Some interesting Ideas.

Let me preface this by stating that I have a few ideas to share with ya'll.

Whenever school starts, I get a-thinking, and since this blog has become very much about my adventures in Egypt, these are starting to pile up.

Now, I have to forewarn everyone that I have NOT done the required background research that usually accompanies these ideas. They are simply interesting things I've thought about. Now that I have internet at AUC I'll be able to include more and more real data as I can get it via the Internets and their series of tubes.

The first is something interesting I heard in my Econ 302 (Intermediate Micro-Economics) Class. First, this class appears to be not that great. My Developmental Econ Class seems cool, but since I've already taken Intermediate Macro, Micro is something I kinda already know about. Anyways, we'll see how the class goes. One thing I can tell, is that people are very argumentative about Econ. I'll write about this in some other post, basically, the bargaining that is pervasive in Egyptian society finds its way into the classroom. So grades are not hard, but "sticky".

Anyways, one thing that I found was very interesting was that we talked about the three flows into the production of goods. The first part is labour, the second is capital (the machines that do the making, though, in many cases this is the labour), and the final was "Gifts from God", which of course here in the states we call "resources". I found it fairly enlightening to find out that the idea of natural resources are of course gifts from god. This vein of thought troubles me because it would appear that the "green" movement will have trouble taking hold in the Middle East. If you believe that the resources around you are gifts, that implies that resources are of course theoretically endless because they come from a divine creator. Also, the entire problem of global warming turns into a "punishment from god" instead of a man-made created problem. That is an easy scape goat for washing your hands of any environmental damage. All you have to do is say "its gods will" and voila! Why do you need to change your habits? Just pray harder.

The second and third ideas are strictly economic thoughts.

The first of those two is an idea I've been having about unemployment and inefficiencies. Let me first state that I am of the disposition, for the most part, for neo-classical economics. So that has to be said in advance. The second is that I believe that recessions/depressions are a very important part of long term economic growth. The force innovation and the value of finding inefficiencies. Without recessions, the long term positive effects that come with great ideas would fade. They also act as a catalyst for change. Barack would never have been elected if the economy was still going strong. Social Security, FDIC, and the GI Bill were all products of the political capital for change that was accumulated during the great depression. Recessions are necessary for developed countries to move forward.

That being said, I've had some thoughts about unemployment. Actually... I've been having thoughts about employment. I've never seen what cheap labour looks like until I arrived in Cairo. The inefficiencies in the work place are beyond anything I've ever seen. Since most of the hiring is "friend of a friend got me a job" anyways, there are a large number of people in Cairo who do nothing but basically wash sidewalks. At AUC, there are probably ten times the number of people on the custodial crew as at Madison, yet AUC is no cleaner. Of course AUC is also in the middle of the desert, so I am leaving out the endless encroachment of sand that invades the roads in my cleanness figures.

That being said, the reason that people in the USA are so productive could be because the price of labour is so high. No company can afford to pay for 50 janitors, so there are only 3. This of course means that in order to get a job in the marketplace, out of those 50 that would have been employed, 3 become janitors, 40 become something else, and SEVEN more become unemployed! Of course unemployment figures are only snapshots at one time and place. The point is that the low price if labour is causing people to become janitors when the should be moving into different fields that can help growth, like engineering, or manufacturing. It is when there is a glut of cheap HIGH SKILLED labour that economic growth occurs. In the past most of the growth has occurred when countries begin to manufacture products, instead of export natural materials, which, somehow in my head is connected to steady jobs in non-developing industries, like washing sidewalks.

There is of course a huge caveat to this, which is that people need hope and the ability to better themselves. If there are no janitor jobs, then the only way you'll be able to be employed is to go to school. Of course this assumes that you CAN go to school. The idea is that boosting the minimum wage can help in the long run. Of course, unemployment will rise. The only problem is that no government could probably keep up with the societal pressures in the short term, that I believe in the long term could provide benefits.

I should elaborate on this more, but I have to leave the library now. I never got to the second point, but I guess I'll write that tomorrow. Ta ta.