Notes on:
The nature of Economies
Jane Jacobs

Chapter 1: Opening Premise: The similarities between ecology and economics

p. 8:"Thinking about development has made me realize how similar economies and ecosystems are"

What is the rational for this statement?

p.9 Is there a difference between nature and human (artificial) things?

"economies are human, not natural"

"If we stop focusing on things...and shift attention to the processes that generate the things, the distinction between nature and economy blur."

p. 10 the roots of the terms ecology and economics.

p.11-12 "Working along with natural principles.....people can create economies that are more reliably prosperous than those we now have and that are also more harmonious with the rest of nature."

What are the consequences of not taking this approach?

What are the principles?


Chapter 2: The nature of development:

pp.16-19, Three development principles are stated: What are these? How are they related to the system's concepts of recursive nesting and webs of interconnection?

pp.32-34 What are the consequences if "portions of a population are prevented from exercising economic creativity and initiative because of discrimination attached to gender, race, caste, religion, social class, ideology or whatever"?

pp. 34- 36 What are the consequences of monopolies?

pp.36-37 Standardized goals or principles versus standardized means? What is the difference and which are to be avoided and why? How does this tie into the ideas of self-organization and context in nested systems?


Chapter 3: The nature of expansion:

On page 47, second half of the page is the "principle of expansion". The argument for this principle is on pages 45-47. The argument is based on thorough use of the energy available to the system.

What is the principle of expansion?

Why is "The interesting question... what happens in the conduit"? (p.46 first full paragraph)

What is the rational for the principle of expansion?

If instead of energy, the concept of exergy was used, how would you state the principle of expansion and the rational for it?

Is thinking about expansion in terms of exergy helpful? Why? Why not?

pp. 48-54 the classical notions of multiplier effects and exports as the key ingredients for expansion are discussed. What are these?

pp.54-63 The notion of import stretching is introduced. What is this idea?

p. 60 It is suggested "that economists would do better to abandon export-multiplier rations and turn their attention to import-stretching ratios" Why? How would such a ratio be calculated? (p.61)

p.62 bottom, p. 63 top: the energy flow principle of economic and ecosystem expansion is discussed.

What is it?

How would you state it in terms of exergy use?

How is it connected to import stretching?

What is the link between economic development, economic expansion and economic diversity?


Chapter 4: The nature of self-refueling:

p.65-66; An important characteristic of self-organizing physical systems is that they be self-refueling. What is meant by self-refueling? What are its two main characteristics?

The concept of self-refueling is discussed in the intervening pages.

P. 78 What is self-refueling in the context of economies?

p.82: What are the two ways that settlements have "to capture and further and different imports."?

p. 82: What are the "three master processes that govern successful economic life"?

What is the difference between expansion and development? (Hint see p.37 and p.43.)


Chapter 5: Evading collapse:

In this chapter a number of self-organizing behaviour of systems are discussed. These are essentially the same as the ones discussed in class when we spoke about attractors, flips etc.

P.86 How do systems maintain dynamic stability? (There are four categories that she identifies. Identify them, define them, give examples of each. Can you relate these to terms (attractors, flips, resiliency etc.) used in class?)

P.111 Why does she argue that subsidies warp development?

There are at least two other important strategies for "evading collapse", that I can think of which we discussed in class. What are they and why were they missed? (Think of the figure 8 diagram and nested hierarchies.)


Chapter 6: Fitness is more than winning at competition

pp.122-123 In addition to winning at competition another critical criteria is introduced in this chapter. What is it?

p.131: What are the implications of this criteria for economic systems?

p. 132. What role does "morality" play in fitness for survival?


Chapter 7: Unpredictability; a summing up

pp.133-137 Unpredictability

pp.135-136What is the butterfly effect?

What are the implications for cause and effect explanations, reproducible experiments and predictability, that is the business of normal science?

Hint: Consider p.137 "Even if every single influence on some types of complex systems could be accurately taken into account, their future would still be unpredictable." ...... "A system can be making itself up as it goes along......Since they make themselves up as they proceed, the aren't predestinated. Not being predestinated, they aren't predictable."
p.141: Given all this what is the role of government?

p. 145: Given all this what is the challenge facing us?

p.147: So what should economics be about and not about?


Notes by James J. Kay

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Last updated: 18\ November, 2000 jjk