Economics and Plot: Vol 2, Applications

If you have not read Vol 1 yet ,do so before reading this article.

As I stated in the last article, a plot can only be considered relevant at connoting a message to the audience if it follows economic reasoning.  This doesn’t make economics the sole determinate of how good a story is.  Remember, this method can only be applied to the pure plot.  Other literary devices can be just as effective if not more so.  We can still use a criticism of the piece through economics to determine a plot’s coherence.  Coherence is not in and of itself a artistically superior pillar of a story, but is necessary to open up certain doors to the writer.  In this article, I will elaborate on some of the applications that plot coherence offers to a work.


Plot Holes and the Suspension of Disbelief

A plot hole is a gap in the flow of logic in a plot or the blatant disregard of relevant information.  If the author doesn’t regard information about the world that they have already established then the actions of the characters will likely be economically incoherent, and limit the value of the story.  It is unrealistic to assume that an author can create a world that has absolutely zero plot holes, but as a rule of thumb the fewer plot holes the better.  Plot holes are often mistaken to be a part of the plot that isn’t explained.  However a plot hole has to directly violate economic law not just possibly violate it.  The author gives the audience relatively little information about the world behind the story, and there are many other economic factors that may affect the surface story.  An example of this misinterpretation that often annoyed me was in The Lord of the Rings.  Many plot hole whistle-blowers will claim that Gandalf could easily have called upon the Great Eagles of Mirkwood to drop the ring into the fires of Mt. Doom instead of making poor Frodo do it.  However, unlike most of Tolkien’s work he gave very little information as to the background of the Eagles.  Even though we see Gandalf acting friendly with them we really have no idea what their goals and motivations are in the world as a whole.  The suspension of disbelief is occasionally necessary to keep a plot coherent.


Crossroads as a Question

Often characters will find themselves in a situation where they have to make a decision.  If they had all of the knowledge that they needed  to make this decision they wouldn’t find themselves at the crossroads and the plot would continue.  When a character is stuck in this position the reader is presented with the same question.  By showing that a character lacks information it asks the reader whether they have the proper information to answer the question as well.  This may be transient knowledge about the plot of the story, or it may be something deeper that in fact the reader or author also does not know such as a moral question.  The reader might in fact have an answer that neither the characters in the story nor the author has which can lead to quite a bit of frustration.


Perspectives as a means of Revealing Information

The amount of information that a reader has about the fictional world is incredibly important to what the reader can draw from the plot.  The way that an author designs the telling of their story is integral to the amount of information that the reader has and the best example of this is the perspective of the story.  First person limits all of the reader’s knowledge down to one person, and the crossroads method can be applied more often.  A plot from one perspective can evoke more thoughts of personal choice and moral deliberation.  Third person gives the reader far more information, and gets them to understand the greater world.  A multi-perspective presentation of the plot can offer more social, political, or economic questions because they give the reader enough information to believe they could actually answer such questions in both the fictional world and in similar circumstances in the real one.  



No author is perfect and plot holes do often arise in a work, but this doesn’t mean that nothing can be understood from the incoherent story.  Sometimes incoherence, intentional or not, can shock us to the degree that we realize what makes this plot incoherent.  Often comedy will use this tool, and a particularly good example would be South Park.  The characters commonly act in incredibly contradictory, and not utility optimizing ways.  This brings out flaws in the characters that represent people in the real world, and make us laugh.  When we find unintentional incoherence it also might tell us something about the author’s views or understanding of how the real world operates, and whether our view of what that is is validated by this plot.
Vol 3. Will cover specific genres and elaborate how they use plot in their own ways.

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Economics and Plot: Vol 1, Theory

Last year, I wrote an essay for my high school senior project.  Originally I began writing for fun, but then quickly realized I needed to turn something in (sunk costs I guess).  The question that I wanted to answer is, how can we relate the study of economics to characters in a fictional story, and what does it tell us about plot as an art form.  The essay itself was a bit too long to upload all in one go, but I thought I would summarize it in multiple parts.  This one is the theory, second are some applications, and thirdly the theory in the context of various genres.

Economics is traditionally a science for use in the concrete world.  However, I want to broaden the uses for the discipline.  Economics can be used anywhere where scarcity and decision makers exist to make choices.  When these things exist we observe certain patterns that we call economic laws.  These laws certainly exist in our world and we don’t have a choice to live without them.  Our intimate yet often unrealized connection with economics can lead us to appreciate the economic situations of others, and draw meaning and understanding from purely their position in the world.  Many people have probably already used economics in this artistic style before without even realizing it.  What most people would call plot in a piece of literature or a film, could be described as a series of actions, events, and values intertwining to create a story.

If economics is the understanding of the laws by which individuals make decisions in scarcity then any imaginary plot which assumes scarcity would also obey these laws.  It may be difficult to differentiate between plot and other parts of the work of art.  In film for example, the cinematography, lighting, acting skill, and editing are all important parts of the artwork, but none of them directly affect the plot.  If we were to strip away all artistic elements of a story and describe it in purely terms of the plot we have the plot all by itself.  This can be called the Pure Plot.  For example,  the epic poem of the Aeneid describes the great journey of Aeneas and his compatriots after the Trojan War.  The poem is famous for its use of poetry to emphasize points of meaning complimented by Virgil’s excellent craftsmanship of the Latin language.  If we ignore the poetry all that we have left is the pure plot.   Here is a pure plot version of Book 2:

  1. Aeneas decides to tell the Carthaginians the story of Troy’s fall.
  2. One morning, the Trojans find a large wooden horse in front of their gate, and the Greek ships are no longer on the horizon
  3. They must debate over whether or not to bring it into the city.
  4. Laocoon, a priest of Neptune, warns them that this horse is just another one of Ulysses’ tricks.
  5. Laocoon is then eaten by a serpent from the sea.
  6. The Trojans take this as an omen, and bring the horse in.  
  7. At night, Ulysses and his men come out of the horse and let the Greek army in.  
  8. Troy is destroyed.

Even though this passage has thrown out all of the “artistic” elements it still has a relation to our world in that the economic laws which govern the individuals in the story are the same as those that govern us, or at least they should be.  With a good understanding of how economics is the range in which plot is formed, economic analysis can be used to judge the validity of a plot and help readers and critics judge the validity of a plot as an artistic piece.  If a plot is artistic because it connects to economic realities of our world then connections that more effectively connote the message the artist wants to get across to more people can be considered better.  One way in which plot can be considered objectively better is that if it properly follows the economic laws that it is based on in the first place.  If a character’s action clearly violates an economic law then there is no way that that plot, or at least that section of the plot, can connote anything about the real world.  It would be the same as if an artist were to paint in a color that does not exist.  The reason that green can be effective in a painting is because we experience green in the real world and can connect the painting to those other parts of our life and the artist recognizes this.  If an artist was to paint in a nonexistent color there is no possible way that we could connect this artwork to our lives because we have nothing to connect it to and therefore can make no connotations about it. Strangely enough, this is a problem that no painter will ever have to face unless someone figures out how to paint in infrared or ultraviolet.  Authors however must make sure to avoid this mistake.

Vol 2 will cover some applications that I have discovered of how Pure Plot is used to connote something to the reader.

Thanks to Sarah Chaga Crispin and David McCauley as I came up with the idea in their class.

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METALLICultural Costs

When I firstMetallica Concert listened to Metallica it changed my life.  Before a certain point I would have told someone that asked about my musical tastes that I outright didn’t like music.  After Metallica, and the subsequent dive headfirst into headbangerdom I would proudly call myself a metal-head.  Recently, Metallica released a new album, Hardwired…To Self Destruct, so I thought it appropriate to write about an idea that I got from experiencing Metallica myself and delving deeper into the history of thrash metal culture.  What makes Metallica, thrash ,and metal unique to other more popular genres of music is that the music is directly tied to a greater culture, and that culture incurs certain costs.  Metallica just so happened to be born in the right place at the right time.  

