There’s a story about an economics professor who went into a bar. The local crowd, intellectually curious after a few drinks, asked the professor to explain economics in two sentences. “First, there is no free lunch,” he said. “Second, incentives work.” We must wonder about this professor, though. He should have said a free drink would give him a mighty incentive to answer.
Economics has strayed far from its days as the study of human behavior. The tenure process has transformed economics into a branch of mathematics, quite irrelevant to today’s world. What we must remember is the hugely relevant second law of economics, described so aptly by the sober (?) professor.
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