0:00:08.640,0:00:11.978
Hey, how are you doing econ students?![br]This is Jason Clifford, and welcome
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to EconMovies. Today, we are going[br]to look at the economics in
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the Hunger Games.[br]Cheering of crowd
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>>The 74th Annual Hunger Games!
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>>These movies are filled[br]with economic concepts
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like the idea of opportunity cost:[br]Katniss has to choose
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between Peeta and Gale.[br]The cost of choosing
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one guy is that she can't be[br]with the other guy.
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Or, continue that secret love affair[br]with Lenny Kravitz.
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The movie also shows the[br]idea of specialization.
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People have different skills,[br]so they should specialize in
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the things that they do well,[br]like swinging swords, throwing
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knives, hosting talk-shows, and whatever[br]else Effie's job is.
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>>And of course, there's[br]Katniss' main skill, which
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is looking directly into the[br]camera. Seriously, she does
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it a lot. Actually, her real skill[br]is with a bow and an arrow.
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Yeah! Get em! Oh, yeah![br]Did you know that there's a funny
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line in the movie that only[br]makes sense if you understand
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economics. Here it is:[br]>>We should probably hunt
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around here. We don't have[br]any food left.
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>>Okay, uh, I'll take the bow...[br]I'm just kidding, I'll go pick
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some stuff.[br]That line is funny, because
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you intuitively understand the[br]idea of comparative advantage.
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Katniss should specialize in hunting,[br]and Peeta should pick berries.
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It's absurd to have Peeta hunt, [br]because Katniss is just way better
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with the bow. But notice,[br]she's also better at picking
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berries:[br]>>That's Nightlock Peeta! Katniss
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knocks berries from Peeta's hand.[br]You'll be dead in a minute.
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>>I didn't know.[br]>>Even though she is better
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at doing both jobs, she specializes[br]in the one that she's more better
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at--is that correct grammar?[br]Economists say that Katniss
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has a comparative advantage[br]in hunting, while Peeta has
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a comparative advantage in [br]picking berries. By the way,
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you know who is not good at[br]picking berries? Foxface.
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This idea of comparative
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advantage also applies to[br]each of the twelve districts of
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Panem. Each specializes in[br]very specific industries based
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on their comparative advantage.[br]District 2 does the stone
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work. District 4 does the fishing.[br]District 11 does the agriculture,
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and District 12 has the coal mines.[br]And of course there's the Capitol,
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which does absolutely nothing,[br]but it does bring us to the
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main economic concept in this[br]episode: Capitalism.
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Capitalism is an economic system[br]that allows for private ownership
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of resources, and promotes[br]competitive markets.
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Like President Snow, people in[br]capitalism are motivated
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by self-interest, but unlike Snow,[br]they can't use coercion
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and violence to get their way.[br]A company can't force you
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to buy their product.[br]They have to earn your money
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by making something that you want.[br]Sure they're motivated by self-interest,
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but they can't make themselves[br]better off without making you
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better off. Free markets are[br]also a blood bath.
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Think about the market for wearable[br]technology right now.
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Jawbone, Apple, Fitbit, Nike, Google,[br]they're all going at it, trying
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to make a better product and[br]win over consumers.
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It's survival of the fittest,[br]and the weakest products
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and companies are being killed off.[br]So Capitalism is the real-life
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Hunger Games. But in the end,[br]the big winners are consumers.
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We get the best products at[br]the lowest prices.
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Let's go back to the economy[br]of Panem. Is that an
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example of Capitalism?[br]Well, no. One of the key
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characteristics of Capitalism[br]is freedom. The Capitol
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doesn't allow individuals[br]to choose where to live,
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where to work, or what to[br]sell. Everything in the districts
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is run by a government monopoly,[br]that's backed by force.
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>>Anyone out after dark[br]will by shot on sight.
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>>The economy of Panem[br]is based on exploitation.
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It's an empire with each[br]district serving the Capitol.
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It's not capitalism. In fact,[br]free trade and investment
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is violently prohibited.[br]>>What do you propose?
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>>Shut down the black markets,[br]take away what little they have,
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and then double the amount of[br]floggings, executions.
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Both the Capitol, and District 13[br]are totalitarian governments
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with ruthless dictators that[br]see themselves as benevolently
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serving the will of the people.[br]We've seen that before.
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Now, the rule of thumb, don't[br]trust anyone who says they want
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to make other people's lives[br]better off, without
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asking for those people's[br]advice. So Capitalism
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is awesome, but it does[br]have some major drawbacks.
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First, capitalism tends to[br]focus too much on
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consumption. On having more[br]and more and more as opposed
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to enjoying what you have.[br]>>What's this?
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>>It's for when you're full.[br]>>It makes you sick,
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so you can go on eating![br]>>How else could you
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taste everything?[br]>>Now, I have never been
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to a party where people[br]puked to eat more,
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and hopefully you haven't either,[br]but I have gotten the
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newest version of a cell phone,[br]even though there was
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nothing wrong with my old one.[br]The excessive production of
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capitalism has a cost. It drains our[br]natural resources, pollutes the
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environment, and perhaps, even worse,[br]it pollutes our minds with the
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idea of always wanting more.[br]Another problem with
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capitalism is income inequality.[br]It's easy to feel outrage,
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when you compare the poverty[br]of District 12 with the opulence
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of the Capitol, but the shameful[br]thing is that that type of inequaliy
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exists, in the real world today.[br]District 12 isn't that much
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different than many modern day[br]cities, and that's sad.
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Now, Capitalism isn't necessarily to[br]blame, and it's helped millions
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of people worldwide escape poverty,[br]but the fact that we have really
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rich people and super super[br]poor people means we do have
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a problem with income inequality,[br]and if we don't address it,
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the results might not be very[br]pretty.
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Even with all these[br]potential problems of capitalism,
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it shouldn't be abandoned.[br]In fact, we should use it to make
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the best economic and[br]political systems possible.
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Something completely different[br]than Panem, a system where
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opportunities are equal, and it[br]doesn't matter where you
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are born. John Rawls was an[br]American philosopher that proposed
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a thought experiment to help[br]us determine how society should
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be organized. Now, assume[br]before you were born,
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you and others had to agree on[br]the political and economic
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system in which you would[br]life, but each of you had
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a veil of ignorance that prevented[br]you from knowing things like your
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gender, race, social status, religion,[br]and intelligence. If who you were
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was a complete lottery, and you had[br]no control over it, would you
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want to come into the world[br]of today? Or would you
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want to make a few changes[br]first? The good news?
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We can make those changes[br]The children of the future
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don't have to play that[br]cruel lottery, where their
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lives depend heavily on[br]factors like their race,
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and social economic status.[br]Let's not abandon capitalism.
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Let's use it to level the[br]playing field and make sure
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everyone has equal opportunities.[br]I think we can do it, but until then,
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>>May the odds be ever[br]in your favor.