 Hey, Kevin here! I'm your host for the Foundation for Economic Education's new series, Invisible Hands. I'm here to guide you through the incredible and miraculous world of economics. Whoa, whoa, whoa! Hey, don't, don't, don't go anywhere. I, I know you might not think so right now, but I promise economics is actually really exciting. Like, in 1900, when the electric light bulb was first introduced, it took 60 hours of work to pay for 10 days of continuous life. Today, that same amount of work can keep the lights on for 52 years. Economics can show us how it's possible to live in a world where resources are scarce, wants and needs are unlimited, and yet we still cut extreme poverty in half just in the last 30 years. Throughout this series, we'll talk about the incredible benefits of trade, what entrepreneurs really do for the economy, and how incentives affect people's behavior. Well, even talk about the rules and social customs that help us create awesome societies people actually want to live in, and what happens when those rules go away. Hi everyone! Whoa, hi Fiona! No, hello students! Hi Professor Ferdberg! How's it going? So Kevin, we thought we'd drop by to help you talk about these important ideas. Oh, awesome! So, I bet at this point you're wondering why any of this matters. What is learning economics even gonna do for you? You know what, Professor, why don't you take this one? Sure! To quote my good friend, Professor Tyler Cowan, economics is everywhere, and understanding economics can help you make better decisions and lead a happier life. Awesome! Wait, what does that even mean? Well, most of us want a lot of the same things in life. To be successful at school, make friends, fall in love, start businesses, or find a great job to improve our lives and make the world a better place. Like ending poverty or cleaning up the environment. That's right Fiona, but the question is, how do we all get what we want in a world where resources are limited and everyone has different ideas about what to do with them? That is a good question. My friends always seem to know how to solve every problem, but they're always coming up with different answers. I never know who's right. Yeah, I know what you mean. Even though most of us want to see progress in the world, it's not always clear how to get there. But that's what studying economics is for. Economists study human behavior so we can learn how people can successfully deal with competing goals in a world where there just aren't enough resources to do everything at the same time. I see! Consider this. Throughout history, only a handful of countries have managed to raise their living standards to the levels we see in America, and that's only happened relatively recently, but then the past 200 years. You mean since the Industrial Revolution? Yeah, and economics teaches us that there are only a few specific ways for society to escape the kind of extreme poverty we've had for most of human history. Like what? Well, for one thing we need institutions that make trading easier for everybody, and we also need high levels of social cooperation and tolerance. And we need the kind of rules that encourage everybody to deal with each other fairly and honestly. These conditions make all the difference. The part about ethics seems pretty clear. We can't have a better society if people are stealing from each other and hurting people all the time. But what's big deal about trade and social cooperation? Professor? No, right. Think about all the things you have that make your life better. Computers, smartphones, stoves and microwaves, comfy pillows, backpacks, clothes and shoes, and even food. Even the simplest of those things is very difficult to make from scratch. Even if you can assemble something like a shoe, you probably can't make the fabric or the rubber, right? Of course not. I think rubber comes from a tree or something. That's all I got. In fact, not anyone of us has enough knowledge and skills to make almost anything that we need. That's why most of us specialize in producing some things and trade what we make with other people who specialize in something else. So increasing our standard of living depends on the voluntary interactions of millions of people all over the world. Coming up with new ideas and producing valuable goods and services for you and me. I mean, that's neat. I think so. But that's why commerce is important. And to have commerce, we need peaceful social cooperation between as many people as possible. But how do all these people know what to make? Doesn't someone need to be in charge of the decisions? Not at all. People around the world cooperate with each other without anybody telling them what to do. No single person, business or government has enough information to plan out all of this mind-boggling amount of activity. We'll talk about this more in another video, but what the good professor is talking about is called spontaneous order. And it's one of the most important ideas in economics. But there's another benefit to trade and social cooperation. Friendship! Connecting with other people through commerce makes everyone in the world more interdependent. And the more we work together and get to know each other the more we build trust and form relationships with people from all over the world. Cool. That makes us more peaceful, right? Yeah, it totally does. So are you saying that if we trade with each other, everyone would be more peaceful, no one would have to go to war, and we'd get wealthier? Yeah, yeah, exactly. And that's the kind of thing that we're going to talk about in this series. Economics can not only help you make better decisions and get the most out of your life, it also helps us understand how to make the world a better place for everyone. Using sound economics to improve human well-being is our vision for a brighter future. Well now I'm excited. You ready? We're ready! Let's go!