I love #economics because its basic principles are so powerful and generalisable (ie, it's not just “about #money”).

I started using Greg #Mankiw's very popular textbook _“Principles of Economics”_ as a reference a few years ago, and since then I find myself applying its “ten principles of economics” often in everyday life.

This week I learnt that David #Henderson has been teaching his own “ten pillars of economic wisdom” for decades. Those seem good, too.

So I decided to merge both!

Hereby I present the main insights of economics condensed in **fourteen principles of economics**. Even if you don't like econ as a subject, you'd do well to heed these ideas:

👉 In common (_Mankiw ≃ Henderson_):

* Rational people **think at the margin**. ≃ Economic thinking is thinking on the margin.
* People respond to **incentives**. ≃ Incentives matter; incentives affect behavior.
* **Trade** can make everyone better off. ≃ The only way to create wealth is to move resources from a lower-valued to a higher-valued use. Corollary: both sides gain from exchange.
* A country's standard of living depends on its ability to produce **goods and services**. ≃ The only way to increase a nation’s real income is to increase its real output.
* **Markets** are usually a good way to organize economic activity. ≃ Competition is a hardy weed, not a delicate flower.
* Society faces a short-run trade-off between **inflation and unemployment**. ≃ Creating jobs is not the same as creating wealth.

👉 Mankiw's:

* People face **trade-offs**.
* The cost of something is **what you give up** to get it.
* **Governments** can sometimes improve market outcomes.
* Prices rise when the government **prints too much money**.

👉 Henderson's:

* TANSTAAFL: There ain’t no such thing as a **free lunch**.
* **Information** is valuable and costly, and most information that’s valuable is inherently decentralized.
* Every action has **unintended consequences**; you can never do only one thing.
* The **value** of a good or a service is subjective.