Celebrating Russian Novelist Fyodor Dostoevsky

Nov. 11 is his birthday. One of his famous books is Crime and Punishment.

Below are some passages that relate to economics and one sounds like the invisible hand.  All of the passages can be found at https://www.bartleby.com/lit-hub/crime-and-punishment/.

From Part I, Chapter 2:

"But Mr. Lebeziatnikov who keeps up with modern ideas explained the other day that compassion is forbidden nowadays by science itself, and that that's what is done now in England, where there is political economy." (economics used to be called political economy)"

From Part II, Chapter 5:

"if I were told, 'love thy neighbour,' what came of it?" Pyotr Petrovitch went on, perhaps with excessive haste. "It came to my tearing my coat in half to share with my neighbour and we both were left half naked. As a Russian proverb has it, 'Catch several hares and you won't catch one.' Science now tells us, love yourself before all men, for everything in the world rests on self-interest. You love yourself and manage your own affairs properly and your coat remains whole. Economic truth adds that the better private affairs are organised in society--the more whole coats, so to say—the firmer are its foundations and the better is the common welfare organised too. Therefore, in acquiring wealth solely and exclusively for myself, I am acquiring, so to speak, for all, and helping to bring to pass my neighbour's getting a little more than a torn coat; and that not from private, personal liberality, but as a consequence of the general advance." The idea is simple, but unhappily it has been a long time reaching us, being hindered by idealism and sentimentality. And yet it would seem to want very little wit to perceive it."

From Part III, Chapter 5:

"“Not quite, that’s true,” Razumihin agreed at once, getting warm and hurried as usual. “Listen, Rodion, and tell us your opinion, I want to hear it. I was fighting tooth and nail with them and wanted you to help me. I told them you were coming.… It began with the socialist doctrine. You know their doctrine; crime is a protest against the abnormality of the social organisation and nothing more, and nothing more; no other causes admitted!…”

“You are wrong there,” cried Porfiry Petrovitch; he was noticeably animated and kept laughing as he looked at Razumihin, which made him more excited than ever.

“Nothing is admitted,” Razumihin interrupted with heat. “I am not wrong. I’ll show you their pamphlets. Everything with them is ‘the influence of environment,’ and nothing else. Their favourite phrase! From which it follows that, if society is normally organised, all crime will cease at once, since there will be nothing to protest against and all men will become righteous in one instant. Human nature is not taken into account, it is excluded, it’s not supposed to exist! They don’t recognise that humanity, developing by a historical living process, will become at last a normal society, but they believe that a social system that has come out of some mathematical brain is going to organise all humanity at once and make it just and sinless in an instant, quicker than any living process! That’s why they instinctively dislike history, ‘nothing but ugliness and stupidity in it,’ and they explain it all as stupidity! That’s why they so dislike the living process of life; they don’t and a living soul! The living soul demands life, the soul won’t obey the rules of mechanics, the soul is an object of suspicion, the soul is retrograde! But what they want though it smells of death and can be made of india-rubber, at least is not alive, has no will, is servile and won’t revolt! And it comes in the end to their reducing everything to the building of walls and the planning of rooms and passages in a phalanstery! The phalanstery is ready, indeed, but your human nature is not ready for the phalanstery—it wants life, it hasn’t completed its vital process, it’s too soon for the graveyard! You can’t skip over nature by logic. Logic presupposes three possibilities, but there are millions! Cut away a million, and reduce it all to the question of comfort! That’s the easiest solution of the problem! It’s seductively clear and you mustn’t think about it. That’s the great thing, you mustn’t think! The whole secret of life in two pages of print!”

“Now he is off, beating the drum! Catch hold of him, do!” laughed Porfiry. “Can you imagine,” he turned to Raskolnikov, “six people holding forth like that last night, in one room, with punch as a preliminary! No, brother, you are wrong, environment accounts for a great deal in crime; I can assure you of that.”

“Oh, I know it does, but just tell me: a man of forty violates a child of ten; was it environment drove him to it?”

“Well, strictly speaking, it did,” Porfiry observed with noteworthy gravity; “a crime of that nature may be very well ascribed to the influence of environment.”"

To see what phalanstery is go to Phalanstère at Wikipedia. Excerpt:

"A phalanstère (or phalanstery) was a type of building designed for a self-contained utopian community, ideally consisting of 500–2,000 people working together for mutual benefit, and developed in the early 19th century by Charles Fourier. Fourier chose the name by combining the French word phalange (phalanx, an emblematic military unit in ancient Greece), with the word monastère (monastery)."

