EXPERT WITNESS: Primary Economics - A Hero(ine)'s Journey (part two)

By John F. Sase, Ph.D.
Gerard J. Senick, Senior Editor
Julie G. Sase, Copyeditor

“We must be willing to let go of the life we planned so as to have the life that is waiting for us.”
—Joseph Campbell, “The Power of Myth” (Anchor Press, 1991)

Our Story Thus Far
Last month, we considered the need for a strong primary sector of Economics that includes agriculture, forestry, fishing, and mining, not only for ongoing production of finished goods and services but as a firm foundation for human organization that we can trace to our distant past. We began our Economist’s Journey by using the model of a pedagogical myth as introduced by the American author and lecturer Joseph Campbell. We used this model to build upon the basics of productive economies, a concept developed by the noted New Zealand-born economist Allan G(eorge) B(arnard) Fisher.

In the overview segment (part one) of this continuing story, we created a post-apocalyptic scenario in order to introduce survivors from different cultures who find themselves on an uncharted island.
Through their experience in group survival by allocation of existing resources, we learn about the four primary sectors of Economics—agriculture, forestry, fishing, and mining. Our plan is to use a central unified story in order to illustrate the economic principles that otherwise may elude an audience due to their abstract nature. As we hope that our readership will see, this approach can be modified and applied to many other disciplines and venues, such as a courtroom.

In this month’s episode, we will organize our text thusly:  We will state the Economic Principle to be illustrated in succinct professional terms. Then, we will reenter the timeline of our Hero(ine)’s Journey in order to provide an illustrative segment that reflects the stated principle. For those readers who missed the first episode, we have posted a readable copy and a downloadable PDF of last month’s column at http://saseassociates.com/readingroom/primaryeconomics.html

Our Raison d’Etre
Why do attorneys need to understand the basics of Economics? How will this knowledge benefit them? When communicating with jurors, both attorneys and experts face a challenge in how best to explain relevant concepts to jurors. If an attorney can prepare the jury through storytelling of the pertinent economic principles of the case, then that attorney can use experts to greater advantage when they present and opine on the stand. More often than not, jurors have had little to no exposure to the technical aspects of Economics. However, they are capable of following a common sense explanation that relates to their fundamental humanity. Thirty-seven years of university teaching and community education has taught me (Dr. Sase) that storytelling, which engages the audience (students), helps them to understand and to retain much more than the straight lecturing of facts. As in a court of law, a clear presentation of the facts is important. However, a relatable story that includes memory-aids forms the basis of an effective takeaway.

Another significant influence came to me when a colleague asked me to summarize the popular business novel “The Goal: A Process of Ongoing Improvement” by Eliyahu M. Goldratt and Jeff Cox (North River Press, 2nd edition, January 1992). Written in the style of a fast-paced thriller, this book describes how the manager of a failing manufacturing plant owned by a parent corporation saves it by applying the fundamentals of Constrained Optimization (maximizing profit while minimizing costs), a standard concept that is taught in university-level Managerial Economics. The success of The Goal suggested to me that explaining Economics through the form of conventional storytelling can work quite well. 

Economic Awareness
Here is our first Economic Principle:  The term “Economics” is derived from the Ancient Greek oikos, meaning “house,” and nomos, meaning “custom” or “law.” As a result, it has come to mean “rules of the household for good management.” In modern thought, Economics implies the management of resources. We consider that all resources are limited in their availability. They may be scarce in time, place, or in a combination of time and place. As a result of their finiteness, we need to manage and allocate them to competing uses.

Now, let us go to our story:  Following a two-day, away-team reconnaissance of our environment that we now know to be an island, we have arrived back at the shoreline in the late afternoon. Looking about, we notice that more of us are around the cove than when we departed two days ago. The fire-builders have gathered wood and kindling and have brought this fresh fuel for the evening fire. They busy themselves by laying the firewood on the upper beach beyond the tide-line. In addition, the fire-builders are experimenting with the extraction of fish oil from the daily catch in the hope of conserving wood while extending the length of the fire by adding oil to it. Working alongside them, we find others who have removed and stretched vesica pisces (fish bladders) over the leaves of nearby trees in order to collect the fresh water that perspires through the leaves.

Meanwhile, others stand waist-deep in the water, catching fish and eels with their bare hands and with pointed sticks (with greater or lesser success). Some members of our expanding community have climbed the rocky embankments on either side of the cove in an attempt to capture birds or to pilfer their eggs. Directly in front of us, we witness two youngsters fighting for possession of a fish head.

