We are in an “election season” now and the language of economics falls consistently from the lips of any politician vying to be your next leader. In recent days all the politicians have jumped on the “change bandwagon” as a result of Senator Obama’s surprising win in the Iowa caucuses. If change is the new banner what changes in economics are on the horizon and how will they have an affect on you? Has each answered your questions on position and plans relative to economic issues? Could any of them sit with you and explain economics? We’ll discuss the politics of economics very soon, but first let’s discuss some basic ideas regarding economics.

One of the first statements or questions that I pose to my students is, “What does Love have to do with it?” Of course, I get the typical response as some break into that familiar melody, while a number of others reflect upon past romantic experiences with a resounding “Nothing!” It is a light hearted introduction to the world of economics, but an immensely important and serious one from my perspective. You’ll have to stick around awhile to understand this one.

Rather than suggest a number of economic “laws”, theories and the like, I pose a series of questions building toward a better understanding of how individuals and institutions participate in obtaining and providing goods and services. My view of the “economizing problem” and the classic view you’ll find in every mainstream economic textbook diverge in dramatic fashion.

Typically, instructors are supposed to begin a discussion of the “economizing problem” with the concept of scarcity, requiring subsequent development of formal and informal means of allocation and distribution of scarce resources. This discussion is based on a generally accepted definition of economics. A discussion quickly followed by the “law of supply” and “the law of demand”. These concepts are important and observable phenomenon without doubt. However, I do make a departure from the sanctity of these laws. I’ll present my definition of economics after we’ve developed some other thoughts.

Heretical or blasphemous my words would seem to most economists writing today. So, I begin with a simple notion or question: What is really scarce? When I pose this question I quickly get long lists of scarce stuff from the class. In today’s world “oil” tops the list and the list goes on and on. With prices increasing more than 200% in just a few years you’d think the world has become a dramatically different place. Is the supply that much less? Or is it that demand is that much more? Maybe you’re more concerned about the price of the iPhone? Why did the price drop $200 in just a few months? What is determining the price of “stuff”? Is it scarcity? If you are wondering what I’m thinking on the issue of scarcity you’ll have to wait. I want to know what you think first!