January 6, 2008

We're all in this together!! (Highlight Chap. 1-5)

Pages 59-60!!

"That may seem like a ridiculous hypothetical scenario. But economists can measure and have measured some of these effects: when frosts hit Brazil, world coffee prices do indeed rise, Kenyan farmers do buy aluminum roofing, the price of roofing does rise, and the farmers do, in fact, time their investment so that they don't pay too much."

Now don't get me wrong the book is great, but the reason I picked this particular area is because it really sums it all up. The quoted section and the parts of the book immediately preceding and following it are really what makes all of what we do, study and comment on possible.

It's suggests to us that the choices we make have an effect whether it be profound or minuscule but an effect none the less, and furthermore it's an effect that causes another and another and so on. It gives us a real world example, measurable and something that sounds like it's from an economist's paper on 'The Butterfly Effect' - (not the movie but the concept). This makes me think of voting, 1 vote matters a little bit and when everyone matters a little bit big things happen.

I solidified this for my first highlight as I was reading Russ' highlight on money buying happiness. I believe that the extra dollar that we spend on the White Chocolate Mocha Latte (my personal favorite) does make a difference (just not immediately to the farmers as we had hoped). Even if it goes 99% into the pocket of the Starbucks 'big-wig's, they spend money too and the decisions they make with the 99 cents they realize from my purchase then trickles through-out the system until it affects the farmer's and me and you and the whole of our global economic system.

It may seem like so many things in Harford's book as 'duh' moments like.. you read them and you say to yourself, well 'duh' I should have known that. However for me it really encompasses the entirety of economics as the study of choice. Cause and effect on it's grandest and most drawn out scale. And as I read through the rest of the book Harford continues to unfold this economic Karma if you will.

Anyhow that's my 2 cents, I'm interested in what other's think about this idea. I invite you to post!!


Jessica Wade said...

I agree that this does encompass a lot of what economics is. One decision, even as small as buying a coffee, can and does have a profound impact on more than just you and the barista. The butterfy effect is a good analogy. No matter what you do in life it will have an inpact on someone else and a whole chain of events will occur because of it. Has anyone read "The Five People You Meet in Heaven"? This book also touches on that. Anyway, nicely written and I agree.

Larry Eubanks said...

I understand the attention to the idea that everything effects everything. And, I'm sure this is one lesson from the study of economics.

Yet, I'm thinking there is probably an even more significant idea in all of this. Everything effects everything, and all the choices and effects are related, and one might marvel that in all of this there is an order, not disorder. No one person chooses, or plans, or orders what happens in all of these interrelated economic activities, yet by some marvelous "mechanism" I'm able to buy a cheeseburger when I want it, and from the business I want to buy it from. There is a spontaneous order that emerges from all of the "everything affects everything else."