CrashCourse - 2015-07-16
In which Adriene Hill and Jacob Clifford teach you about specialization and trade, and how countries decide whether they're going to make stuff or trade for stuff. You'll learn about things like comparative advantage, the production possibilities frontier and how to make pizza! Crash Course is now on Patreon! You can support us directly by signing up at http://www.patreon.com/crashcourse Thanks to the following Patrons for their generous monthly contributions that help keep Crash Course free for everyone forever: Mark Brouwer, Jan Schmid, Anna-Ester Volozh, Robert Kunz, Jason A Saslow, Christian Ludvigsen, Chris Peters, Brad Wardell, Beatrice Jin, Roger C. Rocha, Eric Knight, Jessica Simmons, Jeffrey Thompson, Elliot Beter, Today I Found Out, James Craver, Ian Dundore, Jessica Wode, SR Foxley, Sandra Aft, Jacob Ash, Steve Marshall TO: Sarah M. FROM: Anthony M. "Making our own history awesome! Happy 3 year Anniversary!" TO: Everyone FROM: Someone "The earth is but one country, and mankind its citizens." Thank you so much to all of our awesome supporters for their contributions to help make Crash Course possible and freely available for everyone forever: Nathanial R. Castronovo, Eefje Savelkoul, Nupur Maheshwari, Jacob J., Dominik Steenken, Shai Belfer, Stefan Bjerring Henriksen James Kribs, Hugo Jobly, Tim Eramo Want to find Crash Course elsewhere on the internet? Facebook - http://www.facebook.com/YouTubeCrashCourse Twitter - http://www.twitter.com/TheCrashCourse Tumblr - http://thecrashcourse.tumblr.com Support Crash Course on Patreon: http://patreon.com/crashcourse CC Kids: http://www.youtube.com/crashcoursekids
This series is great, but could Mr. Clifford please speak a little slower?
ya your right he talks way too fast and too loud!
I am watching this on 2x anyways, so who cares!
@espartanam The only problem with that is that the lady speaks a little slower than normal, so if you slow it down then she becomes unbearably slow and if you keep it normal he's a bit too fast.
@TanerNilluhktaf Everyone besides you.
@Atlow DeSu Yea I know ...it sucks hahha but I think this is the only way to keep up with Jacob's speech. I don't have a problem with him speaking fast but not everyone is the same -_-
Adam smith actually posited that while increased specialisation would make economies stronger and more productive, it would make the lives of workers more miserable. Think about it, the artisan shoe maker who crafts shoes by hand has a much more fulfilling job than the factory worker who operates a machine to put the plastic caps on shoe laces. This is a hidden, unquantifiable cost of specialisation. These sorts of hidden costs are why economic models fail to describe the world in a realistic manner. I really hope they talk about the limitations of economic models at some point.
@DjeieA KeksekI I think specialisation is a more macro term for division of labour which the guy was really referring to. Yes using the division 0f labour method creates job dissatisfaction it also creates less occupational mobility and in a macro sense can lead to structural unemployment however in a micro sense a method was found and applied to factories where after a few hours workers switch jobs so that they become less bored
thank you for mentioning this i got so annoyed at hovv they omitted this very important fact
maraima ski yeah then I agree with it. Basically corporations are mostly the cause specialization, right?
@DjeieA KeksekI yes i think so
That's like getting upset that a mathematician doesn't talk about the drawbacks of using math to quantify love and compassion. Any rational thinker should understand that problem solving requires the consideration of multiple disciplines and cannot be limited to one paradigm of thought. If students can't rationalize that, they're struggling somewhere else-- not in economics.
Damn the audio was TERRIBLE in the first minute
hell yeah WTF
They each had their own mics, which were picking up each others voices (but one slightly after the other), and that just messed with the audio.
Stefano Chua thought my expensive earpods broke🤨 was about to complain
Doesn't this guy resemble Mark Cuban?
It's not Mark Cuban?... why am I listening to this guy
reuben jake Yes, I thought I was the only one
he is mark cuban u just cant see it because of the ac dc belt
Yup
Does Mark Cuban wear AC/DC belt buckles too?
So basically it is like the human body; each individual cell working by itself to survive is highly inefficient and ineffective but as soon as you put these cells together to make up a system called human body they work in harmony as a single organism to increase efficiency and become allot more effective. This can also be seen in ecosystems; and how nature operates and manages efficiency.
