On Monday, I opened my inaugural lecture in my Econ 100 (Economics for the Citizen) class by showing this video:
The Big Rock Candy Mountain is a hobo’s Paradise. Everything he wants is at his fingertips. Lakes of whiskey and stew, lots of places to sleep, where they “hung the jerk that invented work.” Truly a Heaven on Earth.
But the economic problem is that we don’t live on the Big Rock Candy Mountain. We live in a world of scarce resources, that is a world where choices need to be made. How does one decide? How can one maximize his resources? How do we interact with one another on this issue? How do we develop rules and institutions that govern these interactions? These are the questions that economists study.*
Economists spend most of our time repeatedly reminding people that resources are scarce. Politicians like to pretend otherwise. Scarcityists like to pretend otherwise. But they are merely chasing a hobo’s dream.
*Note the subtle difference between these questions, which are positive in nature, and the normative questions of “how should resources be allocated” and “who should decide” that many pseudoeconomists like to think economics is.