Message of the Day - The Human Side of Economics

Good Morning,

 

Today I finished Tim Harford’s ‘The Undercover Economist’ (www.timharford.com) and have to say that it was the easiest to read economics book that I have ever tackled. I like the fact that Tim Harford focused on examples which do not include tables and pages of numbers. He also focuses on showing the big picture of economics, and takes it to a level rarely seen by the average person. That is often because eyes glaze over and mouths start to drool at the thought of economic data.

 

The one most striking take away from The Undercover Economist is that economics is a part of everything that we do. Who we are and how we live, what we like and don’t like are all intertwined in economics. Psychology may tell us about our mental state, but economics involves in how that mental state interacts with the world. Freaky really, but when you think about it, pretty much everything in our lives ties back to economics.

 

Let me show you an example:

 

You are reading this email on a computer. That computer was purchased from someone. The person/company who sold the computer was paid for the sale, and they paid the manufacturer or distributor for the computer, who in turn paid the components manufacturers for their parts, and they in turn paid sub-components makers and raw material providers. The logistics providers (trucking, cargo shipping, airmail, etc.) all get a cut. And then there is the electricity to run the computer which is paid to the electric company who in turn pays for fuel and equipment to generate the electricity, and so on and so on.

 

Tim Harford covers how companies and countries build their economic status and why helps and hinders this growth. Again, in each of his examples he ties the economics back to the human element. People who have incentive to improve their lives will improve their economics. People with no incentive to improve their lives will invariable not improve their economic situation.

 

So, improving yourself can lead to improving your personal economics…again, freaky how it all ties together.

 

It was great reading about the human side of economics, and to see how we all fit into the global picture. And when you look at the global picture, you will see me. I’m the one smiling….

 

Enjoy.

 

Sanford Berenberg

Sanford@berenberg.net

http://www.berenberg.net

http://sanfordberenberg.blogspot.com/

502-533-9336

 

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