Economics 113 Slides J. Bradford Delong http://bradford-delong.com - - PowerPoint PPT Presentation

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Economics 113 Slides J. Bradford Delong http://bradford-delong.com - - PowerPoint PPT Presentation

Dec 30, 2023 269 likes •655 views

Economics 113 Slides J. Bradford Delong http://bradford-delong.com brad.delong@gmail.com @delong 2017-01-30 key: https://www.icloud.com/keynote/ 0CDQiI21n5A2CJ4ecF16hzdJw#2017-01-30_Econ_113_Slides Outline Atlantic Trade

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SLIDE 1

Economics 113 Slides

  • J. Bradford Delong

http://bradford-delong.com brad.delong@gmail.com @delong 2017-01-30 key: https://www.icloud.com/keynote/ 0CDQiI21n5A2CJ4ecF16hzdJw#2017-01-30_Econ_113_Slides

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SLIDE 2

Outline…

  • Atlantic Trade
  • Administrivia…
  • British Colonial Settlement (and Dutch)
  • Review: Big Ideas
  • Toward Revolution
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SLIDE 3

iClickers: Supply, Demand, and Surplus in Atlantic Trade in 1700

A Western European population of 80 million producing $3/day and an Americas population

  • f 12 million producing $5/day in 1700.

Atlantic trade 2.5% of Western European GDP —$0.075/person/day x 80M people = $6M/day

  • Americas produce New World crops—

tobacco, (transplanted) sugar, (transplanted) coffee, chocolate, rum, high-quality timber, tobacco, indigo, silver (sold to China for tea), rubber, etc…

  • Which Europe cannot—Europe trades

manufactures for them…

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SLIDE 4

iClickers: 1700 Atlantic Trade: Equilibrium

Price:

  • Per $1 of

“value” in Europe in equilibrium Quantity:

  • $2B/year
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SLIDE 5

iClickers: 1700 Atlantic Trade: Supply of New World Crops

Supply:

  • Epidemics and conquest have left lots
  • f free land
  • Simply sail to Africa and grab some

slaves—trading guns to local potentates for them

  • Move them to the Americas (or enserf

Amerindians) and set them to work

  • In the long run, constant returns to

scale as long as the free land holds

  • ut…
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SLIDE 6

iClickers: 1700 Atlantic Trade: Supply Curve

Supply:

  • Elastic (long-

run) supply

  • f New

World products

  • But what

about demand?

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SLIDE 7

iClickers: 1700 Atlantic Trade: Demand Curve

Supply: P=1 Demand

  • Back in 1500,

a very healthy demand for “spices and silks” at 5x 1700’s real price

  • P = 5 - 2Q
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SLIDE 8

iClickers: 1700 Atlantic Trade: Equilibrium

S: P= 1 D: P= 5 - 2Q What’s our equilibrium price & quantity?

  • A. P*=3, Q*=2B/yr
  • B. P*=1, Q*=2B/yr
  • C. P*=5, Q*=2B/yr
  • D. none of the above
  • E. cannot be

determined from information given

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SLIDE 9

iClickers: 1700 Atlantic Trade: What’s the Producer Surplus?

E: P* = 1, Q* = 2B/yr S: P= 1 D: P= 5 - 2Q

  • A. $8B/yr
  • B. $4B/yr
  • C. $0
  • D. cannot be determined with

information given

  • E. none of the above

Remember:

  • D: P = Pd0 - d x Q
  • S: P = Ps0 + s x Q
  • P* = Ps0(d/(s+d))+Pd0(s/(s+d))
  • Q* = (Pd0 - Ps0)/(s+d)
  • TS=(Pd0 - Ps0)

2/(2(s+d))

  • CS= (d/(s+d))TS
  • PS= (s/(s+d))TS
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SLIDE 10

iClickers: 1700 Atlantic Trade: What’s the Consumer Surplus?

E: P* = 1, Q* = 2B/yr S: P= 1 D: P= 5 - 2Q

  • A. $8B/yr
  • B. $4B/yr
  • C. $0
  • D. cannot be determined with

information given

  • E. none of the above

Remember:

  • D: P = Pd0 - d x Q
  • S: P = Ps0 + s x Q
  • P* = Ps0(d/(s+d))+Pd0(s/(s+d))
  • Q* = (Pd0 - Ps0)/(s+d)
  • TS=(Pd0 - Ps0)

2/(2(s+d))

  • CS= (d/(s+d))TS
  • PS= (s/(s+d))TS
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SLIDE 11

iClickers: 1700 Atlantic Trade: Is This a Complete Welfare Accounting?

