mg.to - Economics - Comments

Your little league experiment has some problems

Don Hosek — Tue, 19 Jun 2007 22:13:07 +0000

After all, what exactly are they buying or selling? The addition of money into the system doesn’t make it any easier to determine who has the rights to which position. I think your experiment would result in chaos and a loss to you of nine bucks.

Lack of existence in nature, incidentally, does not make something a scarce resource. After all, gold exists in nature, so by your reasoning, you should be willing to make a trade of a pound of gold for a box of pencil erasers (and if you are, I’ll be by with the box of pencil erasers post haste).

Does it scale?

Michael Geary — Mon, 24 Jul 2006 20:38:12 +0000

Thanks for the reply, Seth. I must apologize for calling you “misinformed”, and I appreciate your not taking offense over it. I like your way of putting it (“Your analysis doesn’t quite match with mine”) better. :-)

I learned to fly at SJC, so I can certainly agree that the runway is a series of tubes, where I often had to get in line behind enormous amounts of aluminum, enormous amounts of aluminum…

In a way we may not be too far apart: you said that an extremely scarce resource like a runway needs a central authority; I would say that it needs an owner.

Are scarce resources really that different from more plentiful ones? The “rubber” eraser in a pencil is a material that doesn’t even exist in nature. It’s hard to get more scarce than that. The eraser is the end result of a multi-step process involving people and raw materials from all around the world.

No central authority told all those people, “We have no rubber to make erasers! Here is what you must do…” It really does seem like a miracle, as Read says.

For the nine kids agreeing on a Little League batting order, I have to admit I’d probably do just as you said, step in and impose an order. But here’s an idea: what the kids had a market in batting order? Give them each a dollar, in dimes, and let them buy and trade batting positions. I think they might sort it out pretty quickly. If not, it would at least be an interesting experiment. :-)

a series of tubes

seth godin — Sun, 23 Jul 2006 11:26:58 +0000

it’s funny, because I turned the “series of tubes” remix into the ringtone on my phone.

Your analysis doesn’t quite match with mine, and the reason is simple… the resources to make pencils aren’t scarce, not at all, at least not in comparison to booth space near the entrance of CES (only three booths) or spots to go through an intersection (only one or two) or flights on the active runway at LGA.

The runway actually is a series of tubes!

I’m no economist, it’s true, but my guess is that systems with more resource capacity (like Linux, for example) lend themselves to self-organization far better than those with ordinal scarcity and high value to the few spots available.

Thanks for reading!