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