Through my economics class, the textbooks, lectures, and discussions have emphasized the wonder and power of price in responding to the economic question of distributing scarce resources. Price signals where resources need to go, conveys to producers what consumers want, and rations goods and services.
The late Thomas Sowell wrote in his Basic Economics, ” Prices connect you with anyone…so that places with the lowest prices for particular goods can sell those goods around the world. As a result, you can end up wearing shirts made in Malaysia, shoes produced in Italy, and slacks made in Canada, while driving a car manufactured in Japan, rolling on tired produced in France.”
A couple of weeks ago my professor showed this video in class, narrated by Hoover Institution economist and research fellow Russ Roberts. It evaluates the role of price – and the effects of not having prices – through bread baking.
What are your thoughts on “It’s a Wonderful Life”? Does it oversimplify the circumstances? Is it accurate? Do you think it misses any major points?