Most of economics can be summarized in four words: 'People respond to incentives.' The rest is commentary.
Interpretation
Economic behavior largely revolves around how people react to incentives.
This quote by Steven Landsburg emphasizes the foundational principle of economics that human behavior is significantly influenced by incentives. It suggests that understanding people's responses to different incentives allows us to understand most economic phenomena, with the remainder being less critical commentary on those principles.
In practice
In a discussion on consumer behavior during a marketing seminar.
When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident.
Thus, the same blow that strikes interest down will send wages up.
Just as we should never balance the budget on the backs of the poor, so it is an economic delusion to think you can balance it only on the wallets of the rich.
Since 1948 I have spent every single day thinking how the economic and political worlds have changed.
It is better that a man should tyrannize over his bank balance than over his fellow-citizens and whilst the former is sometimes denounced as being but a means to the latter, sometimes at least it is an alternative.
Building new roads and bridges creates jobs. Growing our exports creates jobs. Reforming our outdated tax system and our broken immigration system creates jobs.
Subscribe for the occasional hand-picked quote. No noise.