Three Elements Of Common Sense Economics
In the third section of Common Sense Economics, the three elements of clear thinking about Economic Progress and the role of government are: government promotes economic progress by protecting the rights of individuals and supplying goods that cannot be provided through markets, competition is just as important in government as in markets, and government slows economic progress when it becomes heavily involved in trying to help some people at the expense of others.
The first element regarding the government’s role in rights of individuals and supplying goods means that the government protects its people and goods. This is are illustrated in How an Economy Grows and why it Crashes by Peter Schiff through the use of their courts. The government used the courts as a form of protection for the peoples’ rights. The courts were used to settle disputes between villagers. The courts protected them by holding each individual to the …show more content…
The first key element is discover your comparative advantage. This concept means to find a product that can be made cheaper than the product is already being produced. Schiff expresses this concept with his character Baker. In the beginnings of the story, Able made a fishing net that could bring in two fish or two days’ worth of food. Later, Baker produced an industrial fish-catching device. This device produced so much fish that the three men did not have to fish daily or weekly. Baker found a faster (or cheaper) way to fish. During that setting, time was currency and Baker found a way that made all three of them able to do other projects. An example of comparative advantage in our economy is when the United States made the decision to find oil on our own land. The prices of oil imports were getting too high when we have oil on our own