Economics and Parties

I found these interesting thoughts hidden in one of my notebooks.  I never finished it, but I think the timing was not coincidental – November 2006.  I wish I could say that I can write like this now, but my abilities have been diminishing the last few years on account of writing little.  I expect to reverse that, as putting pen to paper is again becoming a need that I yearn to satisfy.

Imagine going to a big party with a live band, food, and lots of people bustling about.  People are dancing, engaging in various conversations and making sure the great food doesn’t go to waste.  Everything looks good and everyone seems to be having a great time… including yourself… but then some discrepancies start to show their faces.  You notice that most of the smiles are coming from a small corner of the party.  The dance floor is busy, but slowly dissipating.  You overhear a party goer bid his farewell to a friend and say, “I’m running on empty”.

So what is wrong here?  The answer is obvious – the party is winding down, but the explanation is not as easy to discern.  Did everyone just decide at a particular time to take their happy faces off and head for the exit?  Not likely.  A more likely explanation would be that a number of factors, which influence everyone at the party, have begun to exert their aggregate effect. What are some of these factors and how do they operate?

They are things we all possess, but only in limited quantities – things like time and energy. For the most part, we all hold unbalanced positions in these factors. Some of us have more time and others have more energy. The ‘balancing’ happens when we start to commingle and unwittingly join in on an unscripted and hidden dance. The energetic seek out time’s unbridled while another candle waits for that flame to bring it back into existence.

Eventually, one of two outcomes will occur. Either a continual influx of time and energy must be present for the party to continue or the curtains must come down. In the case of the above mentioned party, it is evident that balances have been exhausted. So the question is how could have it continued? Would it have required an equal replenishment of time and energy? Time is limited in an absolute sense so perhaps energy was the critical ingredient. Then again, even with the addition of energy, time is still limited and thus the imbalance is only exaggerated.

Where am I going with this?

I see a striking similarity in our economy. There are discrepancies that have been prevalent for some time now and they only seem to be getting more so.


About Jose Velez

I received my degree in economics and finance from the University of Texas at Dallas School of Economic, Political and Policy Sciences in 2006. Since then I have worked within the energy industry focusing on regulatory and environmental issues.
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