Firstly, we need to actually define what a culture is.  The way I want to organize this is by designating culture to a special kind of utility.  Cultural utility is unique from other kinds of utility in that cultural utility is the satisfaction gained from a good or activity because it is shared with others.  You cannot have culture with only one person.  On my own, I can listen to Metallica in my room or in the car, but at that moment I am not gaining cultural utility.  The cultural utility of Metallica comes when I go to a concert, or when I talk to a fellow fan and we share the bond that the music creates.  A more grounded example would be with the way that we use the road.  If there were no other cars on the road, driving on the left or right side, would be largely indifferent to most people.  However, since the road is usually filled with many cars, the cultural utility of us all driving on the right is great as it prevents accidents.  None of us really have ever made the explicit choice to drive on the right side, but the government recognizes that a law like enforcing driving on the right provides cultural utility.  

So with every culture, there are two necessary costs.  One is the cost of producing that specific good or service which is shared.  The other, since we’re dealing with multiple people in culture, is communication or transaction costs.  So if either one of these two costs is high, a culture may have a difficult time taking root, and when they are low new cultures have the opportunity to spring up.  The most basic example of communication and transaction costs being low is when people live very close to each other.  It’s not too hard to yell at someone across the street, or to make a short distance phone call.  This is often why we like to think of cultures in terms of ethnicity or country.  

Now that we have this theory, we can apply it to Metallica and the Bay Area Thrash culture.  Thrash metal bands are known for mostly coming out of the San Francisco Bay area, but Metallica actually originated in Los Angeles.  Los Angeles was saturated by glam metal bands, which were the opposite of everything that Metallica stood for.  However, record labels would only pick up glam bands, as they were the ones who made the money.  Thrash bands didn’t have a way to produce their music on a massive scale.  However, during this time the costs of recording studio equipment were falling, and a new record label Megaforce Records popped up to sign Metallica.  The still prevalent Metal Blade Records opened to sign other bands like Slayer.  The recording costs in this case are the same as the costs of producing the shared good, the music.

But only producing music would not have created the cultural explosion that it did.  It needed an easy way to communicate.  For thrash, it was cassette tapes and metal magazines.  Cassette tapes allowed thrash fans to easily reproduce the music and spread it to friends anywhere in the world.  Magazines allowed them to talk to each other, and consolidate information on bands such as tour-dates or album releases.  These both contributed to the ease with which the thrash culture was able to grow, and how Metallica was able to be as dynamic and wild as they were when they finally reached San Francisco.

So thrash was built on the backs of not only talented musicians, but savvy entrepreneurs who built the thrash metal culture and studios, tapes, and magazines.  There may be out there cultures who are not dependent on communication costs or the costs of producing the cultural good.  If you can think of any more interesting examples that either confirm of break this theory, leave a comment. Regardless, Metallica is still super metal. \m/

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Information from Metal Evolution Episode 6: Thrash

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Democritus’ Atom of Economics

The Greek philosopher Democritus pioneered a theory in physics that all matter is made up of indivisible, invisible, and homogeneous particles called atoms.  All of the laws of physics were based upon the properties of atoms.  Modern physicists do not believe that atoms have these exact properties, but that they are made up of further particles, electrons, neutrons, and protons, which are made up of even further particles.  However, physicists can draw on some fundamental truths which function to modern physics the way that the atom functioned to Democritus’ view of the natural world.  Namely, these truths are that matter and energy exist and have certain qualities that interact to create the physical world.  All of thought that is in light of these two truths is what we call physics.  Why matter and energy exist in the way that they do is left to other fields such as philosophy, theology, and perhaps even math.  For every field of study there are fundamental principles upon which it is based.  For math, these might be self-proving theorems such as 0=0 or 2<3.  For biology, these are the existence of cells which interact in various ways to create life.  This is all related to the question which I want to answer today.  What is the “basic particle” or “Democritus’ Atom” of economics (I think I know the answer I just wanted to go through a few things first).

