CLARK ROSS: Economics as a discipline begins with the challenge of scarcity.
That important concept is where we will begin our lecture today.
Scarcity has been an issue as long as individuals have walked the earth.
They've always addressed need for food, clothing, shelter, and comfort.
No society has ever had as much as all individuals
would wish to have of these important goods.
From written time, we are aware of issues of poverty,
issues of food shortage.
Differential living standards have long characterized our world.
This is why scarcity has led to the persistent economic problems of what
to produce, how to produce those goods, how to grow the economy knowing
that it reduces current consumption.
And finally, how to distribute those goods when
there are not enough to satisfy the needs of everybody.
The formal study of economics is relatively new
compared to this age-old problem.
The study of microeconomics, and economics really as a whole,
begins with the pioneering work of Adam Smith, who in 1776, published
a book entitled, An Inquiry Into the Nature
and Causes of the Wealth of Nations.
This book is referred to simply as The Wealth of Nations.
In this work, Smith spoke to the advantages
of private property, capitalism, specialization, and competitive markets
in addressing the economic problems that flow from scarcity.
He laid the foundations for our study of microeconomics.
The formal study of macroeconomics is linked
to the writings of John Maynard Keynes, who
during the Depression, the global Depression of the 1930s,
wrote that the aggregate economy might be in disequilibrium,
or at least stuck in a state of high, persistent unemployment.
To that end, the government may need to take
measures to address the problem of unemployment
and the stagnation of the economy.
This is really the first formal study of the macro-economy.
Thus, you can see why, while scarcity has led to economics and its challenges
as the oldest of practicing disciplines, practicing subjects.
It really is one of the newest of those formally studied.
SALLY MEEK: You just heard Dr. Ross explain scarcity to you.
And now the question is, well, what does this mean for you?
Does this apply to you?
Well, have you ever asked yourself the question, why can't I
have everything that I want?
Actually, you probably started asking that question
when you were about two years old.
And most of us still ask that question.
Even if we think that we're more mature now
and we have lots of material products, and maybe we're perfectly satisfied.
But aren't there things that you would like to have?
Wouldn't you like for there to be an improvement in health care
and a cure for cancer, or even something that maybe you don't absolutely need?
Wouldn't you like to have a battery for your smartphone the lasts two or three
Probably, the human condition is that we are always wanting things.
And that there are unlimited human wants.
So that's really half of the dilemma.
And what's the other half?