Fun with Economics

I considered talking about Paul Ryan’s economic reforms, in the news yesterday. It has been a while since we talked here about economic issues. (It’s harder to get commentary here at home right now, since my son Economic Sphere left for the Army, although Political Sphere can fill in pretty adequately; he's just having more fun doing the math on delegate counts.) But that seemed kind of serious for the beginning of spring, when bluebonnets are decorating the highways here in Texas.

It was my experience as a college freshman that economists are funny. In a good way. I laughed a lot in that class, as the teacher intended. He seemed energized by our laughter. But it does take some thinking to get the humor.

I often check in with Greg Mankiw’s blog; he’s a Harvard economics professor (author of the most popular basic economics textbook used in the country) and an economic advisor to presidential candidate Mitt Romney. And sometimes his sense of humor is evident in the blog. Today he references a summary of his 10 Principles of Economics, in a video, translated by yet another funny economist.

Here are the 10 principles:

1.      People face tradeoffs.

2.      The cost of something is what you give up to get it.

3.      Rational people think at the margin.

4.      People respond to incentives.

5.      Trade can make everyone better off.

6.      Markets are usually a good way to organize economic activity.

7.      Governments can sometimes improve market outcomes.

8.      A country’s standard of living depends on its ability to produce goods and services.

9.      Prices rise when the government prints too much money.

10.  Society faces a short-run tradeoff between inflation and unemployment.

So, sensible, but not funny—yet. But when Yoram Bauman, the Standup Economist, translates these principles for the lay person (anyone without a PhD in economics, he suggests), you start to see the humor. And it’s important to laugh when times are as serious as they are today. Plus, there's evidence that when the learning environment is positive (and funny is positive), learning sticks better than when the environment is negative (boring or scary).

The video is a little more than five minutes well spent.