Abstract
Julian Simon’s understanding that the human mind is the “ultimate resource” is fundamental yet unincorporated in the teaching of introductory economics. Incorporating this understanding into ECON 101 would improve instruction. I here explain what such an incorporation might look like.
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Notes
The Julian Simon-inspired change described here, and to some degree also in the following section, in Econ 101 instruction would also arise if Econ 101 incorporated more of the insights of Joseph Schumpeter (1934, 1942). As Nathan Rosenberg (1996: 52) explained, Schumpeter “posits a novel conception of competition based upon innovation as a central element in a disequilibrium process that leads the economy to higher levels of income, output, and, presumably, well-being.” Note Rosenberg’s use of the word “central.” Schumpeter did not anticipate Simon in identifying the human mind as the ultimate resource. But Schumpeter did anticipate Simon in emphasizing the fact that creative entrepreneurship and innovation are part of the very logic of competitive markets. Given Schumpeter’s well-known emphasis on innovation being endogenous to capitalist markets, it’s somewhat surprising that in The Ultimate Resource 2 Simon mentions Schumpeter only twice.
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For helpful feedback on an earlier draft the author thanks Thomas Boudreaux, Veronique de Rugy, and Judi Garrett.
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Boudreaux, D.J. How Might Econ 101 Change If Julian Simon’s “Ultimate Resource” Idea Were Incorporated into the Analysis?. Rev Austrian Econ 35, 315–322 (2022). https://doi.org/10.1007/s11138-022-00582-z
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DOI: https://doi.org/10.1007/s11138-022-00582-z