9:54 a.m. 2010-01-17
splashing econ water in the readers face
Consumer Surplus. Some of you know what I’m talking about right away, some of you have an instinctive “economics is boring” reaction.
(stolen from Wikipedia)
Consumer surplus is the value a product creates for society. It is the difference between what a person actually pays and what they would be willing to pay. I decide if people can buy a privilege (to travel) for a certain fixed price. The price many people would be willing to pay for this privilege is huge. Like $500K huge. Not everybody, of course. There are people who sell packages to try to help people get these rights, and they can spend a huge amount of money on them. Every time I give out this right for the bargain price at which it is offered, a huge consumer surplus is created.
Now, supply and demand when you are talking about privileges are funny things. Ability to pay isn’t the only thing determining who gets this particular privilege, unlike the privilege of owning a CD or a banana. But none the less, consumer surplus is how a capitalist society gets richer. Every day, I know that I am making our global society richer.
Clearly I’m still struggling about how to talk about my job in this forum. Let me say that I am very happy with it.
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