May 30, 2011


From The Uncommon Criminal by Kyle De Wolf (author's profile)


Kyle De Wolf

I recently found a book called "Economics For Everybody," by Gerson Antell and Walter Harris, in our prison library. I like to read economics textbooks. When I was at Dodge County Jail in Wisconsin I took a civics course for my HSED which included an economics section. I thought it was fantastic, although the textbook was written at a sixth-grade level, with short, choppy sentences, simple words, and the like. This textbook looks like it was written at about the same level. I figure that if a person could understand the subject matter, he could probably read at a more advanced level, but I'm not an educator.

I'm not much of an economist either, but I have an annoying habit of questioning what I'm being told by the experts. For example, I tend to believe that we should produce goods and services to meet the needs of society as a whole, rather than to make a profit for a few at the expense of the many. Now the economists tells me that the profit motive benefits society as a whole because it leads businesses to strive to give the public what it wants at the lowest possible cost. There is a dilemma because if a business tries to reduce its costs of production by paying its workers lower wages than the public will have less money to spend on goods and services. However I'd like to point to another contradiction that I've found.

On page 9 my economics textbook gives the following problem:

"A movie theatre has been charging $3 per person at all showings. At this price, about 150 tickets are sold for matinee shows. Last week the theatre tried a new policy. It lowered the price of matinee tickets to $1. It sold an average of 400 seats for every matinee performance that week. Suppose you were the theatre manager. Would you now go back to the old price of $3, or would you keep the price of matinee tickets at $1? Explain your answer."

My answer is that I'd keep the price of tickets at $3. While I get fewer customers, I'm making $50 more than I would otherwise.

I believe this problem illustrates one of the contradictions of capitalism. On the surface it may appear that businesses would make a profit by giving the public what it wants at the lowest possible cost, but that isn't always the case. The law of supply and demand tells us that whenever the supply of a commodity is low and the demand is high prices will rise and more money will be made. Therefore it would behoove businesses not to produce enough goods and services for everybody.

During the Great Depression, the government paid farmers to destroy their own crops. There was more than enough food for everybody but the prices were too low to keep farmers in business. Since we're not godless Communists, we didn't want to collectivize the land and subsidize farmers to produce food for everybody. Instead we paid them to destroy crops so that prices would go back up and the farmers would be able to stay afloat as individual capitalist owners.

Capitalists have a strong temptation to create artificial scarcity in order to keep prices higher and make a bigger profit. The theatre owner would be doing the public a service by offering tickets to matinee shows at $1, but he makes more money keeping the price of tickets at $3, even though fewer people get to see the shows. Now if we're just talking entertainment it may not seem like a big deal, but if we're talking basic necessities like food, clothing, shelter, and medicine, the results could be unconscionable to any decent person.


Replies (2) Replies feed

denise Posted 8 years, 11 months ago. ✓ Mailed 8 years, 11 months ago   Favorite
I have to clean the stadium after people leave the races and people leave a horrible mess. You are not only making fifty dollars more with fewer people but you saving money on clean-up - I guarantee you that. Plus you are saving some poor soul alot of aches and pains.

dldewolf1 Posted 8 years, 11 months ago. ✓ Mailed 8 years, 10 months ago   Favorite
That is the problem with the underclass in America today. They can't afford basic necessities. In some countries you can live fat off just a few thousand dollars a year. In America, you can have a hard time getting the necessities with 15,000 dollars a year.

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