The AI Revolution Will Bring Prosperity

The growth of industry disrupted old economic patterns but produced undreamed-of wealth

By Phil Gramm and Michael Solon. Excerpts:

"From the colossal changes wrought by the Industrial Revolution to the Digital Revolution of the last quarter-century, improvements in technology have created an array of jobs that far exceeded—in quantity and quality—the ones eliminated, elevating standards of living."

"the Industrial Revolution in the U.K. unleashed a greater concentration of material blessings than ordinary people had ever experienced. From 1840 to 1900 real wages doubled, and the average lifespan increased by 22%, from roughly 41 years to 50. The population doubled, and employment rose by 80%."

"In America . . . From 1870 to 1900 real gross domestic product tripled, the population and labor force roughly doubled, and output in manufacturing grew sixfold. Real per capita income rose by 110% between 1865 and 1910, while real wages of manufacturing workers increased an estimated 173%. Life expectancy rose by a quarter as inflation-adjusted costs of food, clothing and shelter dropped by roughly 50%."

"During the Digital Revolution of the last quarter-century, U.S. real GDP rose by 66%."

"Since 2000 on average five million Americans have either been laid off or quit their job every month, but the economy has created 5.1 million better-paying jobs a month. This creative destruction isn’t new. In 1810, 81% of Americans worked in agriculture; today only 1.2% do. In 1953, 32% of Americans worked in factories. As real industrial production quadrupled, the share of the labor force in manufacturing declined to 7.8% in 2025."

"In America, mechanization, economies of scale and mass marketing gutted local competitors by providing lower prices and higher-quality products."

"trade adjustment assistance, extended unemployment and our welfare system were no doubt well-intended, they have impeded workers’ transition to new jobs."

"Europe makes it hard to lay people off, which constrains the ability to create jobs. In China, most industrial subsidies go to noncompetitive industries, not to the potential winners of the future."  

Related posts:

ChatGPT Should Make Retailers Nervous: Retail companies risk losing control of the online shopping experience (2025) 

The Coasean Singularity? Demand, Supply, and Market Design with AI Agents (2025) 

AI startups are literally paying people to fold their laundry (or perform similar chores) (2025)

There Is Now Clearer Evidence AI Is Wrecking Young Americans’ Job Prospects (but the news is not all bad): Young workers face rising AI competition in fields like software development, but some also benefit from AI as a helper, new research shows (2025)

AI Is Forcing the Return of the In-Person Job Interview: More companies are returning to face-to-face meetings to counter cheating by candidates—and more ominous digital threats (2025) 

AI’s Overlooked $97 Billion Contribution to the Economy: The AI ‘dividend’ may not be evident yet in estimates of gross domestic product but it’s making life better and more productive (2025) 

AI Is Wrecking an Already Fragile Job Market for College Graduates (is the problem structural Unemployment & the case of a skills mismatch?) Companies have long leaned on entry-level workers to do grunt work that doubles as on-the-job training. Now ChatGPT and other bots can do many of those chores (2025) 

No, AI Robots Won’t Take All Our Jobs: Instead, they will boost productivity, lower prices and spur the evolution of the labor market (2025) 

IBM CEO Says AI Has Replaced Hundreds of Workers but Created New Programming, Sales Jobs: The tech company promises higher total employment as it reinvests resources toward roles like software development (2025)

Technological Disruption in the Labor Market (2025)

Why AI Might Not Take All Our Jobs—if We Act Quickly (2025)

Some good news on productivity (2025) (AI is mentioned)

Some economics of A.I. (2025) 

The AI-Generated Population Is Here, and They’re Ready to Work (2024)

Robots writing science fiction (2024)

Will technology cost artists their job? (2023)

“Why did the human stare at the glass of orange juice?” “They were trying to concentrate.” (2023) (Partly about AI being used to tell jokes)

The $900,000 AI Job Is Here (2023) 

Prompt engineers chat with generative-AI chatbots (creative destruction and how the economy just keeps creating new types of occupations & professions) (2023)

Are robots writing fake product reviews? (2022)

What if companies can't afford real models for their ads? Use AI generated fake pictures (2020) 

An AI Breaks the Writing Barrier (2020) 

What Econ 101 Can Teach Us About Artificial Intelligence: Here's why advancing technology often leads to more jobs for humans, not fewer (2017)

ChatGPT Should Make Retailers Nervous

Retail companies risk losing control of the online shopping experience

By Jinjoo Lee of The WSJ. Excerpts:

"ChatGPT’s Instant Checkout feature allows shoppers to go from asking something like “find me the lightest strollers under $300,” browse, and proceed to checkout without leaving the chat. OpenAI has said that merchants pay it a small fee on completed purchases. The product results that come out of ChatGPT inquiries will be “organic and unsponsored,” OpenAI says.

