The Adjustments

earthTrust me, aging brings change along with it. Some of the changes are predictable, others not. In the hope of helping us learn better ways to deal with change, I would like to share with you the experiences I’m going through and how I am adapting to the changes they bring about.

To do that I am starting a new series of blog posts entitled “The Adjustments”. It is designed to address the issues that I am facing associated with aging and how I am adapting to them — sometimes successfully and sometimes less so.

For each of us one thing is certain. At some time in the future we will die. When I was growing up in the 1930s Social Security –a.k.a., Old Age Benefits (OAB) –- was just introduced. They came into play at 65. The expectation was that you might make it to that age, or perhaps longer. My dad died at 68. The bottom line is that the amount of time we have left here on Mother Earth is uncertain. I certainly can attest to that at 91, going on 92. For each of us that opens up the question “What do we want to do during the rest of our lives?” There’s another way is to ask that question. In light of the uncertainty, how do we want to use our limited remaining time, energy, resources and funds (TERF).

I’ve addressed the question and here’s what I’ve come up with. Let me begin by telling you a little about myself.  I call myself a nominally retired economist. I have lived alone here in Carrboro in a two-bedroom ground-floor apartment for the last 15 years. One of the bedrooms serves as my office-study-studio-playspace. I am pretty much able to do all the things necessary to take care of myself on a day-to-day, week-to-week basis with some occasional help. (You can see more about me in the blog post entitled “Me–Then ’til Now“). My primary objective is to do just that — that is, to take responsibility for and take care of myself and when I require assistance, to compensate those who provide it. Most of my remaining disposable time, energy, resources and funds (TERF) are used in finding ways in which, based on my background, experience, and expertise, I can help others. The books, essays, video and blog posts on this blog are a part of my contribution. My plan is to continue on that path. Hopefully that will be part of my legacy. Continue reading “The Adjustments”

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Creativity: Ideas, Invention, and Innovation

I recently attended a seminar on creativity at the Seymour Senior Center. It was conducted by Carl Nordgren and I found it very revealing. One of the things he emphasized was that creativity exists and that it changes throughout our entire lifetime. I’d like to share with you what my perspective as an economist reveals for me about the nature and consequences of that creativity.

Playfulness, curiosity, inquiry and improvisation are essential elements of creativity. However, by no means are they the whole story. It is one thing to have a creative “idea” and another thing to make the idea into a reality.

Let’s consider creativity under very different circumstances. The first is when someone comes up with an idea that has no prior experience or understanding of what it takes to get from here to there. For now it is just a new idea, one that popped into their head. The second is when the person who comes up with the idea has a clear understanding of the related processes of production — of what it takes to get from where they are to where they want to be. Then there is the situation where he/she is a recognized, highly-skilled Creative Master Craftsperson who comes upon an idea that pushes the boundaries of their discipline. Perhaps it is an entirely new product, a variation of an existing one, an art work, or a novel, lower-cost, more ‘efficient’ way of producing the product itself.

ideaKeep in mind that there is a significant difference between:

  • having a new idea,
  • bringing it to fruition the first time — the invention, and
  • producing multiple similar copies of it – the innovation.

Sometimes the new ideas come about because the creator has multiple skill sets or a familiarity with different materials or different methods of production.

When an innovation comes into being and is widely accepted, it displaces the old ways of doing things. The new ways make some portion of the population better off. Nonetheless, the displacement causes harm to others and makes them worse off, including those who were involved in supplying the products that were previously relevant.

To begin the discussion of creativity I’ll tell you a story. Last Saturday I was at the Carrboro Farmers Market. I was at Bill Daigle’s booth sitting on one of beautifully crafted chairs. Bill is a woodworker, who calls himself “The Chairman’. (Check out his website and the attached pictures of his work.) I spent a little time watching a three-year-old boy that we’ll call Sam.

His parents were deeply involved in conversation with friends they had just spotted at the market. Sam saw the footrest of one of Bill’s chairs and was singularly focused on it and playing around it. He climbed on top of the footrest, got off and moved it up against the chair. Sam then climbed onto the foot rest and then the chair, where he sat in it with his legs on the footrest. After a while Sam got bored and decided to check out the table that Bill had built with various paraphernalia on it. Along with the other things were some ‘healing crosses’ Bill created. Sam started playing with them. One fell off the table and hit the floor, drawing his mother’s attention. Sam ran over and grabbed his father’s leg for support. The video of the experience is still in my head!

