Monday, September 03, 2012

The Invisible Laws of Economics,

You probably know by now that economics involves the law of supply and demand. And nature involves the law of gravity. Such laws are not tangible; you can't hold them in your hands; they involve a reality that you can't physically see. Seeing something is simple as looking at it; understanding how things work takes a bit of thinking and work on our part. Likewise economics can't be understood simply by seeing speeches by politicians mentioning the poor, the middle class, the wealthy, and the working class.

Away from the politicians we go about our daily lives listening to music, talking to people, and driving our cars etc.But during our day we avoid stress wherever we can; we know the songs that make us feel better, we know how to behave to avoid a fight or argument, we know the shortcuts to take as we drive home and all the other things that help us get through the day feeling as good as we can.

Doing such things is practicing economic decisions; the cost of fighting, getting home late, and hearing a sad song is a huge amount of stress. So you take shortcuts and avoid problems to avoid those daily costs. Hence you have a easier day.

Mr. Government can't be avoided and he fights Mr. Private Industry everyday. Since Mr. Private Industry needs to avoid Mr. Government for his own peace of mind, he finds ways to avoid him. Like taking his business to another country!

Now you know how invisible economic laws are; yet their impact is enormous to our lives. So don't let this lesson about costs be overshadowed by a politicians speech!