The retailers’ reasoning is pretty straightforward: If people are going to chatbots for shopping recommendations, it only makes sense to be there and get the first-mover advantage. “You want to be closest to the place of discovery,” notes Oliver Chen, analyst at TD Cowen."

"Roughly 38% of U.S. consumers surveyed by Adobe earlier this year said they have used generative AI for online shopping"

"letting shoppers skip retailers’ websites and apps could come at a cost. Airline companies, for example, haven’t had the best relationship with third-party booking sites. Some have pulled their fare information from those websites to avoid paying a fee and to improve sales of add-on products such as extra legroom and frequent-flier points through their own websites."

"easy comparisons and direct checkout could hurt retailers’ customer loyalty and take away add-on sale opportunities. It could also dent retailers’ important ad revenue. Of the roughly $59 billion that companies are expected to spend on U.S. retailers’ ad business this year, more than 60% is tied to search placements on those retailers’ sites and apps, according to a report from Emarketer. “If discovery moves upstream to universal AI assistants, ad budgets could follow,” according to the firm’s report. Losing ad revenue would be bad news for retailers, especially Walmart"

"While OpenAI doesn’t run ads yet, it has been looking for ways to monetize the platform"

"Amazon . . . has reportedly blocked GenAI platforms from scraping information from its website"

"Amazon is working on a handful of its own shopping AI features"

"For retailers, the best-case scenario might be a future where consumers use universal AI platforms such as ChatGPT only for certain types of purchases. Perhaps these are purchases that are higher budget or require more complex decisions, such as sofas or washing machines."

"Consumers might use universal chatbots to shop for a wide range of things—from household staples to season-appropriate clothing—without clicking on a single link to a retailer’s website."  

Related posts:

The Coasean Singularity? Demand, Supply, and Market Design with AI Agents (2025) 

AI startups are literally paying people to fold their laundry (or perform similar chores) (2025)

There Is Now Clearer Evidence AI Is Wrecking Young Americans’ Job Prospects (but the news is not all bad): Young workers face rising AI competition in fields like software development, but some also benefit from AI as a helper, new research shows (2025)

AI Is Forcing the Return of the In-Person Job Interview: More companies are returning to face-to-face meetings to counter cheating by candidates—and more ominous digital threats (2025) 

AI’s Overlooked $97 Billion Contribution to the Economy: The AI ‘dividend’ may not be evident yet in estimates of gross domestic product but it’s making life better and more productive (2025) 

AI Is Wrecking an Already Fragile Job Market for College Graduates (is the problem structural Unemployment & the case of a skills mismatch?) Companies have long leaned on entry-level workers to do grunt work that doubles as on-the-job training. Now ChatGPT and other bots can do many of those chores (2025) 

No, AI Robots Won’t Take All Our Jobs: Instead, they will boost productivity, lower prices and spur the evolution of the labor market (2025) 

IBM CEO Says AI Has Replaced Hundreds of Workers but Created New Programming, Sales Jobs: The tech company promises higher total employment as it reinvests resources toward roles like software development (2025)

Technological Disruption in the Labor Market (2025)

Why AI Might Not Take All Our Jobs—if We Act Quickly (2025)

Some good news on productivity (2025) (AI is mentioned)

Some economics of A.I. (2025) 

The AI-Generated Population Is Here, and They’re Ready to Work (2024)

Robots writing science fiction (2024)

Will technology cost artists their job? (2023)

“Why did the human stare at the glass of orange juice?” “They were trying to concentrate.” (2023) (Partly about AI being used to tell jokes)

The $900,000 AI Job Is Here (2023) 

Prompt engineers chat with generative-AI chatbots (creative destruction and how the economy just keeps creating new types of occupations & professions) (2023)

Are robots writing fake product reviews? (2022)

What if companies can't afford real models for their ads? Use AI generated fake pictures (2020) 

An AI Breaks the Writing Barrier (2020) 

What Econ 101 Can Teach Us About Artificial Intelligence: Here's why advancing technology often leads to more jobs for humans, not fewer (2017)

The Economics of Culture

People from cultures that emphasize productive habits tend to advance. The reverse is also true

By Roland Fryer. He is a Harvard economics professor. Excerpts:

[Economist Thomas] "Sowell has argued that both human capital and culture drive mobility—more so, in his view, than discrimination or external barriers. Groups that develop productivity-enhancing traits such as skills, an orientation toward education and work, and thriftiness tend to advance."

