The Economy’s 3 Essential Ingredients from Crossway on Vimeo.

Crossway has the latest video with a taste of what you’ll find in my new book, Economics: A Student’s Guide. This one deals with the three basic types of economic resources:

There’s a tendency to identify the economy with what we do with our money, and that’s understandable, because money is easily counted. We know how much of it there is, and we know who has what (to some extent). You can actually create mathematical formulas, and economists have done a great deal of good service by doing mathematical study of how people use their money. But…it’s a little like looking for your car keys under the street lamp because the light is better there, even though you dropped them down the street. A focus on what can be easily counted, measured and mathematically analyzed can distract us from realities that are just as important, but are not so easily counted. We might even think the model we develop for looking at things that are easily counted can then be mapped onto everything else and become a master metaphor.

In the 1970s, a prominent economist shocked the world by publishing a scholarly article in which he analyzed decisions about marriage choices in terms of a competitive market for attractive mates—as if people were competing for marriage partners the way Coke and Pepsi compete for customers. It’s a deeply shocking article. It’s not wrong for economists to think about things other than money. It’s important for economists to think about things other than money! But they shouldn’t transfer the system for thinking about money as the master metaphor for thinking about everything.

Invest your time in letting me know what you think!