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→Consumer Choice: moved section on charity here
Consumers stop buying a good when the demand price equals the price paid. For movies, the demand price falls the longer it keeps playing in a theater. After you’ve seen the movie once or twice, you’re not willing to pay so much to see it again. People stop paying to see the movie, and the theater stops playing it and begins showing a new movie instead.
Consumers stop buying a good when the demand price equals the price paid. For movies, the demand price falls the longer it keeps playing in a theater. After you’ve seen the movie once or twice, you’re not willing to pay so much to see it again. People stop paying to see the movie, and the theater stops playing it and begins showing a new movie instead.
==Charity==
A force perhaps even stronger than the “invisible hand” is charity. The desire to give something of benefit to others, without demanding as much in return, is enormous. “Give and ye shall receive” is an economic lesson from the Bible. Look around, and you will notice numerous important charitable acts by others and yourself.
An immense advantage of charity is that it has no transaction costs. One person simply gives money, or goods, or services, to someone else (or to a church), and the recipient of the donation then uses it in the best way possible. A person giving $10 in a collection basket at church does not fill out any paperwork or require any commitments on how the church uses the donation. It is assumed that the church will use the money as best it can, perhaps even in an unexpected way during the following year. Pure charity is often purely efficient, with little waste in terms of transaction costs.
America’s health care system, by far the greatest in the world, was built on a foundation of charity. People and religious organizations giving time, money and expertise to care for individuals who could never afford to pay all the costs. Education, too, was developed in this country largely through charity. In recent years, both health care and education have lost their charitable identities, and the results are not encouraging. Both are weakening.
Most economics courses avoid charity entirely. When charity is mentioned, it is described as a minor add-on to the invisible hand of self-interest. But is this backwards? Is the invisible hand of self-interest actually a wrapper around a basic foundation of charity? These are thoughts to consider throughout this course.
The size and importance of charitable institutions in the world is immense. All religious institutions are charitable, as are nearly all private schools. Many hospitals are still charitable, including the Seventh-Day Adventist hospital in Hackettstown, New Jersey. On a recent trip to Orlando, I saw another Seventh-Day Adventist hospital there. Many religious organizations operate hospitals through the United States, just as they built most of our leading universities. Harvard, Yale, Princeton and Columbia, for example, were all built by charitable religious organizations.
The renowned Sloan-Kettering Cancer Center, for example, was built with the generosity of Alfred Sloan and Charles Kettering. They acquired wealth as senior executives of General Motors and ultimately donated their money to the cause of medicine. It has operated on a non-profit basis to this day.
The first private medical clinic in the United States was the Mayo Clinic, established by the Mayo family of physicians in 1889. Their sponsor was the Sisters of St. Francis, which built St. Mary’s Hospital in Rochester, Minnesota.
Likewise, the successful American colonies were initially more religious and charitable than commercial. Pennsylvania was founded on religious principles by the Quaker William Penn, who in turn established Philadelphia as the City of Brotherly Love. Within a few decades it grew to become the second most populated city in the British Empire, after London.
It was only on the solid foundation of the brick houses of hardy Quakers and their strict moral rules that the flower of free enterprise blossomed there. The same could be said for Boston, where Puritans served as the anchor.
The Virginia colony was purely commercial at first, but it only survived by turning to tobacco and slavery. It suffered so many problems that King James revoked its charter and took control less than two decades after its founding.
The colony of Georgia was subsidized by the British Parliament but was essentially charitable in nature. General James Oglethorpe established it as a haven for impoverished Brits languishing in debtors' prison. It was, in a sense, an antithesis to a capitalistic venture, featuring nothing but those who failed in the free market. It barred liquor and slavery, reflecting its idealism.
Over 150 years ago, [[Alexis de Tocqueville]] observed that “despotism may govern without faith, but liberty cannot. ... How is it possible that society should escape destruction if the moral tie is not strengthened in proportion as the political tie is relaxed?” Perhaps charity is the economic manifestation of that “moral tie,” upon which economic liberty and free enterprise rely.
==Assignment==
==Assignment==