Video: Unit 5 Transcript

Hello and Welcome back to our Introduction to Economics class.

What if I told you that every economic decision we make—whether as individuals, businesses, or governments—has a ripple effect far beyond what we see?

 

From the air we breathe to the roads we drive on, from the education we receive to the waste we produce, economics isn’t just about supply and demand—it’s about stewardship. It’s about how our choices impact others, both positively and negatively.

 

As Christians, we are called to be mindful of these impacts. Genesis 2:15 tells us:
"The Lord God took the man and put him in the Garden of Eden to work it and take care of it."

 

But are we truly taking care of what God has entrusted to us? Let’s explore how economic principles like externalities and public goods intersect with our biblical responsibility in today’s world.

 

A negative externality happens when economic activities create unintended costs that society must bear. One of the most pressing examples today is environmental pollution.

 

Take air pollution—cities like New Delhi, Beijing, and Los Angeles struggle with smog so thick that it reduces visibility and causes respiratory illnesses. Why? Because industries, cars, and power plants produce emissions, but the people paying the price aren’t just the companies making profits—it’s the children developing asthma, the elderly struggling to breathe, and even the farmers whose crops are affected by acid rain.

 

This isn’t a new problem. The Great Smog of London in 1952—where pollution from coal burning mixed with fog and killed thousands—pushed governments to create cleaner air laws. More recently, wildfires linked to climate change have destroyed entire towns, from California to Greece and Australia.

 

What does the Bible say about this? Proverbs 29:2 states:
"When the righteous thrive, the people rejoice; when the wicked rule, the people groan."

 

If we allow profit to overshadow responsibility, the people groan. But economics offers solutions—carbon taxes, pollution permits, and incentives for renewable energy—all tools designed to reduce negative externalities. The question is, are we willing to support policies that may cost more in the short term but protect future generations?

 

Case Study: The Cost of Convenience

Let’s talk about a Case Study on the Cost of Convenience dealing with plastic waste.

 

For decades, plastic was seen as a miracle material—cheap, durable, and convenient. But today, we know better. The Great Pacific Garbage Patch, a swirling mass of plastic waste in the ocean, covers over 600,000 square miles—an area twice the size of Texas.

 

Why? Because single-use plastics are cheap to produce, but no one wants to pay for their disposal. Instead, they end up in rivers, oceans, and even in our food chain—scientists have found microplastics in fish, drinking water, and even human blood.

 

Scripture warns us about ignoring long-term consequences for short-term gain. Proverbs 14:12 says:
"There is a way that appears to be right, but in the end, it leads to death."

 

Governments are stepping in—many countries now ban plastic bags and single-use plastics. But change also happens at an individual level. Are we willing to make sacrifices—carry reusable bags, reduce waste, choose sustainable products—even if it’s inconvenient?

 

Not all externalities are bad. Some economic activities create positive externalities, meaning they produce benefits that extend beyond the individual.

 

Take education—when a person goes to school, they gain knowledge. But the benefits don’t stop there. Educated citizens contribute to society, reduce crime rates, and foster innovation. Yet, many developing countries struggle to provide education because markets alone won’t pay for it.

 

That’s where public goods come in—things like clean water, public safety, and roads that benefit everyone but may not be profitable for businesses to provide on their own.

 

Matthew 22:39 reminds us:
"Love your neighbor as yourself."

 

Think about vaccines—one person getting vaccinated against measles doesn’t just protect them; it helps prevent outbreaks that could endanger thousands. This is why governments often subsidize healthcare, ensuring that public goods are available even to the poorest in society.

 

Let’s look at a real-world failure of public goods in the case study of the Flint Water Crisis.

 

In 2014, Flint, Michigan, switched its water source to save money. But due to poor oversight, lead from old pipes contaminated the drinking water. For months, families drank poisoned water, children suffered brain damage, and trust in the government eroded.

 

The Bible warns about neglecting justice. Micah 6:8 says:
"He has shown you, O man, what is good. And what does the Lord require of you? To act justly, and to love mercy, and to walk humbly with your God."

 

Flint’s crisis wasn’t just a failure of economics; it was a failure of responsibility. It reminds us that maintaining public goods—clean water, safe roads, healthcare—requires vigilance and accountability.

 

So what do we do? Well, if you are a business leader, consider your impact. Are you creating a product that benefits people without harming the environment? If you are a policymaker, think long-term. Are your decisions promoting justice and sustainability? If you are a consumer, choose wisely. Every dollar spent is a vote for the kind of world we want to live in.

 

Economics isn’t just about maximizing profit—it’s about honoring God through wise stewardship. Are we building an economy that reflects God's justice and mercy, or one that prioritizes convenience and greed?

 

Proverbs 11:1 tells us:
"The Lord detests dishonest scales, but accurate weights find favor with Him."

 

Let’s make sure our economic choices reflect the balance of justice, wisdom, and love. Thanks and we’ll see you next time.