The Micro Economy Today, 16th Edition

Bradley Schiller
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Page ii
 THE
MICROECONOMY
TODAY
SIXTEENTH EDITION
 Page iii

Th e McGraw-Hi l l Seri es Econ omi cs

SURVEY OF ECON OMICS
Brue, McConnell, and Flynn
Essentials of Economics
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 Page v

THE
MICRO ECONOMY
TODAY
SIXTEENTH EDITION

Bradley R. Schiller
Karen Gebhardt
 Page vi

THE MICROECONOMY TODAY, SIXTEENTH EDITION

Published by McGraw Hill LLC, 1325 Avenue of the Americas, New York, NY 10121. Copyright
©2022 by McGraw Hill LLC. All rights reserved. Printed in the United States of America. Previous
editions ©2019, 2016, and 2013. No part of this publication may be reproduced or distributed in any
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Library of Congress Cataloging-in-Publication Data
Names: Schiller, Bradley R., 1943- author. | Gebhardt, Karen, author.
Title: The microeconomy today / Bradley R. Schiller, with Karen Gebhardt.
Description: Sixteenth edition. | New York, NY : McGraw Hill Education, [2022] | Includes index.
Identifiers: LCCN 2020047123 | ISBN 9781264273416 (hardcover) | ISBN 9781264273447 (spiral
bound)
Subjects: LCSH: Microeconomics.
Classification: LCC HB172 .S3625 2022 | DDC 338.5—dc23
LC record available at https://lccn.loc.gov/2020047123
The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a
website does not indicate an endorsement by the authors or McGraw Hill LLC, and McGraw Hill LLC
does not guarantee the accuracy of the information presented at these sites.

mheducation.com/highered
 Page vii

ABOUT THE AU THORS

Courtesy of Bradley R. Schiller

Bradley R. Schiller has more than four decades of experience teaching introductory economics at
American University, the University of Nevada, the University of California (Berkeley and Santa Cruz),
and the University of Maryland. He has given guest lectures at more than 300 colleges ranging from
Fresno, California, to Istanbul, Turkey. Dr. Schiller’s unique contribution to teaching is his ability to
relate basic principles to current socioeconomic problems, institutions, and public policy decisions.
This perspective is evident throughout The Microeconomy Today.
Dr. Schiller derives this policy focus from his extensive experience as a Washington consultant. He has
been a consultant to most major federal agencies, many congressional committees, political candidates,
and presidents. In addition, he has evaluated scores of government programs and helped design others.
His studies of poverty, discrimination, training programs, tax reform, pensions, welfare, Social Security,
and lifetime wage patterns have appeared in both professional journals and popular media. Dr. Schiller is
also a frequent commentator on economic policy for television and radio, and his commentary has
appeared in The Wall Street Journal, The Washington Post, The New York Times, and Los Angeles
Times, among other major newspapers.
Dr. Schiller received his Ph.D. from Harvard and his B.A. degree, with great distinction, from the
University of California (Berkeley). On his days off, Dr. Schiller is on the tennis courts, the ski slopes,
or the crystal-blue waters of Lake Tahoe.
Courtesy of Karen Gebhardt

Dr. Karen Gebhardt is a faculty member in the Department of Economics and is the Director of the
Online Economics Program at the University of Colorado Boulder. Dr. Gebhardt has a passion for
teaching economics. She regularly instructs courses in all modalities (online, on campus, hybrid,
remote) from introductory courses in macro- and microeconomics, to upper-division courses in
microeconomics, international trade, and managerial economics and graduate courses in environmental
economics and public finance.
She is an early adopter of teaching with technology and advocates strongly for it because she sees the
difference it makes in student engagement and learning. Dr. Gebhardt was the recipient of the Water Pik
Excellence in Education Award in 2006 and was awarded the Best Teacher Award in 2015 while she was
at Colorado State University.
Dr. Gebhardt’s research interests, publications, and presentations involve the economics and online
education and the economics of human–wildlife interaction. Before returning to academia, she worked as
an economist at the U.S. Department of Agriculture/Animal and Plant Health Inspection
Service/Wildlife Services/National Wildlife Research Center, conducting research related to the
interactions of humans and wildlife. Her current research focuses on using data to improve student
learning outcomes in economics education with an emphasis on improving grades and completion rates
in online courses.
In her free time, Dr. Gebhardt enjoys learning about new teaching methods that integrate technology and
going rock climbing and camping in the Colorado Rockies and beyond.
Page viii
 Page ix

PREFACE

CURRENT, POLICY FOCUSED, READABLE

Current
Every edition of The Microeconomy Today has offered a level of currency that no other text has matched.
Maintaining that front-page advantage has been particularly important to this edition. First and foremost
is the integration of the coronavirus pandemic into the narrative. The pandemic – and the responses to it
– changed the behavior and performance of economies around the world. Among other things, the
pandemic prompted breathtaking expansions in the scope of government intervention. It also focused
more attention on the supply side of the economy, especially the potential for external shocks to shut
down production and government subsidies to restore it. In micro, we have seen how the pandemic
changed both consumer and producer behavior – and wreaked havoc on domestic and international
financial markets. The pandemic also changed political priorities, contributing to President Biden’s
2020 Election. This edition examines those developments and their implications for ongoing policy and
personal decision-making. This 16th edition offers the latest data on U.S. economic performance,
global comparisons, policy initiatives, court cases, and political controversies over economic policy
and priorities. Among the more visible updates are the following:

Policy Focused
The Microeconomy Today was one of the first economics textbooks to supplement the narrative with
boxed illustrations of institutional and policy applications of core concepts. The goal has always been
to help students see the relevance of studying economics to themselves and the world around them.
Schiller and Gebhardt make sure students understand the challenges of economic policy and the
consequences of specific actions like tariffs, regulation, and tax reform. They provide a balanced
discussion of these issues, allowing students to recognize and assess different perspectives on critical
issues. This Policy focus is reinforced by (a) attaching explanatory captions to every boxed insert, (b)
referencing all of the boxed material in the body of the text, and (c) referencing the boxed material in
end-of-chapter discussions questions and problems. Even the photos are captioned, to assure that
students see their relevance.

