Posts Tagged ‘economics’
“Is it just a coincidence that as the portion of our income spent on food has declined, spending on health care has soared?”*…
It seems a country’s spending reflects its national stereotypes, according to household expenditure data compiled by Eurostat: Russians splash 8% of their money on booze and cigarettes—far more than most rich countries—while fun-loving Australians spend a tenth of theirs on recreation, and bookish South Koreans splurge more than most on education. Some of the differences are accounted for by economics. Richer places like America and Australia, where household expenditure is around $30,000 per person, will tend to spend a smaller share of their costs on food than Mexico and Russia, where average spending is around $6,000. And politics plays a part too. Predominantly private healthcare in America eats up over a fifth of each household’s budget, whereas the European Union, where public healthcare is common, only spends 4% on it. In Russia, government-subsidized housing and heating make living cheaper, and this means money is left over for the finer things in life.
Via The Economist‘s How Countries Spend Their Money (where oner can find a larger version of the chart above)
* “Is it just a coincidence that as the portion of our income spent on food has declined, spending on health care has soared? In 1960 Americans spent 17.5 percent of their income on food and 5.2 percent of national income on health care. Since then, those numbers have flipped: Spending on food has fallen to 9.9 percent, while spending on heath care has climbed to 16 percent [now, almost 21%] of national income. I have to think that by spending a little more on healthier food we could reduce the amount we have to spend on heath care.”
― Michael Pollan,
As we brood over our budgets, we might recall that it was on this date in 1920 that the biggest incidence of domestic terrorism in U.S. history to that date occurred: the Wall Street bombing. At noon, a horse-drawn wagon passed by lunchtime crowds on Wall Street and stopped across the street from the headquarters of the J.P. Morgan bank at 23 Wall Street, on the Financial District’s busiest corner. Inside the wagon, 100 pounds of dynamite with 500 pounds of heavy, cast-iron sash weights exploded in a timer-set detonation, sending the weights tearing through the air. 30 people were killed immediately, and another eight died later of wounds sustained in the blast. There were 143 seriously injured; the total number of injured was in the hundreds.
Though investigators and historians believe the bombing was carried out by Galleanists (an anarchist group responsible for a series of bombings the previous year), the attack– which was a part of postwar social unrest, labor struggles and anti-capitalist agitation in the U. S.– was never officially solved.
[A similarly silly-but-serious bonus: “An Interactive Guide to Ambiguous Grammar.”]
* alternately attributed to St. Augustine and to Francis Bacon
As we send birthday greetings to the father of the field of sociology and the discipline of Positivism, August Comte, we might recall that it was on this date in 1929 that bearish economist Roger Babson gave a speech in which he warned, “sooner or later, a crash is coming, and it may be terrific.” He had been delivering this message for two years, but for the first time, investors listened. The stock market took a severe dip (now known in economic history as “the Babson Break”). The next day, prices stabilized, but the equity collapse that we know as a trigger event for the Great Depression had begun.
In 1943, as American businesses tried to guess whether wartime relief from the Depression would translate into postwar prosperity, the Tension Envelope Corporation printed this chart for customers. The infographic folded into a pamphlet and could be displayed on the wall when opened. (The online archive of the Federal Reserve, FRASER, has digitized a PDF of the pamphlet, which you can view here.)
The infographic and the explanatory text below it tap data from several sources, including U.S. Treasury reports, the Department of Labor’s Bureau of Labor Statistics, the Survey of Current Business, and the Committee for Economic Development, a nonprofit founded in 1942 to help American business plan for the postwar future. Excerpted text from a Committee for Economic Development publication, “Business Planning Now for V Day,” can be found in the lower left-hand corner of the chart.
In an explanatory section on the federal debt—represented on the chart as a red line that climbs steeply upward beginning in 1941—the chart’s authors articulate a strong stance on what could be an alarming indicator: “The necessary cost of this war is not important. Victory is worth the price. Whatever the cost to the future citizens is, they will get their money’s worth in benefits derived.”…
From the redoubtable Rebecca Onion: “A Comprehensive 1943 Infographic of American Booms and Busts.”
