Issue 11, Spring 1996

William A. McEachern, Editor

Grapevine

• Burton Abrams of the University of Delaware says that his favorite illustration of the law of demand in science fiction comes from one of the original Star Trek shows. The crew of the Enterprise happen upon a planet that is waging war against another planet via computer, which estimates the impact of simulated attacks then project the number of casualties. Citizens selected as victims dutifully go to vaporization chambers. Because no actual weapons are used, no capital is destroyed, greatly reducing the cost of war -- a war that has been underway of decades. Captain Kirk, appalled by the antiseptic nature of the process, essentially pulls the plug on the planet's computer. This causes a treaty violation and forces the two planets to confront the implications of waging a real war. The suddenly higher cost of war forces both sides into peace negotiations. Professor Abrams raises two follow-on questions. Did the existence of nuclear weapons prevent the United States and the Soviet Union from going to war during the Cold War? And would the existence of a neutron bomb make the use of nuclear weapons more likely? All this reminds me of the movie War Games, where, in the end, the computer "realizes" that the only way to win the game of "Thermonuclear War" is not to play.

• Dimitris J. Knaniou of Point Park College in Pittsburgh says he has used science fiction to complement journal articles in his graduate business class. Material about extraterrestrial resource utilization that he has found provocative and conducive to further economic analysis include Greg Bear's Moving Mars, Ben Bova's Privateers, Michael McCollum's Thunder Strike, Frederick Pohl's Mining the Oort, and Kim Stanley Robinson's Red Mars and Green Mars. Food for thought includes ideas about the property rights of interstellar matter, "wormholes" as public goods, creating infrastructure on extraterrestrial facilities, and more generally, exonomics, which is what Professor Knaniou calls the "proper management of extraterrestrial resources."

• Ali A. Ataiifar of Delaware County Community College in Media, Pennsylvania, notes that micro appears more intuitive than macro because micro reflects individual behavior pursuing rational self interest. Students are, after all, individual actors pursuing their rational self interest. Macroeconomics, on the other hand, considers the entire economy, but few people have thought about the entire economy. To solve this perspective problem, Professor Ataiifar suggests that macroeconomic students think of themselves as visiting aliens from outer space, who have no self-interest on this planet. "They don't want our land, food, money, or anything else. Their sole mission is to help poor earthly beings put their economic house in order and prosper." This helps students to think not in terms of them versus the rest of society, but to think in terms of the best solution for a given situation involving the economy as a whole.

• The discussion of the economics of science fiction reminded John Jascot of Capital Community-Technical College in Hartford, Connecticut, of that new strain of fiction that is explicitly economic. He thought "a fun read…with lots of economic concepts thrown in" the fiction by Marshall Jevons, including Murder at the Margin (Princeton University Press), A Fatal Equilibrium (MIT Press), and A Deadly Indifference (Caroll & Graff). As most know, Marshall Jevons is the pseudonym for Ken Elzinga of the University of Virginia and Bill Breit of Trinity University in San Antonio. Another novel he recommends is Ben Stein's On the Brink, which describes the tumult created by a jump in oil prices and includes lots of macroeconomic issues. Ben, incidentally, is a prolific author and also an actor in roles that call for a dry, boring academic. He is the son of Herb Stein, former head of the Council of Economic Advisors and witty contributor to the Wall Street Journal.

• Brad Stamm of Nyack College in Nyack, New York, suggests that we expand the literary net cast for economic examples to include the Bible. He says the focus need not be on the spiritual side. A public finance example involves Christ's observation in Mark (12:41-44) that "the poor widow put in more than all the others contributors to the fund…. For they all have put in out of their abundance; but she out of her want has put in all that she had -- all that she had to live on". This passage implies that the poor widow contributed 100% of her income. More generally, we might consider the holy books of all religions as a source of economic examples.

• Eric K. Steger of East Central University of Ada, Oklahoma, explains in class how to use credit cards more rationally to take full advantage of the float. He shows the class that he has written the closing date on the back of his Visa and MasterCard. The Visa card closes the 6th of the month and the MasterCard, the 22nd. Which card should be used to pay for a purchase on the 12th day of the month and why? With Visa, the user can postpone payment until the 6th day of the following month. MasterCard would be billed as of the 22nd of the current month. By delaying payment, the credit card user has the use of money for a longer period.

• Jerry McElroy of Saint Mary's College in Notre Dame, Indiana, says that late in the class period, he selects a student to work something out at the blackboard based on the day's lecture. For example, the task may involve explaining how natural market forces operate in the context of aggregate demand and aggregate supply. To increase the probability of success during the first few classes, Professor McElroy takes care to select a student who has responded in class before-someone who seems to know what's going on. Once the term gets rolling, he selects students more randomly. This feature provides students a break from the lecture, a reason to pay closer attention, a fresh voice, and a chance to review the day's material. The feature provides the instructor a way to assess how well the material has been communicated.

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