Front Page Economics.

The Front Page Economics boxes are used to illustrate domestic applications of core concepts that make
economics ever more relevant today. Student-focused examples cover everything from Starbucks price
hikes, COVID-19 externalities, antitrust lawsuits, and Disney+ subscription pricing to the CARES Act
and Mike Trout’s $426 million baseball contract. Some of the 20 new Front Page Economics stories are:
“COVID-19 Cases Surpass 1 Million” illustrates externalities in Chapter 4.
“Risky Business: Start-ups Face High Failure Rates” emphasizes entrepreneurial risk in Chapter 8.
“Streaming Wars Heat Up” illustrates how competition evolves in Chapter 11.
 “House approves $15 minimum wage” highlights pros and cons of wage floors in Chapter 16.
“Taxes: Bernie vs. Biden” showcases the difference between nominal and effective tax rates in Chapter
19.
Page x

World View.
The World View boxes focus on global illustrations of core concepts that allow students to see
economics in action beyond U.S. borders to help them become an educated global citizen. Among the
16 new World View boxes in this edition are:
“Venezuela’s Food Crisis” illustrates how price controls cause market shortages in Chapter 3.
“Tesla Starts Rolling Out Cars from Shanghai Gigafactory” highlights investment vs. production
decisions in Chapter 7.
“Nations Scrambling to End Oil-Price War” emphasizes the need for coordination in oligopoly in
Chapter 11.
“JetBlue Looks to London” describes how landing slots are an entry barrier in Chapter 13.
“Imported WineSqueezes U.S. Vintners” explains the resistance to free trade in Chapter 21.

Decisions for Tomorrow.

At the end of every chapter, students are challenged to use critical thinking skills to apply core concepts
to a real-world phenomenon. The challenges may relate to public policy issues or life situations. All of
these provocative questions not only challenge students to apply critical thinking but also to recognize
the relevancy of core principles to the real world. Notice that all of the Decisions are posed as questions.
The intent here is to encourage classroom discussion and debate. Among the Decisions challenges in this
edition are:
“What Is the Cost of Going Green?,” in Chapter 1, explores opportunity costs.
“Do ‘Influencers’ Really Matter?” questions how consumers make decisions in Chapter 5.
“$29 AirPods?” emphasizes the power of competition to drive innovation and prices in Chapter 9.
“Do We Need a Billionaire’s Tax?” examines the pros and cons of taxation in Chapter 19.
“Who Wins Trade Wars?” looks at the impacts of trade wars in Chapter 21.

All of the Decisions are posed as questions to encourage classroom discussion.

Questions for Discussion.

End-of-chapter questions are common in textbooks. What distinguishes the questions in The
Microeconomy Today is their explicit integration with the core narrative and the boxed features in each
chapter. There are 80 new questions in this 16th edition.

Problems.
Problems are also provided at the end of each chapter. Like the Questions for Discussion, the Problems are
closely integrated with chapter material and often require the student to review a boxed feature and apply
data contained therein. There are 227 new problems (!) in this 16th edition.

Readable
The one adjective invariably used to describe The Microeconomy Today is “readable.” Professors often
express a bit of shock when they realize that students actually enjoy reading the text. The writing style is
lively and issue-focused. Unlike any other text on the market, every boxed feature, every graph, and every
table is explained and analyzed. Every feature is also referenced in the text, so students actually learn the
material rather than skipping over it. Because readability is ultimately in the eye of the beholder, you
might ask a couple of students to read and compare a parallel chapter in The Microeconomy Today and in
another text. This is a test The Microeconomy Today usually wins.
Page xi

Robust Integration with Connect

Connect is designed to support teaching and learning goals through providing graded and ungraded
activities that can be integrated into a lecture, or assigned as part of a discussion board or problem set.
Activities such as assignable discussion, graphing, and algorithmic problems; interactive graphs; and
videos make it easy to enhance learning with just a few clicks. One unique feature of this text is that
Schiller and Gebhardt personally have created the text-specific Connect content, leveraging their
combined 60 years of teaching undergraduate face-to-face, online, hybrid, and remote courses to help
you improve your students’ learning. The author team assures that the text and all supplemental materials
are harmonized and robustly integrated with Connect, providing peace of mind for both the professor
and students.