+Abhishek Sehgal - This can actually be generalised..
Ever heard of cooperation? Cooperation is the sine qua non condition for specialisation. Specialisation allows complementarity, which requires cooperation. So cooperation did not wait for Adam Smith to theorize on the wealth of nations. You could even argue that Cooperation in open systems is nature's way of balancing its own second principle of thermodynamics.
Cooperation is ubiquitous because it carries its own guaranty for success – albeit in a non teleonomic way.
Here are a few examples taken from biology to follow up on your initial observation. From the simplest to the most complex. - viroids cooperate to create genomes - self-contained Information-pool allowing (self)reproduction (aka life).
- genomes house themselves in cells; but some cells (eukaryotes) are actually cooperation of genomes (mitochondria within their host cells).
- cells can cooperate in protozoa by specialising in complementary tissues (organs). Your example.
- protozoa can cooperate in various symbiotic or social ways (like social insects or chordates).
Ultimately, cooperation and specialisation are a consequence of nature's parsimony principle. Aka… economy.
Abhishek Sehgal God teaches us thru nature
Yep, right on
That´s Karl Marx´s theory of alienation. And yes specialization really does that!
All these hard-working body cells make up an ineffecient child
"Self-sufficiency is inefficiency" -- That quote is spot on.
It rings true in the world of business, leadership, and it is applicable to life as a whole.
@Pearl Playdinn
It isn't. I believe it is a matter of the level of self-suffieciency one aspires for. Defining yourself as self-sufficient is contrary to reality.
Nature itself is not self-sufficient, much less human beings, or any complex system that may be established by them.
Albania is proof enough of that
If the country was divided by itself (the rich and the poor, the industrialized and the undeveloped, shoe making complexes and airplane complexes, etc.) self sufficiency can be efficient BUT just as you know people can move from each location (and other factors), making self-sufficiently inefficient in the Information Age.
Trade is economically beneficial but under the current tax systems it results in tax liabilities which can completely neutralize that benefit.
This is flattery for people with no agency.
when you parents wanna be hip
"Self-sufficiency is inefficiency." I love it. I can't tell you how many times I've tried to explain this to people. We humans are better off when we collaborate then when we try to go it alone. We're all in this together. That you drew this lesson from Adam Smith, one of the laissez-faire heroes of many of the people to whom I have to keep trying to explain this, just makes it even better.
@Aimbot 1) I do
2) What causes interventionism? the capitalist prompts the government to protect them through threats of economic turmoil
3) No. Labour hours will be shared where possible so weekly working hours. Less working hours, more 'leisure' time.
4) I've given you the solutions, you don't believe in them.
@Saay again That did not even address the things I've pointed out. Your own point 2 disproves point 1. A share of labour hours is somethings I've never heard of and won't even take seriously. These are not solutions. Take me seriously when I say this: learn some economics, it'll shed a lot of light on these topics for you.
@Aimbot It's basic socio-economic analysis. The state is a tool used by capitalists to prevent the loss of wealth.
Monopolies are part and parcel of capitalism. Everyone is competing for what? They want to 'win'. To win is to be the market leader and dominate. Once a company gets in that position, they will do what ever it takes to maintain this position. They will lobby the government , get legislation that favours them implemented, buy competitors, create barriers to entry etc.
What do you propose? Once a company gets to certain size, you break it up? Doesn't that disincentivize the entrepreneur?
@Saay again "The state is a tool used by capitalists to prevent the loss of wealth." That is so wrong I don't even know where to start.
No. Monopolies are not inherently part of a free-market economy. They arise only and I repeat ONLY when there is some government interference. Now naturally government interference is to some degree necessary, but we can not complain about big corporations dominating markets when they (there you make a valid point) are able to abuse government to legislate in their favor. This is obviously a problem so the solution is not to endorse more market interventionism but to get the state out of it and allow incentivized free-market mechanisms.
The fact is that you believe monopolies to self-stabilise naturally in absence of government. But in fact it is only through government that monopolies are STABLE, as I already said. Market monopolies tend to disintegrate; General Motors, Chrysler.
@Aimbot The free market capitalism you speak of cannot exist because of its contradictions.
You want people to accept rules/laws that are not in their interest. Is that logical?
The capitalism we see now is what it always will be and has been. Those who have economic power have control of the state and use it to maintain their power. Why do you think your free market policies do not get enacted? It's not in their interest. It will never be in their interest. Therefore free market capitalism can never exist.
