Economics Is About Scarcity, Property, and Relationships

Michael McKay in an interesting conversation with a friend explains pretty much all there is to economics:

The other day I was having coffee with a new friend, a retired businessman who had customized luxury cars in California. I mentioned I had recently retired from owning an investment firm and had studied economics for many years, especially Austrian economics.

Like so many people, he said, “I really don’t understand economics and always have been confused by it.”

To which I surprised him with, “Of course you understand economics; it is the thought process you use every day to deal with three things: scarcity, property, and relationships.”

His eyes got big and he said, “Whoa! Say that again.”

“OK,” I said, “Everything in human life is organized around how we make decisions about three things: scarcity, property, and relationships.

“First let’s talk about scarcity which you’ve known about all of your life — you notice when something is missing or about to be missing; it is how you decide when it’s time go to the grocery store, do your laundry or whether you should drive your car faster so not to be late for an appointment.

“Every human being is an expert in the decision process of scarcity. It is something we all naturally do whenever we act and choose — which, by the way, we are doing all the time, every day, all day long.”

I smiled, “I could go on and on. You want more?”

“Sure,” he smiled back.

Read on..

I mean none of this barring scarcity is really mentioned in economics teaching. Scarcity too is mentioned just in that boring standard definition of economics. After that it is all forgotten. Property is only mentioned when we say property rights which comes in institutional economics again a specialised area, hardly taught. Relationships is like what is that?

 

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