law, money: store of value / unit of account / medium of exchange, mortgage debt, Network effects, new economy, Norbert Wiener, Occupy movement, oil shale / tar sands, oil shock, Paul Samuelson, payday loans, Pearl River Delta, post-industrial society, precariat, price mechanism, profit motive, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, RFID, Richard Stallman, Robert Gordon, Robert Metcalfe, secular stagnation, sharing economy, Stewart Brand, structural adjustment programs, supply-chain management, The Future of Employment, the scientific method, The Wealth of Nations by Adam Smith, Transnistria, union organizing, universal basic income, urban decay, urban planning, Vilfredo Pareto, wages for housework, women in the workforce

Because the marginalists thought the market was the perfect expression of human rationality, they had no problem – as long as it was only a thought experiment – with the idea that an all-knowing state could achieve the same results as a perfect market. ‘Both systems are not different in form and they lead to the same point,’ wrote the Italian economist Vilfredo Pareto in a celebrated textbook, ‘the result is extremely remarkable.’13 In 1908, his colleague Enrico Barone wrote a detailed account of how a socialist state could calculate the exact same outcomes that the market achieves blindly. Barone showed how it would be possible to discover, using linear equations, the most efficient forms of production, consumption and exchange.


pages: 426 words: 105,423

The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich by Timothy Ferriss

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Albert Einstein, Amazon Mechanical Turk, call centre, clean water, Donald Trump, en.wikipedia.org, Firefox, fixed income, follow your passion, game design, global village, Iridium satellite, knowledge worker, late fees, Maui Hawaii, oil shock, paper trading, Parkinson's law, passive income, peer-to-peer, pre–internet, Ralph Waldo Emerson, remote working, Richard Feynman, risk tolerance, Ronald Reagan, side project, Silicon Valley, Silicon Valley startup, Skype, Steve Jobs, Vilfredo Pareto, wage slave, William of Occam

Pareto and His Garden: 80/20 and Freedom from Futility What gets measured gets managed. —PETER DRUCKER, management theorist, author of 31 books, recipient of Presidential Medal of Freedom Four years ago, an economist changed my life forever. It’s a shame I never had a chance to buy him a drink. My dear Vilfredo died almost 100 years ago. Vilfredo Pareto was a wily and controversial economist-cum-sociologist who lived from 1848 to 1923. An engineer by training, he started his varied career managing coal mines and later succeeded Léon Walras as the chair of political economy at the University of Lausanne in Switzerland. His seminal work, Cours d’economie politique, included a then little-explored “law” of income distribution that would later bear his name: “Pareto’s Law” or the “Pareto Distribution,” in the last decade also popularly called the “80/20 Principle.”


pages: 207 words: 86,639

The New Economics: A Bigger Picture by David Boyle, Andrew Simms

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Asian financial crisis, back-to-the-land, banking crisis, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, Bretton Woods, capital controls, carbon footprint, clean water, collateralized debt obligation, colonial rule, Community Supported Agriculture, congestion charging, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, delayed gratification, deskilling, en.wikipedia.org, energy transition, financial deregulation, financial exclusion, financial innovation, full employment, garden city movement, happiness index / gross national happiness, if you build it, they will come, income inequality, informal economy, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, land reform, light touch regulation, loss aversion, mega-rich, microcredit, Mikhail Gorbachev, mortgage debt, neoliberal agenda, new economy, North Sea oil, Northern Rock, offshore financial centre, oil shock, peak oil, pensions crisis, profit motive, purchasing power parity, quantitative easing, Ronald Reagan, seigniorage, Simon Kuznets, sovereign wealth fund, special drawing rights, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trickle-down economics, Vilfredo Pareto, Washington Consensus, wealth creators, working-age population

Even so, the development of the new economics has reacted against that background of narrow globalization. It has been underpinned by a range of new disciplines and ideas that were emerging from economics itself, realizing that the classical economics of William Stanley Jevons, Leon Walras and Vilfredo Pareto were based on A BRIEF HISTORY OF THE NEW ECONOMICS 29 the assumptions of Victorian physics, borrowing from Newtonian physics long after it had been superseded by Einstein, using economic variables in their equations as if they were equations in physics. They simply replaced energy with economic concepts, when there was little evidence that energy and money or the economic concept of ‘utility’ behaved in the same way at all, as if people’s economic behaviour bore any relation to the behaviour of atoms.


pages: 379 words: 113,656

Six Degrees: The Science of a Connected Age by Duncan J. Watts

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Berlin Wall, Bretton Woods, business process, corporate governance, Drosophila, Erdős number, experimental subject, fixed income, Frank Gehry, Geoffrey West, Santa Fe Institute, industrial cluster, invisible hand, Long Term Capital Management, market bubble, Milgram experiment, Murray Gell-Mann, Network effects, new economy, Norbert Wiener, Paul Erdős, peer-to-peer, rolodex, Ronald Coase, Silicon Valley, supply-chain management, The Nature of the Firm, The Wealth of Nations by Adam Smith, Toyota Production System, transaction costs, transcontinental railway, Vilfredo Pareto, Y2K

A power-law distribution. Although it decreases rapidly with k, it does so much slower than the normal distribution in figure 4.1, implying than large values of k are more likely. The distribution of wealth in the United States, for instance, resembles a power law. The nineteenth-century Parisian engineer Vilfredo Pareto was the first person to note this phenomenon, subsequently called Pareto’s law, and demonstrated that it held true in every European country for which the relevant statistics existed. The law’s main consequence is that very many people possess relatively little wealth while a very small minority are extremely wealthy.


Starstruck: The Business of Celebrity by Currid

barriers to entry, Bernie Madoff, Donald Trump, income inequality, index card, industrial cluster, labour mobility, Mark Zuckerberg, Metcalfe’s law, natural language processing, place-making, Ponzi scheme, post-industrial society, prediction markets, Renaissance Technologies, Richard Florida, Robert Metcalfe, rolodex, shareholder value, Silicon Valley, slashdot, transaction costs, upwardly mobile, urban decay, Vilfredo Pareto, winner-take-all economy

Journal of Advertising Research 46, no. 1 (2006): 113–23. Nüesch, Stephan. “The Economics of Superstars and Celebrities.” PhD diss., University of Zurich, 2007. Oppenheimer, Jerry. Front Row: Anna Wintour: The Cool Life and Hot Times of Vogue’s Editor-in-Chief. New York: St. Martin’s Press, 2005. Pareto, Vilfredo. “Manual of Political Economy.” Bulletin of the American Mathematical Society 18 (1912): 462–74. Perl, Jed. New Art City. New York: Knopf, 2005. Pinksy, Drew, and S. Mark Young. The Mirror Effect: How Celebrity Narcissism Is Seducing America. New York: Harper, 2009. Porter, Michael E. “Clusters and the Economics of Competition.”


pages: 462 words: 150,129

The Rational Optimist: How Prosperity Evolves by Matt Ridley

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23andMe, agricultural Revolution, air freight, back-to-the-land, banking crisis, barriers to entry, Bernie Madoff, British Empire, call centre, carbon footprint, Cesare Marchetti: Marchetti’s constant, charter city, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, colonial exploitation, colonial rule, Corn Laws, creative destruction, credit crunch, David Ricardo: comparative advantage, decarbonisation, dematerialisation, demographic dividend, demographic transition, double entry bookkeeping, Edward Glaeser, en.wikipedia.org, everywhere but in the productivity statistics, falling living standards, feminist movement, financial innovation, Flynn Effect, food miles, Gordon Gekko, greed is good, Hans Rosling, happiness index / gross national happiness, haute cuisine, Hernando de Soto, income inequality, income per capita, Indoor air pollution, informal economy, Intergovernmental Panel on Climate Change (IPCC), invention of agriculture, invisible hand, James Hargreaves, James Watt: steam engine, Jane Jacobs, John Nash: game theory, joint-stock limited liability company, Joseph Schumpeter, Kevin Kelly, knowledge worker, Kula ring, Mark Zuckerberg, meta analysis, meta-analysis, mutually assured destruction, Naomi Klein, Northern Rock, nuclear winter, oil shale / tar sands, out of africa, packet switching, patent troll, Pax Mongolica, Peter Thiel, phenotype, Plutocrats, plutocrats, Ponzi scheme, Productivity paradox, profit motive, purchasing power parity, race to the bottom, Ray Kurzweil, rent-seeking, rising living standards, Silicon Valley, spice trade, spinning jenny, stem cell, Steve Jobs, Steven Pinker, Stewart Brand, supervolcano, technological singularity, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, ultimatum game, upwardly mobile, urban sprawl, Vernor Vinge, Vilfredo Pareto, wage slave, working poor, working-age population, Y2K, Yogi Berra, zero-sum game

