Two things: Economics

You can look up “meme” if you need to or want to. I won’t clutter your life with an explanation here.

I recently learned of the Two Things meme, again courtesy of WordPress’s tags tools. It appears to have been most developed by Glenn Whitman, at California State University – Northridge (also here).

Two Things about economics:

  • One: Incentives matter.
  • Two: There’s no such thing as a free lunch.

Arnold Kling at Liberty Fund’s Econ Library is uncomfortable with the claims. Tim Worstall at Tech Central less so.

Neither of the two things in economics will do a whit for a student on the Texas Assessment of Knowledge and Skills (TAKS). For TAKS, basic economics isn’t as important as the political end of the scale. For TAKS, Texas kids need to know what the Texas Education Agency thinks important about economics, which is:

1. Economic systems are classified as:

  • Traditional or subsistence agriculture;
  • Command or Demand (usually totalitarian government)
  • Free market or free enterprise (usually a democracy)
  • Mixed system

2. Countries with free enterprise economic systems have the highest per capita income, GNP, educational levels, and lowest infant mortality rates.

No kidding. The second point is very interesting to me, considering that Cuba has the highest literacy rate and lowest infant mortality rate in the Americas. Clearly these are not hard and fast rules — the exceptions should be very interesting.

5 Responses to Two things: Economics

  1. bernarda says:

    I found the SNL sketch, “Straight Talk about Today’s Stock Market”, but you should look at it quickly because NBC is trying to get it off everywhere.


  2. bernarda says:

    You probably won’t agree on this one. I think it gives rather good analysis of multinational captialism.

    There was a very good SNL satire on investment counselors on googlevideo, but NBC apparently squelched it. I am looking for it again. It is Season 28 Episode 10 of January 18th 2003. If you find it, it is quite funny.


  3. steven says:

    Bernarda, we finally agree on something!

    Corporate welfare is a disgrace, especially when the corporations benefiting are as profitable as some of them are. The problem is not so much the corporations themselves, but that the government is (politicans are) allowed to pass out all this “free stuff” to their campaign contributors. It’s the same thing with campaign finance rules. Politicians should not be allowed to use the government to benefit their friends, whether corporate or other. If the ability to do so was taken away from them, there would be no need for campaign finance rules (but full disclosure of campaign contributions should always be required).


  4. bernarda says:

    Two: There’s no such thing as a free lunch.

    Well, there is a sort of free lunch for the corporate world. The documentation at the following site is a bit old, but the points made are clear and pertinent.

    A more recent look at corporate welfare including the tens of billions in agricultural subsidies can be found here.

    Here is a third example. You can easily find many more.



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