I once worked with a group of high-school students who knew no economics.
They associated it with
stock markets and inflation rates, things peripheral to their
everyday lives. They were wrong. Economics is about choice, all kinds of
choice. We make economic choices about whether to buy ice cream or potato
chips. We also make economic choices about love and marriage, about life and
death, about crime and punishment, even about faith.
I taught a few simple economic tools and
used them to explain how I murdered people while vacationing at the Grand Canyon,
why some co-eds can be coerced into granting sexual favors they would prefer not
to grant, and why more husbands are doing laundry these days. The next morning
a student came to me wide-eyed and exclaimed, "I keep thinking about
what we did yesterday. Everything we do is really economics, isn't it?"
My goal is to provide an
accessible book that reflects this theme of choice and conveys a sense of the
breadth and power of basic economic analysis. It assumes no prior
knowledge of economics and can be read and appreciated by anyone. While some parts of
the book cover conventional material, others do not. I've ignored many
traditional topics and substituted ones that apply economics in unusual and
often provocative ways. The chapters are not meant to be definitive, they
are meant to raise questions. If they do not make you think or ruffle an
occasional feather, I have failed.
Most chapters use a
story-telling approach that has served me well in the classroom. I am
accustomed to a tough audience. Every semester I stare into the fresh faces of
college students who would rather be at the beach, students who challenge me to
make them care. I use stories to grab their attention, to show how economics
affects their everyday life, and to give them a new and deeper appreciation of
what drives their behavior.
The design of the book
The book is divided into three sections.
The first takes a traditional, though non-technical, approach to develop such core economic concepts as comparative advantage,
demand and supply, and economic efficiency. The second section applies these
concepts to a wide range of microeconomic issues and the third section tackles
macroeconomic issues. These last sections, especially the microeconomic
one, are less traditional. Rather than than trying to explain economics,
their emphasis is on using economics to explain everyday phenomena. The
recurring theme is that differences in behavior across individuals
and/or across time are the result of differences in perceived costs and
benefits. To understand behavior, both good and bad, we must uncover the
underlying costs and benefits that create it.
The chapters are very short. Short
chapters and books are easier to write; they are also easier to read. My best
reading is at the breakfast table, after downing my egg sandwich, but before
heading to the shower. It is about fifteen minutes. My writing strategy was
simple: create readings that can be consumed in ten to fifteen uninterrupted
minutes. Time is scarce. If I cannot find more than ten or fifteen
uninterrupted minutes at a time, most of you cannot either.
The economic theory underlying this book comes from many sources. Gary
Becker pioneered much of the material on the economics of marriage and the
economics of crime. Larry Iannaccone's path-breaking work on the economics of religion is reflected in several
chapters. I also have borrowed heavily from the insights of George Akerlof,
Bob Frank, Tom Schelling, Tibor Scitovsky and Gordon Tullock. These may not be household
names to general readers, but they are to professional economists and I owe them
a great debt.
I also owe a
debt to the thousands of students who have served as unwitting guinea pigs for
my off-beat approach.
Their feedback and encouragement have been a critical component of this venture. Many
passed my essays along to their non-economist friends and encouraged me to write
more. One even exclaimed that he caught his twelve-year-old daughter
laughing aloud while reading my work.
This material can be used successfully as the basic text for introductory
economics courses with an applications or issues emphasis, and individual
chapters or sections can be used as supplementary reading in other courses.
The chapters are self-contained. Although the concepts in the first
section are critical for students in their first economics course, the rest
of the chapters can be read (or skipped) in any order. Instructors
adapting this material for their courses can pick and choose any combination
of chapters without loss of continuity.
The book will be updated and modified on an ongoing basis. Suggestions
and comments are welcomed.
Read on. Feel the joy.