Kung people 44, 135, 136–7 Kuznets curve 106 Kwakiutl people 92 Lagos 322 Lagrange Point 346 lakes, acidification of 305–6 Lamalera people 87 Lancashire 214, 217, 232, 263 Landes, David 223, 406 Lang, Tim 392 language: and exchange 58; genes for 55; Indo-European 129; and isolationism 73; Neanderthals 4, 55; numbers of languages 73; as unique human development 4 Laos 209 lapis lazuli 162, 164 Lascaux caves, France 6 lasers 272 Lassa fever 307 Laurion, Attica 171 Law, John 29, 259 Lawson, Nigel, Baron 331 Lay, Ken 29, 385 Layard, Richard 25 lead 167, 174, 177, 213 Leadbetter, Charles 290 Leahy, Michael 92 leather 70, 122, 167, 176 Lebanon 167 LeBlanc, Steven 137 LEDs (light-emitting diodes) 21–2 lentils 129 Leonardo da Vinci 196, 251 Levy, Stephen 355 Liang Ying (farm worker) 220 liberalism 108, 109–110, 290 Liberia 14, 316 libertarianism 106 Libya 171 lice 68 lichen 75 life expectancy: in Africa 14, 316, 422; in Britain 13, 15, 284; improvements in 12, 14, 15, 17–18, 205, 284, 287, 298, 316; in United States 298; world averages 47 Life (magazine) 304 light, artificial 13, 16, 17, 20–22, 37, 233, 234, 240, 245, 272, 368 light-emitting diodes (LEDs) 21–2 Limits to Growth (report) 303–4, 420 Lindsey, Brink 102, 109 linen 216, 218 lions 43, 87 literacy 106, 201, 290, 353, 396 Liverpool 62, 283 local sourcing (of goods) 35, 41–2, 149, 392; see also food miles Locke, John 96 Lodygin, Alexander 272 Lombardy 178, 196 Lomborg, Björn 280 London 12, 116, 186, 199, 218, 222, 282; as financial centre 259 longitude, measurement of 261 Longshan culture 397 Los Angeles 17, 142 Lothal, Indus valley 162, 164 Louis XI, King of France 184 Louis XIV, King of France 36, 37, 38, 184, 259 Lowell, Francis Cabot 263 Lübeck 180 Lucca 178, 179 Lunar Society 256 Luther, Martin 102 Luxembourg 331 Lyon 184 Macao 183 MacArthur, General Douglas 141 Macaulay, Thomas Babington, 1st Baron 11, 285–7, 359 McCloskey, Deirdre 109, 366–7 Mace, Ruth 73 McEwan, Ian 47 Machiguenga people 87 MacKay, David 342 McKendrick, Neil 224 McKibben, Bill 293 Macmillan, Harold, 1st Earl of Stockton 16 McNamara, Robert 203 mad-cow disease (vCJD) 280, 308 Madagascar 70, 299 Maddison, Angus 180 Maddox, John 207 Madoff, Bernard 28–9 Maghribis 178, 180 magnesium 213 maize 126, 146–7, 153, 155, 156, 163; for biofuel 240, 241 malaria 135, 157, 275, 299, 310, 318, 319, 331, 336, 353, 428, 429 Malawi 40–41, 132, 316, 318 Malawi, Lake 54 Malay Peninsula 66 Malaysia 35, 89, 242, 332 Mali 316, 326 Malinowski, Bronislaw 134 malnutrition 154, 156, 337 Maltese Falcon, The (film) 86 Malthus, Robert 139, 140, 146, 191, 249, 303 Malthusianism 141, 193, 196, 200, 202, 401 mammoths 68, 69, 71, 73, 302 Manchester 214, 218, 283 Mandell, Lewis 254 manganese 150, 213 mangoes 156, 327, 392 Manhattan 83 manure 147, 150, 198, 200, 282 Mao Zedong 16, 187, 262, 296, 311 Marchetti, Cesare 345–6 Marcuse, Herbert 291 Marie-Antoinette, Queen of France 199 markets (in capital and assets) 9, 258–60 markets (in goods and services): and collective betterment 9–10, 36–9, 103–110, 115–16, 281; disdain for 102–3, 104, 291–2, 358; etiquette and ritual of 133–4; and generosity 86–7; global interdependence 42–3; market failure 182, 250; ‘perfect markets’ 249–50; and population control 210–211; and preindustrial economies 133–4; and trust 98–100, 103; and virtue 100–104, 105; see also bartering; exchange; trade Marne, River 234 Martu aborigines 62 Marx, Karl 102, 104, 107–8, 291, 406 Marxism 101, 217–18, 319, 356 Maskelyne, Nevil 221 Maudslay, Henry 221 Mauritius 187, 316 Mauryan empire 172–3, 201, 357 Maxwell, James Clerk 412 measles 14, 135, 310 meat eating 51, 60, 62, 68–9, 126, 147, 156, 241, 376 Mecca 177 Mediterranean Sea: prehistoric settlements 56, 68–9, 159; trade 89, 164, 167–8, 169, 171, 176, 178 meerkats 87 Mehrgarh, Baluchistan 162 Mehta, Suketa 189 Meissen 185 memes 5 Menes, Pharaoh of Egypt 161 mercury 183, 213, 237 Mersey, River 62 Merzbach valley, Germany 138 Mesopotamia 38, 115, 158–61, 163, 177, 193, 251, 357; see also Assyrian empire; Iraq metal prices, reductions in 213 Metaxas, Ioannis 186 methane 140, 329, 345 Mexico: agriculture 14, 123, 126, 142, 387; emigration to United States 117; hurricanes 335; life expectancy 15; nature conservation 324; swine flu 309 Mexico City 190 Meyer, Warren 281 Mezherich, Ukraine 71 mice 55, 125 Michelangelo 115 Microsoft (corporation) 24, 260, 268, 273 migrations: early human 66–70, 82; rural to urban 158, 188–9, 210, 219–20, 226–7, 231, 406; see also emigration Milan 178, 184 Miletus 170–71 milk 22, 55, 97, 135 Mill, John Stuart 34, 103–4, 108, 249, 274, 276, 279 Millennium Development goals 316 Miller, Geoffrey 44, 274 millet 126 Mills, Mark 244 Ming empire 117, 181–4, 260, 311 Minoan civilisation 166 Mississippi Company 29 Mittal, Lakshmi 268 mobile phones 37, 252, 257, 261, 265, 267, 297, 326–7 Mohamed (prophet) 176 Mohawk Indians 138–9 Mohenjo-Daro, Indus valley 161–2 Mojave Desert 69 Mokyr, Joel 197, 252, 257, 411, 412 monarchies 118, 162, 172, 222 monasteries 176, 194, 215, 252 Monbiot, George 291, 311, 426 money: development of 71, 132, 392; ‘trust inscribed’ 85 Mongolia 230 Mongols 161, 181, 182 monkeys 3, 57, 59, 88; capuchins 96–7, 375 monopolies 107, 111, 166, 172, 182 monsoon 174 Montesquieu, Charles, Baron de 103 moon landing 268–9, 275 Moore, Gordon 221, 405 Moore, Michael 291 Morgan, J.P. 100 Mormonism 205 Morocco 53, 209 Morse, Samuel 272 mortgages 25, 29, 30, 323; sub-prime 296 Moses 138 mosquito nets 318 ‘most favoured nation’ principle 186 Moyo, Dambisa 318 Mozambique 132, 316 Mozart, Wolfgang Amadeus 267 Mugabe, Robert 262 Mumbai 189, 190 murder 14, 20, 85, 88, 106, 118, 201 Murrays’ Mills, Manchester 214 music 70, 115, 266–7, 326 Myceneans 166 Nairobi 322 Namibia 209, 324 Napoleon I 184 NASA 269 Nashville 326 Nassarius shells 53, 56, 65 National Food Service 268 National Health Service 111, 261 nationalisation (of industry) 166, 182 nationalism 357 native Americans 62, 92–3, 138–9 Natufians 125 natural selection 5–6, 27, 49–50, 350 nature conservation 324, 339; see also wilderness land, expansion of Neanderthals 3, 4, 53, 55, 64, 65, 68, 71, 79, 373, 378 Nebuchadnezzar 169 needles 43, 70 Nehru, Jawaharlal 187 Nelson, Richard 5 Nepal 15, 209 Netscape (corporation) 259 New Deal 109 New Guinea: agriculture 123, 126, 387; languages 73; malaria 336; prehistoric 66, 123, 126; tribes 87, 92, 138 New York 12, 16, 83, 169, 190 New York Times 23, 295, 305 New Zealand 17, 35, 42, 70 Newcomen, Thomas 244, 256 newspapers 270, 295; licensing copyrights 267 Newsweek (magazine) 329 Newton, Sir Isaac 116, 256 nickel 34, 213 Niger 208–9, 210, 324 Nigeria 15, 31, 99, 117, 210, 236, 316 Nike (corporation) 115, 188 Nile, River 161, 164, 167, 171 nitrogen fertlisers 140, 146, 147, 149–50, 155, 305 nitrous oxide 155 Nobel Peace Prize 143, 280 ‘noble savage’ 43–4, 135–8 Norberg, Johann 187 Nordau, Max 288 Nordhaus, William 331 Norte Chico civilisation 162–3 North, Douglass 324, 397 North Carolina 219–20 North Korea 15, 116–17, 187, 333 North Sea 180, 185 North Sentinel islanders 67 Northern Rock (bank) 9 Northumberland 407 Norton, Seth 211 Norway 97–8, 332, 344 Norwich 225 nostalgia 12–13, 44, 135, 189, 284–5, 292 Novgorod 180 Noyce, Robert 221, 405 nuclear accidents 283, 293–4, 308, 345, 421 nuclear power 37, 236, 238, 239, 245, 246, 343, 344, 345 nuclear war, threat of 280, 290, 299–300, 333 Obama, Barack 203 obesity 8, 156, 296, 337 obsidian 53, 92, 127 occupational safety 106–7 ocean acidification 280, 340–41 ochre 52, 53, 54, 92 octopi 3 Oersted, Hans Christian 272 Oetzi (mummified ‘iceman’) 122–3, 132–3, 137 Ofek, Haim 131 Ohalo II (archaeological site) 124 oil: and ‘curse of resources’ 31, 320; drilling and refining 242, 343; and generation of electricity 239; manufacture of plastics and synthetics 237, 240; pollution 293–4, 385; prices 23, 238; supplies 149, 237–8, 280, 281, 282, 296, 302–3 old age, quality of life in 18 olive oil 167, 169, 171 Olson, Ken 282 Omidyar, Pierre 99 onchoceriasis 310 open-source software 99, 272–3, 356 Orang Asli people 66 orang-utans 60, 239, 339 organic farming 147, 149–52, 393 Orinoco tar shales, Venezuela 238 Orma people 87 ornament, personal 43, 52, 53, 54, 70, 71, 73 O’Rourke, P.J. 157 Orwell, George 253, 290, 354 Ostia 174 otters 297, 299 Otto I, Holy Roman emperor 178 Ottoman empire 161 Oued Djebanna, Algeria 53 oxen 130, 136, 195, 197, 214–15 oxytocin (hormone) 94–5, 97–8 ozone layer 280, 296 Paarlberg, Robert 154 Pacific islanders 134 Pacific Ocean 184 Paddock, William and Paul 301 Padgett, John 103 Page, Larry 114 Pagel, Mark 73 Pakistan 142–3, 204, 300 palm oil 57–8, 239, 240, 242, 339 Pan Am (airline) 24 paper 282, 304 Papin, Denis 256 papyrus 171, 175 Paraguay 61 Pareto, Vilfredo 249 Paris 215, 358; electric lighting 233; restaurants 264 parrots 3 Parsons, Sir Charles 234 Parthian empire 161 Pasadena 17 Pataliputra 173 patents 