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8 - Everything Ties Together: General Equilibrium

Published online by Cambridge University Press:  14 May 2010

Todd Sandler
Affiliation:
University of Southern California
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Summary

From the time of Adam Smith's Wealth of Nations in 1776, one recurrent theme of economic analysis has been the remarkable degree of coherence among vast numbers of individual and seemingly separate decisions about the buying and selling of commodities.

Arrow 1974a, p. 253

When teaching economics, I always use examples from literature to illustrate essential economic concepts and principles and to underscore that economics permeates our lives and is a natural part of humankind. From the Bible to great works of literature, economic thinking abounds. I would not be surprised if the map of human DNA uncovers an economic gene. Economics is so ingrained in our thought processes that I sometimes wonder whether the standard Economics 101 with its myriad graphs and equations does more to obfuscate than to enlighten.

The piece of literature that I use when introducing the notion of general equilibrium is “Harrison Bergeron,” a short story by Kurt Von-negut, Jr. (1970). The story begins, “The year was 2081, and everybody was finally equal” (p.7). As the tale goes, everyone is made equal not by natural forces but by a “handicapper general,” whose job is to devise debilitating handicaps so that everyone is reduced to the level of the least agile, dumbest, homeliest, and most inarticulate person. To accomplish this bizarre task, the handicapper puts weights on the agile, implants distracting transmitters in the brains of the gifted, covers the faces of the attractive, and provides impediments to the orators.

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Publisher: Cambridge University Press
Print publication year: 2001

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