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CORNELL NTRES 2201 - Commodities

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NTRES 2201 1st Edition Lecture 1Outline of previous lectureI. InternshipsII. Key figures of the EnlightenmentA) Questions to ask about these peopleB) David HumeC) Emanuel KantD) HobbesE) Herbert SpencerF) John LockeG) Adam SmithH) DurkheimI) Critiques of Enlightenment thoughtIII. Democratic Revolution Outline of current lectureI. Interested in wolves/moose?II. EconomicsIII. BarryA) ResolutionsIV. MarketV. Tragedy of commons (Harden)VI. Adam SmithVII. Natural capitalCurrent lectureI. Interested in wolves/moose?*Email [email protected]*It’s a volunteer internshipII. Economics*Economics is a form of social theory*Descriptive/prescriptive*”Relative influence”*Economics pretends to not be ideological *It’s not “natural” for the government to stomp on individuals*Issues-The market is the ultimate authority on rights and nature and stuf-Economics doesn’t deal with the fact that natural resources are finiteIII. Barry*”Anyone who believes in unlimited growth is either a madman or an economist”*Natural resources are finite, so our growth can’t be infiniteA) Resolutions*We don’t need infinite growth*We don’t need growth, just progress… economic growth =/= social progress*There are persuasive arguments saying that the earth’s resources are not finite-We have technology that can turn things that were not previously resources into resourcesIV. Market*Requires scarcity relative to need (no market for open-access resources)*Commodities: -Separation of the whole into parts, particularly nature-Competition -Voluntary exchangeV. Tragedy of commons (Harden)*If we all pursue our own interests, it creates ruin*Each rational individual will try to maximize productivity (add lots of animals to the pasture)-Per animal  Utility: +1, Impact: +1/50 (if fifty share the pasture)-This will lead to collapse because each rational person would continue adding animals*We allocate access: randomly, by price, by waiting list, privatization (get rid of the idea of commons)*Harden’s solution: Can’t solve it through technology, can’t solve it through education/appealing to conscience, CAN solve it through mutual agreement/regulation (hint: he wants to limit the amount of children we can have)*Critiques: -Ostrum: There’s no room for collective behavior, no room for feedback loopsVI. Adam Smith*Invisible hand (if everyone aims to improve themselves, society as a whole will improve)*Why? If we fight to improve ourselves, we’ll have to coordinate (social diferentiation) *Unlike Hardy’s argument, we aren’t all herdsmen… we’ve divided our jobs/responsibilitiesVII. Natural capital*Disembedding: separating nature into things of value and things of no value*Natural capital can be converted to economic capital into political capital into social capital*Make investments into capital stocks anticipating a return (we are investing by attending school)*Marginalization of things with no economic value… the things that can’t be turned into market goods are assigned a value (like clean air, clean water, endangered species)*A tallgrass prairie can’t compete economically with an office building… that’s why we need to give it a value*Revealed preference: What we do, what we pay for*Hedonic pricing: House on a lake vs house not on a lake*Expressed value: What we say we’re willing to


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