Introduction

This should eventually be a collection of 100 topics I want my children to understand.

This list is mostly from economics, history and science. Economics because it’s a study of the same question which every society asks itself. History because there are enormous lessons from the past; we are not as different as we think we are. Science because it is the greatest achievement of humans so far, and protecting and furthering science is the greatest prospect for improving the future.

There are lots of important things not in this list. This list is what I think is important and where I think I can write something reliable.

The editing is not very good

  1. My creed

A creed is a short statement of fundamental things. Sometimes the creed is very short (like the Muslim creed) and sometimes a big longer, for example, the Nicene Creed of the Christians.

This is my creed:

I believe that the power of the human mind can explain everything that has happened after the universe began. I believe that we can explain the universe by rules which do not change arbitrarily, and I do not believe there are forces or entities above nature which have the power to modify these rules. I believe that there has never been a reliable observation that proves the existence of a supernatural power.

I believe that an observation is only reliable when it can be repeated and observed by independent people. I believe that an explanation which can make a prediction confirmed by a reliable observation is truth. I believe that if there are two explanation for an observation, the preferred observation is the one which has less assumptions about unknown factors. I believe that things which are held to be true may be proven to be untrue by later observations.

I believe that life after death is impossible because the human mind is a material organ existing only in the observable universe, and that entropy explains that brain death is irreversible. The essense of human existence is at the very least our memories and senses. Our senses, such as vision, are clearly material (they exist in the human body). Our memory is a vast database of information stored in the cells of our brain. Since neither of these disappear into thin air after death, the concept of life after death is contrary to rational thought and observed facts.

I believe that people can collectively decide what is right and what is wrong. I do not believe that humans need the concept of eternal punishment or eternal reward to motivate decent behaviour.

I therefore do not believe that any human can speak with authority conferred by a god.

3. Economics: the question of scarcity

Every society faces the same question: resources (food, shelter, luxuries, etc) are limited, so they have to distributed in some way to people. Economists call this scarcity: there is not enough stuff for everyone to have everything. Economics is the study of the question: how should people allocate scarce resources? Or, who gets what? There are lots of different answers based on different assumptions about the right answer should look like. "Classical" economists says the right answer is the one which produces the most output, others say the right answer is that which is the "fairest" or the most "sustainable". Economists are good at providing the best answer given the starting points. However, the way a society chooses the right answer is not the job of economists. However, economists are experts in understanding the economic consequences of choices. There is a lot of truth in economics, and societies which ignore these truths fail.

While all resources are scarce, some resources don’t seem scarce to individuals. An example is clean air. It seems to be free and limitless, and our own individual actions make no noticeable difference. However, if we all pollute, we all suffer. Economics also studies this problem.

People who use economics to answer the who gets what question often have firm ideas about what a good answer is. Some people say that a good answer to is share resources as evenly as possible. Some people say we should share resources so that those people who can use them the best should have them. Some people say we should divert more resources into improving the future, and some people what to use resources now. These goals conflict. Young people may want tax money to help make their university education better and cheaper, because that is ahead of them. Older people may want taxes to be cut to they can keep more of their lifetime savings. People buying houses want interest rates to be low: people who have savings want interest rates to be higher so they get more income. Resolving these conflicts can be done through war and force, or through politics, where most people either agree on a compromise or agree to be bound by the majority opinion, even though they will keep trying to change that opinion.

Economics can’t actually give the best answer to solving scarcity, But it does answer the consequences. For example, you may think that the best answer to scarcity is to share everything equally. Economics tells us that a consequence of this approach is that people lose the incentive to think of new ideas and to work hard, and there is less economic growth, meaning that overtime, there is less in total compared to a different answers which allow people to keep some of what they produce. Such a system of sharing also means that the society needs to forcefully take property away from people who have more and give it those who have less, and this means that such a society tends to have a lot of police and little freedom of expression. [Experiments with type of society include the Diggers of 17th century England, or the Soviet Union in the 20th century.]

So, Economics helps people understand the consequences of decisions about allocating resources, which is very important to people who want to make such decisions. Economics helps people make better choices as they think about they type of community they want. A lot of economics is based around maximising wealth, where wealth means ‘more resources’ in total; this is “classic” economics. This is understandable: the increase in human wealth since the invention of agriculture is impressive. The increase since the Industrial Revolution is almost miraculous. One of the most famous economists, Adam Smith, wanted to understand how this happened. His answers were so successful that they are still studied today and largely defined what economics is about. [Adam Smith’s most famous work is The Wealth of Nations, which is an easy read for adults, and written in modern English. It starts with questions about everyday experience, such as “why does the baker bake bread for us?”.]

Other streams of economics have a focus on long term issues (such as the cost of pollution) or make very types of society (communism). Economics also helps businesses and governments makes decisions, and more and more, economics helps us understand what motivates people to make decisions. A book called Freakonomics is example, which looks at how people make decisions when they can’t be certain of outcomes (such as buying a second-hand car which does not come with a guarantee).

Economics is a fascinating mix of politics, mathematics and the way people make decisions. Economics can be quite mathematical and can explain very well what happens to an economy when interest rates go up, for example. However, individual people do not behave as perfectly as economists used to believe, so a lot of economic theory now involves studying human decision making. At a large level economies are impossible to always predict. Economics fails to be a science because while economists can explain what happened they have frequently failed to predict what will happen. In fact this is actually predicted by economics.

However there are areas of strong theory where economics makes very useful predictions. It is worth knowing about some of these. Most classic economic advice is sound and has been proven time and time again to lead to faster economic growth and more wealth. There is always a lot of discussion about how to share wealth, but before wealth can be shared, it needs to be created, and classic economics is an incredibly good tool for making this happen. One of the worst causes of economic injustices is rent seeking (below), which effectively steals money the community, and a good understanding of classic economics is the best way to detect and fight rent seekers.

