Javier A. Tabush

Chapter 1: The Lesson

 

- Economists are not aware of the impact that things create in the future, they are only worried on the immediate effects. 

- "Current economic problems arose and may arise due to selfish interests of single groups that look at immediate affects"

- The debate of the new and the old economic policies need to be distinguished and better discussed by the people for what is needed.

- People tend to make decisions to benefit particular groups for current events and do not consider the future.

 

 

Chapter 2: The Broken Window

 

- People are affected by immediate actions and don't consider other possible effects caused by the action.

- The little boy that shattered the window causes the same impact and gives people different points of view to see whether what he did was good or bad. 

- This same difference of points of view causes conflicts between people. 

- When this happens in a multi billionaire business with thousands of employees, the same thing happens but in a much bigger scale. 

 

 

Chapter 3: The Blessings of Destruction

 

- This chapter talks about how a country has to prioritise certain areas of production when there is destruction, like wars for example. 

- What this does is stop the economy of the country and even take it back a few steps because everything paralyses. 

 

 

Chapter 4: Public Works Mean Taxes

 

- "The government has an interest to use the ‘people’s’ money for what will make an overall major impact for the benefit of the community as long as the funds, bodies, and location can enable for the most practical use."

- In this chapter he is stating that since different social classes pay different percentage of taxes, what percentage is actually being used for the construction of roads?

- The money used is for the benefit of the majority overall to make business life commutes faster, resources more accessible, and standards of higher quality that assist in production.

 

 

Chapter 5: Taxes Discourage Production

 

- Taxes are just a pain in the neck imposed by the government prevention real entrepreneurs to advance in the market economy. 

- Morality has been completely abandoned in the way that taxes are being manipulated. 

 

 

Chapter 6: Credit Diverts Production

 

- Government loans create bad investment 

- The largest issue of the chapter was the basic principle of assessing the risk of those you lend money to

- The way money is treated depends a lot on whether that money is yours or not. 

 

Chapter 7: The Curse of Machinery

 

- This was one of my favourite chapters.

- Machinery being the reason for unemployment is a large misconception

- Technological advances due cause unemployment during a short period of time, but in a long term process, it only boosts the economy and create many jobs  in order to provide service for them, like the engineers, shippers, designers, and business that create these technological advances, or machinery. 

 

 

Chapter 9:  Disbanding Troops and Bureaucrats

 

-When the population is faced with war and the people become soldiers with those people running businesses in support of them there is obvious shift in the makeup of the economy in materials and production.

- Reducing the government services jobs does not bring down the economy but impulses it.

 

Chapter 10:  The Fetish of Full Employment

 

- Full employment is a fallacy we've all been cheating by

- "A work force needs to be at a stable number for max efficient with a process and environment to allow for that balance of maximum output on their end with the tools and motivation necessary in order to obtain max production without max employment."

 

Chapter 11: Who's "protected" by Tariffs?

 

- Tariffs are inevitably designed to benefit producers in specific fields that eventually take away from the overall production in a nation’s economy.

- When a tariff is imposed these are only immediate obvious affects that neglect the whole community.

- These subsidies for this product affect take away from the population’s ability to have extra income in a free trade economy. That extra income could have been used to support various others industries to expand trades that the country has strengths in.

 

Chapter 12: The Drive for Exports

 

- a balance of exports and imports is needed to sustain a growing economy.

- like in a market income is made through selling and buying of goods and services.

- If businesses only export then those loans and loss of goods are lost to the rest of the population within the country.

 

Chapter 13: "Parity" Prices

 

- Parity industries have to be taken into account in order to support the market economy structure. 

- Price relationships must be considered in important businesses, as agriculture, which need to maintain certain profit margins to sustain proper production.

- When they fail there is a failure in other businesses as well.

 

Chapter 14: Saving the X Industry

 

- Certain  companies need government assistance with subsidies to save them for the overall good of the economy.

- The fact to have a government inject to raise prices and save those companies, it may create sustainment but is a risk that can lead to net losses at the expenses of everyone else forcibly investing into it. 

 

Chapter 15: How the Price System Works?

 

- The market is run by businessmen seeking profit the application of time and labor needs to be considered as a whole

- When done properly cost production reduces and prices.

 

Chapter 16: “Stabilizing” Commodities

 

- A price extreme lead to market failures both to consumers and produces and must be stabilized by a governing force.

 

Chapter 17: Government Price-Fixing

 

- In order to reduce the cost of living, certain prices are fixed to make items more available  however it becomes issues in other goods causing lack of supply and willingness from producers.

- The government uses these price floors and ceilings in order to make  goods more available.

- Subsidies are a common method to allow prices to be below the desired price of the products and yet have the same profit margins still obtained.

 

 

Chapter 18: Minimum Wage

 

- Minimum wage leads to unemployment and small business die by rewarding those that have a minimum standard. 

- Minimum wages create an unrealistic price for the employers to give to the employees and this destroys all possibilities for competition between employers. 

 

Chapter 19: Do Unions Really Raise Wages? 

 

- Unions have the effect of insuring the well-being, working conditions, and availability of opportunities to all their employees. Wages though are based upon profits and overall productivity of the business. 

- Owners of the businesses are  to seek a maximisation of the profit and are paying wages based upon the standard of the employees and their goals for becoming a prosperous business. 

 

Chapter 20: “Enough to Buy Back the Product”

 

- There needs to be equilibrium in prices and wages to satisfy employee purchasing power.

- Businesses are concerned with profits which coincide with prices.

- Employees are concerned with wages which depends on production. 

 

Chapter 21: The Function of Profits

 

- Corporate profits are only a small fraction of the entire net income of the country.

- Profits actually play the role of prioritizing and regulating the quantity, quality, and capability of goods in the market.

- Higher profits mean higher productivity with more power to purchase them.

- Cutting products out of date and increasing ways to make the system more efficient are aspects profits are there to improve upon.

 

Chapter 22: The Mirage of Inflation

 

- Inflation does not coincide with simply cash but the over cost of production from an overflow of purchasing power.

- When wages increase and more money is printed this raises the cost of living as well.

- When people can suddenly buy more than the demand, chaos and inflation occur.

 

Chapter 23: The Assault on Saving

 

- Saving was once considered a self-interest activity that does not help progress the economy, but that’s not the case at all.

- When people save less and put money back into the economy all they are doing is meeting the demand and supply from producing and retaining that buying and production power.

- When money is saved in a bank and invested by individuals or through banks, the money is used to better a producer’s production capabilities, opens windows for entrepreneur ideas, and expands the market.

 

Chapter 24: The Lesson Restated 

 

- Economics is a science that must be looked at from all angles and used systematically.

- What happens in the economic world and free market is not by mere chance, everything happens for a reason.