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The Brick Wall Economic Theory

About three months ago my neighbour announced that he was going to make the wall between our houses taller. This doesn't sound like a problem at first, but then you start to realise what all the implications are.

The first problem is that the wall is built with bricks. The wall then gets coated with a special plaster primer paint, and after that, it gets painted with a coat of paint that is resistant to the elements of mother nature. Now you may ask me why that is a problem? See, bricks are placed on top of each other and cemented in place. For those of you who don't know, cement is a runny substance that will succumb to gravity when it is placed on the side of a surface which will then make it run down the surface. In this case, the brick wall is the surface on which the cement is being placed. When the cement runs down the wall it creates this ugly grey patches on our once beautifully painted wall.

I'm sure a lot of you at this point is saying, "I thought I clicked on a blog about economics?"

 Well, that is exactly what the process of building a brick wall is. It is the basics of the economy happening without you even noticing. The definition of Economy states that economy is the study of how individuals, industries and governments choose to use scarce resources to satisfy their many basic and other needs in a way that is fair and effective.

A brick wall, really? Yes, a brick wall.

The definition of the economy stated above can easily be used to describe why I am saying that the building of a brick wall is the basics of the economy. Now to clarify, the definition is a broad explanation of what the term economy entails. Everything mentioned in the definition isn't always needed for the statement to be true.

Let me break down the definition of the economy with my example of the brick wall to explain what I am saying:

  • Economy is the study of how; by looking at the brick wall we are going to study how the economy works.
  • Individuals; in the brick wall's case, it is my neighbour.
  • Industries; in the brick wall's case, it is the company my neighbour hired to build the wall.
  • Governments; this is what I mean by everything isn't always needed to make the statement true because in the brick wall's case the government didn't have much of a role in the building process(although in broader terms they did which we will definitely cover later on, but for now we will say that the government didn't play a role in the building of the wall).
  • Choose to use scarce resources; in the brick wall's case, we refer to everything from the bricks, cement and even the labour used to construct the wall. Although bricks isn't necessarily a scarce resource, in economic terms most of the things that are used to produce something is seen as a scarcity. The things that get used in a production process, whether that is to produce smartphones or on a smaller scale, to build a brick wall, is often called the factors of production.
  • Satisfy their basic and other needs; in the brick wall's case, the need was for my neighbour to raise the wall because, well, we are here to study the economics behind the building of the brick wall, not the psychology behind the building of the brick wall.
  • in a way that is fair and effective; in the brick wall's case, a lot of factors can contribute to whether it is fair and effective. Is it fair that my neighbour built the wall higher? Well, yes, we get a higher wall basically for free, and I emphasise, basically for free... This will be discussed more in-depth in the future. As for effectiveness. That is hard to say, effectivity is usually subjective and I alone can't conclude if the project was done effectively or not.

As you can see, the process and the roleplayers in the construction of the brick wall are all present in the definition. Again, this is a very broad way to look at the economy as a whole and obviously, there are a lot more things that we can go way deeper into than how we did in this short example.

That is why I thought of the brick wall as a perfect way to explain economics. A lot, and I mean a lot of things that happen during the construction of the brick wall can be used as examples of basic economic theory. Macro- and microeconomics alike. That is what I aim to do in this blog.

I want to explain key economic concepts in a way that is easy to understand, practical and fun.

So welcome to The Brick Wall Economic Theory. The place where you can come to learn economics in a way that is easy to understand, practical and fun.

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