Thursday, April 26, 2018

econlife - How Your Fish Can Signal Your Wealth by Elaine Schwartz

Worried that someone might poison his arowana at the 2009 Aquarama International Fish Competition (like the Westminster Dog Show, but for fish), a breeder stationed armed guards around his tanks. The Asian arowana has reputedly sold for as much as $300,000.

Where are we going? To how people signal their wealth.

A Rare Fish

You might have been eating the arowana for dinner years ago. No more. Now their owners give them eye lifts, tummy tucks, and fin jobs. One fish “surgeon” said his operations make the fish more lovable because their owners like them to be perfect. And a breeder even noted he is spending millions to develop a pedigreed line.

During its recent history, the Asian arowana has been on and off endangered species lists, snatched from its owners, and sold in black markets. Said to be a picky lover, its lack of fecundity has made it more rare. At one point, legal breeders had to embed each one with a microchip to prove it was the second generation in captivity.

You get the picture. As the fish became increasingly scarce, their price and allure rose. In Asia especially, if you have an arowana, you are signaling your status.

Our Bottom Line: Signaling

Thorstein Veblen could have further told us why people were buying their Asian arowana. In his Theory of the Leisure Class (1899), he pointed out that an upper class uses expensive worthless purchases to signal power and distinguish themselves. His term conspicuous consumption was supposed to convey our profligate and predatory tendencies.

A 1934 painting of Veblen:


As he explained, the more affluent we become, the less productive our behavior. Wealthy people have servants to wash, to clean, and to cook for them. They spend their time engaged in sports and politics. They surround themselves with jewels, with cars, with art…

And with Asian arowana.

My sources and more: Told yesterday by the NY Times and in 2016 by the NY Post, the story of the arowana remains the same. But if you are really interested in the fish and its relatives, do go to Dragon Behind Glass. The Amazon sample of the book was a good read.

Today’s featured picture is the arowana.

Also, please note that the description of Thorstein Veblen is a brief excerpt from the first edition of Econ 101 1/2.

Ideal for the classroom, reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

Wednesday, April 25, 2018

From the Homeschool Front … To go or not to go, that is the question by Colleen Hroncich

My oldest daughter is a junior in high school this year. As you might suspect, that means the college search is upon us in earnest. When my husband and I were her age, the only question was which school to attend. My daughter is wrestling with a much tougher decision … to go or not to go.

The world is changing. That sounds trite, but it’s true. These days, people are likely to change jobs several times; that wasn’t the case when I was growing up. Thus a four-year degree in one field might not be as helpful as it once was.

Rapidly changing technology means that what you learn in school might not be applicable when you graduate. This is particularly true in computer fields. I have a cousin who works in computers; he has no college degree and never gets asked about it. Potential employers just want to know his certifications and experience.

There are some careers, like medicine and law, which still require a college degree and that isn’t likely to change soon. However, for many other professions, experience can be just as valuable. Spending four years at an entry level position in your chosen field – gaining experience and earning an income – may be more useful than spending those years in school. Moreover, the internet has opened up massive entrepreneurial opportunities to anyone with a computer, a good idea, and a willingness to work.

On the flip side, college can be a lot of fun – and I don’t just mean for party animals. There are friends to meet, clubs to join, trips to take. I studied in Ireland for three semesters and it was a great experience. I’d like my kids to have the chance to study abroad.

Through classes and other college experiences, I learned a lot about my field (economics) and life during my time in school. I matured and grew more confident in my abilities. Of course, working can confer many of those same benefits without the debt, so the debate continues.

My daughter is smart enough to know she doesn’t want to graduate with a mountain of debt, so part of her decision will be made based on how she does in the scholarship and financial aid hunt. She is also looking into an exciting apprenticeship program called Praxis that helps jumpstart young adults in startup careers. I’ll share more about this program in a future post.

To go or not to go. In the end, I suspect my daughter will decide to go to college. There are good arguments to be made on both sides, though, so it isn’t an easy decision. 

Colleen Hroncich loves that homeschooling allows her to learn right alongside her children. A published author and former policy analyst, Colleen’s favorite subjects are economics/public policy and history. She has been active in several homeschool co-ops and is a speech and debate coach.

Tuesday, April 17, 2018

econlife - What We Don’t Know About Dirt by Elaine Schwartz

Next time you go to a Major League Baseball game or even a local stadium, take a good look at the infield. There’s no such thing as normal dirt anymore.

Where are we going? To how dirt dealers compete for baseball business.

But first, some infield insight…

How Dirt Differs

Our story starts at Slippery Rock University. Located in Western Pennsylvania, the school needed an infield for its new baseball stadium. A nearby dirt dealer, who had never done an infield before, got the job. But then he had to figure out which dirt to use. Bringing samples to the field, he appears to have wound up with a unique silt, clay, and sand mixture.

You can imagine what the goals are. You don’t want “a trail of chunks” from baserunners. You want the surface to remain smooth so the ball doesn’t take some weird hops. Meanwhile the pitcher needs a gloppier mix for a more secure foothold. And then there’s the weather. With a sufficiently absorbent surface, you can minimize the rain delays and cancellations.

DuraEdge Products was the Pennsylvania firm with a new dirt recipe. From Slippery Rock, their business expanded to the Philadelphia Phillies and to other Major League stadiums. The following map shows some teams that have their infields:


Our Bottom Line: Monopolistic Competition

In monopolistically competitive markets, small and medium size firms sell very similar products. So it makes sense that they try to differentiate themselves. If you are in the infield surface business, then you might say your clay is unusual or your silt is special. Your goal is to move to the right on a competitive market structure continuum to get some pricing power:


The result? Even dirt can provide a competitive advantage.