"culture and economics are woven tightly together."

"Economists define it [culture] as the bundle of beliefs and values that ethnic, religious and social groups pass down from generation to generation."

"Culture operates like capital, potentially influencing the productivity and progress of groups."

"Cultural differences across racial and ethnic groups are unmistakable."

"A 2017 USA Today analysis found that the top show for white audiences, “NCIS,” didn’t even make the top five for black, Hispanic or Asian viewers. Meanwhile, the most-watched show among African-Americans, “Empire,” ranked in fifth place for Hispanics and didn’t make the top five for whites."

"Mr. Sowell argued in his 1994 book “Race and Culture: A World View,” culture can sometimes discourage behaviors that lead to progress—devaluing education, stigmatizing work or glorifying reckless behavior. That idea echoes the long-debated “culture of poverty” theory, which holds that poverty can perpetuate itself through self-defeating norms and expectations."

"In the 1960s, naming differences between black and white parents were modest. Even in segregated neighborhoods, black families chose names similar to those of whites. But in the early 1970s, a profound shift swept through black America, especially in racially isolated areas. In the 1960s, the median black girl living in a segregated black neighborhood received a name that was only twice as common among black girls as among white girls. In the 1970s, that number rose to 20 times. A quarter of black families, mostly those in integrated neighborhoods, moved in the opposite direction, choosing names more similar to whites’ names."

"We found no compelling evidence that having a distinctively black name harmed a child’s prospects once background factors were taken into account."

"culture . . . shapes the formation of human capital—the skills, aspirations and habits that drive success. Mr. Sowell emphasized this repeatedly: The same innate ability can produce different outcomes depending on the norms that surround it."

[In] "a 2015 study by Leonardo Bursztyn and Robert Jensen . . . they offered free SAT-prep courses. On some sign-up forms, they promised to keep students’ decisions completely private; on others, they said the rest of the class would know who signed up. In non-honors classes, students were 11 percentage points less likely to sign up for SAT prep if their classmates would know. For students taking both honors and non-honors courses, their reaction depended on which set of peers would find out; visibility increased sign-ups in honors classes but decreased it in other classes."

"The experiment revealed a “social tax” on learning: Culture didn’t change the real payoff to education, but it changed students’ willingness to claim it."

Related posts:

Differences in national health care outcomes had more to do with culture, environment, social policy and individual choice than with the cost or level of health care (2023)

Authors of the book How the World Became Rich have posted teaching materials online (2022) 

"A society’s past and its institutions and culture play a key role in shaping how it may – or may not – develop"

Germany, Muslims, Christian Values And Technical Expertise: How Economics Is Connected To Everything (2010)

"Germany's attempt to create a multi-cultural society has failed completely, Chancellor Angela Merkel said at the weekend, calling on the country's immigrants to learn German and adopt Christian values"

More risk-averse and less entrepreneurial people grew up listening to stories wherein competitions and challenges are more likely to be harmful than beneficial (2024) 

Self-defense laws and Type I & II Errors

See Six Words Every Killer Should Know: ‘I Feared for My Life, Officer’: The number of legally sanctioned homicides has grown substantially in states with expanded self-defense rights under stand-your-ground laws by Mark Maremont and Paul Overberg of The WSJ.

I used the book The Economics of Public Issues in my micro classes. Chapter 1 is called "Death by Bureaucrat." It discusses how the Food and Drug Administration can make either a Type I error or a Type II error.

Type I error: The FDA approves a drug before enough testing is done and when people take it, there are harmful side effects.

Type II error: The FDA tests a drug longer than necessary to stay on the safe side. But people might suffer because the drug is not yet available. 80,000 people died waiting for Septra to be approved.

The FDA would usually rather make a Type II error because the public can blame the FDA if a Type I error occurs. 

Something similar is happening with self-defense laws. It has gotten easier to claim that you killed someone in self-defense. What about the times when there is not enough evidence one way or another to know if the killer is telling the truth?

This is where Type I & II Errors come in. We could make it very easy to claim self-defense. Then some people who did not kill in self-defense would not be charged or convicted. That would be a Type I error. Some real killers would go free so we could make sure that innocent people never went to jail.

