Understanding Economics

These pages started because one day I was listening to a sports talk show during a basketball strike, and all the callers, the moderator, and even news commentators berated the players for increasing ticket prices.

What upset me was, players' salaries cannot increase ticket prices. Notice I did not say "will" not, nor "have" not, nor should not. I said "cannot." Basketball players' salaries simply do not affect ticket prices: it is impossible for them to affect ticket prices. People think the owners will just pass the costs on to the customers. Only they can't, and they won't.

Martin's first law of human dynamics is that people will only do what they are capable of doing. Business owners and business customers are equally subject to this law. There are iron laws of economic behavior, just like the law of gravity. You can pretend that it doesn't exist, but you are likely to get hurt very bad.

Next: The Constraint of Money