When did I say I believe monopolies self stabilize in the absence of government?
My concern is not with how best to make capitalism 'work' or be 'freer'. I think capitalism is a flawed system. I think it should the economic system should be changed on a fundamental level.
Mongol pizza??? I sense a Green...
He's the exception
Dang, my AP Econ teacher makes us watch videos as part of our homework. If only more teachers were like that xD
my teacher makes me to watch history series of crash course, lol
Haha, my AP Chem teacher used to do the same but with Tyler Dewitt if I remember correctly, she didn't believe in homework but I'm not complaining!
My teacher makes me watch movies for stock markets...
Top Compilations I recently seen a stock-market themed film called "Wall Street"
Recommend it if you haven't already seen it.
Wheatley lucky. I watch these on my free time, and I don't get any credit for it. I do like watching them, though.
Trade between two nations that have a comparable level of development is good for both, yes.
However trade between a richer nation and a poorer nation, if unregulated leads to the less developed country being left unable to develop.
Think about it.
You have 2 Countries A&B, whose citizens interact economically without any government restriction.
If country A has infrastructure (factories) and country B has natural resources and they are trading freely, country A will import natural resources from country B and export industrial products to country B. Country B cannot develop an industry of its own, as its products would be inferior in every way to country A`s. They only possible advantage they could have is cheaper labor. But then again, why would n`t workers from country B go and look for a better life in country A? Remember, no government restrictions. And why would country A`s enterprises relocate from country A to country B when B`s workers are coming to them?
This is basically what West Europe (A) does to East Europe (B). It`s what the Global North (A) does to the Global South (B).
"Specialization and trade makes both parties better off." That is a subjective statement. It depends on who you are asking.
not really
Is it just me or did their audio seem a little out of whack at times? I wonder if maybe both mics were picking up one person sometimes?
What leventhal said?
+Gen Doukeshi It does seem like they must have a different technical team that's still working out the bugs. I suspect they'll get there.
And I personally think that, guy is speaking very fast. Why the F can't that MF slow down? I even watched some of his YouTube videos and he is too damn fast with his words. He is just talking not explaining. Son of a C
0:24 it takes a dip
for a moment there, i thought my earphones malfunctioned again and i had to buy a new one
Completely missed an opportunity with 'Pizza Hun' on that one.
B-but.. the mongols.
you have a lisp like i do Jacob. this gives me hope for my career in public speaking
+Tena Gordon Way to go dude! Keep it up! Love your body. It will never change but your attitude can.
Well that is false. Haven't you ever heard of plastic surgery.
I didn't notice until now.
Yeah, I didn't even notice. As long as the content is interesting I don't think people will pay too much attention to speech styles. UNLESS ITS TOO FAST
Anyone else see his AC-DC belt???
He is a moron anyways lol
Kai Widman m
he has his own channel called AC-DC economics thats why
"Don't forget to be irrationally exuberant."
Like Mickey Mouse?
Just, no.
For anyone doing the worksheet (you know if it’s you)
0:25
1:00
1:11
1:25
1:38
2:55
3:20
3:47
4:02
4:04
5:10
5:15
5:31
5:42
5:51
6:00
6:34
6:52
7:23
7:45
Hope it helps👍
wow. you’re amazing
"Take that physics, we're coming for ya"
Hope you like nuclear weapons, lasers, airplanes, and accurate artillery ;)
Jk, economics is good too
And how are you going to build any of those without the supplies? A master of science can't build a robot without the finances. A master of economics can simply purchase the labor of a few scientists and build a robot without knowing any physics.
That said, I still prefer the core sciences-- but there's no harm in understanding the benefits of economics.
I'm really loving this show, just two episodes in and I already learned something I've never even thought of before!
I don't know about you guys, but I want to try some of that Mongol pizza. We need more Mongols in the US to make Mongol Pizza!!!!!
@Petey T I'm American who is mostly German and I like the Union Jack, a little different then the stars and stripes. I just want Mongols here for their pizza, good old western imperialism. lol
@***** well everyone starts somewhere when it comes to geography, so you're not dumb. Prussia was the country that united most of the rest of the German lands about 140 years ago. It was a highly industrialized military state and it provided the framework for Germany between 1871 and 1945. After 1945 Prussia was almost completely stripped from Germany and granted to Poland in punishment for starting World War 2, and to create a buffer zone between Germany and the Soviet Union (Russia). All of the 12 million German inhabitants were kicked out or killed over the next few years. And so today Prussia doesn't exist at all anymore, so it's completely understandable that you don't know where it is.