Economics students first learn that people deal with utility.  Utility is the value that something has in light of the goals of the actor.  In that sense, isn’t the entire economy made out of utility?  At every single level of the economy, with every single step, we encounter utility.  Does this make utility our basic particle?  I don’t think so.  The nature of utility doesn’t explain why the economy is the way that it is, in the same fashion that the laws of energy and matter explain the entire physical world.  Utility merely functions similarly to how potential and kinetic energy function in the physical world.  It keeps goods flowing through the economy as it gives those goods reasons to move and their actual motion.  

So what about the resources?  Could the goods that hold the utility be our basic particle?  Utility is just a quality that various goods and services hold in the eyes of actors.  Goods and services are at every level and step of the economy along with utility.  All market transactions involve some form of goods whether it be labor, money, or other physical goods.  It would be hard to imagine an economy without goods and services.  As with utility, their ever-presence does not make them a fundamental principle.  Again the various qualities of the goods do not explain why they are where they are in the economy, or again why they have as much utility to various people as they have.

Alright enough screwing around.   In physics what is being studied is the interaction of the qualities of matter and energy to create the physical world.  In economics, it is the interaction of finity and decision-making (sometimes rational, sometimes irrational).  Every interaction of energy and matter results in a physical event, and every interaction of finity and decision-making results in the phenomenon which we call scarcity and an economic event or economic choice.  We then come to the already accepted definition of economics; the study of choice.  

Being that this is a playground, let’s play around with this.  Suppose neither finity nor decision-making existed.  This world has infinite possibilities and no way to discern between them.  There we cannot perceive economics. Suppose only one existed.  If there were finite material yet no decision-making agents, then there is only so many possibilities yet again no one to make choices between them, and they play out on their own.  The situation in which there are decision-making agents yet infinite material is the same as the famous question, “What is the economy of heaven like?”  The answer is that there is no economy in heaven.  The decision making-agents already have all that they could possibly perceive as valuable and therefore have no need to make choices.  

So there we have it; the economic choice is our economist’s Democritus’ atom.  The other proposed ideas of utility and goods are very core properties of economic study, but are still emergent from the economic choice.  Utility exists because there are agents which have goals to which they assign utility, and the resources have utility because the agent is trying to manage around their scarcity.  This fundamental object of the economic choice is what separates economics from other disciplines even though it is still dependent upon other fields such as physics and psychology.  The more that economics focuses on its own base particle, the more confident we can be in a new economic idea.

Physics Proofreading credit to Amartya Banerjee

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Exclusive Interview with a Candy Market Broker

I haven’t yet mentioned my career before starting this website, but I used to work for my family’s candybroking business in the BMCE (Bryn Mawr Candy Exchange).  Today I conducted an interview with a close associate of mine from my candybroking days, my sister, Miriam Shera.

Q: So Miriam, How have you been?

A: I’m doing fine.  Our parents have been doing fine. They’re still alive. They want you to call more.  

Q: Can you discuss the unusual spikes in price that occurred in the mid-Fall quarter of the candy market.

A: It’s referred to as the All Hallow’s eve effect.  Our market analysts have been unable to explain why it occurs only that it is a constant trend in late October, in which suburban candy demand skyrockets as a result of costumed marauders threatening locals with a war chant of “Trick or Treat”.  The demand here is really one for security.

Q: Can you describe these costumed marauders?

A: They seem to wear a wide variety of costumes making it unable to track their origin.  Costumes tend to focus around figures in popular culture or more traditionally horror themed.  Some of them seem to be nonthreatening, but since there is no way to know where they come from, no one is willing to take the risk.  They seem to be attracted to pumpkins like moths to a light, and some have had success at deterring gangs by merely turning their house lights off.

Q: How does this affect your candy trading?

