I love watching Seinfeld. In fact, I watch an episode almost every evening, and I own every season on DVD but one. And that one’s on my birthday list. I also love the subtle economic lessons it (most often) inadvertently teaches us. The concept of scarcity is one such example.
On the episode Reverse Peephole, David Putty enters Elaine’s living room donning a lovely fur coat. Upon seeing her boyfriend wearing fur, Elaine frowns in disapproval. Rolling her eyes,
She asks, “What is that?!”
“My winter coat?” he replies. He shoots back, “Is there a problem?”
Elaine sarcastically remarks, “No. A seemingly infinite supply.”
Elaine’s comment suggests that she disapproves of fur due to its limited supply, not that it requires the untimely death of a cute, fuzzy mink. While her statement is true – fur is in limited supply, her logic is inaccurate. I would explain to Elaine that all [normal] goods are limited in supply.
We live in a world of scarcity, and the supply of leather jackets, rain coats, and everything else all suffer from limited supply, just as fur coats do. Obviously, supplies of fur coats pale in comparison to leather coats, but fortunately we have the price system to allocate the supply of scarce goods. Without our price system, we’d have to rely on rationing, a queue, or some other undesirable system of allocation.
So, Elaine can relax and not fret knowing that scarcity applies to everything, not just fur. And I can feel good about watching Seinfeld, knowing that I’m learning economics while laughing at Jerry’s fairly obvious yet meaningless observations.
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