Poland is geographically near the centre of Europe, it is East of Germany, West of Belarus, North of Ukraine, and South of Scandinavia. A quick google map check would show you the whole area.
@***** It is disappointing that you forgot your mother language. But it is probably not your fault.
+kingofprussia17 Genghi's Pie!
kingofprussia17 Oh hey. I saw you at some SciShow video. Your bigotry was at its peak in that comment. Just sayin'...
I like the show, and I understand you do this, but please stop saying economics is boring. It seems annoying to those who think it's fascinating..
stop arguing about how economics is boring or not..
Nah Pal, you're mistaken they say,' economics is not boring'.
well a lot of people think it's boring, and i think the reason why people watch crash course is because they think the way the subjects are being officially taught in schools is boring, so they're saying it for the benefit of these people.
My economics teacher at school does the same thing. It seems like he really just regrets taking this subject now.
They actually say it's not boring but how it's taught is boring usually , but not how they teach it.
Whomever specialized in sound design / boom operation / getting the 3D sound to work well....
produced a minimum amount of consumer surplus for my ears.
"Store your treasures in heaven, where moths and rust cannot destroy, and thieves do not break in and steal." [Matt. 6:20]
I'm curious and hoping you all can clear something up for me. I've watched this episode and the later episode on trade. Both talk about some countries having a comparative advantage over others in certain products. I can understand this in two circumstances: 1) where one country has greater access to certain natural resources than the other or 2) where new or different technology is used in the manufacturing that is not available in one of the countries. However, this episode uses the example of shoes being made in China as having a comparative advantage over shoes made in the U.S.A. I can't see any natural reasons for this advantage. The only reason I can hypothesize for the comparative advantage is the labor market. Therefore, the comparative advantage must be coming from poorer working conditions or wage, lower standards of living, or less legal restriction on manufacturing. So, it is seeming to me that the comparative advantage mentioned here or the cheaper goods mentioned in episode #15 are actually just the result of exploitation of the lives of individuals living in the country with the advantage, unless you are actually suggesting that China has more natural shoe resources or has developed technology not available in the U.S. for the manufacture of shoes. And, if the benefit of such trade comes down to the the exploitation of workers in other countries, doesn't it raise ethical implications about that benefit of trade? I'm not saying trade it bad, I'm just looking for some clarification.
Yeah, i think you are right. Humans are the resources in China. There are some ethical issues, but just because Chinese labours are paid less doesn't mean they live in poverty. The cost in china is generally lower. Although when there are severe ethical issues, I think that is where fair trade plays its role. You might see that label on the coffee you buy, it has some guidelines that the manufacturer has to sign, so that the ones that actually farm coffee beans earn enough to get what they deserve.
Spot on
5:49 as you can see on the graph. You can also determine who's better at what just by looking at the difference of PPF on each axis. For instance, since US can produce 400 more planes than China, but only 200 more shoes than China, US is better off building planes than building shoes. Additionally, keep note of US = 1 plane/-2shoes and 1 plane/-8 shoes. You can also flip the fraction around, along with the integer, to make it into 2 shoes / -1 plane for the US, and 8 shoes /-1 plane for China when looking at the opportunity cost, or the comparative advantage that each country has over the other in term of production of certain goods.
Since China can produce 8 shoes at the cost 1 plane, and US can produce 2 shoes at the cost of 1 plane, thus, China should specialize in shoes while US should priotize in planes production. You basically are able to produce 6 more shoes if China were to take care of the shoes production than US relying on itself ;to produce both shoes and planes.
this guy talks waay too fast
yeaah its bad thing for non nativers . i have to download and playback with lower speed
+Lucas Garibaldi was gonna comment the exact same thing
+star_light Click on the gear icon on the bottom right corner (the gear you use to choose video quality) and look in that pop up for "Speed" you can slow down the video right here on YouTube! Default is set to "Normal" but if you choose "0.5" it will play slower and honestly the guy sounds drunk but at least you have more time to comprehend what he's saying.
+Lucas Garibaldi yeah man, its hard to catch up with them:/
Very true.. This F is talking as if he's got to run to F his mom after this video. Son of a C
Great content... any chance of slowing down your speech? The tempo is super fast!
same
"Bring it on." -Physics
= )
"Take that physics, we're comin' for ya.."