Sam exhibited curiosity in dealing with a new, novel situation –a setting he had not previously experienced. His curiosity led to exploratory, experiential and experimental behavior, allowing Sam to do what he wanted to do. Sam’s creativity certainly worked for him.

Let’s compare Sam’s behavior with that of a Creative Master Craftsperson’s. We are talking about a person that is highly skilled, experienced and fully understands the “process of production” — what it takes to get from where you are to where you want to be. Among my idols are Frank Lloyd Wright, Isamu Noguchi and Louis Armstrong. Choose yours and imagine that you are right there along with them when they came up with n idea and begin working on it. They go through their own creative process, one based on their extensive knowledge and experience. The end result is there for all to see.

In that context let’s look at the situation where s/he comes up with a creative idea — a new object, piece of music, creative work, or new process of production. It is something no one ever thought of previously.

The next stage is when the new idea pushes all previous boundaries of the discipline. When the idea comes to fruition it becomes an ‘invention’, something that is new, novel and not simply an extension of previous experience. Under those circumstances it may be patentable.

invention-industrial-revolutionSometimes the new idea comes from a person with extensive prior experience. At other times it comes out of the blue. In either case, it is necessary to go from the idea itself to the initial successful attempt to bring it to fruition — the invention. The invention goes through its own process of production, which by its very nature cannot have been experienced previously. Typically, it is not a simple direct path without any hiccups. In all cases some of society’s limited time, energy, resources and funds (TERF) are required to make it happen.

There is another circumstance that is important to keep in mind. During the entire time from when s/he originally comes up with the idea until it comes to fruition, s/he must have sufficient TERF and the basic goods and services required to survive and to fulfill any obligations or commitments that they have taken on. All activities related to the development of the “idea” must come out of the individual’s and society’s discretionary disposable TERF.

Importantly, there is no guarantee that the idea will ever come to fruition. Nevertheless, all the limited TERF involved is used up in the process. When the idea does not become a reality, it is TERF that could have served a more useful purpose. Furthermore, there is no guarantee that the invention, even when it is patentable, ever sees the light of day. In the 1930s my Dad got a patent for an umbrella tent. That is as far as it ever went. The invention becomes part of the public domain after the patent protection period when it becomes available to other potential producers.

The next step is to follow through with the invention and make the new product or new process of production available to potential users — its innovation. Two intermediary steps are required. The first is to set up the process of production for the new product or process. That often requires changes in the way the invention was produced initially. The second is to make potential customers knowledgeable about the innovation — its uses, benefits, potential issues and its price. To be able to remain in business, the sales price must at least cover all of the long-run, most efficient costs of production, marketing and distribution of the good or service at the selected level of output. (For more details about pricing in this situation, see my essay on “Monopoly Pricing”.)

When the innovator is able to provide the customers — the households, firms and/or governments — with the quantity demanded for the product or service at the market price (to use the lay-term) we’re in business! When the price charged exceeds all the long-run cost of production, the company makes “excess profits”. Those are returns over and above all of the costs required to produce the product or service, including a reasonable return for coming up with the invention.

When the price charged for the innovation is over and above its long-run cost of production, the higher price takes money out of consumer’s pocket. They could have used those funds to purchase additional goods and services that they would have preferred. That would make society’s product mix more consistent with the public’s desires. The net effect of that type of pricing is that it makes it more difficult for those at the lower end of the income distribution to become better off.

Moreover, the excess profits provide the company, the managers and owners with additional funds. Those funds help them maintain their position in the upper-end of the income distribution. Some of those funds can be used to maintain and extend the monopoly position and also to engage in economic and political activities that promotes their private agendas. It is also important to recognize that every innovation changes the basic technological and economic conditions under which we, as individuals and as a society, operate. That is especially true of the innovations that have a profound effect on our lives, livelihood and lifestyle. (If you are not convinced about that I suggest you check out my blog post entitled “Me — Then ’til Now”.

