Economics 101: First Principles (the Elon Musk Method)
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- เผยแพร่เมื่อ 5 ก.ย. 2024
- Full article here: bit.ly/econ101F...
Twitter: / andrarchy
In this video I discuss what it means to "argue from first principles" a concept I was first introduced to by Elon Musk (CEO of Tesla Motors and SpaceX), and then apply First Principles Logic to the field of economics. This video is intended for people looking to get started in Economics, but also for people who want to reevaluate their own understanding from a different perspective.
The interesting thing about this video is that there is a glaring example of "First Principles" right in front of the viewer: The way Andrew uses the doors to the dresser as a white-board. The producers of Whiteboards want you to see their products as THE ONLY THING that you can use a magic marker on. But if you refer back to first principles you understand that ANY smooth surface will do. Therefore you redefine what can be used and in what way it can be used.
first principles in a nutshell
Wow, awesome insight! I didn't even think of that!
Very often I shop at Home Depot for things to use other than what they were designed for...
Einstein once said: If you cannot explain a subject in simple terms, then you dont understand the subject enough...
Absolutely....
I think this is a good start for a whiteboarding session. There's a few things I would add:
For scarcity:
-Some stuff is hard to get
I think "some" is important here because oxygen is something everyone wants, and is very easy to get.
For division of labor and money:
-If you get good at making valuable stuff, you'll have more than you need and can trade it for other valuable stuff you're not good at making
-Your extra valuable stuff can be traded for money which can be traded for other valuable stuff
These are two extra bullets points that basically describe why money exists and why people want it.
PA Shapiro awesome contribution, I will give these some thought. Might be good second principles (which are very valuable as well)
Andrew Levine You're probably right that money and division of labor are secondary principles when taking a personal approach to econ.
Scarcity is a trickier principle. The utility of economics is deciding what to produce because you can't produce everything. If scarcity wasn't a thing, economics wouldn't be a thing.
That said, there's a chicken-egg question. You've already identified that people want stuff. Do we want stuff because it's scarce, or does it become scarce because we want it? Oxygen seems to be a useful counter-example, but then there are people who make a living bottling oxygen because it's scarce (hard to get) to people with lung problems!
Great questions. We must remember that economics cannot, and should not be expected to, answer every question. Economics does not have to explain why we want stuff, because us wanting stuff is a universal trait. As far as explanations go, biology, anthropology, neuroscience, etc. would be far better disciplines (with far better track records) to look to. With respect to scarcity, I doubt you could find a single person who admitted to wanting something solely because it is scarce, and even that person, whether they know it or not, is using the item's scarcity as a rough heuristic for determining it's ability to act as a store of capital with a chance of appreciation. Our "desires" are not the result of a rational thought process, so pretending that there is a rational explanation for them (outside of "we evolved to want things) is classic bad economics. "Yes, humans are not rational, but let's assume they are and pretend we're right."
Other sciences have done more than enough to expound on how and why we want stuff, as well as how and why we create stuff (e.g. Chomsky in linguistics). This is why they can be first principles of economics, not because economics proves them to be true, but because other disciplines already have. If we were relying on economics to prove them we would wind up with meaningless circular logic. In fact, this is arguably the major problem with economics today, economists create economic models, assume that they describe reality, and then use that assumption to verify their initial claim. "Of course our models are right, they represent the world as accurately as we are currently able to represent it. Just don't ask us to predict anything."
Well said. You're more than convincing that scarcity doesn't determine what people want, but I'm still looking for an answer to how scarcity fits into the larger discussion. Scarcity may not be more fundamental than people making stuff or people wanting stuff, but I struggle to grasp the utility of economics in a world of unlimited resources.
If stuff wasn't hard to get, we could make all the stuff we want ourselves. In which case, there'd be no reason trade valuable stuff for valuable stuff.
So I think that's where scarcity belongs on the white board, like so:
-The more people want stuff, the more valuable it becomes
-Stuff is hard to get
-To get stuff you want, trade valuable stuff for valuable stuff
So here's how my white board looks, with secondary principles having double dashes:
-People make stuff
-People want stuff
-The more people want stuff, the more valuable it becomes
-Stuff is hard to get
-To get stuff you want, trade valuable stuff for valuable stuff
- - Lots of specific valuable stuff can be traded for all kinds of valuable stuff
-Money is a type of stuff that many people want
- - Trade excess stuff for money
-The more stuff-you-want money enables you to get, the more valuable it becomes
-The less stuff-you-want money enables you to get, the less valuable it becomes
"-Stuff is hard to get"
One should probably start with "Stuff can be easy or hard to get or anywhere in between." So the ease or difficulty sets the stage.
Take water for example. If one lives on the shore of a river running with pure water of a melting glacier, that tastes great and is healthy to drink and is free to take, then there is no need or want to buy bottled water. However, if one is a nomad living in a desert with no water available, that is a different story. At a certain point away from the river and closer to the desert, the availability of water becomes a problem of going to the river and returning, consuming much time and effort thus creating a want for some alternative.
Also, water is a "need" and not a "want". So there is a distinction between the two. But, "want" can cover both in this case.
Furthermore, it might be better to use, "People supply stuff" versus "People make stuff", just as "want" covers "need". For the guy at the river can take the water to the people in the desert and sell it without making it.
The basic problem of economics is that of "value". Because value is clearly based in perception and belief. There are no "speed of light" equivalents or set constants in economics, even if there were to be a gold standard.
So, perception and belief are open to possible manipulation of the minds of the "people" or the "person" via enhancing fear and/or greed.
Furthermore, economics has been separated from politics, which always plays a role in the "real" world.
Say one has developed a "need" for opium. Politics injects a third party, government, who enters the picture and distorts the "value" thus increasing the price. The need is still there, the supply is still there, but the price jumps due to the government creating less competition among those who would supply, thus constricting supply.
On the other hand, among other things, government can restrict and punish those who would seek to manipulate perceptions and markets in an attempt to defraud and also is the final arbiter, both very necessary functions.
how can this guy NOT have a bazillion subscribers? like, seriously? this video is outstanding!
This is excellent. So glad you made this video. The entire Western society would benefit from a return to first principles reasoning from the bottom up.
Thanks again for your contribution.
Thanks!
Awesome presentation. I have recently been taking a look into First Principles and have come to the conclusion that if applied in the education system, taught in the education system, or if applied on a global scale in all areas of industry the world would dramatically shift. Thanks again for your presentation.
I’m paused at 6:57. Already I want to tell you that I absolutely appreciate your outside the box thinking by applying first principles to new things. I hope many people take from your example and become inspired to apply first principles to things in their lives as well. Thank you. You’ve already, more than enough, earned my like and subscribe. I will share this video to everyone I can.
Wow, thanks so much for the kind words! I really appreciate it. Thanks again.
Thank you for taking the time, bringing "first principles" analysis to the field of economics.
I think this is brilliant, but was lacking only two things. Why money is used as the medium of exchange, and a definition of the price function that includes supply. Here is another way you could put it:
1. People make stuff.
2. People want stuff.
3. When there is more stuff than people want, that stuff becomes less valuable.
4. When there is less stuff than people want, that stuff becomes more valuable.
5. People trade valuable stuff for valuable stuff.
6. People don't always want the same stuff, this makes trade hard.
7. Money is stuff everyone wants, this makes trade easy.
8. The more stuff you can trade for money, the more valuable it is.
9. The less stuff you can trade for money, the less valuable it is.
Since we're working from first principles, these ideas must necessarily be universal. As noted by other commentors, these principles may not recognize externalities, but that it's because it's not meant to. An economy is only concerned about the price of stuff in a market, as determined by people. Externalities may be considered, but it is not an essential function.
The buyer always bares the cost of production, regardless of where it comes from, and a competitive market always seeks to keep costs as low as possible, which is why externalities exist.
Chris Mummert Great additions! I've got a video coming out Monday I hope to get your feedback on!
Nice job, Andrew! Btw., one might call it rather "the physicist method", as this approach is an inherent ingredient in solving physics problems. But sure, Elon Musk is a great example of the success of this way of thinking, that physicist acquire during their education. As a consequence, I think that having a physicist on leading positions would be a good thing for many companies.
Andrew, went down a TH-cam wormhole and ended up on this vid. Great video! I studied econ at UF and basically learned it this way. Just took it all to its first principles and thought from a logical stand point to actually apply them, which obviously helped me pass my classes. But more importantly, I started thinking this way about everything, not just school. Anyways, just wanted to let you know, great vid and keep it up! I'll be checking out your channel more often.
Thanks! I appreciate the kind words.
"Rabbit hole" is a very popular expression these days. Thank you Lewis Carrol.
That way of thinking will bring you to Austrian economics, which is great.
I wouldn't discount the effect of printing money on the real value of money. Printing money increases the supply of money, decreasing its value if demand does not adjust accordingly. Therefore, if you print money, and no one wants more stuff (less demand for money) the value of that money decreases (deflation), allowing you to buy more stuff.
The opposite is true of inflation
"The Elon Musk Method?" Is called deductive reasoning. Its the underlying reasoning of mathematics and physics.
The title made me watch the video, a different title would probably not.
DO NOT BUY THE IDEA OF DEDUCTIVE THINKING BEING THE SAME AS FIRST PRINCIPAL THINKING. It's not deductive thinking. First principle thinking doesn't take the effort of thinking at all. It is really just the insight that is say walking, while walking to get to your car. It goes without saying if you question mobility and are creating out of the first stages of mobility...You don't reduce the thought of driving all the way to one of walking. You are the thought of mobility, then all things after come to mind. Understanding this needs no explanation. Explanations are the hard part. All the additives that add to the an exterior thought is the complication. Deducting things is just as complicated. It makes sense when people say deductive thinking but deductive thinking isn't the process in its nature.
Best tool/approach to boil things and concepts down to their fundamental truths is mind mapping.
I really don't understand when people comment that they don't get this...
first line in white board should be
-Need of stuff to people
Then comes-People make stuff to fulfill need
Then comes making buying nd selling
if the stuff satisfies all the need to be fulfilled
Thankyou for the video.
I need to sit on the last 2 statements for a bit....
I would be interested to see what real world example you were thinking of as you developed those statements...
Common language yes, but still A LOT to unpack.
I would like to hear your thought process as you applied the process. Go big - and let us in on the mind chatter whilst you develope😎🖖🏻
Actually you gave me the missing building block I was looking for for a 7 years to write a book !
I'm really grateful for your approach and this amazing boiled down simple yet super rich content
P.S.
You also now taught me how to learn anything to mastery in very short time from the point that tackles this knowledge by tackling a problem related to it !
I guess Now I know how Elon Do it !
Thank you for your work on this video. I did enjoy the content. I was viewing for Information / Insight and I set the speed to 1.25 and 1.5 so it did not move too slow.
Want is an important category but I think you may have missed another important category, need. The best marketing is based on fear and greed which might be also be described as need and want.
Well done sir that was an interesting intro to economics. The first principles approach is very similar to the 80/20 approach of understanding things.
You should start with People NEED some things to live
Clean Air , Clean Water, Food, Safety, A place to sleep, Clothing to protect ..........
Some of this stuff could/should be free, like Clean Air.
Some of this stuff had to be provided and protected, like Clean Water.
Some of this stuff can be made for self and others.
Money is just a representation of value. Inherently worthless unless backed by real value like food, warmth, water, air...
Your points are sound, but Jesus dude, those last two sentences are grammatical disasters. Rephrase them, because they are complete nonsense as stated.
Jordan Belfort they are disaster
Was this guy that good in his explanation where his last 2 sentences get picked apart? Must be a good video.
Good Work, Man.
I applied this idea to gold as people say gold has intrinsic value and is good to have in an economic collapse. But that might only apply to an economic collapse where there is a relatively known bottom before recovery begins. If the economic collapse has no bottom, except a complete failure, no mass manufacturing of food, no jobs, no power, no water or sewer system, no gasoline or powered transportation then at some point gold has no more value than any other shiny rock. At some point a can of food or a bag of dried ramen noodles, becomes more valuable than gold since one cannot eat gold. That led me to the conclusion that gold is a fiat currency and an investment that is only slightly better than bitcoin since no power is required to sustain gold. Gold’s value is market driven so as an investment it is basically worthless unless one can time market sentiment. However, a farm is valuable as long as it can produce the one commodity that will always have value...food. Therefore, in spite of the fear mongering of the coming zombie apocalypse, I am not going to own gold. Imagine the price of gold if everyone thought the way I do. It’s value would only be in the manufacturing of electronics which I predict would be less than half of gold’s current $1500 an ounce price.
This seems to describe the value of Neural Networks. Recently, neural networks could beat top professional poker players and top egamers. Many of the strategies employed were considered unconventional by the gamers and players playing against it. I believe that since a neural network just reorganizes weighted biases until it arrives at a solution then it is empirically exploring first principles.
Sounds about right. It comes down to information theory, decentralization, and what I call "information processing nodes." In order to find signal through noise you have to create a distributed network of information processing nodes (in neural networks I believe they just refer to them as "nodes") each of which has a unique location in space and limited capacity to process information. These nodes then compare the information each one winds up possessing and where that information overlaps is the signal and where it doesn't is the noise. If you can then assess how closely the information coming from certain nodes maps to signal (or how distant it is) you can then further enhance the signal by weighting the nodes. Human beings are also information processing nodes that communicate with one another, compare their information (I don't mean consciously) and use overlap to highlight signal and discard noise. Money is one of the communications tools we leverage to accomplish this. When a price "feels fair" to two people trading we are agreeing that extreme divergences, either high or low, are likely not accurate and the price we agree to is likely somewhere closer to the accurate price of that product or service. We can't possibly learn all of the costs associated with creating that good, so instead we create a meta-layer called "money" that attempts to unify all the actors under a common valuation scheme. While these schemes are not perfect, they certainly give us a better idea of how resources can be allocated among nodes than nothing at all. Great insight! Thanks for the comment!
Great Video, love to see more.
great analysis now I understand deflation keep going thanks!
Outstanding.
I didn't come up with it but my version would be ..
1) You spend money
2) You lend people money for a return with interest
Scarcity is a contributing factor to stuffs value. Water is scarce in the desert so it’s more valuable there.
To a thirsty person
My question is; what do you want to do with this knowledge? Honestly your video is very intriguing, but I feel that even though this video is good, I also feel that there is much more to discover. You went through all the work to figure out what economics are through using the first principles method, but what you do with this knowledge, is left largely untouched. I'd love to see you dive deeper :)
Glad you want to see more! Yes this is exactly my desire: to explore this further in future videos :)
It would be interesting to analize the future development of global economic trends based on first principles analisis, but it would be very difficult probably, taking in consideration how many agents are involved.
I too am interested in a practical application and what we can do with this knowledge. I wonder if Musk has written down a structured process (How-to Guide.) Thanks for making and sharing your video. It is an interesting concept to get away from reasoning by analogy.
Aaron Vega this is exactly what Martin Armstrong does. You should check out his blog if you haven't already
must subscribe
Great video explaining first principles. Found it while exploring ideas for a talk on economics I happening to be preparing. :-)
I believe that your white board exercise does not start with a broad enough question about economics. The assumption that "People make STUFF" in the economy is not a first principe, it is an assumption that the market economy sits inside society.
A wider question would be; if the economy is all of society instead of just the market, what first principle would it function from? So instead of people making stuff, we would instead state that people first make interpersonal connections through communication and that through open communication ideas are shared. From those ideas, people may or may not create stuff.
Would love to dialog further on this. Thanks for the great video!
Good and useful Andrew, five stars
Money is a type of "unit " to establish how valuable the stuff is to equally trade my stuff for your stuff
@Andrew Levine I am sure you are an INTP personality (logician/ intellectual advisor) who is in his flow state of life, living at the max using his cognitive functions according to his preferences, and at the same time making his journey and having an impact in a very INTP way. My own approach and thought processes is also very very similar to yours, and have been thinking in very very similar ways. The difference is that I am alone and not sharing my thoughts, and getting feedback. I am in university right now... I used to follow the principle of not putting my personal information online, but I think I will have to change that. I will have an online presence soon. I hope we meet...
This just seems like nothing more than removing layers of accepted knowledge/practice and generating conjectures/knowledge on your own. People often assume knowledge that might be wrong/outdated, so this method would help you sweep those away, which is what Musk did. But it also takes forever if you want to generate all the knowledge yourself. It seems more valuable to seek out knowledge (assumptions) that other people have already generated and tested, and use those to correct your currently incorrect assumptions, rather than potentially reinventing the wheel.
