The Simpsons and Economics

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The Simpsons and Economics HOMER ECONOMICUS HOMER ECONOMICUS The Simpsons and Economics Edited by JOSHUA HALL STANFORD ECONOMICS AND FINANCE An imprint of Stanford University Press Stanford, California Stanford University Press Stanford, California ©2014 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, or in any information storage or retrieval system without the prior written permission of Stanford University Press. Special discounts for bulk quantities of titles in the Stanford Economics and Finance imprint are available to corporations, professional associations, and other organizations. For details and discount information, contact the special sales department of Stanford University Press. Tel: (650) 736-1782, Fax: (650) 736-1784 Printed in the United States of America on acid-free, archival-quality paper The Simpsons (episode: “Trilogy of Error”) written by Matt Selman. ™ and ©2001 Twentieth Century Fox Film Corporation. All rights reserved. The Simpsons (episode: “Much Apu About Nothing”) written by David S. Cohen. ™ and ©1996 Twentieth Century Fox Film Corporation. All rights reserved. The Simpsons (episode: “Homer’s Triple Bypass”) written by Gary Apple and Michael Carrington. ™ and ©1992 Twentieth Century Fox Film Corporation. All rights reserved. The Simpsons (episode: “$pringfield”) written by Bill Oakley and Josh Weinstein. ™ and ©1993 Twentieth Century Fox Film Corporation. All rights reserved. Library of Congress Cataloging-in-Publication Data Homer economicus : The Simpsons and economics / edited by Joshua C. Hall. pages cm Includes bibliographical references and index. ISBN 978-0-8047-9097-0 (cloth : alk. paper) — ISBN 978-0-8047-9171-7 (pbk. : alk. paper) 1. Microeconomics. 2. Economics. 3. Simpsons (Television program) I. Hall, Joshua C., editor of compilation. HB172.H66 2014 330—dc23 2013047797 ISBN 978-0-8047-9182-3 (electronic) Typeset by Bruce Lundquist in 10/14 Minion CONTENTS Preface ix Joshua Hall Acknowledgments xiii PART I: THE ECONOMIC WAY OF THINKING 1. Scarcity, Specialization, and Squishees: The Simpsons as Homo Economicus 3 Anthony M. Carilli 2 Where the Invisible Hand Has Only Four Fingers: Supply, Demand, and the Market Process in Springfield 20 Douglas Rogers and Peter J. Boettke 3. A Pile of Krusty Burgers Embiggens the Fattest Man: Obesity, Incentives, and Unintended Consequences in “King-Size Homer” 29 Art Carden PART II: MONEY, MARKETS, AND GOVERNMENT 4. Twenty Dollars Can Buy Many Peanuts! Money and The Simpsons 41 Andrew T. Young vi Contents 5. Thank You, Come Again: The Pursuit of Profits in Springfield 52 Gregory M. Randolph 6. They Have the Internet on Computers Now? Entrepreneurship in The Simpsons 61 Per L. Bylund, Christopher M. Holbrook, and Peter G. Klein 7. I’ve Got a Monopoly to Maintain! Market Failure in The Simpsons 70 Diana W. Thomas 8. Will You Stop That Infernal Racket!?! Externalities and The Simpsons 81 Justin M. Ross 9. Mayors, Monorails, and Morons: Government Failure in The Simpsons 94 John Considine PART III: APPLIED MICROECONOMICS 10. Coming to Homerica: The Economics of Immigration 107 Seth R. Gitter and Robert J. Gitter 11. Donut and Dimed: Labor Markets in Springfield 116 David T. Mitchell 12. Paging Dr. Hibbert: What The Simpsons Can Teach Us About Health Economics 127 Lauren Heller 13. At First I Though Prohibition Was a Good Thing: The Economics of Alcohol Control 139 Mark Thornton 14. Mr. Burns’ Casino: The Economics of Casino Gambling 151 Douglas M. Walker and Shannon M. Kelly 15. Homer Economicus or Homer Sapiens? Behavioral Economics in The Simpsons 161 Jodi Beggs 16. From Rabbit Ears to Flat Screen: It’s Getting Better All the Time 177 Steven Horwitz and Stewart Dompe Contents vii The Contributors 191 Notes 197 References 215 Index 225 PREFACE Joshua Hall I was living in a suburb of Columbus, Ohio, when I got my first taste of teach- ing economics. I was asked at the last second to fill in on a principles of eco- nomics section at a small university near my home called Capital University. Though I had been a teaching assistant for many classes while earning a mas- ters degree in economics, I had never had complete control over the classroom. It seemed to me that there were two main questions I needed to answer: What did I want my students to learn? and Did I want to be a “guide on the side” or a “sage on the stage?” Answering the first question was easy (and not just because I knew the name of the course!). Since my graduate school days, I had been concerned that we were going about teaching principles all wrong. Most people who take an eco- nomics course are never going to take another one in their