A Rubber Duck Dilemma
While Mr. Weasley is very much preoccupied with the function of a rubber duck, I find myself, as the Market Geek, taken with a rather different question:
Why buy a rubber duck?
To answer this, one must look at two thing, the two basic pieces of consumption that guide all our decisions, squeaky and otherwise. These pieces are costs and benefits.
Costs are both just what they sound like…and not. Usually when you think of cost, you think of that pesky little train of numbers on the price sticker, usually coming in units of dollars, pounds, galleons, you get the idea. But in reality, we don’t just make decisions based on the price tag, but rather the opportunity cost. Opportunity cost is the sticker price, plus all the other things given up by making the purchase…
A quick browse on the great and venerable Amazon.com led me to a particularly classy looking rubber duck, which for $4.60 (plus indeterminate shipping costs) may be mine to own. But in thinking about whether I ought to buy, what I am also considering are what I might have been able to get instead. If I choose not to buy the rubber duck, I could instead use the money toward this bendable mustache set, or three macaroni and cheese air fresheners.
But that’s only half of it, you see. By that standard alone, we’d probably never buy anything, if everything was all cost. There is still the issue of benefits, the things you gain from buying a bathtub companion.
By buying a rubber duck, you have provided yourself a distraction from navel gazing while pondering the peculiar nature of sitting naked in a tub of warm water. You have gained the duck’s musical squeak, his listening ear to life’s most difficult questions, and his magical floatation properties that may in very well hold all the secrets the universe has to offer…
Does this exceed the cost? I’ll leave you and Mr. Weasley to ponder this one while I begin to sort out another question on my mind, one that deals with the million-dollar comic books, boxes worth more than toys, and the weird and wacky world of collectibles…
i hate you so much dan
The Scarcity of Time
A lot of people seem to think that if we could solve the problem of scarcity, all of a sudden economic issues would be solved. In other words, if we had infinite resources everyone would have access to as much as they wanted and everyone would be happy. But this isn’t true.
I think I can explain the point by describing my brother making breakfast in the morning. Monday through Friday I’ll wake up and go out into the kitchen and see my brother making breakfast. He always makes a basic egg and cheddar cheese omelet and after he’s finished he goes to work. However, his breakfast routine changes on Saturday and Sunday. In addition to his egg and cheddar cheese omelet, he also adds sliced vegetables and meat as well.
So exactly what’s changing his action between the weekdays and the weekend? Technically speaking, his resources are plentiful. He has access to the same ingredients Monday through Friday as he does on Saturday and Sunday but his meals are still different. The factor that’s determining his action is time. Even though he has an abundance of resources (ingredients) all seven days of the week, time is determining the amount of labor he allocates towards preparing his breakfast. On the weekdays he wants something simple and filling before work and on the weekends he wants something a little nicer with more ingredients since he doesn’t have to leave the house earlier to make it to work on time.
Sure the world would be a better place if resources were infinite but there’s still the issue of time and some people don’t seem to understand this. Maybe this helped clear things up.
Indeed. But to clarify, it’s not simply that his desires or demands shift on the weekends - he’d no doubt like those veggies and meat in his omelette on the weekdays - it’s that his preferences adjust based on the opportunity cost of adding those extra ingredients to his omelette. On the weekdays, because (again) his time is scarce, he’d either have to give up a few minutes of sleep or be a few minutes late to work. By choosing a more basic omelette on weekdays, his action reveals his preferences: he’d rather skip the extra ingredients and sleep in/get to work on time.
I’ve mentioned time as the scarcest resource before (most recently in my Money and Speech post) but Rothbard kicks off chapter 1 of Man, Economy, and State explaining how the scarcity of time leads to the development of preferences which leads to action. Time, after all, is the one resource that must be used as a means to attain all ends.
This is fundamental stuff:
All human life must take place in time. Human reason cannot even conceive of an existence or of action that does not take place through time. At a time when a human being decides to act in order to attain an end, his goal, or end, can be finally and completely attained only at some point in the future. If the desired ends could all be attained instantaneously in the present, then man’s ends would all be attained and there would be no reason for him to act; and we have seen that action is necessary to the nature of man. Therefore, an actor chooses means from his environment, in accordance with his ideas, to arrive at an expected end, completely attainable only at some point in the future. For any given action, we can distinguish among three periods of time involved: the period before the action, the time absorbed by the action, and the period after the action has been completed. All action aims at rendering conditions at some time in the future more satisfactory for the actor than they would have been without the intervention of the action.
A man’s time is always scarce. He is not immortal; his time on earth is limited. Each day of his life has only 24 hours in which he can attain his ends. Furthermore, all actions must take place through time. Therefore time is a means that man must use to arrive at his ends. It is a means that is omnipresent in all human action.
Action takes place by choosing which ends shall be satisfied by the employment of means. Time is scarce for man only because whichever ends he chooses to satisfy, there are others that must remain unsatisfied. When we must use a means so that some ends remain unsatisfied, the necessity for a choice among ends arises.
Another gem of a post that I’ve had in my Likes folder. Going to dust off and post a lot of these along with some of my own saved drafts this week since I won’t be reading too many new posts.