Tuesday, September 29, 2009

I love when I read something new pertaining to economics and it illustrates something about everyday life that is seemingly simple, but is also profound.

“We” as a society craft new vocabulary, make it through rush hour traffic every day, and basically coexist with everyone else all on our own. There is no ultimate authority that tells us exactly how to go about our business. There are very few regulations. Individuals make their own decisions based on frameworks that have been set up, be it by grammarians or governments. People manage their trade-offs all on their own.

So why is it that so many people, or at least the vocal people, think that the government needs to regulate or be involved in every aspect of our economic markets? If they trust the market that emerges during rush hour, shouldn’t they trust the market that involves millions of consumers and producers? It is interesting to me that people demand that the government deal with the “problems” that they perceive: this position in a company makes too much money, this company doesn’t pay their entry-level workers enough, etc. Do people think that the solutions to traffic problems should be dealt with by the government? …some might, but I don’t want to think about them. I just think it’s curious that the economy is something that people seem so afraid to deal with on their own, when so many aspects of our lives work out when they are left alone.


  1. Sacha,

    I'm not sure that the average Joe trusts "the market that emerges during rush hour." I lived in Washington DC for three years, and there were 3 things people loved to complain about, The Redskins, The Humidity, and The Traffic!

  2. Sacha, a very good point. But its precisely because people don't understand the simple profound economic truths that they think our nation's economy is some sort of huge radio tuner. Adjust it until you get the right frequency.

    People don't realize how much they take for granted. Every time you drive somewhere you take for granted other people are going to obey the basic rules of traffic: stop at red lights, go on green, yield to right of way, signal when changing lanes, etc. And true, not everyone follows every law ALL the time. But enough people follow enough laws that you can get to work and back everyday without an accident. The number of accidents are shockingly low if you take into account how many trips people make without accidents.

    And no one is forcing these people to follow the laws. Granted police monitor it to an extent, but they can't watch everyone all the time and so most people are left to their own devices. What does cause the general obedience is SELF INTEREST. It's in your best interest to follow the basic laws of traffic in order for you to get to work on time.

    This all makes stunning sense when you think about it, but you have to have your perceptions challenged and changed first. I remember how much of an eye-opening experience my Econ 100 class was, especially when I "took the red pill" as Sherri put it, and read "The Invisible Heart" by Russel Roberts.

    It's our job as the economic freedom fighters freed from the so called Matrix (how's THAT for an alliteration, Camilla :)) to educate others. Teach them basic economic truths and let them begin the Great Discovery.

    Anyway...not to make economics sound like a cult...I just get passionate about it.

  3. Scared citizens solidly support strong social structures... aka government.

    There is this trend of government continually getting larger and meddling with the economy. Each time is does it creates worse unintended consequences than the the problems it "solved."

    At some point either society will see that the problems grow exponential and the solutions only linearly and tame government or the problems will become so bad that they them selfs will tear apart the very fabric of our civilization.

    You seem so have said that fear is the motive to support government meddling. "I just think it’s curious that the economy is something that people seem so afraid to deal with on their own" How are we to combat this fear and save our society?