Efficiency at Dinner?
I just finished reading Tyler Cowen’s opus, An Economist Gets Lunch. I have to admit I’m already a fan of his writing, getting a daily dose on from his blog Marginal Revolution.
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What I like about this book is that it is unconventional by definition. Further economists like scalability engineers like to think about efficiency. How can I squeeze out more from less? Like the business question how do I get better ROI or more bang for my buck? Questions spring to mind like – What does an economist know about food? Or – What does food eating have to do with economics? Well on both points you’ll get some surprising answers.
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To the former question, Cowen has some really good insight because he brings the fresh perspective of an economist. His sort of mantra throughout the book is:
Food is a product of economic supply and demand, so try to figure out where the supplies are fresh, the suppliers are creative and the demanders are informed.
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What about the second question, how is the food we eat related to economics? Further does it have an impact on environmental and energy consumption questions? As it turns out in a rather big way yes it does. Let Tyler say it in his own words…
When it comes to relieving climate change problems, there are two approaches. The first to put it squarely is to have everyone memorize facts about boats & bananas, and update that analysis as often as is necessary. The second approach is to rely on the price system, specifically to modify prices so that they reflect more information about the value of the environment. That’s the economically smart way to address climate change. The first method is wielding a pea shooter and the second is more like a bazooka.
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What he advocates more specifically is taxing the things we want to reduce. Biggest on the list are fossil fuels he says and next up meat production which through methane emissions contribute to climate change problems. These taxes will naturally curb our use, cause us to take fewer trips, be more efficient with our use, and tighten the wallet naturally.
Applying an economists eye to food & environment yields some excellent insights. For those of us in the startups & internet these fresh takes may well give us some insight in business too. If nothing else it’ll help us find the best meal for dinner!