To what do we owe our well being?
Economic thinking empathizes specialization and gains from trade. Most people know intuitively that self-sufficiency would be very difficult. Many animals have figured out that trading favors is a good thing; humans have gone a step further and have learned to trade un-alikes. Each person is prompted to specialize—to discover how he or she can be most productive. People do this and find appropriate trading partners. On a large scale, an boundless number of complex supply chains are formed. Countries that are part of the world exchange economy perform much better than those that remain outside the exchange economy.
Economic Thinking illustrates all this with the example of the Prisoner's Dilemma. The Prisoner's Dilemma illustrates the fact that gains from trade opportunities are lost if: 1) transactions and/or communications costs are high; 2) property rights and contracting rules are not enforced; and 3) levels of trust are low. Most people understand all of this, and economic history is the story of how various societies have addressed shortcomings in all three areas.
This course is approved for .75 AICP CM credit.