Notes from March 11 Class

Last week we read and discussed the delightful economics story, I Pencil, downloaded from one of my favorite economics websites: Foundation for Economic Education. It is hard to believe the story was written 50 years ago; it could just as easily have been written today. It is the story of the making of a pencil -- and explains very well how none of us could even begin to understand all of the processes and all of the different efforts that go into making something as simple as a pencil. A great example of the free market at work!

We also discussed "The 7 Fallacies of Economics", also from the FEE website. Here Mr. Reed does a great job of explaining what economics isn't. He gives a great explanation of these 7 fallacies:
1. The fallacy of collective terms.
2. The fallacy of composition.
3. The fallacy of “money is wealth.”
4. The fallacy of production for its own sake.
5. The fallacy of the “free lunch.”
6. The fallacy of the short run.
7. The fallacy of economics by coercion.
We didn't spend as much time discussing the first 2, but the last 5 are evident all around us! I think we will be referring back to those regularly.