There are not enough things. In fact, it is scarce. Everyone needs not only tangible resources, but also food, water and housing. We also need intangible resources, housing needs better landscape, and lots are scarce; Time for family reunion on special days is scarce; According to the traffic rules, drivers can't make phone calls while driving, and their attention is scarce. Many of us are on a diet every day now. Faced with all kinds of delicious food, I keep asking myself whether they are worth eating by me. Gastrointestinal scarcity, health scarcity.
Economics studies what kind of institutional arrangements people take to coordinate their endless needs when they are faced with these scarcity that they can never get rid of. This law permeates every detail of our lives. When the house price is high, should it be allocated according to the price level or household registration? When there is a traffic jam, should we auction the license plate and the road number, or should we charge the congestion fee? In the case of limited degrees, should we take the way of entering the school nearby, or according to the students' exam results, or according to the children's race and skin color?
The second basic constraint faced by human society is limited time and lack of patience. People don't live long now, even if they can live long in the future, there are still uncertainties in the world. Better take it early than late. Moreover, people have different patience and different expectations for the future. People will exchange what they have today (spot) with what they can get later (futures).
With the exchange of spot and futures, there will be the whole financial market. Of course, your understanding of this problem has something to do with you. Choosing a different career is a process of spot and futures exchange. Do you choose a career with high income when you are young, or choose a career with high income when you are old? The economy and society tell you that what you want to pursue is not the maximization of any instant income, but the maximization of the total income of your life. How you look at your future will greatly affect the career you choose and the rhythm of this career income.
Economists also distinguish between "risk" and "uncertainty". Risk refers to the probability of different events that we already know. The weather tomorrow may be rainy, cloudy and sunny. What are their chances? What about the uncertainty? Refers to something we have no idea about. What technology will replace artificial intelligence tomorrow, and what is the threat that human beings are most worried about in ten years. Save for a rainy day, should we buy insurance for ourselves or save money? These problems are closely related to each of us. This is a problem that we discuss in detail in the pronunciation course and this book.
The third basic constraint people face in society is interdependence. In personal capital's words, it is information asymmetry. We must cooperate with others to live a better life. We can't live without others. We should keep company with others, trade with others, cooperate with others, and even compete with others, so that our life will be better.
But the problem is that no one in the world can be absolutely trusted. Even parents, children, partners, best colleagues and friends. This does not mean that others will deliberately deceive you. It means that the information in the world has always been distributed in different hands. Others will always know something you don't know, and others will always do something you can't control. Then how can we rely on others and not let this dependence cause harm and loss to ourselves? This requires the formation of a series of institutional arrangements and social customs.
The cooperation and game between men and women may be the oldest game in the world. Is the marriage mode monogamous or polygamous? Since the average life expectancy of women is longer than that of men, why do they usually marry men older than themselves? Won't this shorten the time they live together? Do they love each other or not? For these problems, economics has its unique perspective, logical reasoning and convincing conclusions.
In all the stores, sellers take the initiative to be friendly to buyers and smile at them. What is the reason behind this? We all work in the same company. Rich people contribute a lot, but why do people who give money generally give orders, while those who contribute are those who carry out orders and accept supervision? Is this fair?
The fourth basic constraint that everyone faces is the need for coordination. People need coordination. Everyone has different motives and will take different actions. They often make a diversion and cover up their intentions. How can this society get together, live in harmony and develop together? This is also one of the important topics in economic research.
Inflation is coming. How about borrowing money to buy a house? Personal income has increased, and the turnover of enterprises has also increased. Is this because you are getting worse or inflation is coming? Can you make a reasonable judgment based on the phenomenon? In the west, some politicians are very smooth and comprehensive, seeking common ground while reserving differences, and striving for moderation; Moreover, some politicians are maverick, and sometimes they abuse or even fight. What is the explanation of economics?
Today, many companies have to establish their own brand positioning and have encountered the same problem. Is it to seek the greatest common denominator of public tastes, or to accurately locate niche markets and make distinctive products? Have you ever thought that the answer of economics to this question is exactly the same as the answer of economics to politicians' questions just now? This kind of economics is of course related to you.