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Economy

Economics Is a Walk in the Park

Chaos erupts when our dog sees me put my shoes on. She hopes–hopes!–that the next thing I reach for will be the leash because that will mean we’re going on a walk. We got our labrador Lucy near the beginning of the COVID pandemic, when my kids took advantage of a moment of weakness (“Fine. We’ll get a dog.”). She has been a great investment. Our walks in the park are an excellent way to start the day, and they’re an excellent way to take a break between tasks and projects.

They’re also a great chance to think about economics, specifically two of the most basic principles of economics: opportunity cost and incentives. These are, to economics, what blocking and tackling are to American football. Understanding (or victory) usually boils down to them. So if you understand some pictures I took at the park, you’re on your way to understanding economics, and therefore the world, better.

First, notice what these ducks are doing. You might need to squint a bit because the ducks are hard to see. I took the picture at about noon on a sunny, 95-degree day in Birmingham, Alabama. Shockingly, the birds are in the shade, all five of them. The same was true of the other ducks in the park. If you understand why the birds prefer to rest in the shade rather than the sun, then at a very basic level, you have at least some economic intuition and might understand why economics is sometimes called “the painful elaboration of the obvious.” 

The ducks might not be conscious or sentient the way humans are, but they prefer the comfort of the shade to the heat. It doesn’t mean they will always pick the shade or that we jettison economics when we see the ducks venturing into the baking sun. Maybe they venture out into the sun to get something to eat. Perhaps they just need to take a quick walk (like the dog and I did in the thick air and noonday heat). Since they prefer more comfort to less, they’re in the shade.

Maybe you’ve heard that economics assumes people are pathologically selfish, or that it encourages people to be. We get a lot of analytical horsepower from the simple assumption that people maximize “consumption,” but we’re mute on the contents of that consumption. To think “economics tells people to be selfish and to only care about money and material things” is a misreading of economists, and a failure of economists to communicate. Hence, I am giving you the second picture.

It’s a mother duck and her ducklings enjoying a shady spot in the park. Notice what the mother duck is doing: she’s keeping her ducklings close by and, importantly, hiding a little bit. She’s protecting her ducklings,which is no simple task given the birds of prey that live in the park. Notice that she’s watching her ducklings. She isn’t going out of her way to be of service to my kids or to any of the other animals in the park. Instead, she cares about those closest to her. As Adam Smith argued, people pursue their own interests because they have the most knowledge of their local situations. That’s what the mother duck is doing here. She is pursuing her own interest, but her “own interest” happens to include her ducklings’ wellbeing.

This picture shows a handful of pigeons scattering about, looking for food and staying in the shade. I wouldn’t do this because the park rules include “don’t feed the animals,” but imagine I had scattered a handful of birdseed on the sunny part of the sidewalk. Hungry pigeons almost certainly would have gone for it. They would have incurred a cost to feed themselves. When their incentives change, they change their behavior. Going into the sun is costly because it’s uncomfortable, but the pigeons are probably willing to put up with it if they’re hungry.

“So you’re saying we should be like ducks and pigeons?” No, I’m not saying we should be like ducks, pigeons, or even lobsters. I’m asking you to see God’s creatures responding to changing costs and benefits across the animal kingdom. Perhaps you will agree with me, then, that it’s a bit of a stretch to suggest that there isn’t a “human nature” that responds to incentives, makes choices in the face of scarcity, and so on. If even the ducks and pigeons respond to incentives, people may do so too.

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