We could make it very hard to claim self-defense. Then some people who did kill in self-defense would be charged or convicted. That would be a Type II error. Some innocent people would go to jail to make sure that no killers ever went free.

Excerpts from the article:

"It’s easier than ever to kill someone in America and get away with it. 

In 30 states, it often requires only a claim you killed while protecting yourself or others."

"so-called stand-your-ground laws in those 30 states extend legal protections to public places and make it difficult for prosecutors to file homicide charges against anyone who says they killed in self-defense."

"Justifiable homicides by civilians increased 59% from 2019 through 2024 in a large sample of cities and counties in those states, the Journal found, compared with a 16% rise in total homicides for the same locales."

"A retired Las Vegas police officer walked free after fatally shooting a retired computer network engineer during a dispute over who had the right of way in a Walmart parking lot. Both men got out of their vehicles. Both were armed. The ex-officer said the retired engineer pointed a gun at him first."

"In many stand-your-ground cases, authorities are left to rely on the word of survivors. The laws are written to protect those who tell authorities they feared for their life."

Self-defense laws across the U.S. have long varied. In many states, people faced with an aggressor had the responsibility to retreat, if possible. The general exception fell under the so-called castle doctrine: A resident could legally kill a home intruder who posed a serious threat without retreating. 

Under stand-your-ground laws, a person no longer had the duty to retreat in any place they were legally allowed to be. They could defend themselves and others with lethal force if they reasonably thought they were in danger of death or serious harm."

"A provision in Florida’s law, since mirrored by about 15 others, added a presumption that, in most cases, a killer claiming self-defense acted reasonably, requiring prosecutors prove otherwise."

"Homicides in stand-your-ground states were nearly twice as likely to be deemed justifiable as they were in other states in 2024, the Journal found.

Supporters of stand-your-ground laws have often argued that the measures would mostly be used by people to protect against armed strangers. Nationally, FBI data shows about 60% of reported self-defense killings involved a family member, boyfriend, girlfriend, friend, neighbor or acquaintance, according to a tally of 2019-2024 cases that recorded such relationships."

Related posts:

 

Fraud in immigration applications and Type I & II Errors (2025) 

 

Employee Disability Pay and Mental-Health Leave and Type I & II Errors (2024) 

 

Thalidomide, The FDA and Type I & II Errors (2024)

 

Immigration & Asylum meet Type I & II Errors (2023) 

Accommodations for disabled people and Type I & II Errors (2023)

Solar Panels, Tradeoffs and Type I & II Errors (2022)

Zombies might return and fighting them is art as well as science (2021)

Fraction of Covid-19 Rental Assistance Reaches Tenants and Landlords (follow up to a post on June 11) (2021)

Remdesivir and Type I & Type II errors (2020) 

The Paycheck Protection Program and and Type I & Type II Errors (2020)

The FDA, Masks and Type I & Type II Errors (2020)

Do FAA drone regulations illustrate the tradeoff between Type I & Type II errors (2018)

Maker Of Thalidomide Apologizes (2012) 

The Lengths Americans Are Willing to Go to Make Every Penny Count

From buying half a cow to watering down soap, people are experimenting with frugality—and it is affecting sales at consumer companies

By Natasha Khan of The WSJ. 

I have done several posts on how people have been dealing with the inflation of the last few years as well as how they have been affected. Those are listed after some excerpts from the article.  Many of the things consumers are doing involve more time and effort doing things they would not normally do. This is one of the costs of inflation, what we have to do to avoid it or mitigate it.

Excerpts:

[One woman] "added water to her Dawn dish liquid and her Clorox floor cleaner. She stopped buying aerosol glass cleaner and replaced it with a bottle of Windex so that she could add water to make the solution last longer."

"some are shopping at less expensive grocers and buying pantry products on Facebook Marketplace. One consumer sought to save on beef by buying half a cow."

"Procter & Gamble reported volume declined 2% in the latest quarter in its home and fabric-care division, which includes brands like Tide detergent, Dawn dish liquid and Swiffer dusters. Meantime, private-label brands that make cheaper generics haven’t seen a corresponding increase"

"suggesting consumers are using up their inventory and making their existing stock last longer, rather than trading down."

[One man] "has taken other steps to save. On Facebook Marketplace, he tries to buy more overstock, such as cans of P&G’s Febreze room spray that he purchases at bargain-basement prices. He scours the internet for good deals on other items—usually checking out at BJ’s or Aldi. Breaking with his habit of buying packaged beef at supermarkets like Whole Foods, he recently connected with a farmer in North Carolina and bought half a cow." 