A: Honestly, it gives us a big boost.  This period is consistently a bull market as most candy firms tend to raise their prices to adjust for the newfound utility of candy, crime deterrence.  Many insurance companies also subsidize candy buying in order to prevent having to pay for property damages.

Q: This season have there been any particular trends that you noticed.

A: There are a few industry standards such as the consistent success that candies like Kit-Kats and Snickers have, but this year we were willing to take a risk and invest in Almond Joy.

Q: Has anything come of that?

A: I can’t reveal too much information, but it appears to have been somewhat of a bubble as a majority of the stock that we accumulated inexplicably disappeared after the bag was left open near Dad’s desk.  

Q: Other than that how profitable have you been this year?

A: We’re weighing in at about 1500g of sugar, up from our down round last quarter.

Q: Where is the market going as you see it?

A: Two words.  Fun Size.  

Q: Is there any advice that you have for prospective candybrokers?

A: You really need to know the products you’re working with.  You can’t make in this business without getting your hands sticky.  And you have to be prepared just because you’re on a sugar high doesn’t mean the sugar crash isn’t coming soon.  

Credit to David Shera for the idea.

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Can Philosophy be Specialized?

I’m better than you at X, and you’re better than me at Y.  This seems fairly intuitive, but is a really important concept in economics called the Law of Comparative Advantage.  Basically, if I engage in X I’m giving up less productive time in engaging in Y, and if you engage in Y you’re giving up less productive time in engaging in X.  It’s a bit more complicated than the way that I describe it here, but that’s another lesson for another time.  The important thing is that this results in the phenomenon that we call specialization or the division of labor.  These are things in the economy that most people take for granted such as the fact that there are certain people who specialize in medical work and we call them doctors, and there are those of us who specialize baking cakes and we call them bakers.  The division of labor makes people more productive, and therefore people have an incentive to behave in this way making specialization a cornerstone of our economy.


There are certain things that might pose a problem to the productive efficiency of specialization.  Perhaps, some things, if specialized, lose a part of their value.  When you specialize you are placing the production process upon someone else.  So are there goods that derive a part of their value from the production process?  When we engage in creating an idea, the production process is the various logical gates or hoops that must be jumped through to come up with a valid idea.  In the case of philosophy, a philosophical idea is produced when one creates a set of proofs that have true premises and a valid argument which would lead to a true conclusion.  To understand what makes this good valuable, we need to consider why anyone would engage in producing a philosophical idea.  If it is only so that they have the final product, the conclusion of the argument, to guide their actions buy, then anyone could go to the philosophy store and pick up a package of conclusions to valid arguments. However, this isn’t entirely true.  A large portion of the reason that we engage in philosophy is not only to know what conclusions to act by, but also to understand the process by which they are arrived at in order to make ourselves feel more secure on the conclusions that we live by.


“Believing things on authority only means believing them because you’ve been told them by someone you think trustworthy. Ninety-nine per cent of the things you believe are believed on authority. I believe there is such a place as New York. I haven’t seen it myself. I couldn’t prove by abstract reasoning that there must be such a place.”      

-C.S. Lewis


Taking things on authority is not a bad idea as Lewis states, but just because it is okay to believe people in whom you trust does not mean that this is true of all ideas at every level.  If Immanuel Kant was to approach me today and tell me that I should not murder, am I now to trust him and not murder?  My trust in him is based mostly on the fact that he is well established and reputable philosopher, and many people revere his work so I can trust that his argument behind “Thou shalt not murder” is sound.  If I live my entire life based on true conclusions of philosophical arguments, one could say that I am acting morally, but did I gain the full utility of philosophy?  


A large reason that we can’t take philosophical conclusions based purely on authority is that in the real world, even if a philosopher is reputable they may be wrong, and we want to do our own proofreading of their argument.  There are many opposing conclusions out there, and we need to do our own processing of the arguments behind each to figure out which one we believe to be most true.  If we were to take a conclusion based purely on authority than we are leaving ourselves vulnerable to a situation where another conclusion is proposed to the problem we are trying to solve by an equally reputable source as our previously held conclusion, but since we cannot tell the difference between the validity of either argument we are left in a philosophical limbo where we now have less knowledge than we had before.