Isn’t Bitcoin a deflationary system because it never expands but the “coins” can be lost
You've essentially just said that what sets the value of money is the value of money. fundamentally this isn't possible. Money in essence is a certificate that says "I worked" the value of that certificate is set by every person who does work and therefore sees how much work it took you to get that certificate. If money becomes easier to get than the work that was done it looses value. if it becomes harder to get and a lot of work must be performed to obtain it then it gains value.
Side note: if you receive money as a gift someone still worked for it. You may not understand it's value but the person who worked for it does.
I'm not sure that's the correct definition of money. You can have money even if no-one worked for it. It's simply a medium of exchange so that trade can happen more efficiently, as well as a store of value that enables transactions and investment through time. It's an enabling technology of specialization and comparative advantage, and a risk management tool to offset future unknowns.
That's not true. There are resources unrelated to work, like gold.
Also, you say if it becomes easier to get money it looses it's value, but you have it upside-down: it becomes easier to get money *because* it lost value.
First: first principles are NOT what everyone agrees with. Nature does not have to comply to our mental models.
Second: 3rd principle from the bottom is very doubtful. I personally make save (and strive to get more) money not because I want stuff, but because I want to have a safety buffer. You might call it insurance, but its more like assurance. In other words - you need to clarify what "stuff" means in those principles (not products for sure).
3rd: the 3rd principle is not necessarily true as stated. Stuff only becomes more valuable if more people want it if there is a shortage == more people want a particular good (more generally: have unfulfilled desires) that is available for them. And even that is problematic... Hope it helps. I enjoyed the video.
Well, I'd begin with the most basal axiom that human beings have physical needs (e.g. Maslow's pyramid) which is why they want stuff in the first place - showing it's not autotelic.
u really vlow my mind bro!
Your board looks like a notebook, which makes you look like a book-sized person. I like it
Dude, love the vid. Looking forward to more. I do the same thing, my home office is littered with whiteboards.
What an adorable cat!
nice to meet you andrew, i'm korean. can i do some ask? i want read aristoteles's book the written about detail of First principles(said elon musk). but i can't search, because korea site have not information and my english skill is very low. If you know would you please tell me that aristoteles's book name?
The idea is amazing
Enjoyed this, thanks
What about the long-term ecological/ health and therefore economic implications of the externalized costs of production and consumption? Just because it doesn't cost your company or you personally it does not negate the intrinsic cost of generating profit to larger society. It's an embarrassment that business experts almost never address the ethics of externalized costs nor assign a monetary value to what their personal economic opportunity costs others.
ANDARCHY? UPON REPLYING I HAVE A QUESTION. THANK YOU. GOOD VIDEO BTW
well reasoned and explained. poor choice of music though!
That last point, money being printed Fiat money. the more that is printed the less its worth? its worth literally how much we say it is collectively on faith. money is our faith based but still reasonable economy. So does printing more of it make it less valuable? well it would make sense if more people have more money in relation to the resources it could by given that those resources are limited. that the printed money is indeed a massive variable into that fiat economy. because everyone realises that they have more of the special paper but so does everyone else so gradually surely the prices of everything increases aswell?
What is the science behind want?
From your simple presentation, it appears that deflation helps the savers, not the greedy spendthrift govt. Isn't it interesting that the big-bank Feds hate the concept of deflation. They love a certain amount of planned inflation. This is purely their self-interest, not ours. Anyone know what a deflationary economy looks like? (Is there one anywhere in the world now?)
Good job
Did he just mix up inflation with deflation?
Research Resource Based Economy it will give you a clue about "firster" principles :)
Can you recommend any books that explains economic principles in a common sense, easy to understand way?
philipclinder1 Economic principles aren't that difficult to understand. You just have to be willing to look up the words you don't understand. Just take a news article from a financial newspaper and look up the words you don't understand. It wouldn't take long before you actually understand what is explaiend.
And if one explanation isn't clear enough, look for another one.
Well earned sub! good shit man.
DO NOT BUY THE IDEA OF DEDUCTIVE THINKING BEING THE SAME AS FIRST PRINCIPAL THINKING. It's not deductive thinking. First principle thinking doesn't take the effort of thinking at all. It is really just the insight that is say walking, while walking to get to your car. It goes without saying if you question mobility and are creating out of the first stages of mobility...You don't reduce the thought of driving all the way to one of walking. You are the thought of mobility, then all things after come to mind. Understanding this needs no explanation. Explanations are the hard part. All the additives that add to the an exterior thought is the complication. Deducting things is just as complicated. It makes sense when people say deductive thinking but deductive thinking isn't the process in its nature
thank you for this!
i enjoyed watching this video.