Remote Proctoring & Browser-Locking Capabilities

New remote proctoring and browser-locking capabilities, hosted by Proctorio within Connect, provide
control of the assessment environment by enabling security options and verifying the identity of the
student.
Seamlessly integrated within Connect, these services allow instructors to control students’ assessment
experience by restricting browser activity, recording students’ activity, and verifying students are doing
their own work.
Instant and detailed reporting gives instructors an at-a-glance view of potential academic integrity
concerns, thereby avoiding personal bias and supporting evidence-based claims.
CHAPTER-BY-CHAPTER CHANGES: PURPOSE, APPROACH, AND
UPDATES
Every chapter of this edition has been thoroughly reviewed and subjected to careful revision, editing, and
updating. The following paragraphs provide a quick overview of each chapter and a list of the most
notable updates.
Chapter 1: Economics: The Core Issues introduces the core issues of What, How, and For Whom
goods and services are produced. It also highlights debates of how those decisions are made—by free
markets, by governments, or by some mix of both. The intent is to give students a sense that “the
economy” is not an abstract phenomenon but instead a vital determinant of our collective well-being.
Heritage Organization “free market” 2020 rankings illustrate how different economies are structured and
global military spending levels illustrate some of the “guns vs. butter” outcomes that result. A new
“Decisions for Tomorrow” feature highlights the goals and trade-offs of the “Green revolution.”
Chapter 2: The U.S. Economy: A Global View is uniquely designed to give students an empirical
perspective on the dimensions of the U.S. economy—specifically, what we produce, how we produce, and
for whom we produce. Within each of these dimensions, comparisons are provided to the rest of the
world, giving students a truly global view of how the U.S. economy stacks up. This is a critical
foundation for informing students about the economic world we want them to understand.
Chapter 3: Supply and Demand introduces the core elements of the market mechanism. It does this in a
much more empirical context, however, than most texts. Illustrations include a Front Page Economics
story on the pricing of Disney+ subscriptions, a World View on the supply shifts due to the 2019 missile
attacks on Saudi oil fields, a World View on Venezuelan price controls, and a discussion of how the
coronavirus pandemic prompted alleged price gouging. The end-of-chapter Decisions for Tomorrow
feature confronts students with the deadly consequences of prohibiting the purchase and sale of human
organs.
Chapter 4: The Role of Government focuses on the justifications for government intervention Page xii

