Tuesday, October 27, 2009

I Will Only Notice You When Your NOT Around

As I read this week's readings, I was thinking about the causal nerdy conversations of economists. I was thinking about how excited they can get when they talk about cooperation and coordination in the market place. I went back to the days of my Political Economy 100 class. Remembering a very energetic professor with her arms raised up her face filled with pure excitement as she talked about muffins...yes that's right muffins. (she was saying something similar to the following...note this is paraphrased as my verbal memory is not that good)"The person who grew the oat that went into your muffin doesn't care about you. It not compassion that drives people to coordinate to provide all of the goods and services that we all enjoy. They don't wake up in the morning and say well I better get to work or someone in Alaska won't get a muffin this morning and then due to low blood sugar will fall asleep in there classes." (By the way Sherri you rock)

As we economists speak of the market place with wide eyes and are overwhelmed by an amazing price system that allow people to coordinate and cooperate so the city Paris won't have to worry about where food is going to come from the next day or how nobody really needs to know how to make a pencil other people those non-economist people are there with their eyebrows raised. How can you talk about coordination with such passion they say or how come every-time you walk in to Fred Meyer you freak out(like Josh when he goes to Fred's) as you speak about the number of individuals around the world all working to make a huge number of goods available so you can get exactly what you want went you want.

If you ask me this excitement that economists show is a talent. Most individuals don't possess this skill. They only notice systems when they are broken. Like Paul Heyne's illustration of social cooperation as rush-hour traffic. People complain about traffic, but don't think about how fantastic it is that such a large number of people can all get to a number of different places at the same time. Many people who have experienced real shortages of food stables (in say Communist Russia) can be moved in to tears when on a trip to the grocery store because they know what its like when the system is broken and you can't find any bread or milk to feed your children.

Often times we forget how amazing the cooperation and coordination of markets to produce goods and services we enjoy really is.Rather then waiting for the system to fail to realize how well it works, it is a good idea for us as individuals to take a page out of the "causal nerdy conversations of economists" and think about how amazing these two concepts are, as it is very foolish to live by the principle of "I will only notice you when you are not around" (which I also consider to be fabulous dating as well as economic advice note that that doesn't occur to often with economic theory...except for in the case of Opportunity cost ;-)


  1. (not my real post) it's amazing how much economic theory can apply to the dating world. :)

  2. I'd be interested in running the numbers and getting a demand curve together for yours truly. I'm guessing it's very inelastic.

  3. Indeed Robin, as a finance major my first instinct was to look into the potential persons balance sheet, future earnings and calculate a NPV and go after the most "valuable" one in terms of dollars. Now that I've been abducted by the economists and half converted I see utility is a far more inclusive unit of measure rather than dollars. I resolve to date only people who bring me maximum utility, and if having a high NPV increases utility so be it but there is more to utility that NPV, like good looks for instance and other skills.

    Ok ok I'm defiantly at least half joking but I once listened to a rich man say that we can play pool. Even though we don't know the geometry, mathematic, and physics of it and certainly we don't literally calculate our shot. Yet we can play all the same. Instead we are able to automatically approximate all this to such a great degree that we play pool just fine. In the same way I would argue we look for someone who will bring us maximum utilty. Although it is complex beyond reason and we will never have perfect information, we do approximate utility on a continually and automatic process. I might even go so far to say that if you follow your heart its just like taking a shot in pool, you don't do the physics but it just works.