Ed Kless gave a great presentation on “Economics Made Simple” tonight. Using an interactive game, he demonstrated how wealth is created by simply trading items among individuals. Since I hear things like ‘it is a zero sum game’ and ‘the poor keep getting poorer’ I know that lots of people just don’t have a basic understanding of how it works! Ed is willing to give his presentation to civic groups, and he can adjust it to be as short as 20 minutes and as long as 90 minutes. It is very entertaining, interesting, and educational.
Here are some of my notes and take-a-ways:
- Entrepreneurs continue the work of creation
- Free Market vs Cool Market
- Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics by Henry Hazlitt – The lesson: The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. The rest of the book is example after example of how most government policies ignore this lesson.
- If an ‘expert’ starts talking about how one affected group benefits for a policy, they are NOT an economist! (see point above this one)
- Ayn Rand was wrong when she said trades are a zero sum game because value increases for both parties
- Profit is a company’s indicator of altruism
- Concept of everyone goes in to business to help others
- company’s profit = difference between price and cost
- customer’s profit = difference between value and price
- money is spiritual
- on GDP: if a cow is born it goes up, if a baby is born it goes down
- government doesn’t trade, people do
- 2 ways to make a car: build it in Detroit, or grow it in Iowa. (machine to convert corn into cars)
- there are no solutions – only trade-offs