Lionel Robbins was a British economist who lived from the late 1800’s to the late 1900’s and his definition is, in my opinion, one of the best definitions of economics.
“Economics is the study of the use of scarce resources which have alternate uses.”
Now, when you hear the word resources you might be thinking of lumber, ore, and other raw materials, but actually, a paper cup is a resource. Coffeepots are resources. Even you are a resource. “Well, paper cups aren’t scarce,” you might say, but if you look at it, there is always a demand for paper cups. Otherwise, companies wouldn’t sell them. The Merriam-Webster dictionary defines scarce as, “deficient in quantity or number compared with the demand.” Thus, if there is a demand for a specific item, then that item must be scarce.
So, why should this matter to you? Most of us aren’t economic professors or aspiring to be. Economics is different from most other sciences because it is an essential part of our lives. Every time a politician gets elected, he has some say in the economic policies of our nation. If you decided not to vote in the last election, that is still a position. There is no middle ground. If you decide to give up your say in how the government is run, then that is still an economic viewpoint. What you are saying is essentially, “I don’t care how the government will be run and I trust whoever is elected with running my country.”
OK, so here is a different angle: We all go to the store, right? When we do, you might not realize it, but, we are voting with our dollars. If we spend our money on potato chips, what we are actually saying is, “I want potato chips more than I want tortilla chips.” When companies see that they realize that they should put more effort into making potato chips.
So, no matter who we are or what we do, it is essential that we know at least a little bit about economics. And that is what this blog is about: helping people (especially teens) know the fundamentals of economics.
I hope you enjoyed this blog post as much as I enjoyed writing it. If you have any questions or even pushback I would love to talk with you. Just put a comment down below or subscribe to my email list.