Category: Economics

The Ways of Her Household by Laurel Thatcher Ulrich

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Ulrich argues that housekeeping can be a challenging, complex task requiring real skill and intelligence. How so?

At the beginning of the essay, Ulrich sets out the details of some of the daily chores that women in Colonial America performed each day. Unlike the electronic amenities and appliances available to women in modern times, the colonial era was not technologically advanced. As a result, apparently simple activities such as cooking and cleaning took up lots of time and energy. And contrary to common beliefs, these tasks required real skill and intelligence. For example, colonial housewives were experts who understood the “ticklish chemical processes which changed milk into cheese, meal into bread, malt into beer, and flesh into bacon.” (Ulrich, p.48) Further, “preparing the simplest of meals required both judgment and skill…The most basic of housewife’s skills was building and regulating fires – a task so fundamental thtat it must . . . Read More

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Summary of chapters 3,4 & 5 of the book ‘The Economics of Women, Men, and Work’ by Blau, Ferber & Winkler

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Chapter 3 of the book is titled The Family as an Economic Unit.  Here the authors discuss the importance of the concept of family for the functioning of neoclassical economic models.  In the United States and other Western capitalist democracies, the neoclassical economics is the dominant paradigm for analysis and policy.  In this context, it is interesting to study the institution of family from an economic viewpoint.  While neoclassical economics sees the individual citizen as the basic unit among consumers, the family is the next immediate consumer unit.  But herein lies a contradiction.  For example, for the prevailing economic model to work one has to believe that individuals act as self-serving consumers.  But families are founded on the notion of group-interest as opposed to self-interest, whereby one member of the family should forgo some of his/her wants for the sake of family’s wellbeing.  Data gathered over the last century has shown that the family has . . . Read More

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Alexander Hamilton’s role in establishing the US Treasury and laying the foundation for the American Economic System

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Alexander Hamilton, alongside such luminaries as Benjamin Franklin, George Washington, Thomas Jefferson, John Adams and James Madison is rightly considered as a founding father of the United States of America. In the second half of the eighteenth century, when British colonies in America entered a period of fervent political change, intellectuals such as Hamilton played pivotal roles in guiding and influencing this process. This essay will argue that Alexander Hamilton had indeed played a pivotal role in the establishment of U.S. Treasury and his ideas continue to influence economic policy even today.

Although lesser studied when compared to other Founding Fathers, Hamilton’s contribution in shaping the new American republic is substantial. For example,

“The most practical nation builder of the Founding Fathers, Hamilton (1755-1804) fought tirelessly for ratification of the Constitution, played a pivotal role in creating a centralized and powerful . . . Read More

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Investment Through On-line Banking Services: Risks and Rewards

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The growth of the Internet in the last twenty years has spurred the growth of on-line financial services as well.  These days on-line banking and e-commerce have become ubiquitous, as financial transactions are carried out at users’ convenient place and time.  An offshoot of this broader phenomenon is on-line investment services offered by various banks.  This means that the erstwhile specialized activity of stock-trading and stock-investing have now been made accessible to common people as well.  There are both advantages and disadvantages in using on-line investment services. Foremost of the advantages are the convenience and ease of use associated with investment websites.  A number of research and analytic tools are offered to users to aid their decision making process. Lay investors can also save up money on the brokerage charges, as on-line brokerages offer cheaper transaction prices when compared to human-agent brokerages.  But the biggest threat to investments . . . Read More

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Should the UK Tax system be simplified?

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A good indication of how complicated the present tax system in the UK is, is learnt from the size of the most authoritative guide to the subject. Tolley’s Yellow Tax Handbook, which is being published every year since 1983 is getting bigger each subsequent year. To give an example, it totalled close to 6,000 pages in its 2001 edition and has nearly doubled this number in its most recent edition. This is a clear indication that the tax system in the country is becoming cumbersome and complicated with each passing year. Henceforth, there is a strong case to be made for simplifying the prevailing system.

