Country Economics in One Lesson
Don Buck P. Creacy from The News-Graphic Sat. March 4
I watch the news and scratch my head and wonder why folks wrestle so hard with economics.
Out here in Stamping Ground, economics are pretty straight forward. Henry Hazelitt wrote an excellent book in 1946 titled, “Economics in One Lesson.” It’s brilliant and admittedly it has formed part of my own worldview regarding work and industry. Like Mr. Hazelitt, I agree that there are two fairly distinct schools of thought regarding life’s economics. Let’s see if I can make it digestible and scalable for our little town, county, state and nation. Not being egotistical here, I’m just thinking on paper.
Scenario one: A young hooligan picks up a rock and throws it through the picture plate glass window down at Gracie’s Restaurant here in Stamping Ground, which by the way, makes an excellent country breakfast that won’t cost you $20. Anyway, the first economic school of thought says that this is a good thing. Gracie will spend money to replace the window, thereby growing the economy. A glazer will have work setting in a new window, purchased from a glass manufacturer and a sign maker will have work too. And don’t forget that the county coffers will bulge a little from the fines that the young miscreant will pay if and when he or she is caught.
That school of thought and line of thinking tends to make it sound like the vandal has done the county businesses a favor by creating work for the trades people who will fix Gracie’s new window. Remember this is a scenario, and no one should do any harm to Miss Gracie’s window. I do admit work is created by the actions of bad people. But does it help the economy?
The other school of country economics says no. It’s true Gracie’s has a new window. She would also be short the cost of her already paid-for old window with its tried and true signage. And she would take her saved money to buy a new window and pay the sign maker.
Because of that unexpected expense, Gracie may forego buying a new grill, dining tables, china, chairs or wall paper and décor items that she had been planning for years to enhance her restaurant. Or perhaps she would lose heart entirely and go out of business or let some of her help go because her margins for profit and loss are so close together. Gracie would be forced to operate in replacement mode, paying more to stay the same. Very seldom does anyone think for very long about the loss taken by the individuals who have suffered by others misdeeds. This cannot be good for any economy; clearly Gracie will be poorer for the broken window.
In a local parking lot, a bulky four-wheel drive pickup burned rubber and peeled out into the street with its engine roaring. I shake my head and an older gentleman nearby says; “Daddy’s buying a new set of tires soon.” We both chuckled. I remember my own sticker shock the first time I had to buy my own tires. That little economic experience had an amazingly calming effect upon my driving habits. I could drive like the devil himself while someone else was buying my tires. But when it got into my wallet, well, I changed economics schools almost immediately. Thanks, Dad, one more great lesson in a long line of others; country economics.
And there it is; Gracie doesn’t want a new window, her present old window is just fine. If people just leave the window alone, she might have a better retirement, fix up her restaurant and be able to continue creating work for her employees. Gracie’s restaurant is better off and so are her customers, employees and our little town keeps a mighty fine local eating establishment in a world of culinary chains.
Truth be told, that boy’s dad doesn’t want to buy a new set of tires either. Considering the mischief young’uns can get into; I bet he’d rather have his son at home than pay for tires, bail or a coffin. But as long as folks focus on the immediate “first school of economics,” believing that creating replacement work is helping the economy. Well, it looks like we will all be paying more than we want to and losing more than anyone should. Ignorance is and should be painfully expensive.
Don Buck P. Creacy can be reached at email@example.com