Members of our immediate band, our away-team, look at one another, expressing concern through an air of trepidation. In our basic common dialect, one of us communicates that we are running low on resources. This comment fuels a short and broken conversation, which develops into the awareness that we have access to an abundance of resources around the cove and throughout the nearby shore beyond. However, we have not yet learned to manage these resources efficiently in order to produce sufficient benefits to meet our needs. A few of us, who understand similar words from our number of different languages, piece together a statement of observation on how our resources vary in availability by time, place, or by time and place. Areas of the cove that contain shellfish are accessible only at low tide. Long grasses for weaving various goods can be found only at points up the embankments that turn into the cliffs, which flank the cove. A variety of other resources, including small pieces of firewood, lay scattered throughout our small realm.

Factors of Production
We will begin this section with our second Economic Principle:  The objective for properly allocating resources is to produce goods and services. The goal of this production is to satisfy needs and wants. However, in order to allocate resources properly, we need to divide them into human and non-human resources. Then, we need to separate these two divisions into categories known as Factors of Production. The three basic factors here are human labor, capital (useful tools), and land (nature or real estate). In recent times, two additional factors have been delineated. These are entrepreneurship (labor risked, hopefully to earn a profit) and technology (intellectual property—transferable knowledge).

Now, let us return to the island:  In respect to our fellow habitants, we observe that certain individuals appear to possess the nature and the interest for specific kinds of work while others have the proclivity for tasks that require opposite sets of skills. For example, we note that taller individuals have the height to venture into the deeper waters of the cove while others of a shorter height and a lower center of gravity have the ability to scurry safely up the steep incline. Those with greater manual dexterity and near-field focus can weave the tall grasses from the cliffs into rudimentary fishing nets that will enable others to fish with greater speed and ease.

Production Possibilities
Here is our third Economic Principle:  Depending on the overall amounts and equitable balance of our factors, we tend to reach an upper limit in the production of an optimal mix of goods and services. This upper limit of what production is attainable suggests a full utilization of our currently available resources. This limit marks the maximum production that is possible under present conditions. There are two ways for us to achieve a bundle of products beyond this limit. First, we can increase our factors of production equitably to enable a further increase in output. The second way is for us to specialize in the production of certain products for which we have a comparative advantage. Then, we can trade our surplus with similar groups who have other products that we need. For the moment, we will focus on the first way.

Let us see what is happening on the island:  While some of us continue our discussion about resources, the remaining members of our away-team survey the present situation. The size and nature of our cove suggests that it may get fished-out rapidly as we attempt to feed our increasing population. Observation suggests that we will not be able to meet the needs of our growing lot. Part of our away-team remains in discourse while looking out to the sea beyond the cove.

Using a combination of gestures and a smattering of common words, we discuss the feasibility of fishing the waters of the open sea beyond our present frontier. All of us seem to understand that such a venture will require an investment of time, labor, and material to construct larger nets with floats and weights attached as well as some simple rafts, dugouts, or similar small vessels. Furthermore, we recognize that we must identify and sort the skills of our available labor force in order to determine which of us embody the appropriate talents and temperament to go beyond land’s end safely and successfully.

We bring together the members of our away-team, who now possess knowledge of the rest of the island, with several other members of our community. While the away-team was gone, this group gained more in-depth knowledge of our immediate environment. Then, we decide to take a “straw-inventory” of all of our resources—a crude assessment to serve as a starting point in the evolution of our potential sea-fishing project. In order to identify each person of the cove community, we decide to draw an elementary pictogram of each person along with a distinguishing characteristic for identification.  In order to do this, we use charcoal applied to fragments of wood or stone.

Next, we decide that we will delineate the laborable portion of our community into risk-taking and risk-averting members. We do this to develop pools of volunteers to form functional crews for the project. In respect to non-human resources, we map out a method in the sand to measure our surrounding nature and its various characteristics; any tools, such as the flint arrowheads given to us by the people of the Core and Sky (Part One); and any transferable knowledge or offered ideas that would benefit our community.

Specialization and Division of Labor
Here is our fourth Economic Principle:  A basic way to increase productivity is to identify the relative skill-levels of all members of a work force and then to divide the force into groups. Each group focuses on a more specialized process or activity. Generally, this division of labor into specialties serves to increase both individual productivity and, as a result, the total amounts produced.
Now, let us rejoin the cove community:  As the afternoon turns to dusk, we split into sub-teams. We do this in order to take our straw-inventory and to allow some of us to reconnoiter beyond the mouth of the cove. This latter group will assess the overall feasibility of our project. We arrange to regroup at sunset in order to compile the results of our research.

