Opportunity Cost, Price, & What Stuff is 'Worth' - Intro to Political Economy, Lecture7

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COURSE OVERVIEW:
Introduction to Political Economy is a self-contained and nontechnical overview of the intellectual history of political economy, the logic of microeconomics, and the definitions used in macroeconomics. It introduces the notion of a political economy, emphasizing the moral and ethical problems that markets solve, and fail to solve.
LECTURE OVERVIEW:
1. Division of labor is the central concept in all of understanding social institutions. States and markets focus division of labor in different ways, and both are necessary.
2. Both markets and states fail when they encourage rent-seeking.
3. Opportunity cost: The cost of doing something is the cost of NOT doing other things. Example:
the concert tickets
4. Price: When markets work well (and they don't always) price approximates opportunity cost. That
is important because it gives people all over the world accurate signals about how OTHER people value resources.
5. Video: Al Trewis and Moe Cashferme decide whether to grow corn or soy.
6. Sock City: Datang, China makes most of the socks in the world, because of division of labor and the price system. Very efficient, but harmful to the workers who used to make socks, but now lost their jobs.
7. The whole world is constantly "losing" jobs to productivity increases. Great benefit to consumers.
8. An extended example: Recycling. Recycling is expensive. Price system alone would say recycling is a bad idea. But prices here do NOT approximate opportunity cost. May be room for effective state action.
READINGS:
Munger, MC. “A Fable of the OC.” Library of Economics and Liberty. (www.econlib.org...)
Locke, John. “Venditio.” (reconstructing...)
Hayek, FA “The Use of Knowledge in Society,” AER 1945 (www.econlib.org...)
Aquinas, T. Summa Theologica, Questions 75-78. (www.ccel.org/a/...)
Video 1: Michael Munger, “What Do Prices Know That You Don’t?” ( • What Do Prices "Know" ... )
Matt Zwolinski, “Is Price Gouging Immoral?” ( • Is Price Gouging Immor... )
Munger, “They Clapped,” Liberty Fund (www.econlib.org...)
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Produced by Shaun King, Duke University Department of Political Science Multimedia Specialist

[@BBBarua]

This lecture is so awesome! Thanks to youtube for providing the platform and Duke University for sharing this valuable lecture.

[@joaoshenny]

I'm finding this sequence of lectures incredible. There's much to learn from them. I'm very glad you've made such valuable content open for all. This is a great way to contribute. Wish more people were interested or spoke English to be able to benefit from it. Thx from Brazil.

[@philiptaferner6080]

Thanks very much also from Austria - this is really an incredible service to all self-learners!

[@michaellewis7861]

That was quite a ridiculous question and implies something ridiculous. You weren’t willing to purchase the tickets for 400$ but you not selling the tickets makes the tickets worth 400 a piece? Trivially the tickets are worth enormously more than that if you find someone else the monopoly only grows stronger as each scalper runs out. The question is trivial then.
A possible way is to just not tell your wife that you got them for free for then it costs you nothing. There was no forgone alternative to your prior possibilities, that is, in attaining the tickets, you eliminated alternative ways you could have spent said money for the sake of your wife. You would have experienced a loss.
It is the loss which you would have experienced which would have made your wife believe the tickets had worth for purposes of the meaning of you taking her to the concert.
But this introduces more questions about the existence and measurement of consumer surplus.

[@bobv3847]

At around 6.00 did he just quote Brand Nubian's 'Punks Jump Up To Get Beat Down'?!

[@md.alamgirhossain1450]

Thanks to the authorities who are doing this great job.

[@jasonstephenson9959]

Sociology major here. The reason why it's not true that it is immoral for you to take the tickets when someone else is willing to pay more is because you might not be worth as much in the economy as they are. Bill gates wouldn't take the time to bend over and pick up a thousand dollar bill, Because his time is worth more than that. Someone that cleans hotels for a living Wouldn't dream of stepping over a thousand dollar bill. If bill gates really wants the tickets, he could pay a million dollars for it

[@JOHNSMITH-ve3rq]

Big issue with price system claims is that some people have more money than others. So the information is different. Bread is 1% of person a income, but 0.0001% of person Bs.

[@kyisoehan7442]

and why does it even matter?

[@ИринаКим-ъ5ч]

Young Scott Johnson Sharon Smith Matthew

[@nme-bp7cf]

this recycling bit was insaenly confusing and unclear to me

[@hazadus3]

This guy would make a good stand up comedian

[@md.alamgirhossain1450]

More and more different subjects videos need.

[@anon-soso-anon]

He keeps commenting that price tells you how much something is worth to someone but i think it's more complicated than that. If I'm making $200,000 a year and another person is making $30,000 a year the object, convenience, or experience might be equally important to each of us but i am easily able to outbid someone making far less.
I get the point but his description only perfectly works if we all make the same amount of money.

[@nme-bp7cf]

That’s a good point, I wonder what he would say in response

[@chetanasin9150]

Thanks

[@odisiusX5]

I just love these lectures ! Thanks To Duke University, and to this brilliant professor, Michael Munger. Much appreciated Sir !

[@liranrok1]

Thanks for the knowledge Professor 👨‍🏫

[@samih6613]

somalia have state 🤳

[@Boofy31]

Gangstah

[@chetanasin9150]

Thanks