From World Finance
One of the founders of neoclassical economics in the late 19th century was the Italian economist and sociologist Vilfredo Pareto. It might seem that the musings of a neoclassical economist over a century ago would have little in common with the concerns of the Occupy protestors who recently set up camp in cities all over the world – but his work dealt with similar preoccupations, such as wealth distribution, social stability, ideology, and the role of protest.
Pareto, who was the son of an exiled Italian aristocrat and civil engineer, trained as an engineer in Turin (his dissertation on “The Fundamental Principles of Equilibrium in Solid Bodies” would later inform his thinking on equilibrium in the economy). He went on to become director of a railway company, then a steel company, but was also involved in liberal politics. A dedicated democrat, he attacked the Italian government for corruption and corporatism, and railed against excess regulation.
Money that pays negative interest … just what the world needs? From World Finance.
When we deposit money in the bank, we usually expect to receive interest in return. But would it be better for the economy as a whole, if instead we had to pay to have our money looked after?
The cost of keeping money, known as demurrage, has been a feature of some currency systems since ancient times. In fact any currency based on commodities will have associated storage costs. For gold, there is the cost of protecting it; for wheat, there is loss due to spoilage.
Those expenses seem like a disadvantage. But just as parking fees make the allocation of parking spaces more efficient, so currency charges can make money more efficient.
Latest World Finance column on the relationship between economics and aesthetics.
In a 2009 New York Times article entitled How Did Economists Get It So Wrong? Paul Krugman wrote that “The economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth.”
Most non-economists, or even economists, would not associate economics with beauty. But a sense of aesthetics plays an important role in many branches of science. Bertrand Russell wrote that “Mathematics, rightly viewed, possesses not only truth, but supreme beauty – a beauty cold and austere, like that of sculpture.” The same kind of beauty is sought and appreciated by researchers in more applied areas as well – not just for its own sake, but because it often seems to indicate that one is on the right path.