223, 263, 264–6, 269, 271, 413–14 patriarchy 136 Paul, St 102 PayPal (e-commerce business) 262 peacocks 174 peanuts 126 peat 215–16 Peel, Sir Robert 185 Pemberton, John 263 pencils 38 penicillin 258 Pennington, Hugh 308 pensions 29, 40, 106 Periplus of the Erythrean Sea, The 174 Persia 89, 161, 171, 177 Persian Gulf 66, 164, 340, 429 Peru 97–8, 126, 162–3, 320, 387; silver 31, 132, 183–4 pessimism: and belief in turning points in history 287–9, 301, 311; natural pessimism of human nature 294–5; in nineteenth century 283–8; in twentieth century 281, 282, 288–91, 292–4, 296–308, 328–9; in twenty-first century 8–9, 17, 28, 281–2, 291–2, 308–311, 314–15; ubiquity of 280–85, 291–2, 294–7, 341, 352 pesticides 151–2, 154, 155, 336; DDT 297–8, 299; natural 298–9 Peto, Richard 298 Petty, Sir William 185, 199, 254, 256 pharmaceutical industry 260, 266 philanthropy 92, 105, 106, 295, 318–19, 356 Philip II, King of Spain 30–31 Philip II of Macedon 171 Philippines 61–2, 89, 234 Philistines 166, 170, 396 Phillips, Adam 103, 292 Phoenicians 166–70, 177 photography 114, 283, 386 physiocrats 42 pi, calculation of 173 pig farming 135, 145, 148, 197 Pinnacle Point, South Africa 52, 83 Pisa 115, 178 plagues 135, 176, 195–6, 197; forecasts of 280, 284, 307–310; see also Black Death plastics 237, 240, 270 Plate, River 186 platinum 213 Plato 292 Plautus 44 ploughing 129–30, 136, 145, 150, 195, 197, 198, 215 pneumonia 13, 353 Polanyi, Karl 164–5 polar bears 338–9 polio 261, 275, 310 political fragmentation 170–73, 180–81, 184, 185 pollution: effects on wildlife 17, 297, 299, 339; and industrialisation 218; pessimism about 293–4, 304–6; reduction in 17, 106, 148, 279, 293–4, 297, 299 polygamy 136 Pomeranz, Kenneth 201–2 Ponzi, Charles 29 Ponzi schemes 28–9 population control policies 202–4, 210–211 population growth: and food supply 139, 141, 143–4, 146–7, 192, 206, 208–9; global population totals 3, 12, 14, 191, 206, 332; and industrialisation 201–2; and innovation 252; pessimism about 190, 193, 202–3, 281, 290, 293, 300–302, 314; population explosions 8, 139, 141, 202, 206, 281; and specialisation 192–3, 351; see also birth rates; demographic transition; infant mortality; life expectancy porcelain 181, 183, 184–5, 225, 251 Porritt, Jonathan 314 Portugal 75, 183, 184, 317, 331 Post-it notes 261 Postrel, Virginia 290–91 potatoes 199 Potrykus, Ingo 154 pottery 77, 158, 159, 163, 168, 177, 225, 251 Pound, Ezra 289 poverty: and charitable giving 106; current levels 12, 15, 16–17, 41, 316, 353–4; and industrialisation 217–20; pessimism about 280, 290, 314–15; reduction in 12, 15, 16–17, 290; and self-sufficiency 42, 132, 200, 202, 226–7; solutions to 8, 187–8, 316–17, 322, 326–8, 353–4 Prebisch, Raul 187 preservatives (in food) 145 Presley, Elvis 110 Priestley, Joseph 256 printing: on paper 181, 251, 252, 253, 272; on textiles 225, 232 prisoner’s dilemma game 96 property rights 130, 223, 226, 320, 321, 323–5 protectionism 186–7, 226 Ptolemy III 171 Pusu-Ken (Assyrian merchant) 165–6 putting out system 226, 227, 230 pygmy people 54, 67 Pythagoras 171 Quarterly Review 284 quasars 275 Quesnay, François 42 racial segregation 108 racism 104, 415 radioactivity 293–4, 345 radios 264–5, 271 railways 252; and agriculture 139, 140–41; opposition to 283–4; speed of 283, 286; travel costs 23 rainforests 144, 149, 150, 240, 243, 250–51, 338 Rajan, Raghuram 317 Rajasthan 162, 164 Ramsay, Gordon 392 rape seed 240 Ratnagar, Shereen 162 ravens 69 Rawls, John 96 Read, Leonard 38 recession, economic 10, 28, 113, 311 reciprocity 57–9, 87, 95, 133 Red Sea 66, 82, 127, 170, 174, 177 Rees, Martin 294 Reformation 253 refrigeration 139 regress, technological 78–84, 125, 181–2, 197–200, 351, 380 Reiter, Paul 336, 428 religion 4, 104, 106, 170, 357, 358, 396; and population control 205, 207–8, 211; see also Buddhism; Christianity; Islam Rembrandt 116 Renaissance 196 research and development budgets, corporate 260, 262, 269 Research in Motion (company) 265 respiratory disease 18, 307, 310 restaurants 17, 37, 61, 254, 264 Rhine, River 265–6 rhinoceroses 2, 43, 51, 68, 73 Rhodes, Cecil 322 Ricardo, David 75, 169, 187, 193, 196, 249, 274 rice 32, 126, 143, 146–7, 153, 154, 156, 198 Rifkin, Jeremy 306 Riis, Jacob 16 Rio de Janeiro, UN conference (1992) 290 risk aversion 294–5 Rivers, W.H.R. 81 Rivoli, Pietra 220, 228 ‘robber-barons’ 23–4, 100, 265–6 Rockefeller, John D. 23, 281 Rocky Mountains 238 Rogers, Alex 340 Roman empire 161, 166, 172, 173–5, 184, 214, 215, 259–60, 357 Rome 158, 175 Romer, Paul 269, 276–7, 328, 354 Roosevelt, Franklin D. 109 Roosevelt, Theodore 288 Rosling, Hans 368 Rothschild, Nathan 89 Rousseau, Jean-Jacques 43, 96, 104, 137 Royal Institution 221 rubber 220 rule of law 116–18, 325 Rumford, Benjamin Thompson, Count 221 rural to urban migration 158, 188–9, 210, 219–20, 226–7, 231, 406 Ruskin, John 104 Russia, post-Soviet 14; oil and gas production 31, 37; population decline 205 Russia, prehistoric 71, 73 Russia, Tsarist 216, 229, 324 Rwanda 14, 316 rye 124, 125, 199, 224, 286 Sachs, Jeffrey 208 Saddam Hussein 161 Sahel region 123, 334 Sahlins, Marshall 133, 135 Sahul (landmass) 66, 67 Salisbury, Wiltshire 194 Salk, Jonas 38, 261 salmon 297 Salmon, Cecil 142 saltpetre 140 Sanger, Frederick 412 Sanskrit 129 São Paulo 190, 315 Sargon of Akkad 164 SARS virus 307, 310 satellites 252, 253 satnav (satellite navigation systems) 268 Saudi Arabia 238 Saunders, Peter 102 Schumpeter, Joseph 113–14, 227, 260, 276, 302 science, and innovation 255–8, 412 Scientific American 280 Scotland 103, 199–200, 227, 263, 315 scrub jays 87 scurvy 14, 258 sea level, changes in 128, 314, 333–4 Seabright, Paul 93, 138 seals (for denoting property) 130 search engines 245, 256, 267 Second World War 289 segregation, racial 108 Seine, River 215 self-sufficiency 8, 33–5, 39, 82, 90, 133, 192, 193, 351; and poverty 41–2, 132, 200, 202, 226–7 selfishness 86, 87, 93–4, 96, 102, 103, 104, 106, 292 Sematech (non-profit consortium) 267–8 Sentinelese people 67 serendipity 257, 346 serfs 181–2, 222 serotonin 156, 294 sexism 104, 136 sexual division of labour 61–5, 136, 376 sexual reproduction 2, 6, 7, 45, 56, 271; of ideas 6–7, 270–72 Sforza, house of 184 Shady, Ruth 162 Shakespeare, William 2; The Merchant of Venice 101, 102 Shang dynasty 166 Shapiro, Carl 265 sheep 97, 176, 194, 197 Shell (corporation) 111 shellfish 52, 53, 62, 64, 79, 92, 93, 127, 163, 167 Shennan, Stephen 83, 133 Shermer, Michael 101, 106, 118 ship-building 185, 229; see also boat-building shipping, container 113, 253, 386 Shirky, Clay 356 Shiva, Vandana 156 Siberia 145 Sicily 171, 173, 178 Sidon 167, 170 Siemens, William 234 Sierra Leone 14, 316 Silesia 222 silicon chips 245, 263, 267–8 Silicon Valley 221–2, 224, 257, 258, 259, 268 silk 37, 46, 172, 175, 178, 179, 184, 187, 225 Silk Road 182 silver 31, 132, 164, 165, 167, 168, 169, 171, 177, 183–4, 213 Silver, Lee 122–3 Simon, Julian 83, 280, 303 Singapore 31, 160, 187 Skhul, Israel 53 slash-and-burn farming 87, 130 slave trade 167, 170, 177, 229, 319, 380; abolition 214, 221 slavery 34, 214–15, 216, 407; ancient Greece 171; hunter-gatherer societies 45, 92; Mesopotamia 160; Roman empire 174, 176, 214; United States 216, 228–9, 415; see also anti-slavery sleeping sickness 310, 319 Slovakia 136 smallpox 13, 14, 135, 310; vaccine 221 smelting 131–2, 160, 230 smiling 2, 94 Smith, Adam 8, 80, 96, 101, 104, 199, 249, 272, 350; Das Adam Smith Problem 93–4; Theory of Moral Sentiments 93; The Wealth of Nations vii, 37–8, 39, 56, 57, 93, 123, 236, 283 Smith, Vernon 9, 90, 192 smoke, indoor 13, 338, 342, 353, 429 smoking 297, 298 Smoot-Hawley Tariff Act 186 soap 176, 215 social networking websites 262, 268, 356 socialism 106, 115, 357, 406 software, computer 99, 257, 272–3, 304, 356 solar energy 216, 243, 244 solar power 234–5, 238, 239, 245–6, 343, 344–5, 408 solar wind 346 solid-state electronics 257 Solomon, Robert 94 Solow, Robert 276 Somalia 14, 316, 337, 353 songbirds 55 Sony (corporation) 261 sorghum 126, 156 South Africa: agriculture 154; economy 316, 322; life expectancy 316; pre-historic 52, 53, 54, 83 South Korea 15, 31, 116–17, 187, 212, 322 South Sea Company 29 Southey, Robert 284–5 Soviet Union 16, 107, 109, 289, 299, 318, 324 soybeans 147, 148, 155, 156, 242 space travel 268–9, 275, 282 Spain: agriculture 129; climate 334; Franco regime 186, 289; Peruvian silver 30–31, 183–4; tariffs 222 spears 6, 43, 48, 50, 52, 70, 80, 81, 91 specialisation: by sex 61–5, 136, 376; and division of labour 7, 33, 38, 46, 61–5, 175; and exchange 7, 10, 33, 35, 37–8, 46, 56, 58, 75, 90, 132–3, 350–52, 355, 358–9; and innovation 56, 71–2, 73–4, 76–7, 119, 251; and population growth 192–3, 351; and rule of law 116, 117–18 speech 2, 55; see also language Spencer, Herbert 108 Spengler, Oswald 289 sperm counts 280, 293, 329 spice trade 167, 175, 176, 177, 179, 185 Spinoza, Baruch de 116 Sputnik 282 squashes (vegetables) 126, 163 Sri Lanka 35, 38, 66, 205, 208, 299 Stalin, Joseph 16, 262 stamp seals 130 Stangler, Dane 294 steam engines 126, 214, 221, 228, 231–2, 244, 256, 258, 270, 271, 413–14 steamships 139, 253, 283 Stein, Gil 159 Stein, Herb 281 stem-cell research 358 Stephenson, George 256, 412 Steptoe, Patrick 306 sterilisation, coerced 203–4 Stern (magazine) 304 Stern, Nicholas, Baron 330–31, 332, 425 Stiner, Mary 64, 69 storms 314, 333, 335 Strabo 174 string 70 strokes (cerebral accidents) 18 Strong, Maurice 311 Subramanian, Arvind 317 subsidies: farming 188, 328; renewable energy supplies 344 subsistence farming 87, 138, 175–6, 189, 192, 199–200 substantivism 164–5 suburbia 108, 110, 190 Sudan 316 suffrage, universal 107 sugar 179, 202, 215 sugar beet 243 sugar cane 240, 241, 242 Sun Microsystems (corporation) 259 Sunda (landmass) 66 sunflowers 126 Sungir, Russia 71, 73 superconductivity, high-temperature 257 Superior, Lake 131 supermarkets 36, 112, 148, 268, 292, 297 surfboards 273 Sussex 285 Swan, Sir Joseph 234, 272 Swaziland 14 Sweden 17, 184, 229, 305, 340, 344 Swift, Jonathan 121, 240 Switzerland 264 swords, Japanese 198–9 Sybaris 170–71 symbiosis 75, 351 synergy 6, 101 Syria 124, 130, 164, 174 Szilard, Leo 412 Tahiti 169 Taiwan 31, 187, 219, 322 Talheim, Germany 138 Tanzania 316, 325, 327–8; Hadza people 61, 63, 87 Tapscott, Don 262 Tarde, Gabriel 5 tariffs 185–7, 188, 222–3 taro (vegetable plant) 126 Tartessians 169 Tasman, Abel 80 Tasmania 78–81, 83–4 Tattersall, Ian 73 Taverne, Dick, Baron 103 taxation: carbon taxes 346; and charitable giving 319; and consumption 27; and declining birth rates 211; early development of 160; and housing 25; and innovation 255; and intergenerational transfer 30; Mauryan empire 172; Roman empire 184; United States 25 Taylor, Barbara 103 tea 181, 182, 183, 202, 327, 392 telegraph 252–3, 257, 272, 412 telephones 252, 261; charges 22–3, 253; mobile 37, 252, 257, 261, 265, 267, 297, 326–7 television 38, 234, 252, 268 Telford, Thomas 221 Tennessee Valley Authority 326 termites 75–6 terrorism 8, 28, 296, 358 Tesco (retail corporation) 112 Tesla, Nikola 234 text messaging 292, 356 Thailand 320, 322 Thales of Miletus 171 Thames, River 17 thermodynamics 3, 244, 256 Thiel, Peter 262 Thiele, Bob 349 Thoreau, Henry David 33, 190 3M (corporation) 261, 263 threshing 124, 125, 130, 153, 198; machines 139, 283 thumbs, opposable 4, 51–2 Thwaites, Thomas 34–5 Tiberius, Roman emperor 174, 259 tidal and wave power 246, 343, 344 Tierra del Fuego 45, 62, 81–2, 91–2, 137 tigers 146, 240 timber 167, 216, 229; trade 158, 159, 180, 202 time saving 7, 22–4, 34–5, 123 Timurid empire 161 tin 132, 165, 167, 168, 213, 223, 303 ‘tipping points’ 287–9, 290, 291, 293, 301–2, 311, 329 Tiwi people 81 Tokyo 190, 198 Tol, Richard 331 Tooby, John 57 tool making: early Homo sapiens 53, 70, 71; machine tools 211, 221; Mesopotamian 159, 160; Neanderthals 55, 71, 378; Palaeolithic hominids 2, 4, 7, 48–51; technological regress 80 Torres Strait islanders 63–4, 81 tortoises 64, 68, 69, 376 totalitarianism 104, 109, 181–2, 290 toucans 146 Toulouse 222 Townes, Charles 272 ‘toy trade’ 223 Toynbee, Arnold 102–3 tractors 140, 153, 242 trade: and agriculture 123, 126, 127–33, 159, 163–4; early human development of 70–75, 89–93, 133–4, 159–60, 165; female-centred 88–9; and industrialisation 224–6; and innovation 168, 171; and property rights 324–5; and trust 98–100, 103; and urbanisation 158–61, 163–4, 167; see also bartering; exchange; markets trade unions and guilds 113, 115, 223, 226 trademarks 264 traffic congestion 296 tragedy of the commons 203, 324 Trajan, Roman Emperor 161 transistors 271 transport costs 22, 23, 24, 37, 229, 230, 253, 297, 408 transport speeds 22, 252, 253, 270, 283–4, 286, 287, 296 trebuchets 275 Tressell, Robert 288 Trevithick, Richard 221, 256 Trippe, Juan 24 Trobriand islands 58 trust: between strangers 88–9, 93, 94–8, 104; and trade 98–100, 103, 104; within families 87–8, 89, 91 Tswana people 321, 322 tungsten 213 Turchin, Peter 182 Turkey 69, 130, 137 Turnbull, William (farm worker) 219 Turner, Adair, Baron 411 turning points in history, belief in 287–9, 290, 291, 293, 301–2, 311, 329 Tuscany 178 Tyneside 231 typhoid 14, 157, 310 typhus 14, 299, 310 Tyre 167, 168–9, 170, 328 Ubaid period 158–9, 160 Uganda 154, 187, 316 Ukraine 71, 129 Ulrich, Bernd 304 Ultimatum Game 86–7 unemployment 8, 28, 114, 186, 289, 296 United Nations (UN) 15, 40, 205, 206, 290, 402, 429 United States: affluence 12, 16–17, 113, 117; agriculture 139, 140–41, 142, 219–20; biofuel production 240, 241, 242; birth rates 211, 212; civil rights movement 108, 109; copyright and patent systems 265, 266; credit crunch (2008) 9, 28–9; energy use 239, 245; GDP, per capita 23, 31; Great Depression (1930s) 31, 109, 192; happiness 26–7; immigration 108, 199–200, 202, 259; income equality 18–19; industrialisation 219; life expectancy 298; New Deal 109; oil supplies 237–8; pollution levels 17, 279, 304–5; poverty 16–17, 315, 326; productivity 112–13, 117; property rights 323; rural to urban migration 219; slavery 216, 228–9, 415; tax system 25, 111, 241; trade 186, 201, 228 Upper Palaeolithic Revolution 73, 83, 235 urbanisation: and development of agriculture 128, 158–9, 163–4; global urban population totals 158, 189, 190; and population growth 209–210; and trade 158–61, 163–4, 167, 189–90; see also rural to urban migration Uruguay 186 Uruk, Mesopotamia 159–61, 216 vaccines 17, 287, 310; polio 261, 275; smallpox 221 Vandals 175 Vanderbilt, Cornelius 17, 23, 24 vCJD (mad-cow disease) 280, 308 Veblen, Thorstein 102 Veenhoven, Ruut 28 vegetarianism 83, 126, 147, 376 Venezuela 31, 61, 238 Venice 115, 178–9 venture capitalists 223, 258, 259 Veron, Charlie 339–40 Victoria, Lake 250 Victoria, Queen 322 Vienna exhibition (1873) 233–4 Vietnam 15, 183, 188 Vikings 176 violence: decline in 14, 106, 201; homicide 14, 20, 85, 88, 106, 118, 201; in pre-industrial societies 44–5, 136, 137–9; random 104 Visby, Gotland 180 vitamin A 353 vitamin C 258 vitamin D 129 Vivaldi, Antonio 115 Vladimir, Russia 71 Vogel, Orville 142 Vogelherd, Germany 70 voles 97 Voltaire 96, 103, 104, 256 Wagner, Charles 288 Wal-Mart (retail corporation) 21, 112–14, 263 Wales 132 Wall Street (film) 101 Walton, Sam 112–13, 263 Wambugu, Florence 154 war: in Africa 316; in hunter-gatherer societies 44–5; threat of nuclear war 280, 290, 299–300; twentieth-century world wars 289, 309; unilateral declarations of 104 water: contaminated 338, 353, 429; pricing of 148; supplies 147, 280, 281, 324, 334–5; see also droughts; irrigation water snakes 17 watermills 176, 194, 198, 215, 216–17, 234 Watson, Thomas 282 Watt, James 221, 244, 256, 271, 411, 413–14 wave and tidal power 246, 343, 344 weather forecasting 3, 4, 335 weather-related death rates 335–6 Wedgwood, Josiah 105, 114, 225, 256 Wedgwood, Sarah 105 weed control 145, 152 Weiss, George David 349 Weitzman, Martin 332–3 Welch, Jack 261 welfare benefits 16, 106 Wellington, Arthur Wellesley, 1st Duke of 89 Wells, H.G. 65, 313, 352, 354 West Germany 289–90 West Indies 202, 216, 310 Western Union (company) 261 Westinghouse, George 234 whales 6, 281, 302 whaling 87, 185, 281 wheat 42, 71, 124, 125, 129, 139, 140, 146–7, 149, 153, 156, 158, 161, 167, 300–301; new varieties 141–3 Wheeler, Sir Mortimer 162 wheels, invention of 176, 274 Whitehead, Alfred North 255 Wikipedia (online encyclopedia) 99, 115, 273, 356 Wilberforce, William 105, 214 Wilder, Thornton 359 wilderness land, expansion of 144, 147, 148, 239, 337–8, 347, 359 wildlife conservation 324, 329 William III, King 223 Williams, Anthony 262 Williams, Joseph 254 Williams, Rowan, Archbishop of Canterbury 102 Wilson, Bart 90, 324 Wilson, E.O. 243, 293 Wiltshire 194 wind power 239, 246, 343–4, 346, 408 wolves 87, 137 women’s liberation 108–9 wool 37, 149, 158, 167, 178, 179, 194, 224 working conditions, improvements in 106–7, 114, 115, 188, 219–20, 227, 285 World Bank 117, 203, 317 World Health Organisation 336–7, 421 World Wide Web 273, 356 World3 (computer model) 302–3 Wrangham, Richard 59, 60 Wright brothers 261, 264 Wright, Robert 101, 175 Wrigley, Tony 231 Y2K computer bug 280, 290, 341 Yahgan Indians 62 Yahoo (corporation) 268 Yangtze river 181, 199, 230 Yeats, W.B. 289 yellow fever 310 Yellow river 161, 167 Yemen 207, 209 Yir Yoront aborigines 90–91 Yong-Le, Chinese emperor 183, 184, 185 Yorkshire 285 Young, Allyn 276 young people, pessimism about 292 Young, Thomas 221 Younger Dryas (climatic period) 125 Yucatan 335 Zak, Paul 94–5, 97 Zambia 28, 154, 316, 317, 318, 331 zero, invention of 173, 251 zero-sum thinking 101 Zimbabwe 14, 28, 117, 302, 316 zinc 213, 303 Zuckerberg, Mark 262 Acknowledgements It is one of the central arguments of this book that the special feature of human intelligence is that it is collective, not individual – thanks to the invention of exchange and specialisation.