My sources and more: Since we’ve already looked at sand, I was curious about this WSJ article on dirt. And that took me to the Pittsburgh Post-Gazette.

Ideal for the classroom, reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

Thursday, April 12, 2018

econlife - The One Thing We Should Know About Making Sneakers by Elaine Schwartz

Like an iPhone, your sneaker is really a bunch of components that wind up in one factory.

Now though, all of that is changing.

The Old and New Way to Make a Sneaker

The Old Sneaker Supply Chain

Starting with design and ending with the manufactured shoe, we have an 18-month supply chain. A new shoe needs a design, a pattern and prototype testing. From there factories need specs, tooling and sample production. Once ready, the shoe moves through a manufacturing process and shipping that can take 120 days.

Take the “outsole.” It begins as some rubber that comes from one place and is shaped somewhere else. Add to that some stitching and gluing and a midsole in still another factory.  The process at that point is pretty labor intensive and remains that way until we have a sneaker, a cargo ship, and a 60-day journey to a U.S. retail destination.

After design, this is the four-month supply chain:


The New Sneaker Supply Chain

Knowing that consumers expect speedy fashion cycles, sneaker planners are trying to accelerate their supply chain.

At the design stage, the need for sample testing is being replaced by a virtual reality. Here, Nike working with NOVA (DreamWorks animation) has created virtual prototypes. Here also, 3-D printing is a time saver when it eliminates the need for factory-made samples.

Meanwhile, Adidas has been experimenting with a state-of-the-art “Speedfactory.” Shifting from labor intensive procedures to a capital intensive process, Adidas not only combined the old links but also took them closer to the consumer:


The goal is to compress the old supply chain down to four months:


Our Bottom Line: Structural Change

A speedy sneaker supply chain is about much more than one industry. Called structural change, that new supply chain affects landlabor and capital. It means that labor could need different skills and upgraded capital might boost productivity. Together, they jumpstart economic growth and upset the status quo.

The moving assembly line at Ford Motor was one of many reasons we’ve had structural change in the past. With the moving assembly line, chassis assembly time decreased by a whopping 9.7 hours per car. Combine that with consumers clamoring for the Model T during the 1920s and you get the perfect economic synergy between demand and supply.

Structural change that fuels economic growth could be shown through the following production possibilities graph. The arrow points to a new maximum potential output:

So, when you think about making sneakers, the one thing to remember is structural change.

My sources and more: H/T to the Marketplace podcast for alerting me to Quartz’s sneaker articles, here and here.

Hazlegrove-6763_6bIdeal for the classroom, reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

Wednesday, April 4, 2018

Barriers to Critical Thinking by Jim Triplett

I’ve taught at a number of colleges and universities, both online and in-person, in different locations in the eastern half of the United States.  Part of addressing challenging dilemmas found in critical thinking and ethics classes involves carefully selecting one's words, as the message one conveys should be clear, well-supported, and easy to understand for the intended audience.  A concern about offending others is a topic of debate these days on many college campuses:

Now consider a psychiatrist's perspective on the challenges of trigger warnings and microagressions as well as how critical thinking is one of a number of means to address them in this Psychology Today article.

Along with the failure of our education system to properly teach critical thinking, as Dr. Pomeroy suggested in the trigger warning article, one commonly finds defense mechanisms present in the outrage at others' perspectives with which one does not agree.  Defense mechanisms are a means of deceiving oneself in the presence of discomfort related to multiple competing perspectives, including one’s opinion on something that is countered by another equally or more valid perspective.  Splitting, a form of self-deceptions, is something common to politics.  Dr. Burton (2012) noted splitting “reinforces our sense of self as good and virtuous by effectively demonizing all those who do not share in our opinions and values” (para.  8).  He elaborates on splitting in this Psychology Today article.

Dr. Burton referenced groupthink as a potential problem with the limited thinking associated with splitting.  The challenges of groupthink also arise in environments where alternative perspectives are limited for fear of offending others.  While we want to consider how some topics may contain elements that are uncomfortable to some, it’s also important to learn from the uncomfortable elements as a means of making better decisions in the future.  Human history does not rhyme; however, there are quite a few similarities that with some critical thinking may be diminished.  As you reflect on microaggressions and splitting, consider some means to identify these in news broadcasts and school.

Burton, N.  (2012, March 13).  Hide and seek:  Understanding self-deception, self-sabotage, and more.  Psychology Today.  Retrieved from:

Triplett - cover pictureJim Triplett is an author, instructional designer, and instructor in the areas of finance, economics, ethics, and critical thinking. Jim holds Masters Degrees in Finance, Organizational Leadership, and Instructional Design Technology, is ABD / PhD in Organization and Management, and is currently completing a doctoral degree, Ed.D, in Educational Leadership with a focus on Educational Technology.

Tuesday, April 3, 2018

econlife - econlife Quiz: Do You Know Your Baseball Economics

With the baseball season soon to start, the econlife team is looking at the money, the players, and even the music in our latest quiz.

Our sources and more: ForbesStatista for MLB ticket prices, Statista for average MLB player ages, hot-dog.orgReutersThe Hardball TimesMLB.comMental Floss, and one of our own econlife blogs on umpire decision-making.