* William Faulkner
As we reach for the Dramamine, we might recall that it was on this date in 1969 that Chemical Bank installed the first ATM in the U.S. at its branch in Rockville Centre, New York. In fact, as noted here before, the ATM was imagined (and an early version patented) in 1960 by Luther George Simjian; but a six-month trial of the stand-alone device in 1961 was a failure. A British version (developed by the banknote company Delarue and deployed by Barclays) debuted in 1967, but required the use of pre-acquired “cheques” for withdrawal. The Chemical ATM was the first of the breed that is now common: networked machines that communicate with the bank (and its account information) in real time.
“A day will come when there will be no battlefields, but markets opening to commerce and minds opening to ideas”*…
… well, markets opening anyway.
There’s a rule of thumb that to have a healthy diet, you should eat the rainbow—meaning fruits and veggies of all colors. A similar notion could be applied to a country’s economic health. The more diverse the exports, the less susceptible a nation will presumably be to fluctuations in a single market. Too reliant on oil? A drop in prices might spell the loss of billions of dollars. And for a country where heavy machinery comprises most of the exports, that drop in prices might mean lower operating costs and an uptick in sales. And thanks to globalization, the web of trade is very complex and tough to comprehend.
Looking for better ways to unpack this data, Harvard researchers mapped out international exports in an infographic called the Globe of Economic Complexity, an interactive website that visualizes the exports of every country around the world.
Industries like agriculture, medical products, precious metals, cars, and even baked goods are all assigned a specific color. To get more detailed breakdowns, the infographic leads you to an atlas of exports with more detailed breakdowns. The data was collected in 2012 and for that year, the graphic shows the United States as predominantly turquoise (machinery and parts), blue (automotive), and fuchsia (chemicals). Spin the globe and head over to China and nearly half of the exports are machinery related. Saudi Arabia is a beacon of pink for petroleum, accounting for 76% of exports. Clicking on the country names shows who the nation exports to the most.
Changing to different views, like the product space graph, reveals which countries are most heavily involved in the trade of a specific product. Who knew that the United Kingdom accounted for 26% of the antiques trade or that Europe exports the most cigarette papers?
* Victor Hugo
As we note sadly that two countries with McDonald’s franchises have in fact gone to war, we might send charged birthday greetings to Ernest Rutherford, 1st Baron Rutherford of Nelson; he was born on this date in 1871. An experimental physicist whose work earned him the honorifics “father of nuclear physics” and “father of electronics” (along with a Nobel Prize), he is considered the greatest experimentalist since Michael Faraday, and and was instrumental in laying the foundation for the advances in technology and energy that have enabled the globalization visualized above.
Apple paid $10 billion to developers in calendar 2014– thus, iOS app developers earned more than Hollywood did from box office in the U.S. Of course, Hollywood studios make money in foreign theaters, in cable, in home video, and in digital. But, as Horace Dedieu observes…
Apple’s App Store billings is not the complete App revenue picture either. The Apps economy includes Android and ads and service businesses and custom development. Including all revenues, apps are still likely to be bigger than Hollywood.
But there’s more to the story. It’s also likely that the App industry is healthier. On an individual level, some App developers earn more than Hollywood stars, and I would guess that the median income of app developers is higher than the median income of actors [a large majority of whom earn less than $1,000 a year from acting jobs]. The app economy sustains more jobs (627,000 iOS jobs in the US vs. 374,000 in Hollywood) and is easier to enter and has wider reach. As the graph [above] shows, it’s also growing far more rapidly…
Grab some popcorn and read the rest at “Bigger Than Hollywood.”