E: P* = 1, Q* = 2B/yr S: P= 1 D: P= 5 - 2Q CS: $4B/yr PS: $0

  • A. Yes
  • B. no
  • C. maybe
  • D. cannot be determined with

information given

  • E. none of the above

Remember:

  • D: P = Pd0 - d x Q
  • S: P = Ps0 + s x Q
  • P* = Ps0(d/(s+d))+Pd0(s/(s+d))
  • Q* = (Pd0 - Ps0)/(s+d)
  • TS=(Pd0 - Ps0)2/(2(s+d))
  • CS= (d/(s+d))TS
  • PS= (s/(s+d))TS
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SLIDE 12

1700 Atlantic Trade: In Perspective

  • W. Europe: 80M people, $80B/yr GDP

Americas: 12M people, $20B/yr GDP Atlantic trade: $2B/yr

  • But that $2B/yr is providing $6B/yr in value to

European consumers—$4B/yr in surplus

  • 7.5% of value—important, but not decisive
  • But half of that goes (or is about to go) to

Britain—with 13M people. Now we are more than 20%

  • And all of that goes to the top half of the

British population: a 30% boost to resources

  • Plus: inequality and exploitation in the

Americas

  • Plus: what’s going on in Africa?
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SLIDE 13

Catch Our Breath…

  • Comments?
  • Questions?
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SLIDE 14

British Settlement (and Dutch)

  • Too far south to have good furs
  • Thus nothing great to trade for/

with

  • Too far north to raise staple

plantation crops

  • Except for tobacco
  • Which kills your soil stone dead in

a remarkably short time

  • No gold or silver—and few

Amerindians

  • Algonquin: 24K in 1607 —> 2K in

1669

  • Wampanoag: 12K in 1607 —> 400

in 1676

  • Settlement…
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SLIDE 15

Administrivia…

  • bCourses
  • bCourses unacceptable

because it does not indicate its state

  • You can be logged out with

no sign…

  • In which case you lose all

your work if you try to save it…

  • We will keep it for:
  • Assignment turn-in
  • iClicker grading integration
  • Messages
  • Home page
  • If those can be made to work
  • Otherwise, moving things back

to my own website…

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SLIDE 16

Administrivia: Time…

  • Ten hours/week
  • Three in lecture
  • One in session
  • Six outside
  • Reading
  • Reviewing
  • Exercising
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SLIDE 17

Administrivia: Lectures…

  • Mix of
  • Exercises
  • Review
  • Lectures proper
  • Background
  • Lecture slides
  • Lecture notes—when

they are ready enough to be useful (they may not be until the next time I teach this)

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SLIDE 18

Administrivia: Outside Class…

  • Readings
  • Reading notes
  • Review!
  • Structured

repetition and review…

  • Exercises
  • Map exercise out

tomorrow…

  • Sample midterm
  • ut on Friday…
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SLIDE 19

Administrivia: Cognitive Science

  • Is the home page useful?
  • Building an intellectual

web

  • Things you can use
  • Things you know
  • Things you can

remember

  • Things you can refresh
  • Things you know where

to look up

  • Things you do not

understand

  • Things you cannot

find…

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SLIDE 20

An Investment

  • This is an investment by the human race
  • The value to us of your getting a liberal education
  • This is an investment by the state of California
  • The value to us of your getting a liberal education
  • This is an investment by you in you
  • Expected benefits
  • Surprise benefits
  • A “liberal education”
  • The value to you (and us) of a “liberal education”
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SLIDE 21

A Liberal Education a Valuable Thing

  • At a $40,000/year

average earnings level…

  • 82.2% x $40,000/year

=$32,884/year

  • Go to college: invest

$15K/yr (tuition and fees) + $20K/yr (earnings not made) for 5 years = $175,000

  • Get an extra $32,884/

year for 40 years if you’re the kind of person who can graduate

  • Plus: freedom, depth of

experience…

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SLIDE 22

Catch Our Breath…

  • Comments?
  • Questions?
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SLIDE 23

Settler Population of British North American Colonies

  • 1610: 350
  • 1650: 50,000
  • 1700: 250,000
  • 1750: 1,170,000
  • 1780: 2,780,000
  • 1810: 7,240,000
  • 1840: 17,000,000
  • 1860: 31,000,000
  • Union: 22 million (21 million free

white; 0.4 million free black; 0.4 million slave)

  • Confederacy: 9 million (5 million

free white; 0.1 million free black; 3.9 million slave)

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SLIDE 24

Three Important Strains

  • “Virginia”—tidewater plus

piedmont

  • “Kentucky”
  • “New England”—Puritan,

followed by commercial

  • Two more:
  • Slave society: Georgia and

Carolina, plus Caribbean slave colonies

  • Middle colonies: Maryland,

Pennsylvania, New Jersey, and New Amsterdam (York)

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SLIDE 25

Immigration: Virginia

  • A quarter of white population

“free”

  • Three quarters indentured
  • But how do you hold on to

the indentured?

