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KW_Introduction_The_Ordinary_Business_of_Life

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>> Introduction: The Ordinary Business of Life Any Given Sunday intro It’s Sunday afternoon in the summer of 2003, and Route 1 in central New Jersey is a busy place. Thousands of people crowd the shopping malls that line the road for 20 miles, all the way from Trenton to New Brunswick. Most of the shoppers are cheerful—and why not? The stores in those malls offer an extraordinary range of choice; you can buy everything from sophisticated electronic equipment to fashionable clothes to organic carrots. There are probably 100,000 distinct items available along that stretch of road. And most of these items are not luxury goods that only the rich can afford; they are products that millions of Americans can and do purchase every day. The scene along Route 1 that summer day was, of course, perfectly ordinary—very much like the scene along hundreds of other stretches of road, all across America, that same after- noon. But the discipline of economics is mainly concerned with ordinary things. As the great nineteenth-century economist Alfred Marshall put it, economics is “a study of mankind in the ordinary business of life.”
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What can economics say about this “ordinary business”? Quite a lot, it turns out. What we’ll see in this book is that even familiar scenes of economic life pose some very impor- tant questions—questions that economics can help answer. Among these questions are: How does our economic system work? That is, how does it manage to deliver the goods? When and why does our economic system go astray, leading people into counterpro- ductive behavior? Why are there ups and downs in the economy? That is, why does the economy some- times have a “bad year”? Finally, why is the long run mainly a story of ups rather than downs? That is, why has America, along with other advanced nations, become so much richer over time? Let’s take a look at these questions and offer a brief preview of what you will learn in this book. The Invisible Hand That ordinary scene in central New Jersey would not have looked at all ordinary to an American from colonial times—say, one of the patriots who helped George Washington win the battle of Trenton in 1776. (At the time, Trenton was a small vil- lage with not a shopping mall in sight, and farms lined the unpaved road that would eventually become Route 1.) Imagine that you could transport an American from the colonial period forward in time to our own era. (Isn’t that the plot of a movie? Several, actually.) What would this time-traveler find amazing? 2 I N T R O D U C T I O N T H E O R D I N A RY B U S I N E S S O F L I F E
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Surely the most amazing thing would be the sheer prosperity of modern America— the range of goods that ordinary families can afford. Looking at all that wealth, our transplanted colonial would wonder, “How can I get some of that?” Or perhaps he would ask himself, “How can my society get some of that?” The answer is that to get this kind of prosperity, you need a well-functioning sys-
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