pages: 621 words: 157,263

How to Change the World: Reflections on Marx and Marxism by Eric Hobsbawm

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anti-communist, banking crisis, battle of ideas, Berlin Wall, British Empire, continuation of politics by other means, creative destruction, currency manipulation / currency intervention, deindustrialization, discovery of the americas, experimental subject, Fall of the Berlin Wall, full employment, Gunnar Myrdal, labour market flexibility, liberal capitalism, market fundamentalism, mass immigration, means of production, new economy, Simon Kuznets, Thorstein Veblen, Upton Sinclair, upwardly mobile, Vilfredo Pareto, zero-sum game

Robert, 301–2 Mussolini, Benito, 269, 275, 317 oriental history, 138, 148, 172 Myrdal, Gunnar, 389 Origin of the Family, 32, 52, 54, 70, 140, 158, 163–4, 171, 179 Naples, 232, 279 Orwell, George, 297–8 Napoleon Bonaparte, 33, 55 Ostrogorski, Moisey, 243 Napoleon III, 52, 57, 71, 79, 326 Ottoman Empire, 405 465 How to Change the World Outline of a Critique of Political Economy, 33 ‘Prague Spring’, 350, 387 Owen, Robert, 21, 24, 26–7, 33, 35, pre-capitalist formations, 127–75 45–6 pre-Columbian civilisations, 141–2 Owenites, 25–7, 33, 35 Pre-Raphaelites, 250 Prescott, William Hickling, 141 pacifism, 274 prices, sixteenth-century, 141 Pakistan, 412 Private Property and the State, 179 Palestine, 234 proletariat Palmerston, Lord, 78 and Communist Manifesto, 113–17, Pannekoek, A., 227 119 Pareto, Vilfredo, 232, 240, 243, 318 dictatorship of, 52, 56–7, 62, 65, 86, Paris, 40, 102, 117, 235, 254 304–5, 310 Paris Commune, 52, 56–8, 62, 65, 103 and early socialism, 41–2, 45 ‘Parvus’, 225 and industrialisation, 23–4, 90–5 Pearson, Karl, 238 and pauperisation, 96, 115 Peasant War, 65, 180 and revolution, 48, 52, 55–8, 61–6, Pecqueur, Constantin, 36 117 Perrin, Jean, 295 Prothero, M., 204 Peru, 344 Proudhon, Pierre-Joseph, 21, 23, 26, Petrograd soviet, 407 34, 36, 45–7, 208 Philby, Kim, 279 Proust, Marcel, 266 Picard, Edmond, 226 Prussia, 51 Picasso, Pablo, 265 psychoanalysis, 236, 372 Pillot, J.


pages: 453 words: 132,400

Flow by Mihaly Csikszentmihalyi

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Albert Einstein, Bonfire of the Vanities, centralized clearinghouse, conceptual framework, correlation does not imply causation, double helix, fear of failure, Ignaz Semmelweis: hand washing, invisible hand, Isaac Newton, job satisfaction, Mahatma Gandhi, meta analysis, meta-analysis, Necker cube, pattern recognition, place-making, Ralph Waldo Emerson, the scientific method, Thomas Kuhn: the structure of scientific revolutions, Vilfredo Pareto

An excellent (but not impartial) review of the concept is given by the anthropologist Melford Spiro (1987), who in a recent autobiographical account describes why he changed his mind from an uncritical acceptance of the equal value of cultural practices to a much more qualified recognition of the pathological forms that cultures can occasionally assume. Philosophers and other humanists have often accused social scientists, sometimes with justification, of “debunking” absolute values that are important for the survival of culture (e.g., Arendt 1958, Bloom 1987). The early Italian-Swiss sociologist Vilfredo Pareto (1917, 1919) has been one of the scholars most keenly aware of the dangers of relativity inherent in his discipline. English workers. The classic story of how the free English workers were transformed into highly regimented industrial laborers is told by the historian E. P. Thompson (1963).


pages: 424 words: 115,035

How Will Capitalism End? by Wolfgang Streeck

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accounting loophole / creative accounting, Airbnb, basic income, Ben Bernanke: helicopter money, Bretton Woods, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, Clayton Christensen, collective bargaining, conceptual framework, corporate governance, creative destruction, credit crunch, David Brooks, David Graeber, debt deflation, deglobalization, deindustrialization, en.wikipedia.org, eurozone crisis, failed state, financial deregulation, financial innovation, first-past-the-post, fixed income, full employment, Gini coefficient, global reserve currency, Google Glasses, haute cuisine, income inequality, information asymmetry, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, labour mobility, late capitalism, liberal capitalism, market bubble, means of production, moral hazard, North Sea oil, offshore financial centre, open borders, pension reform, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, post-industrial society, private sector deleveraging, profit maximization, profit motive, quantitative easing, reserve currency, rising living standards, Robert Gordon, savings glut, secular stagnation, shareholder value, sharing economy, sovereign wealth fund, The Future of Employment, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Uber for X, upwardly mobile, Vilfredo Pareto, winner-take-all economy, Wolfgang Streeck