and the institutions—federal, state, and local—that have been developed to perform those functions. The
chapter not only details the scope of government(s) but also looks at public perceptions about how
well the public sector performs. A World View on Israel’s “Iron Dome” missile defense (a public
good), a Front Page Economics on vaping bans (externalities), and a Front Page Economics on public
confidence in government enliven the discussion. The end-of-chapter Decisions for Tomorrow feature
highlights the shortcomings of collective decision making, including public choice theory.
Chapter 5: Consumer Choice introduces consumer choice by first contrasting sociopsychiatric and
economic explanations of consumer behavior, thereby highlighting the differences between the desire for
goods and the demand for goods. Utility theory, consumer surplus, price discrimination, and consumer
choice are all covered. The Decisions for Tomorrow feature looks at how “influencers” affect consumer
choices.
Chapter 6: Elasticity explores price, income, and cross-price elasticities with illustrations of Netflix
price hikes, iPhone sales, and California’s increased tax on cigarettes. The Decisions for Tomorrow
feature ponders how falling gasoline prices will affect consumers’ demand for electric vehicles.
Chapter 7: The Costs of Production introduces students to the supply side of markets. The production
function is discussed in detail, emphasizing the embryotic relationship between productivity and cost
measures. Changes in ATC are illustrated with the volume of Uber rides, and economies of scale are
illustrated with a World View on Tesla’s Shanghai gigafactory. The Decisions for Tomorrow feature
examines the substance of President Trump’s accusation of “unfair” competition from foreign
producers.
Chapter 8: The Competitive Firm starts by looking at the nature of profits and public (mis)perceptions
about their scope and origins. It then illustrates the spectrum of market power, ranging from the
perfectly competitive firm to monopoly. With this foundation, the chapter proceeds to examine the
production decisions of perfectly competitive firms in the context of static equilibrium. Front Page
Economics on start-up failure rates, public views of profits, and corporate shutdown decisions provide
illustrative context.
Chapter 9: Competitive Markets is a unique, second chapter on competition that focuses on the
dynamics of competitive markets—the heart and soul of market economies. The core story traces the
evolution of the personal computer industry from the original Apple 1 to the latest iPhone. The
emphasis is on how the profit motive drives innovation, entry, cost reductions, price cuts, and even exit
in low-barrier markets. The Decisions for Tomorrow feature applies these insights to the current
competition in AirPods.
Chapter 10: Monopoly takes students to the other end of the market structure spectrum and shows how
monopoly decision making and outcomes differ from those of perfect competition. A unique, step-by-
step contrast of behavior patterns drives the message home. The 2020 Justice Department suit against
Live Nation and the continuing EU antitrust actions against Google should spark student interest.
Chapter 11: Oligopoly starts by showing how common oligopoly is in familiar product markets, using
product-specific concentration ratios found in no other text. This empirical base is followed by an
analysis of how oligopolies would like to behave (replicating monopoly outcomes), the mechanisms
they use in pursuit of that goal, and the obstacles they confront. Front Page Economics on the ongoing
streaming wars, the 2020 oil-price war, the T-Mobile–Sprint merger, and Dr Pepper’s “Fansville” ad
campaign enliven the theoretical analysis. The Decisions for Tomorrow feature examines recent
proposals to break up Big Tech companies.
Chapter 12: Monopolistic Competition stresses the unique structure, behavior, and outcomes of this
common industry structure. Data on brand values and ad spending underscore the importance of product
differentiation in monopolistic competition. The Front Page Economics on the latest Starbucks price
hike illustrates the low price elasticity of demand that brand loyalty creates. The Decisions for
Tomorrow feature considers proposals for requiring truth in advertising.
Chapter 13: Natural Monopolies: (De)Regulation? goes beyond the depiction of this unique Page xiii
industry structure to explore the regulatory dilemmas that result. Quite simply, how can regulators
compel natural monopolies to deliver the benefits of economies of scale without stifling innovation and
productivity advance? And how much will regulation cost? These questions are illustrated in the
trucking, airline, cable, and electricity industries. A World View on landing rights at Heathrow airport
highlights the importance of entry barriers in sheltering natural monopolies from potential competition.
Chapter 14: Environmental Protection addresses one of the world’s greatest challenges—namely, saving
the planet. The role of market incentives in both environmental degradation and, potentially,
environmental protection is emphasized. Also discussed are the pros and cons of several nonmarket
approaches. Front Page Economics on pollution-induced deaths, the 2021 closing of New York’s
nuclear plant, and California’s cap-and-trade program enliven the discussion. The Decisions for
Tomorrow feature assesses the costs of the Green New Deal.
Chapter 15: The Farm Problem looks at the unique circumstances of the farm sector that have motivated
government interventions. Low price and income elasticities combine with the vagaries of the weather to
keep farm prices and incomes volatile. The history of farm incomes and subsidies is depicted, including
a summary of the 2018 Farm Act. A World View on the U.S.–China trade war points to another source
of income instability on the farm.
Chapter 16: The Labor Market analyzes the determinants of labor demand and supply, and then shows
how they interact to set market wages and employment levels. The issues of wage inequality and
minimum wage floors are discussed at length. A critical distinction between effective and ineffective
legislated wage hikes helps resolve empirical disputes. Front Page stories on Amazon’s Career Day,
Mike Trout’s $426 million baseball contract, and the proposed “Raise the Wage Act” drive home the
relevance of this chapter. The Decisions feature examines proposals for capping CEO pay.
Chapter 17: Labor Unions looks at the character, history, and prevalence of labor unions. The core of
the chapter focuses on union wage/employment goals and their strategies for achieving them.
Monopsonist strategies are also described and the parameters of collective bargaining established. A
Front Page Economics on the 2019 UAW strike against GM illustrates the breadth of bargaining issues.
Chapter 18: Financial Markets emphasizes the economic function of financial markets in reallocating
resources to new ventures and products. The stock, bond, and venture-capital markets are all analyzed.
Examples range from the financing of Columbus’s expedition to the Uber IPO. Stock market data on
Apple, Google, and Uber are used to illustrate risk and present values.
Chapter 19: Taxes: Equity versus Efficiency sheds critical light on continuing debates about tax policy.
The discussion begins with a look at the U.S. pre-tax and post-tax distributions of income. Actual tax
burdens are illustrated with the tax returns of Joe Biden and Bernie Sanders (President Trump declined to
provide his tax returns for this analysis) and 2020 tax brackets. Trump’s tax cuts and Biden’s proposed
tax hikes are reviewed. The Decisions feature assesses billionaires’ tax proposals.
Chapter 20: Transfer Payments: Welfare and Social Security focuses on the second tool of income
redistribution. The discussion emphasizes the same trade-off between equity and efficiency that permeates
tax policy. Welfare and social security illustrations showcase implicit marginal tax rates and their impact
on labor-supply behavior.
Chapter 21: International Trade not only explains the theory of comparative advantage but also
examines the opposition to free trade and the trade barriers that result. President Trump’s trade wars with
China and his national security argument about TikTok are discussed, followed by a Decisions feature
on “Who Wins Trade Wars?” The USMCA is reviewed, as are the latest data on trade flows. World Views
on the dumping of Korean cigarettes and competition from wine imports and a Front Page Economics
on the cost of sugar quotas keep the discussion lively.
Chapter 22: International Finance goes beyond the mechanics of exchange-rate determination Page xiv
to identify the gainers and losers from exchange-rate fluctuations. A World View on the effects of the
2014–2020 appreciation of the U.S. dollar helps illustrate those redistributive effects (and the
opposition thereto). The collapse of the Venezuelan bolivar adds further insight. A World View on the
weakest global currencies is insightful as well.
Chapter 23: Global Poverty draws attention to the persistent depravation that still afflicts nearly 40
percent of the world’s population. The discussion begins with a comparison of U.S. poverty thresholds
with official global poverty measures. A survey of global poverty incidence is followed by an analysis of
causation and potential remedies.

Student Problem Set

We firmly believe that students must work with key concepts in order to really learn them. Weekly
homework assignments are de rigueur in our own classes. To facilitate homework assignments, we have
prepared the student problem set at the end of each chapter. These sets include built-in numerical and
graphing problems that build on the tables, graphs, and boxed material that align with each chapter’s
learning objectives. Students cannot complete all the problems without referring to material in the
chapter. This increases the odds of students actually reading the chapter, the tables, and the boxed
applications.
The student problem set at the end of each chapter is reproduced in Connect. This really helps students
transition between the written material and online supplements. It also means that the online assignments
are totally book-specific.