* “Norma Desmond” (Gloria Swanson) in Billy Wilder’s Sunset Boulevard
As we disable in-app purchases, we might recall that it was on this date in 1931 that City Lights premiered. Written and directed by its star, Charlie Chaplin, the film follows Chaplin’s “Tramp” character as he falls in love with a blind woman (Virginia Cherrill). Though sound films– “talkies”– were the rage at the time, Chaplin produced City Lights as a scored silent– for which he composed the music himself. It was a huge success on its release, grossing over $5 million ($730 million in 2015 dollars). And it has grown in critical stature ever since: In 1992, the Library of Congress selected City Lights for preservation in the United States National Film Registry; then in 2007, the American Film Institute‘s 100 Years… 100 Movies ranked City Lights as the 11th greatest American film of all time. The critic James Agee referred to the final scene in the film as the “greatest single piece of acting ever committed to celluloid.”
Adam Smith once famously observed…
How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.
– Theory of Moral Sentiments, 1759
He is a member of a stream of observers of the human condition, stretching back to the ancient Greeks, who believe that an innate goodness is at work in us all. But is it so?
Behavioral economists have revolutionized the standard view of human nature. No longer are people presumed to be purely selfish, only acting in their own interest. Hundreds of experiments appear to show that most people are pro-social, preferring to sacrifice their own success in order to benefit others. That’s altruism.
If the interpretations of these experiments are true, then we have to rip up the textbooks for both economics and evolutionary biology! Economic and evolutionary models assume that individuals only act unselfishly when they stand to benefit some way. Yet humans appear to be unique in the animal kingdom as experiments suggest they willingly sacrifice their own success on behalf of strangers they will never meet. These results have led researchers to look for the evolutionary precursors of such exceptional altruism by also running these kinds of experiments with non-human primates.
But are these altruism experiments really evidence of humans being special? Our new study says probably not…
Read more– and draw your own conclusion– at “Does behavioral economics show people are altruistic or just confused?”
[TotH to Mark Stahlman]
* P.J. O’Rourke
As we calculate the angles, we might spare a thought for Johannes Schöner; this is both his birthday (1477) and the anniversary of his death (1547). A priest, astronomer, astrologer, geographer, cosmographer, cartographer, mathematician, globe and scientific instrument maker, and editor and publisher of scientific texts, he is probably best remembered today (and was renowned in his own tine) as a pioneering maker of globes. In 1515 he created one of the earliest surviving globes produced following the discovery of new lands by Christopher Columbus. It was the first to show the name “America” that had been suggested by Waldseemüller– and tantalizingly, it depicts a passage around South America before it was recorded as having been discovered by Magellan. In his roles as professor and academic publisher, he played a significant part in the events that led up to the publishing of Copernicus’ epoch-making “De revolutionibus” in Nürnberg in 1543.
People sometimes say “If I had all the money in the world …” in order to discuss what they would do if they had no financial constraints. I’m curious, though, what would happen if one person had all of the world’s money?
– Daniel Pino
So you’ve somehow found a way to gather all the world’s money. We won’t worry about how you did it—let’s just assume you invented some kind of money-summoning magic spell.
Physical currency—coins and bills—represents just a small percentage of the world’s wealth. In theory, you could edit all the property records on Earth to say that you own all the land and edit all the banking records to say you own all the money. But everyone else would disagree with those records, and they would edit them back or ignore them. Money is an idea, and you can’t make the entire world respect your idea.
Getting all the world’s cash, on the other hand, is much more straightforward. There’s a certain amount of cash in the world—it’s about $4 trillion—and you want it all…
Find out what you’d have to do with all that scratch on Randall Monroe’s What If? at “All the Money.”
* Sociologist William Bruce Cameron (though often attributed to Albert Einstein)
As we go all Scrooge McDuck, we might send imperial birthday greetings to Titus Flavius Caesar Vespasianus Augustus (better known as Vespasian); he was born on this date in 9 CE. Vespasian was crowned Emperor of Rome in 69 after a year of civil strife following the death of Nero; he served for six years and founded the Flavian Dynasty that ruled the Empire for another 20 years. Vespasian was judged (by Suetonius and others) to have been a witty and effective ruler, even as he had to govern through severe financial turmoil. Indeed, to this day urinals are known in Italian as vespasiano, a vestige of Vespasian’s tax on urine (which was valuable in his day for its ammoniac content).