• Unit 3: Time and Labor

    The third unit focuses on understanding time, and using it to explain the concept of scarcity, which is the starting point of all economic analysis. And how humans make decisions about their time and labor. Based on the work of economist Julian Simon,I explain how the only real scarcity is the scarcity of human time. We are able to direct human time to make ever-larger quantities of all commodities, goods, and services imaginable. But human time is limited, and irreversible. No amount of resourcescan buy back time that has passed. Humans always prefer enjoyment in the presence to the future, which gives them a positive time preference, a very important concept which we discuss in-depth in this course and in the next course, ECON104: Principles of Austrian Economics II. Human economizing of time is the basis of all economics, and we must constantly choose between dedicating our time to labor, or to leisure.

    Completing this unit should take you approximately 3 hours.


    • Upon successful completion of this unit, you will be able to:

      • Explain why time is the ultimate scarce resource.
      • Explain why humans will not run out of material resources, such as metals, even as population and consumption continue to grow over time.
      • Describe the Simon-Ehrlich bet and its implications on the difference between thinking statically and through the lens of human action.
      • Explain the concept of time preference, how is it measured and what factors influence it.
      • Differentiate concepts of labor and leisure, explain the trade-off between them.
      • Explain how the value of labor has changed over time.

    • 3.1: Time, the Ultimate Resource Lecture

      • 3.1: Lecture Page

        In this section, you will watch a video lecture that encourages us to think about time as a resource, and apply the framework of human action to understand how it functions. Topics covered include: Uniqueness of time as a resource • Economic scarcity as a product of the scarcity of time • Why resources never run out • The Simon-Ehrlich bet • What is time preference • How is it measured • Factors influencing time preference • The trade-off between labor and leisure • The value of labor over time

    • 3.2: Time, the Ultimate Resource Discussion

      • 3.2: Discussion Page
        Since you have watched the video lecture for unit 3, it's time to watch Dr. Saifedean moderate a discussion on the unit's theme by addressing questions asked by your fellow classmates. As you watch the discussion unfold, take notes to help you retain information. Make sure you watch the entire discussion seminar video, otherwise you may skip over important points. To get the best learning experience and mastery of the major concepts covered in this unit, you'll want to watch all videos in their entirety,

    • 3.3: Time, the Ultimate Resource Review

      • 3.3 Review: Time and Labor Page

        This resource contains a summary of some of the key concepts discussed in unit 3. Don't skip ahead - the information on this page is easier to understand if you have watched the video lecture and discussion seminar video in their entirety. Bookmark this resource to keep it handy during studying.

      • 3.3: Write an Essay Quiz

        Write a 500 word essay on how the value of labor has changed over time. Do not worry about an introduction or a conclusion. Just explain how it has changed. Include positive and negative effects, and address possible ramifications. Understanding the difference between economic way of thinking and static thinking will help you develop your essay. You will post your completed essay in the next section.

        This activity does not count towards your grade.

      • 3.3 Discussion Forum URL

        Post your finished essay here. Make sure you respond to another student's essay.