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Freakonomics and what it means?
Feb 10th, 2008 by admin
By: Kenneth D. Gartrell
The first law of economics should be that on the margin, little things mean a lot. The good news is that the Dismal Science is growing in popularity and people are more receptive than ever to such powerful intuitions. It is in popular books at the books stores near us. Business and economic media is one of the fastest growing segments of the news and commentary markets. Economic Weblogs appear in many forms.
We all face everyday questions requiring us to think for ourselves more clearly and effectively in economic terms. Can you give a simple economic explanation for why a beautiful new country club has hundreds of un-repaired ball marks on otherwise perfect greens and why the tee boxes are strewn with broken tees? Can you recommend the least cost and most effective way to solve the problem?
When we can think more clearly about these digestible questions, we can start to think about bigger things and tougher issues.
A growing popular desire to unravel the mysteries of practical life, as well as poverty and prosperity, explains for me an exploding interest in books on economics such as Freakonomics, Capital Ideas and more. It also explains why there is a rise in the business and economic media. We even see a trend towards the popular diffusion of economic thinking as it begins to rival murder tabloids on major cable networks.
It all reassures me in human nature and about the worth of all the economic study up to this time.
We are bombarded daily with big and complex questions like: “Is Social Security a good thing?” “Did the Federal Reserve Bank cause the NASDAQ bubble?” Will the Federal Reserve solve the housing crisis? These questions are obviously matters of economics. Other questions such as: “Should I worry about my Medicare benefits?” “Will there someday be a cure for cancer?” “Will a wall on our borders make us safer and more prosperous?” are not so obviously economic questions – but in their true underlying character they are!
The way to address ALL these questions is to learn the simplest intuitions of economics and then use them to break down the complex questions one part at a time.
AND THE ANSWER IS:
The country club proshop was giving away tees and charging members for ball repair tools. When a friendly economist suggested that the clubhouse sell tees and give away ball repair tools, the greens became spotless and the tee boxes were pristine in 30 days. Due the relative cost of tees and ball mark repair tools the change was nearly costless, but the result was exceedingly effective.
SO THE LESSON FOR THE DAY IS: On the margin little things mean a lot.
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