Over at Marginal Revolution, Alex Tabarrok notes that today's NY Times just misses the opportunity for another "teaching moment". He refers us to their "Fine Lines ... Inside one of America's last pencil factories." I am referring to Leonard Reed's I, Pencil, an essential teaching tool re specialization and exchange. No one person can easily make a pencil. But something as mundane as a pencil reaches us at very low cost because large numbers of strangers have come together as specialists, producing pencils for us at low cost. It's a wonderful lesson in how market signals perform remarkable coordination at great benefit to us all. It thereby explains our material well being.
The same issue of the NY Times includes "Your child's preschool teachers may be the most important educators she'll ever have ... So why do they get paid so little.?" It's another supply and demand opportunity squandered. The essential "The Economic Way of Thinking" by Paul Heyne, Peter Boettke and David Prytchitko includes another simple and incisively useful example. I am looking at their question #9 at the end of Chapter 11 (11th edition). Why do hairdressers earn more than day-care workers? Does our "society" care more about vanity than children? Pretty awful? Bad news? No. Demand and supply indicate that there are many people who enjoy working with young children. Apparently many more than want to muck around in other people's hair. Good news.
Here are just two simple but profound lessons from very basic economics. It's not about "fake" news. It's about good news, much better than what the "wets" (thank you, Margaret Thatcher) dwell on.
Sunday, January 14, 2018
Monday, January 01, 2018
Urban structure, not urban size
Tyler Cowen asks "Why don't cities grow without limit." He comments on (and links to) a Paul Krugman discussion of the same topic.
"City size" as the focus has problems. What is the boundary of "the city"? And cities are about spatial arrangements. Spatial arrangements involve many trade-offs and are necessarily emergent. Emergent arrangements would bend and displace the (imaginary) marginal benefit and marginal cost functions. This goes on as the "cities" keep spreading out.
But emergent spatial arrangements are up against the durability of physical forms as well as the durability of politicized land use regulations.
All of this sounds like Jane Jacobs v Robert Moses all over again. But times have changed insofar as people now link up in many ways. People in cities want space as well as access. That alone suggests a trade off. But they want access to many things. They also choose the mode of access to all these things (electronic v. traditional). "Geography matters more than ever despite the digital revolution ..." And more potential trade-offs than ever.
"City size" as the focus has problems. What is the boundary of "the city"? And cities are about spatial arrangements. Spatial arrangements involve many trade-offs and are necessarily emergent. Emergent arrangements would bend and displace the (imaginary) marginal benefit and marginal cost functions. This goes on as the "cities" keep spreading out.
But emergent spatial arrangements are up against the durability of physical forms as well as the durability of politicized land use regulations.
All of this sounds like Jane Jacobs v Robert Moses all over again. But times have changed insofar as people now link up in many ways. People in cities want space as well as access. That alone suggests a trade off. But they want access to many things. They also choose the mode of access to all these things (electronic v. traditional). "Geography matters more than ever despite the digital revolution ..." And more potential trade-offs than ever.
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