Author @TheEconomist

The thing that you have to understand about Economists is that they’re generally an optimistic bunch, but they’re really annoyed by the complications of…reality. They love models: models are perfect and simple. Because they omit externalities and oddities, they work perfectly. The simplest of models involve but two variables: wine and cheese, money and time, socks and shoes, and so on. As you progress further in your studies of the dismal science, you must heartbreakingly accept that in the real world, there is almost no application for a two-variable model.
It’s heartbreaking because in the sterile simplicity of Economics, the world works perfectly. Everyone who wants a job, has one; everyone who wants to borrow money, can; if you want time off work, you just work fewer hours. In the world of Economics we are all Utility Calculators, and we’re very good at what we do. We scan the job market for opportunities, spot them, and train to be the next Michael Jordan, Bill Gates, or Homer Simpson, depending our utility/salary demands (shockingly, no one ever chooses to be homeless, or a drug addict, or unemployed in this model).
In the world of Economic models, not only do we all have jobs, but we all have jobs that we’re good at, so we make a lot of money. On top of that, we enjoy our jobs. In other words, if you simplify the model enough, you can actually create the conditions for perfect Human Capital Allocation.
My point is this: there are a few differences between the skills in this world, and where they are most needed (likewise, the low-skill human labor, and where that’s needed). It’s just of a pain in the butt that these two groups can’t find each other more easily. If they could, so theorizes Robert Guest, we could solve most if not all of the world’s problems. In a perfect Economic World, every product has the perfect price, there is no Economic profit, and everyone is maximizing their happiness. How adorable. Continue reading

