Podcast Summary
Economic History: Exploring economic history provides insights into our current economic landscape and evaluates the impact of economics on people's lives throughout history.
Understanding economic history is essential to appreciate the present and assess whether economics has lived up to its promise of making life better for everyone. The Planet Money podcast's summer school series, featuring iconic economic thinkers like Adam Smith, Karl Marx, and John Maynard Keynes, encourages listeners to delve into economic history to gain insights into our current economic landscape. The summer school session covers 5,000 years of economic history, from stone coins to modern-day machines, and encourages students to take an online quiz to test their knowledge. The ultimate goal is to evaluate whether economics has made a positive impact on people's lives throughout history. The podcast also highlights the importance of recognizing both the sudden negative events and the slow, invisible progress in understanding the world's economic situation. Support for the podcast comes from Bolin Branch, offering organic cotton sheets with a discount for NPR listeners, and WISE, an app for managing international money transactions.
50-year news cycle: In a 50-year news cycle, both good and bad news would dominate, with advancements in technology leading to significant improvements in poverty and hunger despite increased CO2 emissions and potential temperature rise
If news updates only came every 50 years instead of daily or even hourly, the front page would be dominated by both good and bad news. For instance, carbon dioxide emissions have more than doubled over the last 50 years, leading to a potential temperature increase of over three and a half degrees in the next hundred years. However, this bad news is also a side effect of great news, such as a 60% decline in global poverty and a 60% decrease in child mortality. These improvements have led to a better life for most people on the planet, showing that modern economic growth can be a positive sum game. Additionally, advancements in agriculture, such as fertilizer, improved crop varieties, irrigation, and agricultural machinery, have contributed to a nearly two-thirds decrease in the number of people who are undernourished or hungry. These technological advancements may not always seem high-tech, but they have had a profound impact on improving lives and reducing poverty.
Economic Impact of Agriculture: Adam Smith's insights can help us find a way to continue making people's lives better through agricultural advancements without further damaging the planet.
The economic advancements in agriculture, responsible for saving billions of lives, have come at the cost of higher emissions and less biodiversity. The challenge for the next 50 years is to continue making people's lives better without further damaging the planet. The innovations in agriculture, the fall of communism, and economic growth have significantly impacted the world, but they've also brought about substantial costs. The key is to find a way to keep progressing while minimizing harm. Adam Smith, the father of economics, is an influential thinker who can provide guidance. He understood that many aspects of society emerge naturally through individual actions, and his ideas laid the foundation for modern market economies. Smith's insights can help us navigate the complexities of the modern world and make informed decisions.
Adam Smith vs. Karl Marx: Adam Smith believed self-interest and competition drive progress, while Marx criticized capitalism for widening wealth gap and advocated for socialism or communism
Adam Smith and Karl Marx, two influential economic thinkers, had differing perspectives on how self-interest and economic systems could shape society. Adam Smith emphasized the importance of self-interest and competition in driving individual and societal progress, while also acknowledging the need for morality and respect. On the other hand, Karl Marx criticized the capitalist system for creating a divide between the wealthy and the laboring classes and advocated for socialism or communism, where workers collectively own the means of production and resources are shared democratically. Both figures provide valuable insights into the complex relationship between economics and morality, and the role they play in shaping our lives and communities.
Critical Thinking, Challenging Inequities: Marx and Alexander, despite different times, emphasized critical thinking and challenging societal inequities. Marx urged ruthless criticism of institutions, while Alexander used economics and law to challenge racial and gender discrimination.
Both Karl Marx and Sadie Tanner M. Alexander, despite living in different times, emphasized the importance of critical thinking and challenging societal inequities. Marx urged us to engage in "ruthless criticism" of the world around us, questioning the legitimacy of institutions and the reasons behind obedience to power. Sadie Alexander, the first African American economist, used her knowledge of economics and the law to challenge racial and gender discrimination through the civil rights movement. She advocated for government policies that promote full employment and expand citizenship rights. In essence, both Marx and Alexander encourage graduates to be outspoken, challenge injustices, and promote dignity for all people. Their legacies remind us that economic theories must be grounded in the realities of people's lives and experiences.
Keynes and Robinson's Impact on Economics: Keynes and Robinson, two influential economists, shaped economic thinking through their ideas on macroeconomics, government intervention, and the importance of critical thinking.
John Maynard Keynes and Joan Robinson were two influential economists of the 20th century whose ideas continue to shape economic thinking. Keynes is known for establishing the basis for macroeconomics and advocating for government intervention to ensure full employment. He believed that economists should be well-rounded individuals who understand the abstract and concrete, and touch on all aspects of human nature and institutions. Robinson, on the other hand, emphasized the importance of critical thinking and avoiding being deceived by economists. Her quote, "The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists," reflects her belief in the importance of independent thought. Both economists' ideas have significantly influenced economic theory and policy, particularly in the areas of macroeconomics and government intervention.
Labor Markets and Inflation: Joan Robinson introduced the concept of monopsony, allowing employers to set wages below fair pay, while Milton Friedman argued inflation is primarily a monetary phenomenon
Joan Robinson and Milton Friedman, two influential economists with contrasting perspectives, shaped our understanding of labor markets and inflation, respectively. Joan Robinson introduced the concept of monopsony, which allows employers to set wages below fair pay, contributing to wage stagnation. Milton Friedman, on the other hand, argued that inflation is primarily a monetary phenomenon, caused by the amount of money circulating in an economy. Both economists challenged the status quo and encouraged graduates to engage with complex economic questions and think beyond visible explanations.
Individual power to make a difference: Historian and economist Robert Heilbroner encourages graduates and listeners to approach challenges with confidence and optimism, focusing on individual creativity, ingenuity, and freedom, rather than blaming external circumstances for problems.
While it's important to consider external factors like market crashes or government policies when examining historical events or current social issues, ultimately, the power to make a difference lies in individual creativity, ingenuity, and freedom. Don't blame external circumstances for problems, instead, look for solutions within yourself and your community. This perspective, as espoused by historian and economist Robert Heilbroner, encourages graduates and listeners to approach challenges with confidence and optimism. Additionally, the importance of questioning the role of government in solving social problems was emphasized, as some regulations or programs might inadvertently worsen the situation. Heilbroner, however, was not a pessimist and believed in the potential of human beings to create positive change. As a reminder, graduates, before celebrating your achievement, take the Planet Money History Quiz at npr.org/summer-school to earn your virtual diploma and access more academic content. Keep learning and making your own history. This podcast episode was produced by Audrey Gilling, engineered by James Willitz, and featured the expertise of various historians, professors, and economists. To stay informed on the latest technological advancements, listen to the Shortwave podcast from NPR.