One of the reasons why the system has remained complicated is the half-hearted measures undertaken by policy-makers in reforming/simplifying the system. While Chartered Accountants have thrived in this climate, their clients, including common people, have often ended up with confusion. Furthermore, the complexities inherent in the current tax system can be attributed to . . . Read More

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Human trafficking in the United States and its relationship to poverty

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In recent decades the issue of human trafficking into the United States has been an issue of contention in political debates. The southern border with Mexico is the primary channel through which illegal immigrants (most of them of Hispanic origin from Central American countries) attempt to sneak into the confines of the world’s most prosperous nation. In spite of this trend of human trafficking across borders going on for more than two decades, the government has done nothing substantial to curb it. Probably this is in recognition of the fact that without cheap labor provided by millions of such immigrants, it is difficult to sustain an economy as big as that of the United States. While these impoverished people from South and Central America get into the United States in order to improve their economic wellbeing, evidence suggests that they barely get past acute poverty and only manage to survive. Despite being the richest nation on earth, a significant portion of its inhabitants . . . Read More

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A comparison of the development strategies of India and China and their rates of poverty reduction

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India and China are both touted to be the next economic superpowers.  As both countries are home to close to a third of the world’s population, they have enormous human resources with which to capitalize on.  Alongside this natural advantage in terms of human resource, the domestic and foreign policies of both nations have been conducive to economic growth over the last few decades.  While China started the process of economic liberalization earlier than India, the latter has caught up with its Asian neighbour in quick time.  In this context, political analyst Fareed Zakaria’s assessment that we are entering a “post-American world” is a valid one.  In the six decades since the end of the Second World War, the United States had dominated global politics and had also attained the status of an economic and military superpower.  But with the onset of globalization, countries with abundance of cheap labour such as India and China are primed to assume the leadership position . . . Read More

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The Choice: A Fable of Free Trade and Protectionism by Russell Roberts

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Russell Roberts is one of the prominent economic thinkers of our times. His works are known for their insightfulness, accessibility and relevance to current economic problems. The Choice: A Fable of Free Trade and Protectionism is one of his best works as it excels in the above mentioned qualities. The book essentially presents to the reader the contrasting choices of free trade and protectionism. Adopting the literary form of a fable, the book is one long dialogue between two intellectuals. Roberts makes no claims of neutrality, as he passionately and rigorously argues in favor of free trade practices and against protectionist policies. The rest of this essay will highlight two major criticisms of the author’s point of view.

The last three decades have seen the rapid rise of neo-liberal capitalism as the de facto global economic model. Having first been pioneered by U.S. President Ronald Reagan and his British counterpart Margaret Thatcher in the early 1980s, the . . . Read More

Warren Buffett overturns all the main ideas of modern investment theory

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Warren Buffett, alongside Benjamin Graham is considered to be the leading gurus of investment strategy. Though Benjamin Graham pioneered the notion of ‘value investing’, it was Buffett who consolidated the theory through repeated application. The consistency with which Buffett’s portfolio out-performed the average market results does prove beyond doubt the veracity of his ideas. His investment management company Berkshire Hathaway had consistently outperformed both the broader markets as well as competing investment funds. Yet, some of his ideas come across as counter-intuitive at first. For example, Buffett’s assertion that he buys stocks with no intent of selling them stands against the common practice of booking profits when the price is high. This essay will further elaborate how Buffett’s strategies differ from other contenting investment management theories.

Warren Buffett’s strong faith in a few fundamental ideas of investing puts him at odds with several . . . Read More

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What are the major determinants of economic growth and how far the costs of economic growth outweigh the benefits

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The promise of impressive economic growth has been a staple of electoral promises ever since the inception of parliamentary democracy in the UK.  In recent years, this phenomenon has only gathered pace with both the Tories and the New Labour leadership claiming the ‘economic growth’ mantle as their own.  Here, the implicit assumption is that economic growth per se is a good thing for the country and its citizens.  But there are economists and intellectuals who would argue that other parameters of human development should also measured alongside economic prosperity.  The rest of this essay will delve into some of their arguments and also attempt to ascertain the major determinants of economic growth and how far their benefits outweigh their costs.

Various economic theories differ in their emphasis on key determinants of economic growth.  But some of the determinants appear more frequently than others, helping them gain recognition as factors contributing to economic . . . Read More

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