Tag: communism

Posted in History & Literature

Demand And Supply

Posted on by Jinavie

How does the economy function? On the surface, economics seems extremely complex and intricate, changing dynamically due to what appear to be insignificant factors. For example, one can predict a recession from the increasing attractiveness of waitresses. But economics relies largely on two simple laws: the law of demand and the law of supply.

The law of demand states that as the price of a good goes up, people demand less quantities of that good. This makes logical sense as (rational) consumers want to spend the least amount of money possible for something. When plotted on a graph with price (P) as the y-axis and quantity (Q) as the x-asis, we can show that demand (D) is a downward-sloping curve.

The law of supply states that as the price of a good goes up, people supply more quantities of that good. This makes logical sense as (rational) producers want to sell something for as much money as they can. When plotted on a graph with price (P) as the y-axis and quantity (Q) as the x-asis, we can show that demand (S) is a upward-sloping curve.

When we superimpose these two laws on the same graph, we get a nice X-shape as the two lines cross over. The point where they cross is called the market equilibrium and this is where the consumers demand exactly the right amount of goods that the producers are willing to supply at a given price. If a good is being sold at a price higher than the equilibrium price, consumers demand less of the good and producers are left with an excess. If the price is lower, then there is a shortage as demand exceeds supply. Over time, the price is pushed towards the market equilibrium. Thus, thanks to the laws of supply and demand, the market automatically adjusts to the price to accurately reflect the value of the good.

Adam Smith, the father of economics, called this the invisible hand – a force driven by the individual ambitions of consumers and producers to balance the market. This force is not found in centrally planned economies of communist states, as the price and quantity supplied is fixed by the government. A pure free market is only driven by the invisible hand. Most modern countries’ economies are mixed economies, usually in the form of free markets with some government intervention.

Although economics appears complicated, it essentially boils down to the laws of supply and demand. By understanding the principles of demand and supply, one can begin to understand more complicated economic theories such as aggregate demand and supply, elasticity, foreign currency exchange and trade. Real economic situations such as oil cartels, trade embargos and taxation can be broken down and modelled using PQ-diagrams (depicting the demand and supply curves).

The laws of supply and demand are two crucial laws of economics that everyone should have some understanding of, as it can be extremely useful in everyday life. Not only do they apply in obvious situations such as running a store or a business, or understanding how the economy works, but it can be applied to negotiating too. One of the fundamental principles of negotiating is finding the balance between what one person wants (demand) and what the other person is willing to do (supply). It is amazing how useful knowing that simply being slightly flexible is in negotiations.

Posted in History & Literature

Communism

Posted on by Jinavie

A professor was lecturing about communism. The students insisted that communism worked since no one would be poor and no one would be rich – a great equalizer. To show the students whether communism worked or not, the professor designed a social experiment. The professor announced to the class that all grades will be averaged and everyone will receive the same grade.

After the first test, the grades were averaged and everyone got a B. The students who had studied hard were upset while the students who had studied very little were happy.
But when the second test came, the students who had studied little studied even less and the ones who had studied hard before decided that since they could not make an A (even if they got 100%, the bottom half of the class would pull the average down), they also studied less. The second test average was a D.
No one was happy. By the third test, the class average had fallen to an F. Now no one was rich, but everyone was equally “poor”.

Communism ultimately fails because it removes one of the major driving forces of economies – incentive. Money is a key (but not the only) incentive that motivates people to work harder as they are rewarded with a better quality of life. But when private wealth is abolished and wealthy is “equally” (note that it is not “equitably”) split among the population, there is no longer motivation to try harder. Because no one wants to work for the benefit of strangers (due to psychological phenomena such as responsibility splitting and the monkeysphere), the economy does not grow and everyone becomes poor.

Communism essentially relies on the goodwill of the people while disregarding all realistic factors of economic growth. It is an extreme ideal that has failed in every instance in history. The only times communism works is in a small society setting such as a small village or tribe where there are less than 150 people (within the monkeysphere, thus people actually care about all of the others). The idea behind it is admirable – that all human beings have equal rights to a certain quality of life. However, it disregards the most important factor of economics; that resources are scarce and we cannot fulfil the infinite needs of everyone. Monetary incentives at least allow us to seek out these resources ourselves, with market economies rewarding such behaviour with money.

Thus, we should not focus on “equality”, which means that everyone should receive the “same”, but “equity”, which means that everyone should receive a “fair share” according to how much they have worked and contributed to the society.

Posted in Life & Happiness

Specialist

Posted on by Jinavie

In modern ant cities, there can be found many genetic mutations as a result of millennia of division of labour. Thus, ants born with large mandibles that can cut down enemies become soldier ants, while ants born with mandibles that can grind grains become milling ants. Some ants have highly advanced salivary glands and these ants wash and disinfect young larvae.

Here are some examples of the amazing adaptability of ants through the use of mutations:

  • Doorkeeper ants have large, flat heads that can block strategically important entry points to guard the hive. If a worker ant wishes to enter the hive, it must knock on the broad head. If it gives the wrong password, the living door attacks and devours the worker ant.
  • Honeypot ants are found in some tropical ant species. These worker ants are hung upside down on the ceiling and are filled with honey until their abdomens swell up to 20 times the normal size. When another ant comes and strokes the honeypot ant, it releases a few drops of honey it is storing.