Wright), 38, 94 Mitterrand, François, 175 mixed economy, 56, 227 modern capitalism, 4, 16, 56, 119, 203 monetary systems, 172–83 monetary weapons, 167–8 money commodification of, 15, 24, 35, 61–5, 72, 209, 248 concept of, 165–7 as fictitious commodity, 61, 64, 248 Monnet, Jean, 146 Monsen, Joseph, 95, 96, 98, 99, 106, 107 Monti, Mario, 144 moral economy, 76, 174, 204, 213, 214, 215, 246 Morgan Stanley, 31 multi-morbidity, diagnosis of, 13 N National Socialism, 153 National Union of Mineworkers (United Kingdom), 81 nature advancing exhaustion of, 62 commodification of, 15, 72, 208, 248 as fictitious commodity, 61, 208–9, 248 necessary impurities, 61 necessity, empire of, 46 neocapitalist and neoliberal lifestyle, 9 neo-feudalism, 28, 30, 35 neo-functionalist integration, 146, 175 neoliberal capitalism, 13, 14, 16, 22, 36, 42 neoliberalism, 5, 21, 22, 26, 37–8, 81 neo-Malthusian discourses, 62 neo-Protestant work ethic, 45 networks of users, behaviours required of, 41–4 new world system equilibrium, 13 niche markets, 100, 241 non-economic social relations, 203 non-owners, motivating of, 2 nuclear war, as possible crisis in which capitalism would go under, 8 O Obama, Barack, 32, 40f, 66 Obama administration, 32, 33, 40f, 66f, 88, 231f O’Connor, James, 115, 245 oligarchic inequality, 28–30 oligarchic redistribution, 28, 65, 68, 69, 186 oligarchic rule, 15 oligarchs, 30 Olympic Games, 101 ordoliberalism, 153, 154, 155, 159 P Packard, Vance, 210 Papademos, Lukas, 144 Papandreou, George, 143 Pareto, Vilfredo, 201 Parsons, Talcott, 166, 167, 169, 201, 251 party membership, 21. See also political parties Paulsen, Henry, 31 Phase IV, 18, 20 Piketty, Thomas, 30 plutonomy memorandum, 68 Polanyi, Karl, 3, 24, 61, 74, 76, 134, 180, 208, 223, 224, 229, 230, 231, 248 Polanyian, 62, 229, 231, 232, 248 political communities, 24, 91, 108 political-economic theory, 201, 202 political economy capitalist political economy.

Culture and Prosperity: The Truth About Markets - Why Some Nations Are Rich but Most Remain Poor by John Kay

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Albert Einstein, Asian financial crisis, Barry Marshall: ulcers, Berlin Wall, Big bang: deregulation of the City of London, California gold rush, complexity theory, computer age, constrained optimization, corporate governance, corporate social responsibility, correlation does not imply causation, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, Donald Trump, double entry bookkeeping, double helix, Edward Lloyd's coffeehouse, equity premium, Ernest Rutherford, European colonialism, experimental economics, Exxon Valdez, failed state, financial innovation, Francis Fukuyama: the end of history, George Akerlof, George Gilder, greed is good, Gunnar Myrdal, haute couture, illegal immigration, income inequality, industrial cluster, information asymmetry, intangible asset, invention of the telephone, invention of the wheel, invisible hand, John Meriwether, John Nash: game theory, John von Neumann, Kenneth Arrow, Kevin Kelly, knowledge economy, labour market flexibility, late capitalism, light touch regulation, Long Term Capital Management, loss aversion, Mahatma Gandhi, market bubble, market clearing, market fundamentalism, means of production, Menlo Park, Mikhail Gorbachev, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Naomi Klein, Nash equilibrium, new economy, oil shale / tar sands, oil shock, Pareto efficiency, Paul Samuelson, pets.com, popular electronics, price discrimination, price mechanism, prisoner's dilemma, profit maximization, purchasing power parity, QWERTY keyboard, Ralph Nader, RAND corporation, random walk, rent-seeking, Right to Buy, risk tolerance, road to serfdom, Ronald Coase, Ronald Reagan, second-price auction, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, Steve Jobs, telemarketer, The Chicago School, The Death and Life of Great American Cities, The Market for Lemons, The Nature of the Firm, the new new thing, The Predators' Ball, The Wealth of Nations by Adam Smith, Thorstein Veblen, total factor productivity, transaction costs, tulip mania, urban decay, Vilfredo Pareto, Washington Consensus, women in the workforce, yield curve, yield management

The felicific calculus was designed to solve the knotty problem of commensurability-how to weight my utility against yours, how to decide whether greater aggregate happiness had been achieved. Sadly, progress toward the felicific calculus remains elusive, and utilitarianism fell out of fashion amongst philosophers many years ago. Pareto Efficiency ••••••••••••••••••••••••••••••••••••• Vilfredo Pareto, Walras's successor at Lausanne, believed, like the utilitarians, that the welfare of society could be defined in terms of the individual utilities of individual citizens or households. He was content simply to list the utilities they achieved as a vector. So instead of a vector that described picture quality, sound quality, etc., a vector would list the welfare of the Smiths, the welfare of the J oneses, and so on for all the households in the economy.


pages: 624 words: 127,987

The Personal MBA: A World-Class Business Education in a Single Volume by Josh Kaufman

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Albert Einstein, Atul Gawande, Black Swan, business process, buy low sell high, capital asset pricing model, Checklist Manifesto, cognitive bias, correlation does not imply causation, Credit Default Swap, Daniel Kahneman / Amos Tversky, David Heinemeier Hansson, David Ricardo: comparative advantage, Dean Kamen, delayed gratification, discounted cash flows, Donald Knuth, double entry bookkeeping, Douglas Hofstadter, en.wikipedia.org, Frederick Winslow Taylor, George Santayana, Gödel, Escher, Bach, high net worth, hindsight bias, index card, inventory management, iterative process, job satisfaction, Johann Wolfgang von Goethe, Kevin Kelly, Lao Tzu, loose coupling, loss aversion, Marc Andreessen, market bubble, Network effects, Parkinson's law, Paul Buchheit, Paul Graham, place-making, premature optimization, Ralph Waldo Emerson, rent control, side project, statistical model, stealth mode startup, Steve Jobs, Steve Wozniak, subscription business, telemarketer, the scientific method, time value of money, Toyota Production System, tulip mania, Upton Sinclair, Vilfredo Pareto, Walter Mischel, Y Combinator, Yogi Berra

SHARE THIS CONCEPT: http://book.personalmba.com/refactoring/ The Critical Few Typically, causes, inputs, or effort divide into two categories: (1) the majority, that have little impact, and (2) a small minority, that have a major, dominant impact. —RICHARD KOCH, AUTHOR OF THE 80/20 PRINCIPLE Vilfredo Pareto was a nineteenth-century economist and sociologist who was very interested in the topic of land ownership and the social distribution of wealth. After collecting and analyzing a great deal of data, Pareto found a curious Pattern: over 80 percent of the land in Italy was owned by less than 20 percent of the population.


pages: 461 words: 128,421

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street by Justin Fox

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activist fund / activist shareholder / activist investor, Albert Einstein, Andrei Shleifer, asset allocation, asset-backed security, bank run, beat the dealer, Benoit Mandelbrot, Black-Scholes formula, Bretton Woods, Brownian motion, capital asset pricing model, card file, Cass Sunstein, collateralized debt obligation, complexity theory, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, discovery of the americas, diversification, diversified portfolio, Edward Glaeser, Edward Thorp, endowment effect, Eugene Fama: efficient market hypothesis, experimental economics, financial innovation, Financial Instability Hypothesis, fixed income, floating exchange rates, George Akerlof, Henri Poincaré, Hyman Minsky, implied volatility, impulse control, index arbitrage, index card, index fund, information asymmetry, invisible hand, Isaac Newton, John Meriwether, John Nash: game theory, John von Neumann, joint-stock company, Joseph Schumpeter, Kenneth Arrow, libertarian paternalism, linear programming, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, market bubble, market design, Myron Scholes, New Journalism, Nikolai Kondratiev, Paul Lévy, Paul Samuelson, pension reform, performance metric, Ponzi scheme, prediction markets, pushing on a string, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Richard Thaler, risk/return, road to serfdom, Robert Bork, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, shareholder value, Sharpe ratio, short selling, side project, Silicon Valley, South Sea Bubble, statistical model, The Chicago School, The Myth of the Rational Market, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, Thorstein Veblen, Tobin tax, transaction costs, tulip mania, value at risk, Vanguard fund, Vilfredo Pareto, volatility smile, Yogi Berra

Hudson, The (Mis)behavior of Markets: A Fractal View of Risk, Ruin, and Reward (New York: Basic Books, 2004), 150–59. The Zipf book mentioned is Human Behavior and the Principle of Least Effort: An Introduction to Human Ecology (Cambridge, Mass.: Addison-Wesley, 1949). 2. This field had been pioneered by Italian mathematical economist Vilfredo Pareto. Pareto made important contributions to equilibrium economics and Irving Fisher visited him during his European grand tour in 1894. He was appalled that Pareto’s wife smoked, but the two corresponded regularly afterward and Mrs. Pareto translated Fisher’s doctoral dissertation into Italian. Irving Norton Fisher, My Father Irving Fisher (New York: Comet Press Books, 1956), 65.