NEW AND IMPROVED SUPPLEMENTS

The following ancillaries are available for quick download and convenient access via the Instructor
Resource material available through McGraw-Hill Connect: PowerPoint Presentations, Accessible
PowerPoint Presentations, Instructor’s Manual, Solution’s Manual, and Test Builder Access.
Page xv

ACKNOWLEDGMENTS
This 16th edition of The Microeconomy Today represents a continuing commitment to disseminate the
core principles of economics to a broad swath of college students.
Like earlier editions, it has benefited greatly from the continuing stream of ideas and suggestions from
both instructors and students. For all that feedback we are most grateful. Among those who have
contributed to this and prior editions are the following instructors:

Reviewers
Cynthia E. Abadie
Southwest Tennessee Community College
Mark Abajian
San Diego Mesa College
Steve Abid
Grand Rapids Community College
Ercument G. Aksoy
Los Angeles Valley College
Mauro Cristian Amor
Northwood University
Catalina Amuedo-Dorantes
San Diego State University
Dr. Michael Aubry
Cuyamaca College
Gerald Baumgardner
Penn College
Mack A. Bean
Franklin Pierce University
Adolfo Benavides
Texas A&M University–Corpus Christi
Anoop Bhargava
Finger Lakes Community College
Joerg Bibow
Skidmore College
Eugenie Bietry
Pace University
John Bockino
Suffolk County Community College
Peter Boelman
Norco College
Walter Francis Boyle
Fayetteville Technical Community College
Amber Brown
Grand Valley State University
Don Bumpass
Sam Houston State University
Suparna Chakraborty
Baruch College, CUNY
Stephen J. Conroy
University of San Diego
Sherry L. Creswell
Kent State University
Manabendra Dasgupta
University of Alabama–Birmingham
Antony Davies
Duquesne University
Diane de Freitas
Fresno City College
Diana Denison
Red Rocks Community College
Alexander Deshkovski
North Carolina Central University
John A. Doces
Bucknell University
Ishita Edwards
Oxnard College
Eric R. Eide
Brigham Young University
Yalcin Ertekin
Trine University
Ali Faegh
Houston Community College–Northwest
Kelley L. Fallon
Owensboro Community & Technical College
Frank Garland
Tri-County Technical College
Leroy Gill
The Ohio State University Page xvi
Michael G. Goode
Central Piedmont Community College
Paul Graf
Indiana University
Barnali Gupta
Miami University
Sheila Amin Gutierrez de Pineres
University of Texas–Dallas
Jonatan Jelen
City College of New York
Hyojin Jeong
Lakeland Community College
Barbara Heroy John
University of Dayton
Ken Knox, Ph.D.
Eastern Gateway Community College
Tim Kochanski
Portland State University
David E. Laurel
South Texas College
Raymond Lawless
Quinsigamond Community College
Richard B. Le
Cosumnes River College
Jim Lee
Texas A&M University–Corpus Christi
Sang H. Lee
Southeastern Louisiana University
Minghua Li
Franklin Pierce University
Yan Li
University of Wisconsin–Eau Claire
Paul Lockard
Black Hawk College
Rotua Lumbantobing
North Carolina State University
Paula Manns
Atlantic Cape Community College
Shah Mehrabi
Montgomery College
Jeanette Milius
Iowa Western Community College
Norman C. Miller
Miami University
Stanley Robert Mitchell
McLennan Community College
Dr. Victor Moussoki
Lone Star College
Stephen K. Nodine
Tri-County Technical College
Phacharaphot Nuntramas
San Diego State University
Seth Ari Roberts
Frederick Community College
Michael J. Ryan
Western Michigan University
Craig F. Santicola
Westmoreland County Community College
Rolando A. Santos
Lakeland Community College
Theodore P. Scheinman
Mt. Hood Community College
James K. Self
Indiana University–Bloomington
Warren Smith
Palm Beach State College–Lake Worth
Marilyn K. Spencer
Texas A&M University–Corpus Christi
Irina Nikolayevna Strelnikova
Red Rocks Community College
Michael Swope
Wayne County Community College
Gary Lee Taylor
South Dakota State University
Deborah L. Thorsen
Palm Beach State College
Ngoc-Bich Tran
San Jacinto College
Markland Tuttle
Sam Houston State University
Roger E. Wehr
University of Texas–Arlington
Kenneth Lewis Weimer
Kellogg Community College
Selin Yalcindag
Mercyhurst College
Erik Zemljic
Kent State University
We would like to express our sincere appreciation to Gregory Gilpin of Montana State Page xvii

University and Christina Esparza-Luna at Hartnell College for preparing the PowerPoint Presentations,
Christopher Blake of Emory University, Deborah Thorsen of Palm Beach State College, Emily Bello,
and Stephen Slice of University of South Carolina for their contributions in revising the Testbank, Dan
Mizak of Frostburg University for authoring the Instructor’s Manual, and Jody Lotz for her detailed edit
of the Connect content, as well as Mark Wilson of West Virginia State University, Joseph Euculano of
Wilmington University, and Susan Bell of Seminole State College for their careful accuracy review. The
text itself and all the accompanying supplements could not make it to the marketplace without the
prodigious efforts of the production team at McGraw-Hill. In this regard, we want to extend special
thanks to Kelly Delso, who managed the product development process required to produce a text today.
Anke Weekes served once again as a valued portfolio director of the entire project. Let us conclude by
thanking all the instructors and students who are going to use The Microeconomy Today as an
introduction to economic principles. We will welcome any reactions and suggestions you’d like to pass
on for future editions.
—Bradley R. Schiller
—Karen Gebhardt
Page xviii

Page xix
Page xx

Page xxi
Page xxii
 Page xxiii

CONTENTS IN BRIEF

PREFACE ix

PART : THE ECONOMIC CHALLENGE

CHAPTER : ECONOMICS: THE CORE ISSUES 
Appendix: Using Graphs 
CHAPTER : THE U.S. ECONOMY: A GLOBAL VIEW 
CHAPTER : SUPPLY AND DEMAND 
CHAPTER : THE ROLE OF GOVERNMENT 

PART : PRODUCT MARKETS: THE BASICS

CHAPTER : CONSUMER CHOICE 
Appendix: Indifference Curves 
CHAPTER : ELASTICITY 
CHAPTER : THE COSTS OF PRODUCTION 