The first group remains along the shoreline while the second climbs the embankments to the top of the cliffs, which are on opposing sides of the cove. The third group returns to the forest beyond the shore in order to locate the forest people. We hope to discuss the possibility of combining resources with them in order to work together for mutual benefit.

We in the fourth group head out to the cove. Our destination is the sea beyond. As we sally forth into deeper water, it rises above our waists. We notice a woman who appears to be resting on top of the water. Glancing with a smile at our passing party, she waves to us. We approach inquisitively as this perched personage gestures that she is sitting on a boulder, of which there are many below the surface toward the mouth of the cove. We smile and motion that we understand, thankful for this information that may save lives. If our crews venture forth in small vessels, we do not want to risk their smashing upon the rocks and drowning.

Pushing onward, we recognize a partially exposed shoal. As we ascend it, the waters grow shallower. Most of the shoal remains just beneath the surface of the open sea at present tide. To collect our thoughts and energy, we rest. Some of us sit and look back at the shore while others crouch and look seaward at the reddening sun, which is dipping closer to the horizon. We see flocks of sea birds swooping down toward a large school of fish.

A few of us who have previous experience with shoals search for tiny water-jets and then dig down into the sands with our fingers to retrieve mussels and small steamer-clams to bring back to shore. We have found new resources beyond our previous limits.

In a short time, everyone has gathered all of the shellfish that we can carry; we head back toward shore. On our return journey, a few of us pause at a boulder near the mouth of the cove where the sea is up to our solar plexuses.

As the fog begins to roll in, we experience a minor epiphany:  We turn full circle to scan the surrounding horizon. Looking outward toward the open water, we observe the horizon-line between the sky above and the sea below. The setting sun fully illuminates the horizon. As we turn ninety degrees, the horizon transforms from that of sky above sea to one of sky above earth. We continue to turn to the 180-degree mark. We face the beach, which is bathed in light by a new fire where the sky above meets the earth below. This point marks our destination, our goal of safe return.

In this epiphany of the obvious, we stumbled across four primary navigational coordinates. These are easy to locate, to communicate, and to remember under stress. By regarding the obvious, we have been granted a gift of transferable knowledge that may save us if a gale arises suddenly. If novice crews fall into panic, a maintained focus upon the sky-earth horizon may provide the only chance for a fleet to reach home-shore safely. In addition, the navigational points of the sky-sea/sky-earth horizon at the entrance of the cove may help to prevent running aground on the shoal or smashing against sub-surface boulders. Observation of the nature has provided us with a most valuable piece of intellectual property. It is easier to get out to sea than it is to return alive.

We arrive back on shore. As we bask in the warmth of the fire, the four expeditionary groups recombine and compile our observations and inventories. Our collective spirits lift while we discuss our adventures of the day. As we sample the variety that our community of the cove has produced, a wizened member of the community stands before the fire and flames and begins to speak:  “What we experience in the here and now has been experienced in the past and will be experienced again in the future. We repeat this cycle over and over again.”

From this second part of our journey, we hope that the attorney/hero(ine) has begun to understand the process of our story-adventure. This month, we have developed an understanding that Economics means the management of scarce resources that we can delineate into factors of production in order to produce goods and services to satisfy our needs and wants. In next month’s episode, we will continue with this model of our Economist’s Journey as we face some major changes.
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Dr. John F. Sase has taught Economics for more than three decades and has practiced Forensic and Investigative Economics since the early 1990s. He earned an M.A. in Economics and an MBA at the University of Detroit and a Ph.D. in Economics at Wayne State University. He is a graduate of the University of Detroit Jesuit High School. Dr. Sase can be reached at 248-569-5228 and at drjohn@saseassociates.com. You can find his educational videos of interest to attorneys at www.youtube.com/saseassociates.

Gerard J. Senick is a freelance writer, editor, and musician. He earned his degree in English at the University of Detroit and was a supervisory editor at Gale Research Company (now Cengage) for over twenty years. Currently, he edits books for publication and gives seminars on writing and music. Senick can be reached at 313-342-4048 and at www.senick-editing.com. You can find some of his writing tips at www.YouTube.com/SenickEditing.

Julie G. Sase is a freelance copyeditor and proofreader. She earned her degree in English at Marygrove College and her graduate certificate in Parent Coaching from Seattle Pacific University. As a consultant, Ms. Sase coaches clients, writes articles for publication, and gives interviews to various media. Ms. Sase can be reached at sasej@aol.com and Quill2Keyboard.com.