ECON103: Principles of Austrian Economics I

Before you watch the video below, answer this question: do you spend your time or do you invest it? Unlike all other resources, you cannot produce more time indefinitely. You need to think deeply about the implications for this on how you economize in your actions. Ultimately, all scarcity is the scarcity of human time. With more human time, there is no limit on how much can be produced from anything else. The only real limit is how much time is dedicated to different production processes. By thinking in terms of human time as the ultimate resource, we are able to explain why resources never seem to run out, even as our population and consumption continues to increase every year. As you watch the lecture, pay attention to the work of Julian Simon and imagine a scenario in which Simon's conception of resources is correct, and compare it to a world in which Simon's conception is wrong. How would they be different? Take notes on the difference between low and high time preference. Think about how it applies to you, by thinking about how your decisions have differential impact over time. Do they tend to prioritize short-term reward or long-term reward? Through many generations of human economizing and progress, what has happened to the value of human time?

After you watch the lecture in its entirety, reflect on your actions and analyze whether they can be described as labor or leisure. If you had a large sum of money, how much interest would you ask a bank to delay having access to that same purchasing power of money for a year? Humans are constantly economizing with their time by trying to increase its quantity and quality. In the coming units, we discuss some of the most significant ways humans use to increase the value of their time, and how the market system emerges from that. The concept of time preference will be discussed in more depth in the course sequel to this.