What I know - Episteme
  • Introduction
  • Learning
    • Learning How to Learn
    • The Feynman Technique
    • How to remember stuff?
    • Language Learning
  • Books
    • Books I Recommend
    • Book Notes
  • Blogs
  • Podcasts
  • Marketing
  • Advice
  • Crypto
  • Courses
  • Communities
  • Privacy
  • Economics
  • Psychology
    • Emotions
    • Habits
    • Happiness
  • Productivity
  • Meditation
  • Tools
    • Bookmarklets
    • Command Line Tools
      • fish
    • IFTTT
    • Text Editor
      • Vim Plugins
  • Search
  • Movies
  • Documentaries
  • TV Series
  • Music
  • Short Stories
  • Writing
  • Programming
    • Git
    • JavaScript
    • Ruby
    • Learn The Command Line
    • Best Practices
    • Cheatsheets
  • Cryptography
  • News
  • Mental Models
  • Design
  • Research papers
  • Talks
  • History
  • Progress
  • Protocols
    • Dat
    • Matrix
    • MimbleWimble
    • IPFS
  • Questions
  • Poems
  • YouTube
Powered by GitBook
On this page
  • Thoughts
  • What I enjoyed reading
  • Links

Economics

"All models are wrong, but some are useful".

Thoughts

  • Most economics is speculation without stakes.

  • Observe the underlying incentives.

    • Who profits the most?

    • Who suffers the most consequences directly from one’s actions?

    • How to (re)align the incentive structures?

  • There is always an opportunity cost (even if good things happen). Always ask:

    • "What is the trade-off?"

    • "Under what conditions would my idea be a bad idea?"

  • Politicians/bureaucrats are incentives to practice first-order thinking (anticipating the immediate results of their actions/policy). It's what gets them re-elected.

    • By "solving" one problem that way they create a bigger one down the road. They compound problems.

    • Solution: solve for the long term. Practice second-order and n-th order thinking.

      • "What are the consequences in 10 hours? 10 months? 10 Years? 100 years?"

  • The demand curve slopes downward: if something becomes more expensive you do less of it.

  • Markets work when both parties benefit from a trade.

  • Understanding the price system tell us what ends up where doing what.

  • The more growth you have, the bigger your margin of error. When in doubt optimize for growth.

    • "What actions can I take now that will produce compounding returns?"

    • "Am I on a track where my knowledge compounds?"

  • Leave small crises to resolve themselves. Step in for huge ones.

  • Debt is easy, but it's not the answer. Bureaucrats love it: no one gets fired for adding more debt.

    • Private debt shouldn't become public debt. Taxpayers shouldn't pay for bailouts.

  • Crony capitalism is rent-seeking as a service. Warning signs:

    • Wealth is seen as a zero-sum game.

    • Wanting economic gain without any real risk.

    • High positions are equated with wealth, prestige and status.

    • Competition is seen as inconvenient and battled with special permits, grants, tax breaks.

  • Decentralised systems withstand more than centralised systems.

  • Governments use taxes to create demand for their currency. After Adam Smith:

    "A prince, who should enact that a certain proportion of his taxes should be paid in a paper money of a certain kind, might thereby give a certain value to this paper money"

What I enjoyed reading

Links

PreviousPrivacyNextPsychology

Last updated 4 years ago

Adam Smith: and

by Frédéric Bastiat

by Henry Hazlitt

by Leonard E. Read

by Friedrich A. Hayek

.

.

The Library of Economics and Liberty.

- using Seinfeld scenes to make economic concepts come alive.

suggested and .

- a repository for all of the woeful, antiquated, or plain old misguided notions Redditors post about how the economy works.

by David D. Friedman - economics in storytelling.

An Inquiry into the Nature and Causes of the Wealth of Nations
The Theory of Moral Sentiments
The Law
Economics in One Lesson
I, Pencil: My Family Tree
The Use of Knowledge in Society"
Charlie Munger: Academic Economics — Strengths and Weaknesses, after Considering Interdisciplinary Needs
More books I recommend
Economic podcasts I listen to
Econlib
The Economics of Seinfeld
r/Economics
blogs
reading list
r/BadEconomics
Literary Works with Economic Insight