pages: 523 words: 143,139

Algorithms to Live By: The Computer Science of Human Decisions by Brian Christian, Tom Griffiths

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4chan, Ada Lovelace, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, Albert Einstein, algorithmic trading, anthropic principle, asset allocation, autonomous vehicles, Bayesian statistics, Berlin Wall, Bill Duvall, bitcoin, Community Supported Agriculture, complexity theory, constrained optimization, cosmological principle, cryptocurrency, Danny Hillis, David Heinemeier Hansson, delayed gratification, dematerialisation, diversification, Donald Knuth, double helix, Elon Musk, fault tolerance, Fellow of the Royal Society, Firefox, first-price auction, Flash crash, Frederick Winslow Taylor, George Akerlof, global supply chain, Google Chrome, Henri Poincaré, information retrieval, Internet Archive, Jeff Bezos, John Nash: game theory, John von Neumann, knapsack problem, Lao Tzu, Leonard Kleinrock, linear programming, martingale, Nash equilibrium, natural language processing, NP-complete, P = NP, packet switching, Pierre-Simon Laplace, prediction markets, race to the bottom, RAND corporation, RFC: Request For Comment, Robert X Cringely, sealed-bid auction, second-price auction, self-driving car, Silicon Valley, Skype, sorting algorithm, spectrum auction, Steve Jobs, stochastic process, Thomas Bayes, Thomas Malthus, traveling salesman, Turing machine, urban planning, Vickrey auction, Vilfredo Pareto, Walter Mischel, Y Combinator, zero-sum game

“On Complexity as Bounded Rationality.” In Proceedings of the Twenty-Sixth Annual ACM Symposium on Theory of Computing, 1994, 726–733. Pardalos, Panos M., and Georg Schnitger. “Checking Local Optimality in Constrained Quadratic Programming is NP-hard.” Operations Research Letters 7 (1988): 33–35. Pareto, Vilfredo. Cours d’économie politique. Lausanne: F. Rouge, 1896. Parfit, Derek. Reasons and Persons. Oxford, UK: Oxford University Press, 1984. Partnoy, Frank. Wait: The Art and Science of Delay. New York: PublicAffairs, 2012. Pascal, Blaise. Pensées sur la religion et sur quelques autres sujets. Paris: Guillaume Desprez, 1670.


pages: 331 words: 60,536

The Sovereign Individual: How to Survive and Thrive During the Collapse of the Welfare State by James Dale Davidson, Rees Mogg

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affirmative action, agricultural Revolution, bank run, barriers to entry, Berlin Wall, borderless world, British Empire, California gold rush, clean water, colonial rule, Columbine, compound rate of return, creative destruction, Danny Hillis, debt deflation, ending welfare as we know it, epigenetics, Fall of the Berlin Wall, falling living standards, feminist movement, financial independence, Francis Fukuyama: the end of history, full employment, George Gilder, Hernando de Soto, illegal immigration, income inequality, informal economy, information retrieval, Isaac Newton, Kevin Kelly, market clearing, Martin Wolf, Menlo Park, money: store of value / unit of account / medium of exchange, new economy, New Urbanism, offshore financial centre, Parkinson's law, pattern recognition, phenotype, price mechanism, profit maximization, rent-seeking, reserve currency, road to serfdom, Ronald Coase, school vouchers, seigniorage, Silicon Valley, spice trade, statistical model, telepresence, The Nature of the Firm, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, trade route, transaction costs, Turing machine, union organizing, very high income, Vilfredo Pareto

A MAGNITUDE BEYOND PARETO'S LAW Pareto's law says that 80 percent of the benefit will depend on or go to 20 percent of those engaged. This may be approximately true, though, more strikingly, 1 percent of the population of the United States pays 28.7 percent of the income tax, suggesting that as societies advance into the Information Age they will experience an even more skewed distribution of incomes and abilities than Vilfredo Pareto observed at the end of the last century. People are quite accustomed to substantial inequalities of wealth. In 1828, 4 percent of New Yorkers were thought to have owned 62 percent of all the city's wealth. 169 By 1845, the top 4 percent owned about 81 percent of all corporate and noncorporate wealth in New York City.


pages: 505 words: 142,118

A Man for All Markets by Edward O. Thorp

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3Com Palm IPO, Albert Einstein, asset allocation, beat the dealer, Bernie Madoff, Black Swan, Black-Scholes formula, Brownian motion, buy low sell high, carried interest, Chuck Templeton: OpenTable, Claude Shannon: information theory, cognitive dissonance, collateralized debt obligation, compound rate of return, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, Edward Thorp, Erdős number, Eugene Fama: efficient market hypothesis, financial innovation, George Santayana, German hyperinflation, Henri Poincaré, high net worth, High speed trading, index arbitrage, index fund, interest rate swap, invisible hand, Jarndyce and Jarndyce, Jeff Bezos, John Meriwether, John Nash: game theory, Kenneth Arrow, Livingstone, I presume, Long Term Capital Management, Louis Bachelier, margin call, Mason jar, merger arbitrage, Murray Gell-Mann, Myron Scholes, NetJets, Norbert Wiener, passive investing, Paul Erdős, Paul Samuelson, Pluto: dwarf planet, Ponzi scheme, price anchoring, publish or perish, quantitative trading / quantitative finance, race to the bottom, random walk, Renaissance Technologies, RFID, Richard Feynman, Richard Feynman, risk-adjusted returns, Robert Shiller, Robert Shiller, rolodex, Sharpe ratio, short selling, Silicon Valley, statistical arbitrage, stem cell, survivorship bias, The Myth of the Rational Market, The Predators' Ball, the rule of 72, The Wisdom of Crowds, too big to fail, Upton Sinclair, value at risk, Vanguard fund, Vilfredo Pareto, Works Progress Administration

To those who balk at changing their ways we can only ask, along with Regis Philbin, “Who wants to be a millionaire?” Investors I dealt with typically were not just millionaires but multimillionaires with fortunes of $5 million and up. How many households have reached these rarefied heights? The great Italian economist Vilfredo Pareto studied the distribution of income and in 1897 came up with a “power law” formula that seems then and now to describe fairly well how many top wealth holders in a modern society have reached various levels. To calibrate the formula we need just these two facts: The Forbes 400 cutoff for the United States, which was $1.55 billion in 2014, and the total wealth of those four hundred, an amazing $2.3 trillion.


pages: 651 words: 180,162

Antifragile: Things That Gain From Disorder by Nassim Nicholas Taleb

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Air France Flight 447, Andrei Shleifer, banking crisis, Benoit Mandelbrot, Berlin Wall, Black Swan, Chuck Templeton: OpenTable, commoditize, creative destruction, credit crunch, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, discrete time, double entry bookkeeping, Emanuel Derman, epigenetics, financial independence, Flash crash, Gary Taubes, George Santayana, Gini coefficient, Henri Poincaré, high net worth, hygiene hypothesis, Ignaz Semmelweis: hand washing, informal economy, invention of the wheel, invisible hand, Isaac Newton, James Hargreaves, Jane Jacobs, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Arrow, knowledge economy, Lao Tzu, Long Term Capital Management, loss aversion, Louis Pasteur, mandelbrot fractal, Marc Andreessen, meta analysis, meta-analysis, microbiome, money market fund, moral hazard, mouse model, Myron Scholes, Norbert Wiener, pattern recognition, Paul Samuelson, placebo effect, Ponzi scheme, principal–agent problem, purchasing power parity, quantitative trading / quantitative finance, Ralph Nader, random walk, Ray Kurzweil, rent control, Republic of Letters, Ronald Reagan, Rory Sutherland, selection bias, Silicon Valley, six sigma, spinning jenny, statistical model, Steve Jobs, Steven Pinker, Stewart Brand, stochastic process, stochastic volatility, The Great Moderation, the new new thing, The Wealth of Nations by Adam Smith, Thomas Bayes, Thomas Malthus, too big to fail, transaction costs, urban planning, Vilfredo Pareto, Yogi Berra, Zipf's Law

There may not be an easily identifiable cause for a large share of the problems, but often there is an easy solution (not to all problems, but good enough; I mean really good enough), and such a solution is immediately identifiable, sometimes with the naked eye rather than the use of complicated analyses and highly fragile, error-prone, cause-ferreting nerdiness. Some people are aware of the eighty/twenty idea, based on the discovery by Vilfredo Pareto more than a century ago that 20 percent of the people in Italy owned 80 percent of the land, and vice versa. Of these 20 percent, 20 percent (that is, 4 percent) would have owned around 80 percent of the 80 percent (that is, 64 percent). We end up with less than 1 percent representing about 50 percent of the total.


pages: 678 words: 216,204

The Wealth of Networks: How Social Production Transforms Markets and Freedom by Yochai Benkler

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affirmative action, barriers to entry, bioinformatics, Brownian motion, call centre, Cass Sunstein, centre right, clean water, commoditize, dark matter, desegregation, East Village, fear of failure, Firefox, game design, George Gilder, hiring and firing, Howard Rheingold, informal economy, invention of radio, Isaac Newton, iterative process, Jean Tirole, jimmy wales, John Markoff, Kenneth Arrow, market bubble, market clearing, Marshall McLuhan, New Journalism, optical character recognition, pattern recognition, peer-to-peer, pre–internet, price discrimination, profit maximization, profit motive, random walk, recommendation engine, regulatory arbitrage, rent-seeking, RFID, Richard Stallman, Ronald Coase, Search for Extraterrestrial Intelligence, SETI@home, shareholder value, Silicon Valley, Skype, slashdot, social software, software patent, spectrum auction, technoutopianism, The Fortune at the Bottom of the Pyramid, The Nature of the Firm, transaction costs, Vilfredo Pareto