See also Grocery Prices Keep Rising. Frustrated Consumers Are Trying to Adapt.: Record beef prices and coffee that costs $1 more per pound since May have shoppers cutting back on some foods, stockpiling others by Christopher Kuo of The WSJ. Excerpts:

"Inflation in the grocery aisle is picking up, and stinging consumers. Consumers said they are cutting back on purchases, stockpiling certain foods or exploring more-affordable stores."

"shoppers were choosing smaller package sizes and using more coupons to reduce their grocery bills."

"consumers, especially in low- to middle-income households, are shopping more strategically—making more-frequent trips with fewer items in a basket."  

Related posts:

Are you hurting the economy if you bring your lunch to work? (2025)

More people are bringing their lunch to work because restaurant meals have been going up in price. Again, more tasks that people are performing to avoid inflation 

Inflation Has Cooled, but Americans Are Still Seething Over Prices: Many people—though not all—saw wage increases that kept pace with the pandemic’s rapid price hikes, but the psychological toll remains (2024)

Child Care, Rent, Insurance: Where Inflation Hits Hardest Now (2024)

Why do workers dislike inflation? (2024) 

"workers must take costly actions (“conflict”) to have nominal wages catch up with inflation" They have to bargain with or fight their employers to get a wage increase to match inflation.

Inflation Usually Hits Harder for Poor Families. For a Couple of Years, It Didn’t. New research on how inflation varies between the poor, middle class and rich paints a different picture of poverty and inequality (2024)

The Haves and Have-Nots at the Center of America’s Inflation Fight: There’s a growing gap between Americans who are battered by high inflation and interest rates and those who are actually benefiting (2024)

An Increase in Uninsured Drivers Is Pushing Up Costs for Everyone Else (2024) 

Inflation has caused consumers to choose what they need to cut back on (insurance)

Costco and Sam’s Club Aisles Are Full of Gen Z Shoppers (2024)

Consumers are buying in bulk to save money by getting a lower per unit price

Inflation is mentally taxing (2024)

Inflation is mentally taxing. Dealing with a straitened budget exacts a psychological toll as well as a financial one

Store Brands Are Filling Up More of Your Shopping Cart (2024) 

People are on the look out for cheaper alternatives due to inflation

Consumers Fed Up With Food Costs Are Ditching Big Brands (2024) 

After years of price increases, food companies say more consumers pull back; fast-food chains and snack makers plan new deals and flavors

Are Americans Worrying Too Much About Inflation? Two opposing views (2024)

The Era of One-Stop Grocery Shopping Is Over (2024)

One thing that I always talked about with inflation was that one of its costs was all the things we had to do to avoid it. Consumers are making 8% more trips to different retailers as inflation continues to upend household budgets. They are going to more stores to find lower prices. But it costs time to do that and probably more money on gas.

When workers were paid twice a day and given half-hour shopping breaks (Germany, 1923) 

By mid-1923 workers were being paid as often as three times a day. Their wives would meet them, take the money and rush to the shops to exchange it for goods. However, by this time, more and more often, shops were empty. Storekeepers could not obtain goods or could not do business fast enough to protect their cash receipts. Farmers refused to bring produce into the city in return for worthless paper. The requirements to calculate and recalculate commercial transactions in the billions and trillions made it practically impossible to do business in paper Marks.

Religious advice on investing

See Proxy Advisers Get Religion: ISS and Glass Lewis will follow the bishops when voting faithful Catholics’ shares by Andrew Abela and Nicholas Schmitz. Mr. Abela is dean and Mr. Schmitz holds a chair in finance at the Catholic University of America’s Busch School of Business. Excerpts:

"proxy advisers ISS and Glass Lewis . . . have agreed to work with our university to help Catholics honor their faith in their investments."

"The U.S. Conference of Catholic Bishops has long offered advice for investing."

"Catholics shouldn’t invest in “companies, securities, or investment funds that produce a significant amount of revenue from immoral activities.” Strategies ought to “protect life, promote human dignity, act justly, enhance the common good, and provide care for the environment."

"guidelines directly based on those issued by the bishops. ISS and Glass Lewis will offer them to investors for use in the shareholder resolution season that begins next spring."

"Every investor who opts into this service can be confident that his proxy votes will be consistent with his Catholic beliefs. If a shareholder resolution urges the company to pay for its employees to obtain abortions across state lines, the proxy advisers will recommend voting no."

