Economics Archives

Who Are the Power Elite in America? Where the Influence Lies

Who are the power elite in America? What institutions wield influence over nearly everything? In The Power Elite, sociologist C. Wright Mills discusses how a small group of leaders has taken over a vast majority of American political and economic decision-making. He defines the power elite—who they are and how they operate—and he identifies the three institutions where the power elite emerged. Keep reading to learn who these people are and how they’ve consolidated their power.

How the Corporate Elite Quietly Rose to Power in America

What’s the “executive class”? How did corporations in the United States get so powerful? In The Power Elite, C. Wright Mills discusses how influential institutions came to control a majority of wealth and power in America. Corporations are one of the three main institutions where Mills believes the power elite developed. Mills explores the process by which their influence solidified over the years. Read more to learn about the subtle rise of the corporate elite in America.

The 4 Poverty Alleviation Programs That Need More Attention

How does poverty affect one’s cognitive functioning? What are the psychological consequences of never having enough money? Poverty takes a huge toll on one’s cognitive capacity. Poor people are so preoccupied with stretching their money that they don’t have any mental bandwidth to focus on anything else. The cognitive effects of poverty should be tackled on the institutional level. Here are some recommended poverty alleviation programs from Scarcity.

The Colorado River Water Shortage: The Cause & Impact

What’s causing the Colorado River water shortage? What impact will it have on the river itself, water users, and the wider economy? Reservoirs throughout the Colorado River drainage have become critically depleted because current water use agreements divert more irrigation water to farmers than the river can provide. Reduced availability of irrigation water could potentially diminish the nation’s food supply and drive up prices. Keep reading to learn more about the cause and impact of the Colorado River water shortage.

Freakonomics: Book Club Exercises for a Thoughtful Discussion

Would you like to understand your fellow humans better? When is conventional wisdom wrong? What if you thought like an economist? Authored by Steven D. Levitt and Stephen J. Dubner, Freakonomics: A Rogue Economist Explores the Hidden Side of Everything applies the tools of economics to explain real-world phenomena that aren’t conventionally thought of as “economic.” The book contains fascinating implications and applications. Continue reading for discussion questions and a quiz that you can use with your Freakonomics book club.

The Wealth of Nations by Adam Smith: An Overview of a Classic

What’s so great about the free market? Does self-interest benefit everyone? How should taxes be used? Many economists consider The Wealth of Nations by Adam Smith to be one of the major foundational texts of their discipline. Writing in 1776, Smith argues that free markets are the best institution for cultivating a nation’s wealth. Continue reading for an overview of this important classic work.

Adam Smith: Self-Interest Is the Engine of a Free Economy

Can self-interest be a good thing? What does it have to do with labor, embargoes, and taxation? According to Adam Smith, self-interest in the context of a free market is what a nation needs in order to flourish. In The Wealth of Nations, he argues that free markets harness the power of rational self-interest to incentivize the production of useful goods while efficiently distributing surplus wealth. Read more to understand Smith’s case for free markets and individual self-interest as the best ways to grow a nation’s economy.

Adam Smith: Specialization of Labor Leads to More Wealth

What is specialization of labor? What impact does it have on workers and on the economy as a whole? According to Adam Smith, specialization of labor contributes to the wealth of a nation. In his seminal work, The Wealth of Nations, Smith explains three ways this happens. He also discusses how a market’s size affects the amount of specialization that can occur. Continue reading to learn Smith’s views on labor specialization.

How Does a Country Make Money? Adam Smith Explains

How does a country make money? What separates a wealthy country from a poor country? Many economists consider Adam Smith’s The Wealth of Nations one of the major foundational texts of their discipline. Writing in 1776, Smith argues that free markets are the best institution for cultivating a nation’s wealth. Keep reading to learn the basics of how a country makes money.

Adam Smith’s Labor Theory of Value: Everyone’s a Merchant

Could you live your life without ever buying something that someone else produces? What do you produce that others buy? In The Wealth of Nations, Adam Smith lays much of the groundwork for the field of economics. He makes the case for free markets, and he puts forward his theories on what markets exchange and how they’re able to facilitate this exchange. One of his theories is that labor is the basis of value. Let’s take a look at Adam Smith’s labor theory of value.