Opportunity Cost, Price, & What Stuff is 'Worth' - Intro to Political Economy, Lecture7

Описание: https://sites.duke.edu/intrope/

COURSE OVERVIEW:
Introduction to Political Economy is a self-contained and nontechnical overview of the intellectual history of political economy, the logic of microeconomics, and the definitions used in macroeconomics. It introduces the notion of a political economy, emphasizing the moral and ethical problems that markets solve, and fail to solve.

LECTURE OVERVIEW:
1. Division of labor is the central concept in all of understanding social institutions. States and markets focus division of labor in different ways, and both are necessary.
2. Both markets and states fail when they encourage rent-seeking.
3. Opportunity cost: The cost of doing something is the cost of NOT doing other things. Example:
the concert tickets
4. Price: When markets work well (and they don't always) price approximates opportunity cost. That
is important because it gives people all over the world accurate signals about how OTHER people value resources.
5. Video: Al Trewis and Moe Cashferme decide whether to grow corn or soy.
6. Sock City: Datang, China makes most of the socks in the world, because of division of labor and the price system. Very efficient, but harmful to the workers who used to make socks, but now lost their jobs.
7. The whole world is constantly "losing" jobs to productivity increases. Great benefit to consumers.
8. An extended example: Recycling. Recycling is expensive. Price system alone would say recycling is a bad idea. But prices here do NOT approximate opportunity cost. May be room for effective state action.

READINGS:
Munger, MC. “A Fable of the OC.” Library of Economics and Liberty. (http://www.econlib.org/library/Column...)
Locke, John. “Venditio.” (https://reconstructingeconomics.com/2...)
Hayek, FA “The Use of Knowledge in Society,” AER 1945 (http://www.econlib.org/library/Essays...)
Aquinas, T. Summa Theologica, Questions 75-78. (http://www.ccel.org/a/aquinas/summa/S...)
Video 1: Michael Munger, “What Do Prices Know That You Don’t?” (   • What Do Prices "Know" That You Don't?  )
Matt Zwolinski, “Is Price Gouging Immoral?” (   • Is Price Gouging Immoral? Should It Be Ill...  )
Munger, “They Clapped,” Liberty Fund (http://www.econlib.org/library/Column...)

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Produced by Shaun King, Duke University Department of Political Science Multimedia Specialist