My principal is about that cat, you want the cat, you spend that money for that cat and you get value of enjoyment of the cat, perfectly balanced. If two people have same thinking to “complete “ for THE CAT, inflation. Actually your theory has to go 1step further to define what “stuff” people want and compete to think about if their prices are going up or down. Right now, more money is injected, what’s going up? Houses, everyone wants. What about stocks? Today everyone wants because everyone thinks they give them more “values “ tomorrow.
Ehr sounds a bit like you try to reinvent Praxeology. Did anybody bring Human Action written by Ludwig von Mises do your attention?
Printing money can change how much people want money in a realitivly stable system by controlling how much money can be had.
For a common man, wouldn't the product become more valuable if he really needs it during inflation??
I'm not sure those are good first principles for economics 101. There are too many assumptions embodied in them. You need to first sort out what conditions enable people to produce things, which in turn creates a surplus that can be traded. For example, property and exclusions rights, and the right technological conditions. But we take those for granted in our modern western world, because the existence of such conditions have been mostly met, and thus are already deeply ingrained in our consciousness. But they evolved over time from legal and societal concepts that were not so easily established. (Marx-Engles Theory of History is a good starting point for folks who want to study economic history). Lastly, a more interesting and fundamental question to ask: Is Elon Musk more happy now then before he used first principles to such great apparent success?!
I didnt understand a bit. What r u talking ?
to consume more than we can contribute to is negitive you seem to be caught in a capitalistic notion that growth is the only way, how many beans do i have in my hand people ,want to covet these things i do believe in capitalizem we are part of the grand sceme life is the base line lets start with this and build apon this thought. im always open for truth
What happens when robots can make everything for us?
Andy Nickles
As Elon has suggested, we will have to come with a “UBI” (Universal Basic Income). The wealth of the world will be distributed more evenly. Or you will have to increase your “intellectual capital” so you become more valuable and still operate alongside robots.
You missed the most important principles of economics:
* Making stuff needs resources
* Resources are limited
“Reasoning from First Principles” does not consider nor answer objections because its findings (the First Principles) are irreducible, irrefutable, & inconstatable. Yes or no? So, to me you spent too much time answering too many objections (your own), that it almost took away from the exercise itself, that is to demonstrate that one can derive the “First Principles” of a subject matter just by critically thinking. The common man will be baffled by this work because it’s too simple and an “expert, researcher, or scientist” didn’t come up with it. However, it is the way to a higher level of both consciousness and hierarchical understanding of the world. You’ve done a great job. That’s what the rest of us, thinkers, do. As a Business Major, I “cannot” disagree with you. In your sentences are found the major principles of Macro Economics. These statements drive the economies of our world. But spend less time answering potential objections next time. Great job and thank you. 👍🏿👏🏿
what if you put first, the people want stuff, then people make stuff... and then instead give the value to the stuff, you give it to the person... then construct an entire diferent economic system... i do that for a fiction story im writing
I still don't get it, first principle logic...isn't he saying that's just basic logic? You need batteries so you build a factory.Duh ...what logic?
You don't even seem to understand "First Principles." All it is removing all assumption going with the basic rules.
Nerd 101, but works 👍
Here are the real first principles of economics.
STUFF is MADE by PEOPLE using ENERGY, AGENCY and TIME.
PEOPLE trade other PEOPLE MONEY for their ENERGY and AGENCY.
TIME cannot be traded for MONEY, only used in return for the promise of MONEY.
MONEY cannot be traded for TIME, only ACCESS to it.
TIME is UNIVERSALLY DISTRIBUTED.
AGENCY can be traded for MONEY.
MONEY can be traded for AGENCY.
AGENCY can be (and mostly is, thanks to the Internet) UNIVERSALLY DISTRIBUTED.
ENERGY can be traded for MONEY.
MONEY can be traded for ENERGY.
ENERGY can be (Sunlight) UNIVERSALLY DISTRIBUTED.
