History of Economic Thought

As my History of Economic Thought subject progresses, I am rightfully beginning to acknowledge and appreciate better the contributions of renown dead economists from mercantilists to physiocrats, and now pre-classical to classical. Vast as their fields of studies may seem, basic foundations of this social science are beginning to curve themselves out as time progresses. Questions of production, factors of production, money, politics and government amongst others are slowly taking form as the years get ever recent. Economics has in deed evolved a huge considerable bit no doubt, but it is also striking how much of Smith, say, can be picked out in our modern economic systems.

Interesting to note is Thomas Carlyle quote in "Occasional Discourse on the Negro Question" we reviewed today. Thomas, a Victorian historian, was arguing for the reintroduction of slavery as a means to regulate the labor market in the West Indies, views that John Stuart Mill clearly objected,

Truly, my philanthropic friends, Exeter Hall philanthropy is wonderful; and the social science -- not a "gay science," but a rueful --which finds the secret of this universe in "supply and demand," and reduces the duty of human governors to that of letting men alone, is also wonderful. Not a "gay science," I should say, like some we have heard of; no, a dreary, desolate and, indeed, quite abject and distressing one; what we might call, by way of eminence, the dismal science.

John Stuart Mill was quick to answer him on this saying, in "The Negro Question"

There is, however, another place where that tyranny still flourishes, but now for the first time finds itself seriously in danger. At this crisis of American slavery, when the decisive conflict between right and iniquity seems about to commence, your contributor steps in, and flings this missile, loaded with the weight of his reputation, into the abolitionist camp. The words of English writers of celebrity are words of power on the other side of the ocean; and the owners of human flesh, who probably thought they had not an honest man on their side between the Atlantic and the Vistula, will welcome such an auxiliary. Circulated as his dissertation will probably be, by those whose interests profit by it, from one end of the American Union to the other, I hardly know of an act by which one person could have done so much mischief as this may possibly do; and I hold that by thus acting, he has made himself an instrument of what an able writer in the Inquirer justly calls a true work of the devil.

I am really looking forward to hear what Marx, Marshall and Keynes bring to this science, which I would not go as far as Carlyle went to call it dismal.

An Undervalued Yuan?

I read Greg Mankiw's article on the question of an undervalued Yuan a year ago and it sure still is very applicable today. I paraphrased that article this way:

I believe there is more to the Chinese Yuan problem than we are currently being made to see as a grave thing. I don't deny though that if it were the case, that an undervalued Yuan would be undesirable in light of fair competition in the global markets. Might things be a little exaggerated though?

Firstly, I believe in free trade like most other modern economists would, but what is seeming to be suggested as possible solution to this undervaluation problem can only be called protectionism. The US, in particular, might, for genuine reasons, fear that having to compete with highly efficient Chinese producers, might put some of their industries out of the radar. Good examples would probably be the clothes industry and car industry. The US therefore might like to disguise its protectionism motive behind this active campaigning against an undervalued Yuan. Do we really want to go this far to limit free trade?

Financial supervision in the US has recently undergone huge tests and some even believe that it failed to prevent an economic downturn that proved very far-reaching. Is a correctly valued Yuan more necessary than careful financial supervision? I tend to believe efforts should be more deliberate towards streamlining financial institutions in the US.

Given the argument for free trade, I think it is fair to ask this question as well, does undervaluation really hurt the American consumer. After all, clothes and cars produced in China are cheaper than those produced in America so assuming there was free flow of the clothes and cars, wouldn't American consumers be better off? I am sure we all prefer to pay less for what we buy.

China also holds vast amounts of US securities so what message would this campaigning send? The US no longer requires Chinese debt? I tend to think this is far from what the US desires especially at this time.

Does America really want to isolate themselves by "confronting" China as some suggest? I clearly don't think this is the way to go. A year ago President Obama said this would be a problem he was going to make sure he handles but I am yet to see major steps by his administration in this regard besides a Chinese tires tariff. The tariff imposed in September 2009 only serves to stress the "protectionism" stand that undermines free trade principles.

Credits are due to Ushahidi

Without intention of coming off biased, the developers of Ushahidi need the applause they deserve for the kind of service they implement. Ushahidi has definitely revolutionised geo-mapping in conflict stricken spots with the latest of them being the Haiti disaster. Originally, and according to the Ushahidi website, the website was developed in Kenya to map out incidents of violence in Kenya when the country found itself stuck in one of the bloodiest post-election fall-outs at the beginning of 2008.

The strength of the website comes from its apparent ease of use given this age of improved internet connectivity. Incidents can be reported through text messaging a local or international number, directly through email, on twitter and through a web form available on their website(for instance in the Haiti page).

As simple as it may seem, the site has found a place far out in the wider world which only serves as a clear demonstration that every country has its mettle in this increasingly globalising world of today. In this case, Kenya, wins the lime light for a product that is as good as any in quality and to make the cake even bigger and sweeter, all code is open-source.

Ushahidi, is a Swahili word for 'testimony'.  Credit to all the developers involved in the project primarily in Kenya and elsewhere worldwide.

Read more about Ushahidi on their website.

The New York Times has recently written on this as well:

"And an important force behind this upheaval is a small Kenyan-born organization called Ushahidi, which has become a hero of the Haitian and Chilean earthquakes and which may have something larger to tell us about the future of humanitarianism, innovation and the nature of what we label as truth.
After Kenya’s disputed election in 2007, violence erupted. A prominent Kenyan lawyer and blogger, Ory Okolloh, who was based in South Africa but had gone back to Kenya to vote and observe the election, received threats about her work and returned to South Africa. She posted online the idea of an Internet mapping tool to allow people anonymously to report violence and other misdeeds. Technology whizzes saw her post and built the Ushahidi Web platform over a long weekend.
The site collected user-generated cellphone reports of riots, stranded refugees, rapes and deaths and plotted them on a map, using the locations given by informants. It collected more testimony — which is what ushahidi means in Swahili — with greater rapidity than any reporter or election monitor."