Econ In The News

Mercantilism was popular from the 16 th to 18 th centuries. It is the belief that a government policy which encouraged and promoted exports while simultaneously restricting imports had a positive effect on the economy. This trade imbalance would result in an accumulation of gold by the exporting country making it wealthier. Today, we could call it “Trumponomics” or perhaps “alt-econ”, as this is what the US President seems to be promoting. The key assumption underlying Mercantilism is that the world’s wealth is static. The implication is that domestic growth comes at the cost of a country’s trading partners. That assumption may have been valid prior to the Industrial Revolution but certainly not now. A trade surplus is no longer a viable source of growth because the assumption that wealth is static is no longer valid. With the exception of a few hiccups along the way, the economies of the industrialized countries have been growing since the late 19 th century.  In addition,

Two news articles this summer gave me the incentive to reintroduce my blog … albeit under a different name.  One of the articles, from Global News , had to do with the extremely long waits to get into the U2 concert in Vancouver. It seems that BC Place and Ticketmaster had introduced a policy whereby the ticketholders had to produce the credit card that was used to purchase the ticket. The second, from buzzfeed.com , is about Taylor Swift’s efforts to battle ticket resellers. Both of these problems exist because fans of the artists are upset about not being able to get tickets at the posted prices. They may, if they can afford to do so, purchase a ticket in the resale market using StubHub or one of their competitors. It is this secondary market that appears to upset the artists involved.   It is to those artists, that this blog post is directed. Clearly, those artists that condemn scalpers do not understand one of the basic lessons of microeconomic theory: market prices will