Video on ZOOM, still awaited.
Slides: Part 1 and Part 2 writeup: slides & voiceovers (Part 1) (Part 2)
8A · Why Wants Must Grow (about 7,000 words)
The chapter opens with things people buy and never use: Australians' $10.5 billion a year, and the clothes in British wardrobes left unworn. It sets this against the textbook's promise: wants are given, whatever is chosen is preferred, and producing more makes people better off. The puzzle (Step 1) is that we are far richer than in Keynes's day, we work almost as long, and we are no happier. The chapter names abduction as the reasoning from a surprising fact to a hidden cause, the step positivism leaves out. The first half of the hypothesis (Step 2) is that a machine run for profit cannot stop growing, because of falling average cost and rivals who undersell, so wants must be manufactured. The textbook's rival, rising marginal cost, is refuted by what firms themselves report, and is still taught. The chapter ends by asking why: a market economy needs minds shaped to accept it, as Polanyi argued, and Romer is a witness from inside.
8B · How Wants Grow (about 4,000 words)
The second half of Step 2 turns particular reasons for buying into general hypotheses: envy, habit and advertising. Advertising is set aside, and the others are taken one at a time. Envy is shown by the choice between two worlds (World A, where you have more than others, or World B, where you have more but others have even more), by the evidence that people compare themselves with neighbours and colleagues, and by Frank's arms race and expenditure cascades. Habit appears as the hedonic treadmill and the ratchet: yesterday's luxury becomes today's need. Separating needs from wants answers a question the textbook cannot: meeting a need is a lasting gain, while a want raised by envy or habit gives at most a short-run gain, paid for in hours. A rival runs the arrow the other way: Marglin's loss of community comes first, and Bartolini's defensive growth runs both ways at once.
8C · A Different Consumer (about 4,300 words)
This chapter asks what consumer Islam describes. Needs are limited and provided for, and are met by sharing; wants are unlimited, and are met by restraint. The Qur'an names the chase: Qarun's display, and the boasting and rivalry in increase of 57:20. Islamic ethics separates ḥasad, wishing another to lose a blessing, from ghibṭah, wishing for the like of it. It acts on both ends of envy: the one who looks is told to look at those below in worldly things, and the one who shows is told not to grieve a neighbour. Gratitude differs from display by its intention, rivalry is turned to good deeds, and contentment blocks habit. Behind these teachings stand three stages of the self, of which the textbook models only the first. Islam does not add constraints to the textbook's consumer; it describes a different one, and the middle way of moderation.
8D · The Envy Ladder (about 5,750 words)
Steps 3 and 4 turn envy into an agent-based model of six households on a ladder, run by hand. There are two rule cards, each beginning with an intention: a follower that will not fall behind the household above it, and a displayer that wants to stand above the household below it. The chapter explains why a model's rules must never contain the answer to its puzzle. It also explains why the rule for judging "better off" is stated before the run: to build intuition about how complex models work. It separates scaffolding from drivers, and shows why few free choices make a fit count, as Occam's razor says. Run 0, with six followers, does nothing. Run 1, with one displayer, sends a wave down the ladder. The town consumes more and works longer, no household's rank changes, and by the rule every household ends worse off, the displayer included. The result is emergent: no household chose it.
8E · Testing Envy (about 5,800 words)
Step 5 sets envy against the textbook's rival, "more is better", where the two disagree. The tests are our own experience, what advertisers sell, goods priced to set their owners apart (Leibenstein; Burberry), and the neighbours of lottery winners. The lottery is the cleanest test, because chance chose the winners. Step 6 runs an unequal town with no displayer. Inequality alone drives the cascade, and the poorest work the most extra hours. The consumer of 8C then enters the town. A content household stays out of the race. A considerate household keeps its cloth out of sight and leaves its neighbours nothing to envy, though in an unequal town that must be every neighbour's practice. What cannot be hidden can be forgone. The chapter ends with a principle: the puzzle decides how much detail a model needs. Under four ways of looking at one another, the answer to the puzzle survives, and so does the considerate household's result. The content household's protection of others does not, so the model does not claim it.
8F · From a Town to a Society (about 4,500 words)
The model is carried beyond the town. Between nations, what can be seen drives wants too: Nurkse's international demonstration effect, the iron and bamboo curtains, the Nixon–Khrushchev kitchen debate, and East Germany's valley of the innocent, which could not receive West German television. In a society, the power to protect others belongs to those whom many look at, and behind them lies what a society honours (49:13). The ḥisbah, the office that supervised the market, can restrain deceptive advertising and the appeal to envy, and a Green Curtain can buy time. Set out on three levels (character, institutions and law), the safeguards show that law can act only on what is shown. The second puzzle is answered: it is not the machine that does the harm, but running it for private profit. So the invisible hand fails, and capitalism is not compatible with Islam, though markets are. Leaving the race frees the hours that a lost web of relationships needs if it is to be rebuilt, through the masjid and the awqaf. Step 7 gathers the validation and the model's five results, and the chapter ends with why no real model is certain.