Musings on Business Optimization, Economics, and Vocations

In the Economics courses I teach each semester, before we dive into the mechanics of supply and demand and after we establish what the science of economics is, we discuss the various types of economic systems around the world.   We spend at least a couple of classes discussing the economies of the world on a spectrum between those that are command and those that are market economies.   One source we use to feed our discussions is the Index of Economic Freedom , which ranks the economies of the world. About five years ago many of my students assumed that the United States was at or near the very top of the list.   They were wrong (as I had also been before diving deeper into the facts).   The United States left the index's highest “Free” category in 2010 and has been in the lower “Mostly Free” category ever since.   ( Interestingly, as an anecdote of how public perception has changed, today most of my students come to class expecting...

What is wealth? Wealth is often misunderstood.   When the word “wealth” is spoken, people often bring to mind images of opulence.   For me, it used to conjure up images of a cartoon I enjoyed as child, Duck Tales, in which Scrooge McDuck would swim through gold coins in his money vault.   So, if these are the images that come to our minds then it might be natural that when we speak of increasing wealth, one might assume that we are speaking of adding a few more coins to the vaults of those wealthy like Scrooge McDuck.   This isn’t the case.   Merriam-Webster gives one definition of wealth as “abundance of valuable material possessions or resources, abundant supply, all property that has a money value or an exchange value, all material objects that have economic utility; especially: the stock of useful goods having economic value in existence at any one time.” This definition is more appropriate. We are not only talking about the rich getting riche...