Capitalism and The Hunger Games: EconMovies #10

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.