This first chapter covered the ten principles of economics, and while they’re all things that I’ve thought about when thinking of economics, there were also some concepts that made me think a little more than usual. First, Principle #3, which states that “rational people think at the margin,” made me think of economists and rational people almost as computers; they tend to see everything as something that needs to be optimized for better results. Principle 8 also made me think of the standards of living of each country a little differently. Mexico, for example, is a country where the average person made about 17 thousand dollars a year compared to the US at 55 thousand. The standard of living is therefor higher in the US. But the way I normally saw it was that the issue for the poorer countries was that there just wasn’t enough money; the problem is actually that those countries are simply not as productive as the ones that do better. It’s all about productivity.
This chapter made me ponder on the way the US economy works and what makes it so strong. I believe it is the way it’s set up for entrepreneurs and small businesses to succeed, as well as obviously the productivity rate of the country is very high. What I want to know is how the US can help implement this structure of economy into other countries; I’m sure that’s already being attempted all over the world, but what would be the single most important factor in getting the ball rolling to improve a country’s economy to the point that it is as good as the US?
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