Also importantly, every innovation mandates change. The old ways of doing things are no longer the best way and, in fact, they may become irrelevant. As a result the companies and individuals that produced the “old products” — like horse-drawn carriages — are displaced and replaced by the firms and employees producing the new products. The technical economic term for it is “the reallocation of scarce resources”. The reallocationbottom line is that while some households and firms are made better off as a result of the innovation, others are harmed and made worse off. Perhaps one way to help them would be to assist them in their transition. Some of the funds necessary to make that happen could come out of “excess profits” earned as a result of the innovation.

In summary

The challenge we face, both as individuals and as a society, is to discover what creates and triggers our creativity. It is likely to be different for each of us. As an aside, it would also be interesting to find out what suppresses it. Once we determine that it will be easier to promote creativity.

The “idea” triggered by creativity opens up uncertainty as to whether the new product or process of production is, in fact, achievable and also what it would take in terms of the time, energy, resources and funds (TERF) to make it happen. Nevertheless, the idea will never become a reality unless the necessary disposable discretionary TERF is available. Furthermore, the innovation brings changes along with it. They include the transformation to the new technological and economic conditions and the unintended consequences, like the use of disposable TERF for unsuccessful ventures and those firms and individuals who are made worse off by the new developments. Those consequences come along with the benefits the new innovation brings. An integral part of creativity and the innovation is that it brings along with it the resulting changes that the societies have to adjust to.

The Rash of Anti-Abortion Legislation

heart-3846613_960_720As human beings we are largely all alike, 99.9  percent of our DNA is the same.  Despite the differences in gender, sexual orientation, appearance, our skin color and the shape of our eyes and nose, etc., we have far more in common than different. Nonetheless, each of us is different. We all have different combinations of genes, skills, strengths and weaknesses, background and experiences. Those differences make it possible for us each to make a unique contribution.

There has been a recent rash of anti-abortion legislation. Some States have made it illegal to have an abortion once the fetal heartbeat can be detected, which can occur before the woman even knows that she is pregnant. Let’s take a closer look at the consequences — on the woman, the child and society — of making it illegal for a woman to have an abortion when she would elect to have one.

Regardless of the circumstances that led to the pregnancy, making it illegal for a woman to have an abortion puts her in a very difficult position. Because the decision is forced on her, this changes her life, lifestyle and her life path. It places her decision in the hands of others. She and the child bear the consequences and the burdens of the unwanted pregnancy. Typically, she receives little or no additional support or help adjust to the decision that was forced upon her. Much of the time the man, who is also responsible for the pregnancy, is not held accountable for the results of his actions.

The unwanted pregnancy also has important additional consequences. Each of us, as adults, is responsible for taking care of ourselves on a daily basis. That obviously becomes more difficult for a woman in the case of an unwanted pregnancy. That responsibility is present regardless of her age and marital status. It is even more difficult to fulfill when she is single, a teenager, or the victim of rape or incest. If she elects not to put the child up for adoption, that added burden of raising a child she didn’t plan on having, continues until both are adults. Under any of those circumstances not allowing her to have an abortion when she wants one, clearly, places an additional burden on her and the child.

Continue reading “The Rash of Anti-Abortion Legislation”

Monuments: The Unrecognized Achievements of Ancient Cultures

stonehengeWe are all familiar with ancient monuments like: The Egyptian Sphinx and the Pyramids, the Parthenon in Athens, the Colosseum in Rome, Hagia Sophia in Istanbul, Turkey, the Cathedrals throughout Europe, the Taj Mahal, Stonehenge in England, the Great Wall in China, the Mayan Pyramids, and the Statues on Easter Island, just to mention a few that have survived. There are others as well, including the recently discovered Mayan treasures that are hidden by the regrowth of the rainforests in Central America and the monuments that were lost to the ravages of war, conflicts time, and nature. This accompanying complete list provides additional information and references

It is one thing and fully appropriate to honor the magnificent monuments that previous societies created.  However, there is another very important hidden attribute to understand and honor as well. It is almost always neglected. It is the accomplishments of the cultures that gave rise to the structures. Especially impressive is the fact that the cultures were able to create the beautiful works of art under the limiting conditions they faced. Continue reading “Monuments: The Unrecognized Achievements of Ancient Cultures”

Of the People, By the People, and For the People

When our predecessors broke away from Britain in the late 1700s they set up a government of the people, by the people, and for the people — a Democracy. The governmenLincoln_Of_the_People-3ct has three branches, the Executive, Legislative and Judicial. They are designed to help ensure that no one branch has control over the government.

