rolling plant, and a machine-tool factory to produce equipment to crimp the thingy in place. And he’d have to grow a rubber tree in his backyard. All this would take a lot of money. Yet a pencil sells for nine cents. The implications of division of labor are surprising, but only if we don’t think about them. If we do think about them, they are, like most economic principles, a matter of common sense. There are, however, a few things about economics that don’t seem to make sense at all. Todd G. Buchholz, in his book New Ideas from Dead Economists, says, “An insolent natural scientist once asked a famous economist to name one economic rule that isn’t either obvious or unimportant.” The reply was “Ricardo’s Law of Comparative Advantage.” The English economist David Ricardo (1772–1823) postulated this: If you can do X better than you can do Z, and there’s a second person who can do Z better than he can do X, but can also do both X and Z better than you can, then an economy should not encourage that second person to do both things. You and he (and society as a whole) will profit more if you each do what you do best. Let us decide, for the sake of an example, that one legal thriller is equal to one pop song as a Benefit to Society. (One thriller or one song = 1 unit of BS.) John Grisham is a better writer than Courtney Love. John Grisham is also (assuming he plays the comb and wax paper or something) a better musician than Courtney Love. Say John Grisham is 100 times the writer Courtney Love is, and say he’s 10 times the musician. Then say that John Grisham can either write 100 legal thrillers in a year (I’ll bet he can) or compose 50 songs. This would mean that Courtney Love could write either 1 thriller or compose 5 songs in the same period. If John Grisham spends 50 percent of his time scribbling predictable plots and 50 percent of his time blowing into a kazoo, the result will be 50 thrillers and 25 songs for a total of 75 BS units. If Courtney Love spends 50 percent of her time annoying a word processor and 50 percent of her time making noise in a recording studio, the result will be 1 half-completed thriller and 2.5 songs for a total of 3 BS. The grand total Benefit to Society will be 78 units. JOHN GRISHAM AND COURTNEY LOVE EACH SPENd EQUAL TIME WRITING AND COMPOSING THRILLERS SONGS BS PRODUCTION John Grisham 50.0 + 25.0 = 75
Made with FlippingBook - professional solution for displaying marketing and sales documents online