Economy is a walk in the park

Chaos erupts when our dog sees me putting my shoes on. Meditation-Hopes!– that the next thing I’d reach for would be the leash because that means we Go for a walk. We got Lucy’s Labrador near the start of the COVID pandemic, when my kids seized on a moment of vulnerability (“Fine. We’re going to get a dog”). It was a great investment. Our garden walks are an excellent way to start the day, and an excellent way to take a break between tasks and projects.

It’s also a great opportunity to think about economics, specifically two basic principles of economics: opportunity cost And the incentives. These are, to economics, what it means to intercept and tackle American football. Understanding (or winning) usually boils down to understanding them. So if you understand some of the photos I took in the park, you’re on your way to understanding the economy, and thus the world, better.

First, notice what these ducks are doing. You may need to squint a bit because ducks are hard to see. The photo was taken around noon on a sunny 95-degree day in Birmingham, Alabama. appallingly, Birds in the shade, all five of them. The same goes for the other ducks in the park. If you understand why birds prefer to rest in the shade rather than the sun, then at a very basic level, you have at least some Economic intuition and may understand why economics is sometimes called “the painful explanation of the obvious.”

Ducks may not be as aware or sensitive as humans are, but they prefer the comfort of shade to heat. This does not mean that they will Always Choose shade or we forgo the frugality when we see ducks venturing into the baking sun. Maybe they go out into the sun to get something to eat. Maybe they just need a brisk walk (like the dog and I did in the heavy air and afternoon heat). Since they prefer at least a little more rest, they are in the shade.

You may have heard that economics assumes that people are pathologically selfish, or that it encourages people to be so. We get a good deal of analytical horsepower from the simple assumption that people maximize “consumption,” but we’re silent about the contents of that consumption. The belief that “economics tells people to be selfish and only care about money and material things” is a misreading of economists, and economists fail to communicate. Hence, I present to you the second picture.

It’s a mother duck and her little ones having fun in a shady spot in the garden. Notice what the mother duck does: she keeps the ducklings close to her, and most importantly, she hides a little. She protects the ducklings, which is no small task given the birds of prey that live in the park. Note that she is watching to her Ducklings. She would not go out of her way to be of service to my kids or any of the other animals in the park. Instead, she cares for those closest to her. As Adam Smith argued, people go after king interests because they have the most knowledge of their local situation. That’s what the mother duck is doing here. She is out for her own good, but her “own interest” includes the welfare of the ducklings.

This photo shows a bunch of pigeons scurrying around, looking for food and staying in the shade. I wouldn’t do this because park rules include “don’t feed the animals,” but imagine I had sprinkled a handful of bird seed on the sunny part of the sidewalk. Hungry pigeons would almost certainly have gone for it. They would incur a cost to feed themselves. When their urges change, they change their behaviour. Going out into the sun is expensive because it is inconvenient, but the pigeons are probably willing to put up with it if they are hungry.

“So you say we should be like ducks and pigeons?” No, I’m not saying we are should Be like ducks, pigeons, or even lobsters. I ask you to see God’s creatures respond to changing costs and benefits across the animal kingdom. You’ll probably agree with me, then, that it’s a bit of an exaggeration to suggest that no It’s “human nature” to respond to stimuli, make choices in the face of scarcity, and so on. If even ducks and pigeons respond to stimuli, people might, too.

Art Cardin

Art Cardin

Art Cardin is a senior fellow at the American Institute for Economic Research. He is also an associate professor of economics at Samford University in Birmingham, Alabama and a research fellow at the Independent Institute.

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