That was awesome!!
If you guys could just slow your rate of speech just a tad that'd be great.
Summerneverdies Ikr? As a non-native English speaker, at some points it’s hard to follow. So yeah guys, slow down a little.
slow down the speed in setting option.
That would be inefficient.
"Take that, Physics! We're coming for ya!" 😂😂
When is the next episode going to be released; it has been about two weeks, since the last episode?
I only get my economic education from someone wearing an AC/DC belt!
I guess you guys forgot to give credit to David Ricardo for the Comparative Advantage model
@Marcial Amaury Pineda Moquete agree
"If you wish to make an apple pie from scratch, you must first invent the universe."
Ummmmm no. Physics still rules!
"Self-sufficiency can lead to inefficiency and inefficiency can lead to poverty." Adam Smith
physics:"how dare you challenge me?!!!"
that "ACDC" belt tho :) respect!
Now if only anyone running for President would watch this video. Or take a basic economics class...
Politicians do what they are told by think tanks that are the mouth pieces of investment bankers and corporate CEO's. They only have to con themselves into office after that it's just helping the rich get richer.
You're a goof Bryce
Did you get what you wanted Bryce? :)
"[...] all of them working in harmony."
...of slave labor.
All the videos I have watched all I have to say is SLOW DOWN when you speak. You guys speak crazy fast. Slow down and clearly get your point across.
This series has already covered everything that I studied in a whole term of economics
0:03 I confirm your suggestion that complex fields of research are often expressed with a hypercomplex vocabulary.
"Countries who have opened their doors, like Japan..." Well, I wouldn't quite word it that way...
@Kaleb Sagehorn And how would it not?
@Sierra Davis Because it took two to a major city to convince them to stop.
@Kaleb Sagehorn Many of the Japanese war leaders still followed the samurai code of honor, Bushido. This dictated that they avenge the dead by inflicting equal bloodshed. This would not have been seen as necessary by them if the bombs had not been dropped on Hiroshima and Nagasaki, as there would be no deaths to avenge. Thus, a demonstration would have been enough to convince them to back down, in order to protect Japanese noncombatants from harm.
SirRandomMonkey I
YYYEEEEESSSSSSSS
I'm having a hard time creating an income, so hopefully watching these videos will help...
I wish these videos existed when I was studying economics in High School! You guys are doing such an amazing job <3
Great job on explaining the concepts. Taking an online course, this is a great supplement to clarify much of the reading involved.
Сергей Галиуллин - 2016-03-14
Main outtakes of this lesson:
1) Economics is the study of scarcity and choices. We have limited resources, so we need a way to analyze the best way to use them.
2) Significant sustained increase in people's lives happened after Industrial Revolution.
3) Adam Smith concluded that division of labor made countries wealthy.
a. Analogy: one pizza takes few people to be created. One prepares ingredients, another puts it in the oven, another one puts it in the box. This division makes each worker more productive, since each one is focused on a thing they do best and they don't need to spend time switching between the tasks.
b. Without specializations, if you want something - you have to make it yourself.
c. So if you are good at producing something - specialize at it and then trade with others.
4) Production Possibilities Frontier (PPF) shows different combinations of two goods being produced using all resources efficiently.
a. Every possible combination inside the curve is inefficient. On the curve - efficient. Outside - impossible.
b. The country that can produce more goods of one kind (per time) than another country is having an absolute advantage over another country in production of those goods.
c. Opportunity cost is a cost of production of good, measured in losses in production of another good.
d. Country that can produce good with cheaper opportunity cost, has comparative advantage over another country.
e. Individuals and countries should specialize in producing things in which they have a comparative advantage and then trade with other countries that specialize in something else. This trade is mutually beneficial.
5) If there is one point where economists agree it's that specialization and trade makes the world better off.
6) Self-sufficiency is inefficiency
Maxdk - 2019-11-27
It's better to be a single cog in a fancy machine than it is to be a whole crappy machine.
Ростислав Бачурин - 2020-02-14
Спасибо, брат. Но смысл self-sustainability не столько экономический, сколько духовный (aka specialism vs Renaissance man generalism polymath)
Awesome Angel In the Coconut shell - 2020-03-10
谢谢课代表！
Giovanni Siesto - 2020-03-23
Сергей Галиуллин thanks
Raidy Sanchez - 2020-03-25
U a goat very helpful