Related posts:

Vatican Tells Catholics How to Make ‘Faith-Consistent’ Investments (2022)

Should you invest according to religious guidelines? (2017)

Can You Find Virtue by Investing in Vice? (2006)

Another Book Relates Religion to Economics (2007)

Can You Mix Economics With Religion? (2022)

Does Economics Trump Religion (2022)

New Book Uses Economics to Analyze Religion (2006)

Religion and Growth (2024)  

Economics influenced the spread of viral rumors during the French Revolution

See Panic-Inducing Rumors Went Viral Ahead of the French Revolution: Researchers use the tools of epidemiology to trace how false tales spread from place to place, and provoked a revolt by Eric Niiler of The WSJ. Excerpts:

"the French Revolution was driven by the mass hysteria of ignorant peasants or a rational response to the famine and economic conditions of the day."

"In the summer of 1789, French peasants formed militias to combat bandits rumored to be attacking towns and villages, destroying crops and terrorizing peasants. When the brigands, which were believed to be acting with the support of nobles, didn’t materialize, the peasants turned against castles to destroy land titles held by local lords."

"The rumors . . . were more likely to affect towns and cities with more-educated populations"

"regions with high wheat prices—and hence higher food prices—were more likely to be “infected.”"

"the Great Fear spread according to a logical pattern linked to the social and political conditions of the time"

"Cities or areas that had suffered most had more incentive to revolt"

[rumors] "spread from town to town by horseback"

See also Epidemiology models explain rumour spreading during France’s Great Fear of 1789 by Stefano Zapperi, Constant Varlet-Bertrand, Cécile Bastidon, Caterina A. M. La Porta & Antoine Parent.

Other history related posts:

Both numeracy and literacy were invented in the service of finance and commerce 

World's oldest writing not poetry but a shopping receipt 

The surprising link between science fiction and economic history 

MONKS, GENTS AND INDUSTRIALISTS: THE LONG-RUN IMPACT OF THE DISSOLUTION OF THE ENGLISH MONASTERIES 

Did Tea Drinking Cut Mortality Rates in England?

Both numeracy and literacy were invented in the service of finance and commerce

Pre-market societies could sometimes have alot of violence

Was 1800 (approximately) A Pivotal Year In Human History? Robert Fogel, Francis Fukuyama, And Deirdre McCloskey All Seem To Think So

Some History of Insurance

The surprising link between science fiction and economic history

What happened in some earlier U.S. trade Wars?  

Did the industrial revolution cause children to take on adult roles later and later? 

Were The Pilgrims Capitalists Or Socialists? 

Primitive communism: Marx’s idea that societies were naturally egalitarian and communal before farming is widely influential and quite wrong (plus Ruth Benedict on property rights)  

When workers were paid twice a day and given half-hour shopping breaks (Germany, 1923) 

In 1923, Germany printed money to pay workers who were told to stay at home 

The short history of global living conditions and why it matters that we know it 

Electric Camelot: An Economist Visits King Arthur's Court (Mark Twain on economics)

I have posted several items about Mark Twain on economics. Those are listed below. 

This is the title of an article that was published recently and was actually in Spanish by Rafael Galvão de Almeida. He is at Universidade Federal de Minas Gerais, Brasil. The title in Spanish is "Camelot Elétrica: Um Economista Visita a Corte do Rei Arthur."

It was published in the journal "História Econômica & História de Empresas" which means "Economic History & Business History." Click here for more information.

Here is the translation of the abstract:

"Mark Twain wrote the novel A Connecticut yankee in King Arthur’s court (1889) as a way to reflect on the changes happening in the so called “Gilded Age” of the United States. The book tells the story of Hank Morgan, an engineer whofound himself in the 6th century England, when King Arthur led the Knights of the Round Table in Camelot. Hank tries to industrialize England twelve centuries before, using his knowledge of technology, political economy and culture. His project of an Electric Camelot, however, suffers many problems and fails. The novel is relevant for economists because it deals with many topics of interest, such as entrepreneurship and economic development. The literature in the “visiting economist syndrome” – term created by Albert Hirschman – identifies many problems in the development aid process of a country due to a series of factors, including even arrogance and naivety of the economic models, but that are present when dealing with different contexts. It is argued that these problems have been discussed by Mark Twain, who had interest in the nascent neoclassical economics, in the referred novel. In spite of Hank being an engineer, his trajectory resembles a visiting economist. Thus, the novel is a tool to explore problems and challenges of economic development through fiction."