PART : MARKET STRUCTURE

CHAPTER : THE COMPETITIVE FIRM 
CHAPTER : COMPETITIVE MARKETS 
CHAPTER : MONOPOLY 
CHAPTER : OLIGOPOLY 
CHAPTER : MONOPOLISTIC COMPETITION 

PART : REGULATORY ISSUES

CHAPTER : NATURAL MONOPOLIES: (DE)REGULATION? 
CHAPTER : ENVIRONMENTAL PROTECTION 
CHAPTER : THE FARM PROBLEM 

PART : FACTOR MARKETS: BASIC THEORY

CHAPTER : THE LABOR MARKET 
CHAPTER : LABOR UNIONS 
 CHAPTER : FINANCIAL MARKETS 
Page xxiv

PART : DISTRIBUTIONAL ISSUES

CHAPTER : TAXES: EQUITY VERSUS EFFICIENCY 
CHAPTER : TRANSFER PAYMENTS: WELFARE AND SOCIAL SECURITY


PART : INTERNATIONAL ECONOMICS

CHAPTER : INTERNATIONAL TRADE 
CHAPTER : INTERNATIONAL FINANCE 
CHAPTER : GLOBAL POVERTY 

Glossary G-
Index I-

DIGITAL EDITION
 Page xxv

CONTENTS

PREFACE ix
PART : THE ECONOMIC CHALLENGE
CHAPTER : ECONOMICS: THE CORE ISSUES 
The Economy Is Us 
Scarcity: The Core Problem 
Opportunity Costs 
Production Possibilities 
Three Basic Decisions 
The Mechanisms of Choice 
What Economics Is All About 
Summary 
Appendix: Using Graphs 
DECISIONS FOR TOMORROW
What Is the Cost of Going Green? 
FRONT PAGE ECONOMICS
Jobless Workers Outnumber Manufacturing Workers 
WORLD VIEW
World’s Largest Armies 
North Korean Food Rations Cut 
North Korea Resumes Missile Launches 
Market Reliance vs. Government Reliance? 
Index of Economic Freedom 
CHAPTER : THE U.S. ECONOMY: A GLOBAL VIEW 
What America Produces 
How America Produces 
For Whom America Produces 
Summary 
DECISIONS FOR TOMORROW
Can We Eliminate Global Poverty? 
WORLD VIEW
Comparative Output (GDP) 
GDP per Capita Around the World 
The Education Gap Between Rich and Poor Nations 
Global Inequalities 
CHAPTER : SUPPLY AND DEMAND 
Market Participants 
The Circular Flow 
Demand 
Supply 
Equilibrium 
Market Outcomes 
Summary 
DECISIONS FOR TOMORROW
Should We Allow the Sale of Human Organs? 
FRONT PAGE ECONOMICS
Pricing Disney+ 
March Madness Becomes Sadness 
WORLD VIEW
Gas Prices Jump in Wake of Saudi Attack 
Venezuela’s Food Crisis 
CHAPTER : THE ROLE OF GOVERNMENT 
Market Failure 
Growth of Government 
Taxation 
Government Failure 
Summary 
DECISIONS FOR TOMORROW
Can We Trust Government to Fix Things? 
FRONT PAGE ECONOMICS
Firefighters Watch as Home Burns to the Ground 
The Health Risks of Vaping 
COVID- Cases Surpass  Million 
State Lotteries: A Tax on the Uneducated and the Poor 
Perceptions of Government Failure 
WORLD VIEW
Israel’s “Iron Dome”  Percent Effective 
Secondhand Smoke Kills More Than , People a Year  Page xxvi

