Scarcity blah blah
Filed under: Ideas by Jeremy on Wednesday, 8th September 2010 at 4:41 pmFrom Aid Watch this morning. A textbook definition of economics versus Bill Easterly’s definition of economics. Which do you find more interesting?
Textbook:
Economics is the social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity.
Easterly:
Sorry, I’m not all that concerned with “how individuals, blah, blah, optimal choices, blah, blah, scarcity, blah, blah…” I’m concerned why some people are so rich and other people are so poor. I want to understand why some economies work and others don’t, and why even the ones that work still don’t work for everyone. I want to understand how other Americans and I got 64 times richer than our ancestors.
I want to know why Robert Iger, the CEO of Disney, makes $140,000 a day, andwhy some rock-breakers I met in Ghana make $1 a day. I think a differential of 140,000 times is pretty important to understand (obviously includes both domestic and international inequality).
Read the rest of the post here.
Easterly’s definition is definitely more interesting. And more accurate. What do ‘optimal choices’ refer to anyway?
What do you mean? When I wake up, my first thought is always about how scarce the milk in my fridge is and, therefore, my optimal choice is toast, not cereal