The Indicator from Planet Money - The Economics of Gods and Mortals

The first milestone in the history of economics was an 8th century B.C. poem — a lecture by an ancient Greek poet to his deadbeat brother.

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This is the indicator from Planet Money. I'm Stacey Vanek Smith. And I'm part of course there probably isn't anybody out there who would argue against the idea that the coronavirus pandemic is painfully upended the entire global economy. It is accelerated changes in the way and tire Industries function and the ways in which people live and work and interact with each other and just like earlier crisis. It is forcing Economist to re-evaluate what they know about how the economy works. So in our second episode of Summer Friday economically lessons, we thought we take the opportunity to get back to basics to look at the moment when some of the fundamental ideas in economics were first introduced all the way back in the eighth Century BC. This is from an episode that we aired in February of this year.

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Do you ever wonder where economics came from yes or is it just us might just be also probably the first ever work of Economics that we know of was an ancient Greek poem for the eighth Century BC withhold works and Days by the poet hesiod and it wasn't anything like the more famous ancient Greek poems from that time with the Iliad and the Odyssey about war and conquest and Trojan horses and revenge and seafaring. Yes, it works and days was a different kind of poem Steven historian of economic thought at Duke University describes it it's not an epic tale. You know, there's no Adventure. There's no, you know lovely young Maiden waiting at the other end of the journey. It's just hesiod lecturing his brother. Tell him to quit being such a jerk.

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Brother Percy's would like the original slacker. The two brothers had inherited this big estate from their parents, but Percy's had blown his half of the wealth and was coming after Hessians have bribing local Greek officials to give him more of it and responded by doing what any of us would do lawyers know and then wrote a long poem about the virtues of hard work as a chafing Percy's and those corrupt local officials. That's right a Greek poet telling his brother to stop being so lazy freeloader is the first-ever milestone in the history of Economics. The very first place with a kind of analytical reasoning used in economics is found Steven says Steven is the author of a book called economics book from xenofon to cryptocurrency 250 milestones in the history of Economics works and days and see ideas.

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Presenting his home or still recognizable as Concepts that are fundamental to economics today.

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Ladies and gentlemen a passage from hesiod's poem works and days.

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formerly the tribes of

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boils in the Grievous sicknesses that are deadly to men

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Yeah, one of the stories did hesiod tells in works and days is about why hard work is needed if men want to build up their wealth and yes, he was referring just two men that then there was not a super progressed. So it was a century. Get my past but there was a former time according to this mythology when food and other things were abundant in the earth provided all that man could want but then Prometheus a Titan trick Zeus King of the Gods and stole the use of fire from the gods. So that men could use it this right has he had responded angrily by sending to Earth a terrible affliction.

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Is that against the fire? I shall give them in Affliction in which they will all Delight as they Embrace their own Misfortune was a woman. That's how I thought I said. It wasn't a Super Bowl Crider Pandora who's jar or box Unleashed Terrible Things upon all Mortals when she opened it one of those hardships was it for people to get what they wanted. They would have to work for it food for instance us had Rights was now concealed by the gods. So people would have to toil in the field if they wanted something to eat or words. The gods had introduced scarcity to the world and scarcity is the first thing we're going to discuss from the poem. Stephen Batman comic book says that the economic definition of scarcity though is different from the way that normal people use it when they mean a shortage of something that might run out when the economist talks about scarcity.

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He's really talking about is is available resources are limited relative to human wants. So we have to make choices about how to use those resources land is a resource. So if you use land to ride horses or keg parties, whatever you're also choosing not to use it as farmland and crops won't grow that is using the concept of scarcity Unleashed by Pandora's jar to lecture his brother Percy's on why hard work is a moral virtue after Percy has has blown his half of the family money Percy's squandered a whole bunch of that and now has she had saying you got to work you need to earn your way he's arguing and if you don't you're not going to be well viewed by the people around you which brings us to the second economic theme and his dad's poem shame namely the role of shame in a market economy this kind of society.

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Approval can help an economy work better. If it creates social norms of fairness and trust and pixie up writes about the importance of property rights. If you earn something yourself you get to keep it for yourself or if you know, you can also voluntarily trade it for something else without property rights people might not work as hard because then the stuff they make could be taken from them. This was an early iteration of the idea that the law and also a sense of Shame can reinforce good social norms and respect for property rights. And this is good for a whole economy. That's true of countries to this very day. Steven says Percy's has his brother is trying to cheat has see it out of his own share of The Inheritance, right? He's not respecting has his property rights. And so there's that sort of personal lesson to tell with the much broader more General implications, which brings us to the third big economic theme in works and days the role of Envy in the economy.

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When you look at the wealth of others and see that they have worked hard for that. Well, then it might lead you to work hard to attain that same well that she had refers to this form of envious strife. And he says it is good for Mortals. It Stephen says Economist know that Strife by a different name when he uses the word strife The Economist reads the word competition and there's good competition and there's destructive competition and what he's emphasized in here of course is the good competition, right? So perhaps he had the motivation to work hard or at least part of it. Is it is it keeping up with the Joneses effect right that I want half what that person has and so I'm going to work hard so I can be like her or keeping up with like, I don't know demosthenes affect. What did she said?

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Percy's was envious of haecceitas wealth and hesiod was trying to convince Percy's of a better alternative a more ethical alternative to satisfying his NV then to seize as he is half of the wealth work hard build wealth yourself and the gods will bless you. And this is an underlying theme in works and days. The peaceful competition is better than destructive seizing or Conquest. It's going to fly to countries as much as it applies to feuding brothers from ancient Greece hesiod rights quote violence is bad for a lonely man. Not even a man of worth can carry it easily and it's an economically sound lesson. But Steven as the economic growth can take a long time and a lot of work where is death in Conquest are always tempting because they're easier you just take somebody to do something kind of sad about the fact that has she had wrote all this back in the eighth Century BC his Conquest imperialism seizing unearned wealth. These were still the norm until at least a couple of hundred years ago.

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And they're still with us now in some places. So yeah, she has economic analysis with all its references to the muses and the gods was killed it was primitive because he was a man of his time but in understanding the importance of stability and peace for economic prosperity in a lot of ways, I think he was ahead of our time.

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This episode of the indicator was produced by Darius rafie on or editor is Patty Hirsch are in turn. In fact Checker is Brittany Cronin and the indicator is a production of NPR.
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