Tuesday, March 12, 2013

Economic Concepts in Broadway Musicals

Over SU's spring break, our family took a quick 1-night/2-day trip to New York City.  We've been to NYC before, so we didn't feel compelled to hit the Empire State Building or Ellis Island/Statue of Liberty again, which gave us freedom to see lots of other places and a couple Broadway shows. 

We went to Central Park, FAO Schwarz, American Girl world, Nintendo World, St. Patrick's cathedral, the NY public library, and more. It was a great trip.  We also saw two musicals that were not only outstanding, but hit on economic themes.

Newsies is based on an 1899 strike by paper deliverers.  The show is outstanding (and our seats were awesome) and the whole family liked it.  This song is about the point when the newsies decide to strike after Mr. Pulitzer decides to decrease the their wages.

There is some room for debating whether they the newsies were "in the right".  In a market that's not competitive, a union could be socially useful by countering the market power of the company.  However, in New York City there are hundreds of employers, so could the newspaper owners really have that much pricing power? 

Further, if 100 people have a job but 100 others are willing to do the same work for less money, is it right to restrict those willing to work for less from taking those jobs?  (In the show, the newsies think that it is OK.).  I don't think so, but that's certainly another contentious issue.  Regardless of the pro-union bias of the musical  it's still a great show.  Here's another clip.

Hands on a Hardbody

We also saw a show in previews called "Hands on a Hardbody".  This show is based on true story.  In it, 10 Texans entered a contest and started by putting their hands on a truck.  When a person removes his/her hands, he/she loses.  The last one to not remove his/her hands wins the truck.  This was another great musical that covered economic topics.  The 10 contestants all had their own individual issues, including one who was struggling to get a job, another who needed money to pay for school, and other economics related topics. 

The whole theme of the show, however, illustrates the concept of "rent seeking".  We teach in principles of microeconomics that when you have a  fixed prize that will be awarded in a contest, too much useless effort will be devoted to win the contest.  That's precisely what happens here, as this contest goes for days.

There isn't much yet on youtube about this show, but here's a clip from it's pre-Broadway days.

I highly recommend both shows - both are amazingly entertaining and give an opportunity to think through economic issues. What could be better?

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