How should we introduce economics to the interested public?
This year I have the privilege of helping to run ICES’ High School Economics Workshops. In doing so, I get to introduce interested students to the economic way of thinking, and take them on a romp through all the various sub-fields, and analyze all the classic economic & policy problems from minimum wages to rule of law. But the most important and most difficult (at least in my view) lecture is the first one – a cold introduction economics.
I’ve always thought that Principles courses are the most important in undergraduate economics departments – they’re the classes that most students will take (by requirement) and it will be their only exposure to [good] economics, quite possibly in their lives. Don’t worry about the actual Econ majors – sure they’re important too, but there’s several courses in Micro, Macro, and 3 or 4 field courses for them to hone their skills and beliefs. I’ve learned from some of my mentors and professors that Econ 101 is really the chance to correct all of the fallacious beliefs that today’s youth have about the world, and replace them with solid, economic thinking.
If we’re being honest, in Econ 101 we’re spreading “good” propaganda to counter all the “bad” propaganda that students have been exposed to their whole lives (and will continue to be overwhelmingly exposed to). It’s Econ 101 that correctly teaches that protectionism, tariffs, minimum wages, & government regulation tend to be bad, decentralized markets & voluntary cooperation tend to be good, and that we need to restrain ourselves from our overconfidence in forseeing unintended consequences. It is often the first course (maybe the only course, other than those in philosophy) that actually teaches people to critically analyze their sincerely-held beliefs.
Earlier this fall, an article came out on Geekwire’s website featuring an interview with Gabe Newell, the man in charge of one of the most successful PC game developers and distributors – Valve Corporation. This interview highlights a lot of strange, interesting, and puzzling phenomena found in the online PC market that puts a lot of economic principles to test.
Valve is in a unique position to collect data and analyze economic theories, being the largest distributor of online PC games through their Steam distribution service. Through Steam, Valve can observe consumer behavior, purchases, and game activity in real time and base policies on data trends.
I want to highlight three interesting insights that emerge from the interview, and provide some brief commentary on what makes them so strange, and how we might go about exploring their consequences. Some of the language of the interview is a bit unclear, so below is my attempt to glean the basic results of it. Continue reading →
This could have easily become another blog about economics or politics or philosophy or current events, as all of us are eagerly interested and fairly qualified to comment on these subjects. But we chose to center our blog around the idea of sporders.
I want to take a moment to describe why I think several economically-savvy bloggers, most of us aspiring to become professional economists, are taking a broader leap outside of normal “economics” to explore sporders. Of course, this is just my own opinion and ex-post facto rationalization. But nonetheless, I think this approach brings something new and useful to the table of understanding our world and seeking to improve it. The sporder framework seems to be effective, honest, and interesting. Continue reading →
Following up on Ryan’s post about population fears, I find it interesting that almost nobody ever mentions the substantial benefits of greater population. I’ll admit that I struggled with the economic arguments at first. It just seems so obvious that a population of billions is too much for the planet. My problem was that I was thinking of it as a physical problem rather than an economic one.
The economic argument for greater population is so simple that I’m surprised it didn’t occur to me right away. It rests on Adam Smith’s insight: “The division of labour is limited by the extent of the market.” Simply put, in a world of just one person, there would be no division of labor, and that person would (maybe) barely survive. With more people in the world, trade makes specialization and division of labor possible, greatly increasing each person’s productivity through economies of scale. Moreover, the range of consumer goods expands, as low-cost mass production of a good is economical only with a sufficiently large consumer market for that good. More people makes us all better off. Likewise, more trade makes us all better off.
As Matt Ridley argues in The Rational Optimist, as population has increased, our ecological footprint has shrunk. Greater division of labor has decreased each person’s ecological footprint so much that it more than offset the addition of more people. For example, greater efficiency in agriculture allows more people to move to cities and reduces the amount of land needed to produce food, both of which lessen our ecological impact. So more trade and more population is better for the planet too!
So rather than celebrate falling rates of population growth, we should really consider it as a bad thing, and encourage more child-having.
Below is a quote from a website of one of the major alliances in EVE online. Their plans are to crash a part of the EVE economy by cornering the market for an essential fuel. They speak in a lot of lingo, but that is the basic jist of their plans. This is fully within the games rules, and I’m guessing that the developers will not intervene.
help release this pubbie from his eternal burden. by suicide bombing him.
It’s time to inflict Goonswarm’s rage on Empire once again. Jihadswarm was a way for Goons to cause suffering and rage in unsuspecting pubbies, who (naturally) had no idea that they could be hurt in empire space. Unfortunately, Jihadswarm had few lasting effects on the EVE universe. By hitting everywhere, it failed to hit hard enough in any one spot. That all has changed now, as the finance team has come up with a way to hit a small slice of empire space, and yet have a much larger impact. The isolated pain of random pubbies is not enough. It is time for Goonswarm to hurt everyone in EVE, and so reap the misery of a wronged universe.