50 Cent is the Future

Cornelius Vanderbilt (1794 – 1877) was an American entrepreneur and philanthropist who became one of the wealthiest Americans of the 19th century. He gained the nickname “Commodore” for his reputation of being fiercely competitive and ruthless.

Socrates (469 – 399 BC) was known as the “gadfly” of Athens (the gadfly stings the horse and thus prevents it from becoming sluggish and going to sleep) because he often antagonized the city in his attempts to improve the Athenians' sense of justice. Socrates was ultimately sentenced to death for corrupting the minds of the Athenians and impiety. He turned down an opportunity to escape from prison, stating that he did not fear death and would not break his social contract with the State.

An arrow can be shot only by pulling it backward. So when life is dragging you back with difficulties, use it as a way to launch yourself into something great.

The worst stock market crash in history occurred on October 29th, 1929 or “Black Tuesday”, and ushered in a roughly decade-long economic depression that saw unemployment rates rise as high as 25% and roughly half of the nation’s banks fail.

The prolonged adversity was made worse as people took their savings out of banks for fear that the banks would fail and they would lose all their deposits. This in turn meant that banks had fewer funds to invest, and economic expansion and job creation suffered as a result. People also purchased less for fear of losing their savings and again, business declined.

Essentially, people started hoarding money when times were tough due to fear; but times become tougher because they were hoarding money. Fear-based action made the overall situation much worse.

The output of a nation, the amount of stuff it produces, depends on:

1. Dividing labor so that people work smart ie work on what they do well rather than waste time on tasks that are not in line with their talents
2. The proportion of the population that is contributing to the economy

In advanced nations, unemployment rates may be higher than in poor nations but the overall standard of living is better because work has been divided based on talent and strength. Therefore, because the system runs so much more efficiently, the total amount of goods produced rises even if a smaller percentage of the population is working.

For example, if I had to grow my own edamame and fish my own unagi, I would spend years doing so. In our present system, however, I’ve left it to the pros while I live it up in the econ world. As a result, Adam Smith’s Wealth of Nations gets explained while I call up a sushi place that delivers in under 30 min.

Book II of the Wealth of Nations details how division of labor leads to the creation of capital stock which then allows for the expansion of the system. The accumulation of capital thereby reinforces division of labor by supporting specialization.

Different “industrialized” or “advanced” nations' policies promote different industries. Adam Smith notes that hardly any advanced nations have encouraged or valued all industries equally. For example, European policy seems to favor manufacturing to agriculture.

Book I of the Wealth of Nations details why the division of labor is beneficial to the economy.