PART : PRODUCT MARKETS: THE BASICS

CHAPTER : CONSUMER CHOICE 
Determinants of Demand 
The Demand Curve 
Market Demand 
Consumer Surplus 
Price Discrimination 
Choosing Among Products 
Summary 
Appendix: Indifference Curves 
DECISIONS FOR TOMORROW
Do “Influencers” Really Matter? 
FRONT PAGE ECONOMICS
Men vs. Women: How They Spend 
CHAPTER : ELASTICITY 
Price Elasticity 
Price Elasticity and Total Revenue 
Cross-Price Elasticity 
Income Elasticity 
Elasticity of Supply 
Summary 
DECISIONS FOR TOMORROW
Will EVs Replace Gas Guzzlers? 
FRONT PAGE ECONOMICS
After iPhone Price Cut, Sales Are Up by  Percent 
Californians Vote to Triple Cigarette Tax 
Professor Becker Rejects Clinton’s Tax Math 
WORLD VIEW
Rebounding Oil Price Spurs More Rigs 
CHAPTER : THE COSTS OF PRODUCTION 
The Production Function 
Marginal Productivity 
Resource Costs 
Dollar Costs 
Economic vs. Accounting Costs 
Long-Run Costs 
Economies of Scale 
Summary 
DECISIONS FOR TOMORROW
Can U.S. Companies Compete? 
WORLD VIEW
Tesla Starts Rolling Out Cars from Shanghai Gigafactory 
PART : MARKET STRUCTURE
CHAPTER : THE COMPETITIVE FIRM 
The Profit Motive 
Economic vs. Accounting Profits 
Market Structure 
The Nature of Perfect Competition 
The Production Decision 
Profit-Maximizing Rule 
The Shutdown Decision 
The Investment Decision 
Determinants of Supply 
Summary 
DECISIONS FOR TOMORROW
How Do Taxes Affect Business Decisions? 
FRONT PAGE ECONOMICS
Too Much Profit? 
The Value of Hiro’s Strawberry Farm 
Risky Business: Start-ups Face High Failure Rates 
Too Many Sellers: The Woes of T-Shirt Shops 
The Lure of Catfish 
Boeing Halts  MAX Production 
GM Closing  Plants 
CHAPTER : COMPETITIVE MARKETS  Page xxvii
The Market Supply Curve 
Competition at Work: Microcomputers 
The Competitive Process 
Summary 
DECISIONS FOR TOMORROW
$ AirPods? 
WORLD VIEW
Catfish Farmers Give Up 
Flat Panels, Thin Margins 
CHAPTER : MONOPOLY 
Market Power 
Market Power at Work: The Computer Market Revisited 
A Comparative Perspective of Market Power 
Pros and Cons of Market Power 
Summary 
DECISIONS FOR TOMORROW
Microsoft and Google: Bullies or Geniuses? 
FRONT PAGE ECONOMICS
Live Nation Drives Up Ticket Prices 
Drugmaker Hikes Price of AIDS Drug , Percent! 
Jury Awards $ Million for Suppressed Technology 
US FTC Enables Boeing–Lockheed “Monopoly” 
A Sirius Mistake? FCC Approves XM–Sirius Merger 
Microsoft Guilty of Monopoly Abuse 
EU Levies Record Fines on Google 
WORLD VIEW
Russia’s Sable Monopoly Persists 
CHAPTER : OLIGOPOLY 
Market Structure 
Oligopoly Behavior 
The Kinked Demand Curve 
Game Theory 
Oligopoly vs. Competition 
Coordination Problems 
Barriers to Entry 
Summary 
DECISIONS FOR TOMORROW
Should We Break Up Big Tech? 
FRONT PAGE ECONOMICS
Dr Pepper Targets College Football Fans 
Streaming Wars Heat Up 
Rivals Match Southwest’s Flash Sale 
Delta Rolls Back Fare Hike 
Eliminating the Competition with Low Prices 
Frito-Lay Eats Up Snack-Food Business 
Joe Camel Acquires Newport 
Feds Approve T-Mobile–Sprint Merger 
WORLD VIEW
Putting Size in Global Perspective 
COPEC: The New Cocoa Cartel 
Nations Scrambling to End Oil-Price War 
CHAPTER : MONOPOLISTIC COMPETITION 
Structure 
Behavior 
Summary 
DECISIONS FOR TOMORROW
Do We Need Truth in Advertising? 
FRONT PAGE ECONOMICS
Starbucks Raises Prices Again 
Selling “Pure Water”: A $Billion Scam? 
Coffee Shops Seeking New Identities 
The Cola Wars: It’s Not All Taste 
WORLD VIEW
The Best Global Brands 
Page xxviii

PART : REGULATORY ISSUES

CHAPTER : NATURAL MONOPOLIES: (DE)REGULATION? 
Antitrust vs. Regulation 
Natural Monopoly 
Regulatory Options 
The Costs of Regulation 
Deregulation In Practice 
Summary 
DECISIONS FOR TOMORROW
Should We Deregulate Everything? 
FRONT PAGE ECONOMICS
Sleep Rules Raise Trucking Costs 
WORLD VIEW
JetBlue Looks to London 
CHAPTER : ENVIRONMENTAL PROTECTION 
The Environmental Threat 
Pollution Damages 
Market Incentives 
Market Failure: External Costs 
Regulatory Options 
Balancing Benefits and Costs 
Summary 
DECISIONS FOR TOMORROW
Can We Afford a Green New Deal? 
FRONT PAGE ECONOMICS
Air Pollution Kills 
Cut the Power to Save the Fish? 
Paying to Polllulte in California 
Recycling Wastes Money 
WORLD VIEW
Polluted Cities 
CHAPTER : THE FARM PROBLEM 
Destabilizing Forces 
The First Farm Depression, – 
U.S. Farm Policy 
Continuing Income Volatility 
Summary 
DECISIONS FOR TOMORROW
Should We Keep Farmers on the Dole? 
WORLD VIEW
U.S.–China Trade War Takes Soybean Farmers as Victims 
EU Farm Subsidies 
PART : FACTOR MARKETS: BASIC THEORY
CHAPTER : THE LABOR MARKET 
Labor Supply 
Market Supply 
Labor Demand 
A Firm’s Hiring Decision 
Market Equilibrium 
Choosing among Inputs 
Summary 
DECISIONS FOR TOMORROW
Should We Cap CEO Pay? 
FRONT PAGE ECONOMICS
Thousands Line Up for Amazon Jobs 
MBA Grads Willing to Sacrifice Money for Coorporate Responsibility 
Angels Sign Mike Trout for $ Million 
House Approves $ Minimum Wage 
WORLD VIEW
More Time or More Money? 
CHAPTER : LABOR UNIONS  Page xxix
The Labor Market 
Labor Unions 
The Potential Use of Power 
The Extent of Union Power 
Employer Power 
Collective Bargaining 
The Impact of Unions 
Summary 
DECISIONS FOR TOMORROW
Will Unions Survive? 
FRONT PAGE ECONOMICS
NBA and Players Strike a Deal 
Judge OKs $ Million Settlement of “No Poaching” Charges 
Caterpillar vs. the IAM 
GM Strike Ends 
WORLD VIEW
Union Membership 
Walmart Shutters Quebec Store as Union Closes In 
CHAPTER : FINANCIAL MARKETS 
The Role of Financial Markets 
The Present Value of Future Profits 
The Stock Market 
The Bond Market 
Summary 
DECISIONS FOR TOMORROW
Venture Capitalists—Vultures or Angels? 
FRONT PAGE ECONOMICS
Uber IPO Disappoints 
Where Do Start-Ups Get Their Money? 
PART : DISTRIBUTIONAL ISSUES
CHAPTER : TAXES: EQUITY VERSUS EFFICIENCY 
What Is Income? 
The Size Distribution of Income 
The Federal Income Tax 
Payroll, State, and Local Taxes 
Taxes and Inequality 
What Is Fair? 
Summary 
DECISIONS FOR TOMORROW
Do We Need a Billionaire’s Tax? 
FRONT PAGE ECONOMICS
Taxes: Bernie vs. Biden 
Americans See Tax System as Unfair 
WORLD VIEW
Bono Says “Stupid” to Pay Irish Taxes 
Top Tax Rates 
CHAPTER : TRANSFER PAYMENTS: WELFARE AND SOCIAL SECURITY 
Major Transfer Programs 
Welfare Programs 
Social Security 
Summary 
DECISIONS FOR TOMORROW
Should We Privatize Social Security? 
Page xxx

