Wednesday, November 4, 2009

10 pillars of Economic Wisdom

By David Henderson:
1. TANSTAAFL: There ain't no such thing as a free lunch.
2. Incentives matter.
3. Economic thinking is thinking on the margin.
4. The only way to create wealth is to move it from a lower valued to a higher valued use. Corollary: Both sides gain from exchange.
5. Information is valuable and costly.
6. Every action has unintended consequences.
7. The value of a good or service is subjective.
8. Costs are a bad, not a good.
9. The only way to increase a nation's real income is to increase its real output.
10. Competition is a hardy weed, not a delicate flower.
I think I will post these in big letters on the wall of a classroom someday. I also think I will buy Henderson's book.

1 comment:

Pete Abbate said...

Find someone with Tyler and Alex's book - didn't they have almost the same list in the beginning?

Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty