Episode 1 of Crash Course gave a brief introduction to how the course is designed, who your co-hosts are, and some basic principles and definitions in economics. There was a mix of good and bad economic conclusions, so let’s dive right in:
How Does Crash Course Define Economics?
Our first co-host, Mr. Clifford, defines economics as “the study of people and choices”. This is a pretty great definition, especially considering the alternatives. Depending on his preferred school of economic thought, he could have easily said economics is the study of “classes and prosperity,” “institutions and planning,” or “statistics and predictions”. Instead, Mr. Clifford went with people and choices which will become important later on when the show gives examples of choices.
The first example of what a human choice looks like couldn’t be more relatable to the audience: watching a YouTube video. YouTubers compete for your attention, and by proxy, ad revenue. YouTube content is a serious business as our hosts know, and the popularity of some channels over others will determine the actual wealth of the content creators.
Our second co-host, Adriene, even goes into defining opportunity cost: “the cost of watching this video is the video you’re not watching.”
I would have been satisfied with this explanation, but Adriene goes so far as to give a great example of opportunity cost in having a large military state:
Military spending in the United States is over $600 billion per year. That’s close to what the next top 10 countries spend combined…the opportunity cost of [each] aircraft carrier could be hospitals, schools, and roads.
This statement is pretty profound in one sense, considering that some people and economists continue to write that any kind of government spending is good for the economy regardless of what it is, even if it’s for a fake alien invasion.
What is not mentioned, however, is that the opportunity cost of these aircraft carriers could also be non-government spending in the marketplace. In other words, if the money spent on aircraft carriers were refunded to taxpayers (or never taken in the first place), people could decide for themselves what they would prefer to spend that money on. It could be towards their healthcare bills, their kids’ college tuition, or buying consumer goods, any of which might be more important to them than another aircraft carrier.
This is a good example of Bastiat’s broken window argument or “the unseen”, which says that it’s easier to see the stuff paid for (in this case, the aircraft carrier) than that which could have paid for.
The YouTube video selection example was a great illustration of the marketplace, but I thought next examples were a little strange.
“But what if I’m watching this at school,” you ask. “What if I’m forced to watch this?” Well, you weren’t forced to go to school. You could ditch, you could drop out, you could move to a country that doesn’t have compulsory education.
Wait, isn’t that a contradiction? Doesn’t something legally compulsory require coercion or force? Parents have a legal obligation to send their kids to school, under the threat of significant fines or jail time, sometimes for the student. It doesn’t matter if school gives you anxiety or you’re being bullied, you still have to go. And you obviously can’t just move to another country; runaways are sent back to their legal guardians.
This is quite different from choosing which YouTube video to watch. You don’t get fined or jailed for not watching a YouTube video. To a child, compulsory education is not the marketplace.
Another problem I had with the videos was a lack of distinction of individual and government action:
Is there a way to ensure there will never be another traffic fatality? Yes, we can crush all the cars, close the roads, and force everyone to walk. Do you want to decrease the number of people convicted of murder? You could decriminalize murder. You want to end the unethical treatment of elephants? You can kill off the elephants, in an ethical way of course.
Are these questions directed at me? I can’t do any of these things.
I can choose one YouTube video over another, but I cannot choose an alternative road system, legal system, or what other people do with their elephants.
You know driving has risks, that you might get in a car accident, but you still drive.
Adriene has now switched the subject to what I personally decide to take as my transportation method. The power to choose whether to drive is different from deciding to crush all the cars and force everyone else to walk. I have control over myself and my actions, but I don’t get to decide how other people act.
I was pleased and entertained by the introductory episode of Crash Course Economics. The big economic principles it taught are generally unobjectionable, but some of the word selection and examples are either confusing or misleading. The 10-minute video has a lot more to unpack, and I’ll try to expound on some of the interesting choices of words and implications before the next video comes out. I’ll also include some thoughts from other economists I’ve asked to contribute to the blog.
Like what I wrote? Hate what I wrote? Feel free to comment below.