However, out of all of these mutations that produce “specialists”, the most noticeable is the mutation that produced specialists of love.
Worker ants are born without the ability to reproduce. This is to prevent these busy worker ants from being distracted from sexual impulses. Reproduction is left to certain ants that do nothing other than reproduce. These ants are the male and female ants – essentially the princes and princesses of the ant kingdom. These ants are born only to make love and have special anatomical features that make the mating process easier. Wings that allow them to fly, antennae that allow the communication of abstract emotions and eyes that can sense infrared light are all examples of this.

How about human beings? We too have “specialists”, but they are not based on features we are born with. Instead, they are a result of the education and upbringing we receive as we grow up – an acquired specialisation rather than a natural one. Then again, it is not as if we are all born equal. Some people are born with a more muscular body that is helpful for labour-intensive work, while others are born with more intelligent brains that are better for jobs that require much thinking. However, our societies have a strange style of oppressing these natural talents and only push study on them. No matter how good a child is at the arts, music or sports, their abilities are ignored and the children are forced to conform into a pre-set path. If a child is introverted and prefer working quietly indoors, they are told off and told to become more extroverted. Ultimately, human societies prefer producing all-round individuals rather than specialists in a certain trade.

But what if we did what ants did and recognise a child’s natural talents and nurture it? The Jewish people have followed a system of education that focusses on helping a child develop their own skill instead of forcing something on them. Considering that 18 of the 40 richest people in USA are Jewish, it could be suggested that this is a very effective form of educating children.

Then why do so many parents want their children to become doctors, lawyers and CEOs? The reason is capitalism. Given the characteristics of the jobs, they are comparatively better paid and more stable than workers and artists. Ergo, parents push children towards such professions “for the sake of their future”. Even though many other professions are required for the smooth functioning of society. If so, could we not equalise the pay of all jobs? Unfortunately, this was tried in communist states but tragically failed as the incentive to study and go into such professions disappeared as the pay was “not worth it”. In fact, the major reason for the downfall of communism was human greed. As ants work for the good of the society rather than the individual, they have the luxury of doing the job they were literally born for and still be well-nourished.

Then what if we paid salaries not equally, but fairly? For example, instead of giving everyone the same pay, we pay people according to the amount of work they do, regardless of the profession. If we distributed the unnecessarily high amounts of wealth of politicians and upper class have to fund the wages of technicians and artists, the income gap between jobs would disappear and children would receive the same reward for whatever profession they chose (given it helps society). If this was implemented, then everyone would be able to bring out their strongest trade and significantly boost productivity. Furthermore, the tragedy of having to give up something you want to do for the sake of money would disappear. If we can find a way to overcome human greed and make equitable distribution of wealth possible, human societies would be able to kill two birds with one stone – progress and happiness.

(first half from the Encyclopaedia of Relative and Absolute Knowledge by Bernard Werber, second half from author’s original thoughts)
(Image Source: http://www.behance.net/gallery/Collages-ABC-of-professions/237797, see source for description of each letter (professions in French))

Posted in History & Literature

Charon’s Obol

Posted on by Jinavie

According to ancient Greek mythology, a person’s soul must cross five rivers to enter Hades’ underworld after death. Charon ferries souls across the first river, Acheron, also known as the river of pain. To use Charon’s services, one had to pay a silver coin (obolus). If one could not pay the fee, one could not cross the river and would circle the Earth for eternity. Thus, the ancient Greeks had a custom of putting a coin in the deceased’s mouth for their journey.

Even for something as unavoidable as death, Charon asks for money. This not only shows that the ancient Greeks had a good understanding of market economies, but also teaches us something important about capitalism.
Just as the reaper takes a fee, nothing in the world is free. A market is the most effective economy system that man has devised and no other system (especially communism) has overcome it. But we have a tendency to denounce corporations for only taking advantage of poor, helpless citizens. Although there is corruption in reality, corporations are still subject to the invisible hand and bound by the basic principle of capitalism, supply and demand.

We only see the negative sides of capitalism and decry Charon’s greed. “How could you ask a helpless soul for money? Is that not robbery?”, we cry. But such words can only be said by someone who has devised a better system than the market, or found a way to keep Charon well-fed. Instead of criticising the economy or policies, it is far more efficient to think of a way to improve the market system. Blindly criticising and trying to destroy capitalism like Karl Marx did will only result in splitting the world in two and cause everyone to starve to death.
The reason being, money is an invention as important as fire to mankind.

Posted in Psychology & Medicine

Brainwashing

Posted on by Jinavie

The term brainwashing describes the act of converting a person’s deepest thoughts and ideologies. The term originated from the efforts of the Chinese army to convert US soldiers to communism in the Korean War.

The Chinese first made American prisoners-of-war write essays hailing communism, then gave them some rice, candy or cigarettes as rewards.
The intelligence officers posited that the prisoners would be tormented by the reality of having to act against their ideology (of anti-communism) to receive such petty rewards, and that they would convert their beliefs to escape this. They were right.

A significant number of Americans who were given rewards after writing the essays defected to become communists after the war. This was because they justified their actions, believing that they did not write the essays to get a few candies, but because they truly are communists. Converting them did not require horrific torture or heavy bribery. All the officers needed were some candy, and the powerful psychological phenomenon known as cognitive dissonance to play with a grown man’s mind.

Leon Festinger said: “People are not rational beings, but beings that rationalise themselves”. People easily get caught in the trap of self-justification, and distort reality and even their own memories to accommodate it.