Looking around the world today in many countries, both large and small, we see the government under the control of a ‘strongman’ — dictator, despot, demagogue, autocrat and oligarch — call him what you will. Frequently they have the support of the Military. Many will do anything to remain in power. Our country — the United States of America — was designed to help ensure that does not happen here.

The late 1800s brought about significant technological changes. Steam engines brought along with them locomotives, the railroads and steamships. Internal combustion engines led to the development of automobiles, trucks and tractors. Electricity added lamps and electric motors; and the telegraph and telephones. All were part of the Industrial Revolution. The new technology contributed to making ‘the people’ better off. They had new products that they could buy along with many more job opportunities and greater income. Initially, the changes remained largely within national borders. The changes also brought with them the “Robber Barons” who were relatively few in number. Continue reading “Of the People, By the People, and For the People”

Revisiting Retirement

gray trunk green leaf tree beside body of water
Photo by Daniel Watson on Pexels.com

Before taking a closer look at ‘retirement’, let’s check out some of the changes that have occurred during my lifetime. When I was growing up in the 1930s and early 40s, life expectancy was much shorter than it is now. Remember that was just before World War II. Guys hoped to make it ’til 65, or perhaps a little longer. On average women lived a little beyond that. My dad made it to 68. My mother lived to 80. People seldom made it into their 90s, much less to 100.

Technology was a lot different then. It took three days to get from New York to Europe by boat and about the same time to get from Penn Station to San Francisco by train. There were no jet planes and no Interstates. At the end of the period the first of the antibiotics, natural penicillin, was just introduced. Long-distance calls were placed through an operator. We had radios, newspapers and the movies, but no TVs, computers, the Internet or iPhones. My guess is that for most of you it is pretty hard to imagine what life was like.

For the most part guys were expected to get a job and bring home the money to support the family. The primary role of women was taking care of the family and the household. Some had jobs as secretaries or nurses. World War II introduced us to Rosie the Riveter. Job opportunities for women increased markedly during and after the War.

Here’s how those conditions affected the retirement years. As a guy, your adult life has been spent working full-time at a job that you didn’t necessarily like just to bring in the income necessary to support the family. Women took care of the family and the household, and perhaps the grandkids in their later years. Both expected to live a few years longer at most. If they were from moderate or low income families, they probably were unable to set aside funds for future spending. Sometimes money for current expenses had to come from their children’s current income. The Social Security system — at the time it was known as Old Age Benefits (OAB) — had just come into play. Any income from it helped support those who reached their retirement years — a few years at best.

World War II and postwar periods were prosperous times. Significant technological changes brought along with them new products and new processes of production. Good jobs were available — both for men and women. The G.I. Bill of Rights covered some of the college expenses of previous members of the armed forces. College education opened up new job opportunities and, in some cases, entry into a profession, along with the good salaries that came along with them. The changes in the health-care system led to a longer life expectancy. That was in marked contrast to the pre-World War II era when we were in the midst of the Great Depression. Continue reading “Revisiting Retirement”

At (almost) 91

box celebration gift package
Photo by Pixabay on Pexels.com

Let me issue you a warning. The Holidays are upon us. That is, of course, unless you treat every day as a ‘Holy Day’. Along with the holidays comes the end of 2018. In the St. John tradition, where I lived for 18 years, we celebrated ‘Old Years Night’, putting the old year behind us.

Shortly after the New Year, on January 7th, I turn 91. How about that!

I’d like to offer everyone my birthday gift. In addition to my blog posts and the books, I will from time to time, provide my take on various issues. They will be posted on the Essays tab on the website. The first essay is entitled, Some Fundamentals in Making Any Decision. It comes along with two accompanying papers, Innovations and Monopoly Pricing.

I know the decision-making process is often complex, confusing and, sometimes, overwhelming. The purpose of the essay is to clarify the process and examine the likely consequences any time we make and implement a decision. It is my hope that the ideas resonate with you, make a difference in the way you approach things, and will improve your life, as it has for some of my first readers.

If you find the ideas valuable, please feel free to pass them on by letting others know about the website. Thank you to all of you for following my blog. It is a real gift to continue to make a contribution (even at almost 91!)

Peace and Love,

Bernie