See policy networked information economy, 42 methodological choices, 42-56 Networked public sphere, 27, 31-34, 324, 327, 331, 340, 356, 376-484, 385, 403, 416, 425, 429, 437, 467, 469, 473, 481, 515, 631, 642, 649, 666, 686, 816-818 Diebold Election Systems case study, 403-415, 469, 686-689 Internet as concentrated vs. chaotic, 429-436 authoritarian control, working around, 473-480 basic communication tools, 385-393 critiques that Internet democratizes, 416-428 defined, 324-328 future of, 481-484 liberal, design characteristics of, 331-339 loose affiliations, 27-28, 631, 642, 649-653 mass-media platform for, 327-330, 340-341, 356-358 see also social relations and norms networked society, 666-667, 816 topology and connectivity of, 437-466 transparency of Internet culture, 515-527 watchdog functionality, 425, 467-472 Networks sharing, 174 News (as data), 561 Newspapers, 85, 341-343, 363 market concentration, 363 Newton, Isaac, 81 Niche markets, 112 Nissenbaum, Helen, 466 No Electrical Theft (NET) Act, 775 Noam, Eli, 363, 430-431 Nonexclusion-market production strategies, 83-87, 94-99 Nonmarket information producers, 15-19, 48, 83-87, 91, 98, 194, 225, 244, 522, 613 conditions for production, 194-207 cultural change, transparency of, 522-526 emergence of social production, 225-243 relationship with nonmarket information producers (cont.) market-based businesses, 244-250 role of, 48 strategies for information production, 91-92, 98-99 universities as, 613-616 Nonmarket production, economics of, 120, 182-250, 194, 208, 225 emergence in digital networks, 225-243 feasibility conditions, 194-207 transaction costs, 120, 208-224 Nonmarket strategies, effectiveness of, 111-113 Nonprofit medical research, 619 Nonrival goods, 79-83 Norms (social), 27, 41, 67, 120, 145-148, 157, 183, 208, 273, 421, 430, 459, 629-667, 631, 642, 649, 654, 659, 664, 818 Internet and human coexistence, 664-666 Internet as platform for, 654-658 Slashdot mechanisms for, 157-160 enforced norms with software, 659-663 fragmentation of communication, 421, 430-431, 459-460, 818-819 fragments of communication, 41 loose affiliations, 27-28, 631, 642, 649-653 motivation within, 183-187 property, commons, and autonomy, 273-278 software for, emergence of, 659-663 technology-defined structure, 67-76 thickening of preexisting relations, 631 transaction costs, 120, 208-224 working with social expectations, 649-653 Nozick, Robert, 544 Number of behavioral options, 286-288, 316 O OAIster protocol, 581 ODP (Open Directory Project), 154 OSTG (Open Source Technology Group), 156 Obscurity of some Web sites, 446, 451-452 Older Web sites, obscurity of, 446 On the shoulders of giants, 81-83 One World Health, 619 Open Archives Initiative, 581 Open Courseware Initiative (MIT), 562, 582 Open Directory Project (ODP), 154 Open commons, 122 Open wireless networks, 709-714, 715, 805 municipal broadband initiatives, 715-717 security, 805-806 Open-source software, 19-20, 37, 96, 125-132, 202, 247, 573, 762, 803 as competition to market-based business, 247 commons-based welfare development, 573-576 human development and justice, 37 policy on, 762-763 project modularity and granularity, 202 security considerations, 803-807 Opinion, public, 337, 338, 358, 367, 373 iconic representations of, 367, 373 synthesis of, 337, 338, 358 Opportunities created by social production, 246-250 Options, behavioral, 286-288, 316 Organization structure, 200-207, 221 granularity, 200-203, 221-222 modularity, 200-203 Organizational clustering, 446-453 Organizational structure, 543 justice and, 543-545 Ostrom, Elinor, 276 Owners of mass media, power of, 355, 359-365, 397 corrective effects of network environment, 397-402 P P2p networks, 171-175, 737-752, 805 security considerations, 805 PIPRA (Public Intellectual Property for Agriculture), 598-604 PLoS (Public Library of Science), 579 Pantic, Drazen, 393 Pareto, Vilfredo, 441 Participatory culture, 249, 262, 531-536 See also culture passive vs. active consumers, 249-250, 262 Patents, 682 see proprietary rights path dependency, 682 Peer production, 19, 27, 73, 118-181, 194, 204, 208, 244, 403, 425, 467, 620, 631, 642, 649, 662, 813-815 as platform for human connection, 662-663 drug research and development, 620 electronic voting machines (case study), 403-415 feasibility conditions for social production, 194-207 loose affiliations, 27, 631, 642, 649-653 maintenance of cooperation, 204-205 relationship with market-based business, 244-250 sustainability of, 208-224 watchdog functionality, 425, 467-472 Peer review of scientific publications, 578-580 Peer-to-peer networks, 171-175, 737-752, 805 security considerations, 805 Pennock, David, 451 Perceptions of others, shaping, 281-288, 285, 295, 298, 315-316, 397, 531 influence exaction, 295-296, 298-300 with propaganda, 285, 397-402, 531-536 Perfect information, 364 Performance as means of communication, 367 Permission to communicate, 294-295 Personal computers, 206, 220, 294, 718 as shareable, lumpy goods, 220-222 infrastructure ownership, 294-295 policy on physical devises, 718-725 Pew studies, 647, 745 Pharmaceuticals, commons-based research on, 609-623 Philadelphia, wireless initiatives in, 716-717 Physical capital for production, 21-23, 73, 89, 120, 195, 216, 309, 676-677, 699-725 control of, 195-196 cost minimization and benefit maximization, 89 fixed and initial costs, 216 production costs as limiting, 309 see also commons and social capital, 699 transaction costs, 120 Physical constraints on information production, 15-17, 60-62 Physical contact, diminishment of, 638-639 Physical layer of institutional ecology, 691, 696, 823-825 recent changes, 696 Physical machinery and computers, 206, 220, 294, 718 as shareable, lumpy goods, 220-222 infrastructure ownership, 294-295 policy on physical devices, 718-725 Piore, Michael, 266 Planned modularization, 200-203 Plasticity of Internet culture, 528-530, 535 Polarization, 422, 461 Policy, 63-65, 146, 299, 339, 355, 403, 469, 473, 531, 539, 545, 568, 611, 671, 674-807, 679, 685, 686, 695, 698, 796, 803, 808 Diebold Election Systems case study, 403-415, 469, 686-689 authoritarian control, 473-480 commons-based research, 568 enclosure movement, 671-672 global Internet and, 698 independence from government control, 339, 355-356 international harmonization, 796-801 liberal theories of justice and, 545-548 mapping institutional ecology, 685-698 participatory culture, 531-536 path dependency, 679-684 pharmaceutical innovation, 611 property-based, 299-302 proprietary rights vs. justice, 539-541 security-related, 695, 803-807 security-related policy, 146-148 stakes of, 808-829 Policy layers, 676-677, 685-698, 691, 696, 767, 823-825 content layer, 691, 696, 767-802, 823-825 physical layer, 691, 823-825 Policy routers, 281-284, 296, 298, 355-358, 702 influence exaction, 296, 298-300 Political concern, undermined by commercialism, 355, 365-375 Political freedom, mass media and, 323-376, 327, 331, 340, 353 commercial platform for public sphere, 327-330, 340-341 criticisms, 353-375 design characteristics of liberal public sphere, 331-339 Political freedom, media and, 356 commercial platform for public sphere, 356-358 Political freedom, public sphere and, 376-484, 385, 416, 425, 429, 437, 467, 473, 481 Internet as concentrated vs. chaotic, 429-436 authoritarian control, working around, 473-480 basic communication tools, 385-393 critiques that Internet democratizes, 416-428 future of, 481-484 topology and connectivity of, 437-466 watchdog functionality, 425, 467-472 Pool, Ithiel de Sola, 682 Popular culture, commercial production of, 529-530 Post, Robert, 269 Postel, Jon, 754 Postman, Neil, 341 Powell, Walter, 218 Power law distribution of Web connections, 437-466, 448, 451 strongly connected Web sites, 448-450 uniform component of moderate connectivity, 451 Power of mass media owners, 355, 359-365, 397 corrective effects of network environment, 397-402 Preexisting relations, thickening of, 631 Press, commercial, 341-343, 363 Price compensation, as demotivator, 187-190 Pricing, 214-219 Pringle, Peter, 594 Print media, commercial, 341-343 Private communications, 326 Privatization, 289, 299, 594, 779 ProCD v.


pages: 568 words: 174,089

The Power Elite by C. Wright Mills, Alan Wolfe

affirmative action, Albert Einstein, anti-communist, Asilomar, collective bargaining, creative destruction, cuban missile crisis, desegregation, full employment, Joseph Schumpeter, long peace, means of production, Monroe Doctrine, one-China policy, Plutocrats, plutocrats, profit motive, Ralph Waldo Emerson, Ronald Reagan, Simon Kuznets, Thorstein Veblen, Vilfredo Pareto

To the man who has made his millions—honestly or dishonestly as the case may be—we will give 10. To the man who has earned his thousands we will give 6; to such as just manage to keep out of the poor-house, 1, keeping zero for those who get in … So let us make a class of people who have the highest indices in their branch of activity, and to that class give the name of elite.’ Vilfredo Pareto, The Mind and Society (New York: Harcourt, Brace, 1935), par. 2027 and 2031. Those who follow this approach end up not with one elite, but with a number corresponding to the number of values they select. Like many rather abstract ways of reasoning, this one is useful because it forces us to think in a clear-cut way.