Does this mean that philosophy cannot be specialized?  Let’s imagine a world in which no philosophy is specialized.  Everyone does their own philosophical proofs starting from cogito ergo sum.  This would take incredibly large amounts of time, and if every person was to do all of the other activities of their life in addition to creating their own philosophy then no one would get very far in life, philosophy or otherwise.


In real life, we have come to a consensus.  The kind of specialized philosophy that I have been describing could be called perfectly specialized philosophy, in which there are designated people called philosophers who produce a philosophical conclusion which are accepted on authority and directly applied to the life of the consumer for an ambiguous amount of utility.  In reality philosophy is specialized, but not to this perfect degree.  The philosopher creates arguments and conclusions and puts them into the world for people to either accept or to criticize and modify to something that they believe is more accurate to live by.  Perfectly specialized philosophy may occasionally create individuals who do the morally correct thing, but it does not give the consumers the personal comfort of additional confidence in the good they are using nor does it allow them to distinguish from other philosophical ideas.  


To put this into more economic terms, we could consider the perfectly specialized philosopher to produce consumer goods.  The philosophical conclusions are the part of philosophy that we directly apply to our actions so that we derive more utility from our life.  People cannot really choose an action based on its actual utility, but act on how much utility they expect to gain from it.  A philosophical conclusion in and of itself does not communicate to its adherent how much utility they might gain from it.  Therefore, what the real life imperfectly specialized philosopher does is create the various productive such as factors and relevant premises that they analyze and organize for their followers to produce conclusions from themselves. At the very least they show the entire process, and allow the public to understand and consume them at some degree.  
So in fact many things that seemed perfectly specialized may in fact not be.  Even the baker who makes the cake to the very end does not lift the fork to the diners mouth.  The basic Law of Comparative Advantage still holds true in light of the productive complications that philosophy holds.  There are those of us who are better at engaging in the activities that are useful for philosophy, and therefore those become philosophers as they are more productive than if those same people became construction workers.

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As a debut post on this website I wanted to clear a few things up.

So this will function as a disclaimer for all future posts.  

I am not a real economist

I don’t have any real credentials.

I’ve never payed taxes.

I’m barely an adult at the time of writing this.

Don’t expect expert-level writing from me. (Or artwork as you can probably tell by the Microsoft Paint drawing on the right.)

So I will undoubtedly say things that I will later disagree with.  As time goes on, I will try to stay consistent in my thought and not throw random ideas out into cyberspace.  Interestingly enough this ties somewhat into the double purpose of this site.  One to send things out into the world, and the other to organize things internally.  Nothing irks me more than self-contradiction so this should help me self-medicate.

Having said that, I am an economics student (emphasis on student) at George Mason University, and am somewhat learned in the subject myself.  What I want to do with this site is to post various articles of interest to me and hopefully others on about 95% economics and the rest will be other subjects with which I will find an excuse to relate to economics.  I hope to expand to other formats such as podcast or perhaps video, but time will tell.  

One particular article of interest I hope to be reviewing is films, books, TV shows, video games, or any sort of artwork with a narrative.  Crafting a story is essentially the same as crafting a series of economic events, and I’d like to bring an economist’s eye to fictional worlds as it makes them both more relatable and engaging.  

As a final purpose for this post, I pledge to revisit this page one year from now, and reevaluate the site.  Either I last that long, and will have paid for another year’s worth of hosting or I don’t and it doesn’t matter anyway.

One more additional note, the following are all of the people who contributed to the Facebook post I made while trying to craft a name.

Scott Connell
Alex Greene
John Halcovich
Tim Harper
Kate Huangpu
Ara Jizmejian
Josh Kim
William Kocher
Steve Mittleman
Bridget Murray
Isaac Shaw
Peter Shevchenko
Justin Winas
Craig Zimmerman

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