lives. Knowing that, principles courses should not be focused on preparing students for advanced study of economics but instead giving them tools and insight that will help them at work, at home, and at the ballot box. My job as a teacher was to show them how economics explained the world around them, not just some lines on a chalkboard. The bigger question was how to do it. While the first couple of days convinced me that I preferred to lecture, I also realized that a two-hour lecture was just too long if you didn’t break it up every thirty minutes or so. How could I break things up and show students that economics was everywhere? At first I would just stop the lecture and illustrate a topic with an example from that day’s newspaper or by discussing how a scene x Preface from a classic movie or television show illustrated a concept. I soon realized that most of my examples were coming from The Simpsons, and as luck would have it, the first couple of seasons of that program were just starting to come out on DVD. So I began to show brief snippets of episodes in class when ap- propriate. I quickly found that students loved to talk about The Simpsons and to learn by using examples from the show. Students began to come up to me and say things like, “Did you see in last night’s episode Homer’s fear about donating a kidney to his dad illustrated the trade-offs organ donors face?” In my mind, that was a clear sign that using The Simpsons was getting them to engage with the course material. Nearly a decade later, I have taught thousands of students using The Simp- sons, authored one article1 and coauthored another2 on how to use The Simpsons in the classroom, and edited the book you hold in your hands. The origins of this volume began with a conversation I had over dinner with two economists, Deirdre McCloskey and Bob Lawson. I told them I was writing an article on using The Simpsons in the economics classroom, and I planned on calling it “Homer Economicus,” a play on the Latin phrase homo economicus, which is often translated as “economic man.”3 McCloskey’s response was roughly, “A title like that deserves a book.” So while I did originally ignore McCloskey’s advice, after running into doz- ens of economists over the years that were using The Simpsons in the class- room, I realized that she was right. A title like that did deserve a book, and the only question was how to get it done. After all, I could write it, but what fun would that be? Instead, I contacted dozens of excellent economics teach- ers and scholars who were also Simpsons fans and asked them if they would be willing to contribute to a volume explaining how the show illustrates homer economicus in action. The response was tremendous, as my inbox was flooded by essays using The Simpsons to illustrate concepts in economics from general ones such as money or unintended consequences to very specific areas of in- quiry such as health economics or the economics of prohibition. Luckily for me everyone clearly understood that the book is about how The Simpsons re- flects concepts or ideas from economics, not about how much money Matt Groening has made from the show! The book is organized into three sections. Because The Simpsons is primar- ily about the Simpsons family and the other residents of Springfield, the book focuses primarily on microeconomics. Microeconomics is the study of human behavior in small units, such as individuals, families, or firms. The first three Preface xi chapters constitute Part I, and they deal with “the economic way of think- ing” and primarily focus on understanding individual behavior and decision making. I tell my students that studying economics is like putting on a pair of glasses that let you see the world in a different way. The basic economic lessons about individual behavior, the market process, and tracing out the effects of policies are all laid out in these three chapters. Part II of the book comprises six chapters on “money, markets, and gov- ernment,” and these essays primarily cover issues beyond isolated individual decision making and behavior. For example, in Chapter 4, West Virginia Uni- versity’s Andrew Young details how money serves to facilitate exchange and then asks the important question of whether Milhouse can be said to be money. Other important topics covered in this section include how best to un- derstand Homer’s serial entrepreneurship (Chapter 6) and the role of profits and losses (for Homer, mostly losses) in a market economy. Chapters 7 and 8 discuss situations when free markets might not lead to desirable outcomes, such as monopolies and externalities (think Springfield Nuclear Power Plant).
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