BOTH Sides Gain From Exchange
By David Henderson
When I’ve discussed with people on Facebook my view that the lockdowns should end, people often respond that surely we can wait a few more weeks for a haircut. This happens even though I mentioned nothing about others or me wanting a haircut.
The people who make this response would not be contenders for the ideological Turing Test award. They put words in my mouth that I didn’t even say.
But it’s happened so much that it made me realize that if I were teaching again, I would put a little different emphasis on a pillar of economic wisdom that I teach the first day. The pillar is “Both sides gain from exchange.” When I teach it, I tend to emphasize consumers’ gains from exchange rather than producers’ gains. Of course, I mention both, but I emphasize consumers. The reason is that I take it for granted that the vast majority of people already understand that the person selling them something gains from the exchange. The one exception is the example I use of sweat shops, where I focus on the producers’ (the Third World workers’) gains from exchange.
So, for those who have found my Pillars of Economic Wisdom worth teaching, I would recommend that you emphasize consumers and producers. Indeed, I would use the ending of the lockdowns as examples. Many of us recognize that the biggest losses from the lockdowns were not to us as consumers but to the producers. That’s why I gave hunks of money to two local hairdressers whom I didn’t even meet and will probably never get a haircut from.