  • Ferocious mortality: 1620-40

VA population 7K —> 14K with 25K indentured servants

  • Slaves: 300 in 1650 —> 13000

in 1700 —> 150000 (40%) by 1750

  • What did VA export? Tobacco

(and corn)

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SLIDE 26

Settlement: New England

  • Building a utopia…
  • Godly and prosperous…
  • Timber, fish, shipbuilding, shipping…
  • In return for British manufactured

goods…

  • And Caribbean and other colonial

staples…

  • 20,000 migrants by 1640—

thereafter natural increase

  • Not young, unskilled young men on

the make…

  • Not indentured servants…
  • Healthier and closer to gender

balanced…

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SLIDE 27

Catch Our Breath…

  • Comments?
  • Questions?
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SLIDE 28

Big Ideas

  • Structured repetition
  • All of our big ideas live in the future still, except for

two

  • Which big ideas have we brushed so far?
  • A. American nationalism and American

exceptionalism

  • B. American exceptionalism and American slavery
  • C. The tyranny of geography and American

nationalism

  • D. Social democracy and Gilded Ages
  • E. None of the above
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SLIDE 29

BIG IDEAS

  • Which of these do you think will turn out to be most important in this

course?

  • A. Narrative: We are animals that live by it—hence by studying

history…

  • B. American nationalism: There are three:
  • A. The City Upon a Hill: “Let it be as it was in New-England…”
  • A. A place where we can live freely…
  • B. “But here was Old Kentucky!”
  • C. American exceptionalism: The American project has been

astonishingly successful—in Trotsky’s words: “the furnace where the future is being forged…”

  • D. American slavery: But the American project has been much

worse than shadowed by plantation slavery and its echoes down the centuries…

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SLIDE 30

BIG IDEAS II

  • Which of these do you think will be most important?
  • A. Immigration: One big contributor to the success of the

American project has been immigration…

  • B. Liberty: American society has generated a large—in

comparative context—but unevenly distributed quantum

  • f liberty…
  • C. Opportunity: American society used to deliver an

unusually large quantum of opportunity—but not any more…

  • D. Prosperity: American society has delivered an

unprecedented and unequalled quantum of prosperity

  • E. Public Interest: Growth: The story of industrialization

requires focusing on growth-oriented industrial policy…

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SLIDE 31

BIG IDEAS III

  • Which of these do you think will be most important?
  • A. Public Interest: Distribution: The story of industrialization

requires focusing on societal well being-oriented industrial policy

  • B. Gilded Ages: The story of opportunity and prosperity is the

story of our two Gilded Ages: their rise, fall, and rise

  • C. Social Democracy: The apogee of American success is the

mid twentieth century era of social democracy

  • D. Structural Transition: Society has moved from agriculture

to industry to post-industrial services, and is now moving on to ?…

  • E. The Tyranny of Geography: Much of what has gone wrong

with America can be traced to regional geography—and to the cultures that entrenched themselves in that geography…

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SLIDE 32

Catch Our Breath…

  • Comments?
  • Questions?
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SLIDE 33

Toward Revolution

  • The conquest of New

France

  • New Orleans (1718-64

French; 1764-1803 Spanish; 1803 French)

  • Royal Proclamation of

1763

  • “Navigation Acts”
  • Taxation? Representation?

Quartering? Royal governors?

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SLIDE 34

Thomas Jefferson’s View

  • The family psychodrama
  • f Thomas Jefferson
  • “Why do we hear the

loudest yelps for liberty from the masters of negroes?”

  • Virtuous Roman farmers
  • The corruption and fall of

the Roman Republic

  • Britain’s Augustan Age
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SLIDE 35

Benefits of Revolution?

  • To revolutionaries—young men on

the make…

  • To supporters of revolution…
  • Costs to supporters…
  • Costs to others…
  • Tories…
  • Amerindians…
  • Slaves…
  • How can we draw a plus out of

this?

  • Effects of American Revolution
  • n European political

development…

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SLIDE 36

Artemas Ward

  • Serious rabble-rouser
  • Military experience in the French

and Indian War

  • Organizer of the army
  • Decision to fortify Bunker Hill
  • Battle of Bunker Hill June 17, 1775
  • George Washington arrives July 3,

1775

  • George Washington loses the

entire army in New York

  • August-December 1776: Battle
  • f Long Island, capture of Fort

Washington: from 24K down to 2K in the main field army

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SLIDE 37

Catch Our Breath…

  • Comments?
  • Questions?