Related posts:

Chapter 33 Of Mark Twain's A Connecticut Yankee in King Arthur’s Court Is Titled "SIXTH CENTURY POLITICAL ECONOMY" And Deals With "Money Illusion"

Mark Twain On Work And Pay

Mark Twain On Labor Markets And How Wages Should Be Decided-By Government Fiat Or By Markets?

Mark Twain Understood That It Is The Purchasing Power Of Wages That Matters

Mark Twain, Free Trade and Tariffs

Mark Twain, Economist?

Tracking the Short-Run Price Impact of U.S. Tariffs

By Alberto Cavallo, Paola Llamas & Franco Vazquez. 

"Abstract 

We use high-frequency retail microdata to measure the short-run impact of the 2025 U.S. tariffs on consumer prices. By matching daily prices from major U.S. retailers to product-level tariff rates and countries of origin, we construct price indices that isolate the direct effects of tariff changes across goods and trading partners. Prices began ris- ing immediately after the tariffs were implemented in March and continued to increase gradually over subsequent months, with imported goods rising roughly twice as much as domestic ones. Our estimated retail tariff pass-through is 20 percent, with a cumula- tive contribution of about 0.7 percentage points to the all-items Consumer Price Index by September 2025. Our results show that tariff costs were gradually but steadily transmitted to U.S. consumers, with additional spillovers to domestic goods." 

The article mentions that some prices rose more than others.  How does this work? Let's look at the graph below.

What if there is a reduction in the supply of a good? (this happens when a product is taxed, like in a tariff although the supply line actually shifts upward by the amount of the tax). If we have demand 1 (D1), price will go up quite a bit (as shown by the long green line). This is inelastic demand.

But if demand becomes more elastic and we move to demand 2 (D2), the same decrease in supply means a much smaller increase in price (as shown by the short green line). So if we have more elastic demand (D2), the price is lower than at D1 when supply decreases.

So the products that don't go up as much that the article mentions will have more elastic demand like D1.

 

One caveat. Slope and elasticity are not the same thing. Elasticity usually changes as you move along a demand curve (the elasticity going from a price of 10 down to 9 is not the same as when the price falls from 2 to 1). But if we picked two prices (any prices that are not where the demand curve hits the price axis and zero) and the calculate the elasticity, the steeper line will have a lower elasticity. 

Price elasticity of demand-It tells us how responsive quantity demanded (Q_d)is to a change in price. That is, when price changes, will the change in Q_d be large or small? The bigger the change in Q_d  the greater will be the price elasticity of demand.

We will use E_d to stand for price elasticity of demand. Here is the definition

E_d = %DQ_d /%DP

where D (the Greek letter delta) means "change in."

OR  E_d = % change in Q_d divided by % change in P 

Related posts:

Why Haven’t Tariffs Boosted Inflation? This Theory Is Gaining Traction: New research suggests the actual tariff rates are well below what economists have suspected (2025) 

Trump’s Tariffs Are Being Picked Up by Corporate America: Neither consumers nor foreign countries are assuming much of the tariff burden. At least not yet. (2025) 

Are Businesses Absorbing the Tariffs or Passing Them On to Their Customers? (2025) (This one has supply and demand curves that show that businesses usually can't pass all of a tax like tariffs on to the buyers and that how much gets passed along depends on the price elasticity of demand for the different products) 

Trump’s Tariffs Are Unique in History: U.S. trade policy went through three eras, focused on ‘revenue, restriction and reciprocity,’ economist Douglas Irwin says. The 47th president likes all three Rs, and a fourth, ‘retribution.’ (2025) 

Can Trump’s Tariff Offensive Deliver New American Jobs? (2025)

Americans Are Stockpiling Ahead of Trump’s Tariffs (2025)

Powell Warns of ‘Challenging Scenario’ for Fed as Trade War Rages (2025) 

How Much Do Tariffs Raise Prices? (2025)

Politicians talk about creating manufacturing jobs but do people really want them? (2025)

How some of Trump's policies might affect the economy (2024)

Tariffs are regressive: they fall more heavily on lower-income families who tend to spend more of their income on cheap imported goods (2024)

Americans Are Stockpiling to Get Ahead of Tariffs: Some consumers are snapping up computer parts, vacuum cleaners, coffee and olive oil before levies take effect (2024)

Life is full of tradeoffs: If we support American workers with trade restrictions it might mean more inflation (2023)