Tuesday, February 24, 2009

The Behavior of Profit-Maximizing Firms

I decided to study economics because after 20 years or so in business I have a pretty good understanding of how business works, but not why it works, at least not in any formal sense. For me, this isn't just a casual interest. I run a business, and realize that many of the decisions we make could be better-informed by a formal education in economics. So I'm thrilled that my class has gotten past the basic supply-and-demand stuff and is moving into a study of how firms make decisions.

2 comments:

Jay said...

Along these same lines...

I caught the Chairman and CEO of Morgan Stanley, John Mack, being interviewed by Charlie Rose last night for the full hour.

http://www.charlierose.com/view/interview/10095

Unfortunately an aggregate 20 minutes of that hour were taken up by Mack using the phrases "Charlie, without question..." and "Charlie, CLEARLY, that's something we have to look at..."

I'd swear he said them each a dozen times.

Phraseology aside, I thought his take on the impact of the global economy and the resulting entrenched interdependence of US banks on foreign markets was instructive.

It's pretty heady stuff that operates WAY above basic supply and demand of products but how enormous amounts of money flow through the banking systems and their respective economies.

He called for a new global regulatory body to oversee the various worldwide banks, holding companies, etc.

"Crap! Not a United Nations for banks!!!" ...was my first thought. But I also have to admit it could be necessary.

Charlie said...

Somebody in my class was complaining yesterday that college doesn't have anything to do with real life. I thought, "Pick up a paper! Turn on your TV! You won't be able to *escape* economics or economists!"

Speaking of which, hopefully someone will note something I say so one day Charlie Rose can introduce me as "noted computer scientist and economist Charlie Wood". :-)