Howie Lecture

In this series of lectures, Howard Baetjer gives an overview of a few foundational concepts in economics.

Baetjer outlines some basic concepts essential to understanding economics, including the natures of wealth and economic value.

Baetjer explains scarcity, the problem that any given good of finite supply can only ever be put to some of the many ends for which we might use it, and opportunity cost, the concept that taking one option costs us the benefit we would have gotten from taking the next-best option instead.

Building on the concept of opportunity cost, Baetjer explains how specialization and trade make us richer.

Baetjer explains the “demand” half of “supply and demand.”

Baetjer explains the “supply” half of “supply and demand.”

Having discussed supply and demand separately, Baetjer explains how, together, they describe the way markets operate.

Prices, explains Baetjer, are a powerful tool for getting people the knowledge they need to cooperate with one another in the market.

Continuing his discussion of prices, Baetjer explains what can go wrong when outside interference prevents genuine market prices from emerging.

The trial-and-error based profit and loss mechanism, says Baetjer, is an indispensable tool for guiding discovery and innovation in the economy.

Baetjer argues that the incentives inherent in market institutions outperform the incentives inherent in state institutions in getting people to properly consider the well-being of others when they act.

Baetjer illustrates the harmful effects of economic regulations and argues that we ought to instead prefer economic liberty.