MONEY is an increasingly weakening substitute for ENERGY and AGENCY access through TIME.
and natural resources
Under First Principles, natural resources are a simple function of agency. When you have a device that pulls carbon from the atmosphere, strips hydrogen/oxygen from the groundwater and scoops up a bit of dirt for silicates and trace elements-- there are few limits to what you can assemble from those elements.
en.wikipedia.org/wiki/Molecular_assembler
Stop saying theory it's hypothesis especially in a scientific frame of mind. Put your key notes around the camera and not off to the side that you continue to look at constantly or remember your script better.
Вы даете не верное определение первых принципов. Маск ссылается на физику, не зря он Ph.D по физике. В физике один из таких принципов - Закон сохранения импульса. Этот закон не само очевиден для основной части людей.
Listen I like your video, however if you intent to apply First Principle thinking, first check what the word Theory mean when applied to physic. You seems to mix Hypothesis with Theory. There is no difference between Law or Theory because both have been tested and proven true which is not the case for an hypothesis. However even with First Principle thinking you might still continue to challenge the physic itself. This is what Einstein did with Gravity when he challenged Newton's ideas; he helped to provide a better view on the geometry of the space time. This however doesn't mean Newton was wrong, after all Newton's formula is still used today for launching satellites and probes......Nice job for your video however.
In Elon we Musk
Could this mean that scarcity can't be a principle of economics? Not in the long run, but in the short run it is true.
Is making a factory the first principle in producing batteries? Hardly. Let's talk about Marx's critique of capitalism. The availability and so-called ownership of the earth's resources has to come first. Rare earth minerals are not everywhere. Capitalism says that owners can sell products for a profit if they add value to them. Labor adds the most value to any product, and things like digging them up, and processing them requires labor, even if it is with robots. Another problem for Elon Musk is they are in places like North Korea and China, and they are controlled (not owned) by the respective governments. This is why Trump wants to eliminate the people in charge of North Korea, and why North Korea has a nuclear weapons program. So it comes down to the US being brutish and stealing all the world's resources so the US can have economic growth. This is not Elon Musk's First Principle for a good reason. It means that some people must be exploited and eliminated from being in his way, in order for him to realize his profits, control, and power. This is the major flaw for capitalism dictating an economic First Principle in a so-called democratic system. Capitalism and democracy don't mix, and corporations are tyrannical by design.
The black cat living on first principles
Be an mathematical fundamentalist and an economical fundamentalist and a muslim fundamentalist... Or not..
You're not an economist, are you? Your definitions of inflation and deflation are completely wrong!
better correct him?
Always looking to left and reading , i couldnt concentrate.
Holy smoke, was it just me or did this video ramble incoherently on the entire time?
I think it was just you.
Just you, I guess.
Yep, just you.
Yup, just a Elon Musk fanboy rambling.
Definitely just you.
Sorry man, but its the weirdest video I've seen in my whole life. Of course money is the ultimate instrument that enable people to buy staff they want, and there are no secret in that, at all. But there are some staff, that people need, not only want, in order to survive. And in communistic society, where all the enterprises is owned by the government, still cash flow exist in the full power, although choose of the product you can consume are limited ( 1 company producers of water, 2 company that produce bread, etc). Anyway, if anyone can explain what is the point of the whole video?
Lmao @ elon, "It has to be big. because the world is big."
SPEAK FASTER
This is just logic. You're just using logic.
boring
company
Complete and utter crap.
wtf is this guy talking about
This just sounds like an Elon Musk fanboy rant. Nothing to do with Economics.
I think this is brilliant, but was lacking only two things. Why money is used as the medium of exchange, and a definition of the price function that includes supply. Here is another way you could put it:
1. People make stuff.
2. People want stuff.
3. When there is more stuff than people want, that stuff becomes less valuable.
4. When there is less stuff than people want, that stuff becomes more valuable.
5. People trade valuable stuff for valuable stuff.
6. People don't always want the same stuff, this makes trade hard.
7. Money is stuff everyone wants, this makes trade easy.
8. The more stuff you can trade for money, the more valuable it is.
9. The less stuff you can trade for money, the less valuable it is.
Since we're working from first principles, these ideas must necessarily be universal. As noted by other commentors, these principles may not recognize externalities, but that it's because it's not meant to. An economy is only concerned about the price of stuff in a market, as determined by people. Externalities may be considered, but it is not an essential function.
The buyer always bares the cost of production, regardless of where it comes from, and a competitive market always seeks to keep costs as low as possible, which is why externalities exist.