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- [Tyler] Back to ideas of two words --
opportunity cost, another central economic idea.
Even when something good happens, there's a tradeoff, right?
Sometimes I think this is more important
than "incentives matter."
I'm torn, incentives matter, opportunity cost, tradeoffs --
I don't know --
but it's in the top three or four ideas of economics.
It doesn't mean you shouldn't make an investment,
but it does suggest always look at what is the cost.
Do the best you can.
What is the tradeoff involved?
This actually relates back to my point
about not always knowing.
Because if you're considering a choice -- what school to go to,
whether you should marry,
whether you should buy ping pong balls,
where to take your next vacation --
you're giving up something else.
You generally don't see in any direct way
what it is you're giving up.
So there's an element of built-in agnosticism here.
Of course, you have to make a choice.
You should use the evidence and reasoning as best you can.
But we don't always know.
An implication of tradeoffs everywhere
is you're comparing a seen to an unseen,
and you should not always be totally completely confident
in your ability to know what the unseen is like.
So any policy you favor -- republican, democrat,
progressive, libertarian, left, right, whatever, conservative --
I think the main point is not to be for or against it,
but to be able to spell out like under what conditions
would my idea be a bad idea?
And that's a bit of a stretch,
but if you can teach your students that.
I'm not saying they can always do it off the bat,
but simply that they should aspire to be able to do this:
"I have some idea under what conditions
is my idea a bad idea."
And if they are asking that question in an earnest, honest way,
I think in policy, in politics, in their lives, whatever,
in education, they will make better decisions.
Not, "Here's the big pile of reasons why I know I'm right" --
We're actually, mostly pretty good at doing that.
We're like biologically trained to do it --
but the... "here are the conditions where I would be wrong."
The Great Wall of China -- was it a good idea?
Well, it protected China against invasion from the North,
except, of course, as you probably know,
invasion from the North came anyway.
The Great Wall of China, I am told it is 4,160 miles.
At its peak, 800,000 people worked on it.
It's the longest and biggest wall ever built.
By one estimate it contains 4 billion bricks.
It took two millennia -- not 2 years, not 200 years --
two millennia to build.
It has the weight equal to 8 million elephants.
And according to one internet estimate,
which I do not believe at all --
I've no idea how they converted money across time --
but it cost, over two millennia, $360 billion.
I've no idea what that means.
But if you think about the Great Wall,
it had some benefits; it had an opportunity cost.
Always think about what are the tradeoffs.
If you put on a tariff, you may create some jobs in one place,
but you're going to lose jobs somewhere else.
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