The most important reason to know economics is to be very clear what trade offs are being made when making decisions. Economics addresses one of the most important questions every human society has faced and there is a lot to learn from it.

2. The use of models, and attacks on scientific thought

Many things in nature and in human nature are incredibly complicated. Humans have made great progress by simplifying reality into a “model”, and then using the model to test ideas and make predictions. Then these predictions are tested in the real world. Models are very useful. They are a simplification, though, so they can make big mistakes if you take the wrong conclusions.

Teachers and scientists use models all the time when teaching, and so do these notes. Because they simplify, they are easier to understand. They work very well, but they are far from perfect.

A model works by developing a formula or algorithm that produces an outcome based on some inputs. For example, a model of the temperature inside a glass jar left in the sun would predict how hot the air is inside the jar. Many things will affect this: how hot the air is outside, how windy it is, what type of gas is in the jar and what pressure it is, how thick the glass is, what the lid is made from and so on.

A model starts by asking which of these variables is interesting. Some variables may not be interesting because they don’t change very often, or because we think they don’t make much difference. A model can only be useful if it is accurate, and if you agree with the variables it is studying, and if the assumptions about what doesn’t matter much are true.

Models which study more than a few variables at the same time are extremely complicated. For example, it is easy to model one billiard ball bouncing around an empty table. It becomes much harder fi the table is full of balls, although not very hard. Modelling the weather is very, very hard.

Models are of course simplifications. Someone who wishes to criticise a model can easily introduce complications which the model has not addressed. This is a common tactic to attack a rational conclusion from a model. For example, evolution can be modelled easily: the basic concepts are easy to understand. Someone who does not want to accept evolution can say something like: here is the incredible human eye. How does your little model explain something so advanced?

There are articles below which talk about how science works, and these articles come back to this. For the moment, the most important question to ask someone who makes such a criticism is: what is your alternate explanation? And does their alternate explanation have any predictive power (can it be used to make predictions about things we don’t yet know). Models are often over simplifications, but they are predictive and verifiable, which is extremely important when it comes to proving that something is true.

4. Free trade, interference with free trade

Free Trade is at the simplest two people exchanging things they own, with both parties being happy to do this. Remarkably, both people leave the trade being better off, which is kind of magic: by coming together and exchanging things they own, the world has got better. The benefits of invidual trade may be small, but when billions of people do it each day, it produces incredible things.

"The Adventures of Tom Sawyer" contains some memorable examples of free trade.

Trade is much older the economists, but when people such as Adam Smith started paying attention to it, they quickly worked out how it works. Economists also concluded that if trade is good, harming trade is bad. Societies has usually put barries in the way of free trade, sometimes to block it almost completely (the communist experiment of the USSR or in Cuba), which was disastrous, or the blocking of free trade in the 1930s which was one of the greatest catasrophes in human history.  All modern advanced economies mildly impede fre trade in the name of greater good. In these cases, societies sacrifice some benefits of free trade to achieve other objectives. The effects of impeding free trade become very expensive if pushed too far, harming employment and wealth, so we see waves of higher regulations followed by "reforms" to reduce it, and free up trade again. 

Is trade good? Does it make us better off? There is a lot of academic discussion, but there is also thousands of years of experience. Markets and trade are many thousands of years older than economics. What does human experience tell us? All around the world, given the chance, people have traded, which says it all. When two people trade, they walk away after the trade better off than before the trade: otherwise, why would they do it, year after year, for thousands of years?  

When Stamford Raffles wanted to counter Dutch influence in the East Indies, he realised that the Dutch administrators were charging traders taxes. Raffles, who taught himself Malay, went to rival local rulers and arranged a lease in what is now Singapore (but was then a few simple villages). He then simply announced a zero-tax trading port. With six weeks, many traders had gathered, and Singapore had begun. Hong Kong was likewise a sleepy fishing village, until British rulers made it a trading hub. Singapore is covered below.

Free trade is the recognition that if trade is good, more trade must be better, and therefore we should have as few barriers as possible to free trade. Countries which follow this broad principle are known as market economies, although there is no pure free trading nation. Singapore, New Zealand and Hong Kong are close. Singpare and Hong Kong: from inception. New Zealand was a convert to free trade after an over-regulated economy neared catastrophic failure.

Economists have models which show how free trade makes people better oaff. These are covered in the next section. Pure free trade is very unusual, partly because trade works better with support such as law, courts, schools, hospitals, scientific research, security and systems of money, and these have to be paid for (via taxes), and partly because powerful forces will seek to tilt the rules in their favour. For example, suppliers may try to block competitors from entering the market. Finally, the wealth created by trade and economic development benefits some people more than others.

Even though pure free trade is impossible in reality, we often consider it as an ideal way of distributing resources. Simple economic models show this to be the case, and many economic theories assume that every time we impair free trade, it costs us wealth. I find this position very convincing, both in the models which support it, and my own experience of working and living in different economies around the world.

This is not to say that we should not interfere with perfect markets. A crucial political question is to make sure that we understand the harm of interfering with free trade, compared to the benefits brought by the interference. Since the second world war, “western civilisation” has come to mean a country which follows a market economy and liberal democracy. The official group of market economy + democracy is the OECD group of nations, which includes non “western” countries such as South Korea and Japan. Taiwan should be a member but for China blocks this, so Taiwan is an “observer”. There are 35 members of the OECD (plus Taiwan) as of 2016.