With my new book – What would Keynes do? – The brief was to write essays on how famous economists would respond to everyday questions. So for example, with the question – Is it OK to be selfish? I examined how the likes of Adam Smith, Karl Marx, Arthur Pigou and Alfred Marshall might answer this question – using their economic teachings.
It was a good experience to research and share the views of different economists, but now I’ve finished writing the book, I’m writing my own perspective on my economics blog.
#2. Should I park illegally?
The essence of this question is that – an economist may calculate it is worth parking illegally and risking a fine because the probability of getting fine is less than the utility of just parking. It is called rational choice theory – we maximise our individual utility by careful evaluation of the different benefits and costs.
I was in London, and my friend wanted to buy something from a shop. There were no parking spots anywhere, so I parked on a single yellow line, while my friend ran into the shop. I waited by the car, ready to drive off – if a parking warden came. No one did come, my friend got his food, and we drove off. I thought I was clever to save a lot of hassle and park for free.
However, one week later, I got a very nice parking fine (something like £80) from Wandsworth Council saying I spent 10 minutes on a single yellow line. Not only that – they had a picture of me standing nonchalantly by my car, waiting for a traffic warden to appear.
So in that case, the clever economist got caught out by CCTV!