Economic Blabber

When economics is discussed, money is usually what comes to mind for most. For those with more training, things like utility and social cost may enter conversation. Things like equilibria, marginal costs, and opportunity costs are key concepts. As I was pondering economics in general, I realized something. Economics is generally defined as the efficient use and transfer of scarce goods, or the creation of value through trade. I think economics is simply human exchange and response. This may seem obvious to most, but I'm in the mood to write about it.

Economics is human exchange and response. How do humans respond to external forces? How do humans exchange? We give money to the government in the form of taxes. What do we get in return? We have to get something. Perhaps we get laws that enhance other forms of exchange. Perhaps we get the guarantee not to go to jail for tax evasion. Maybe it is because we don't have a choice. I think not. Whatever our reason is for paying taxes, that is what we get in return.

Why would I befriend a particular person, Fred, for example? I'm giving Fred my time. What do I get in return? Maybe he's a real jerk but likes being my friend. He takes my time and energy and gives me nothing but a hard time back. What if I keep being His friend? Obviously he's giving me a hard time back, but that can't possibly be why I'm his friend. I'm not a fool. I must get something back though. I might get the satisfaction of knowing he has a friend in me. There is still exchange.

I think all humans are rational. It's the definition of rationality that is a farce.