Friday, October 19, 2007

Economics and Pop Culture: The Music Man, #4

Here's an example that doesn't hang on one of the play's musical numbers. It does follow hard on the heels of the song in yesterday's post, however. In the aftermath of shifting the demand curve to the right, a couple events (and concepts) come to our attention.

First, the mayor decides that Professor Hill is a smooth-talking salesperson, determines that he needs to see Hill's credentials. Chalk this up to the economic idea of the role of government in the economy. While we usually think about fiscal and monetary policy first, one of the roles of government in many economic systems is to protect consumers. This is frequently done by providing information to the marketplace in order to help make the markets more efficient. By deciding to ask for Hill's credentials, the mayor is seeking information to help determine whether the professor is what he seems to be, or whether he is a fraud. (And let's not forget that Hill has been disparaging the pool table - owned by Mayor Shinn.)

The second concept is the role of the entrepreneur. This comes not once, but twice later in the same scene. First, Hill gets young Tommy off the hook by focusing the young man's attention on the problem of a music holder for marching piccolo players. Hill recognizes Tommy's mechanical bent from earlier in the scene and redirects it to a more "useful" goal. Tommy begins to think about the problem and the resources necessary to create the product that will solve the problem. Second, when confronted with members of the town council, sent to retrieve his credentials, Hill examines the resources and promptly establishes a barber-shop quartet. Now, in both cases, you can argue that if Hill is an entrepreneur, he's not seeing any profit from his enterprise. I would counter that in the case of Tommy, his profit is the development of a partner and source of information on the inside. And that information can help with selling the idea of the band, and the accompanying profits. In the case of the council, Hill manages to get more time in order to bring his main enterprise to light. While the profits are not monetary in either case, not all profits are monetary.

I look forward to your comments.

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