PART : INTERNATIONAL ECONOMICS

CHAPTER : INTERNATIONAL TRADE 
U.S. Trade Patterns 
Motivation to Trade 
Pursuit of Comparative Advantage 
Terms of Trade 
Protectionist Pressures 
Barriers to Trade 
Multilateral Trade Deals 
Summary 
DECISIONS FOR TOMORROW
Who Wins Trade Wars? 
FRONT PAGE ECONOMICS
Sugar Quotas a Sour Deal For U.S. Consumers 
WORLD VIEW
Export Ratios 
Imported Wine Squeezing U.S. Vintners 
U.S. Accuses South Korea of Dumping Cigarettes 
French Tractors Roll into Paris 
“Beggar-Thy-Neighbor” Policies in the s 
CHAPTER : INTERNATIONAL FINANCE 
Exchange Rates: The Global Link 
Foreign Exchange Markets 
Market Dynamics 
Resistance to Exchange Rate Changes 
Exchange Rate Intervention 
Summary 
DECISIONS FOR TOMORROW
Are Currency Bailouts a Good Thing? 
WORLD VIEW
Foreign Exchange Rates 
Who Gains, Who Loses from Strong Dollar 
Weakest Currencies of  
CHAPTER : GLOBAL POVERTY 
American Poverty 
Global Poverty 
Goals and Strategies 
Income Redistribution 
Economic Growth 
Summary 
DECISIONS FOR TOMORROW
Can Entrepreneurship Alleviate Poverty? 
WORLD VIEW
Glaring Inequalities 
The Way We Give 
The Female “Inequality Trap” 
Jeffrey Sachs: Big Money, Big Plans 
Maduro: “Bourgeois Parasites” Thwart Growth 
Glossary G-
Index I-
 g

PART 

THE ECONOMIC CHALLENGE

People in Equatorial Guinea want more food, better shelter, and access to safe drinking water.
Will they get it? That depends on how well their economy grows and how the fruits of
economic growth are distributed. The same is true for middle-class Americans. We want better
homes, newer cars, stylish clothes, the latest tech toys, more exotic vacations, and effective
vaccines. Will we get these things? Again, that depends on how well the economy grows and
how the fruits of economic growth are distributed.
These first few chapters look at what “the economy” is and how it grows. What are the limits
to the production of goods and services? How does the interplay of market forces and
government policy determine how much output will actually be produced and who will get it?
How does a nation’s capacity to produce goods and services increase—so that we can have
more of the things we want? How will those goods be distributed?

ZUMA Press, Inc./Alamy Stock Photo

Jeff Chiu/AP Images Glow Images
Pek/Shutterstock LADO/Shutterstock

Hisham F. Ibrahim/Getty Images

 Page 2

CHAPTER 
Economics: The Core Issues

“The Economist in Chief”

ZUMA Press, Inc./Alamy Stock Photo

L EARNING OBJECTIVES

After reading this chapter, you should know

LO- What scarcity is.
LO- How scarcity creates opportunity costs.
LO- What the production possibilities curve represents.
LO- The three core economic questions that every society must answer.
LO- How market and government approaches to economic problems differ.

People understand that the president of the United States is the Commander in Chief of the armed
forces. The president has the ultimate responsibility to decide when and how America’s military forces
will be deployed. He issues the orders that military officers must carry out. He is given credit for military
successes and blame for military failures. He can’t “pass the buck” down the line of command.
Less recognized is the president’s role as “Economist in Chief.” The president is held responsible not
just for the military security of the United States, but for its economic security as well. Although he
doesn’t have the command powers in the economic arena that he has in the military arena, people expect
him to take charge of the economy. They expect the Economist in Chief to keep the economy growing,
to create jobs for everyone who wants one, and to prevent prices from rising too fast. Along the way, they
expect the Economist in Chief to protect the environment, assure economic justice for all, and protect
America’s position in the global economy.
That is a tall order, especially in view of the president’s limited constitutional powers to make economic
policy decisions. The president can propose tax changes, spending priorities, and international trade
deals, but the U.S. Congress must approve those policies. The economy is also buffeted by international
and natural forces that no president can control. This was abundantly clear in 2020 when the “invisible
enemy” of COVID-19 attacked the U.S. and derailed an otherwise prosperous economy. But no matter.
Voters hold the Economist in Chief responsible for economic misfortunes, whether or not he is able to
single-handedly prevent them, and give him credit for economic success.
What everyone ultimately wants is a prosperous and growing economy: an economy in which people can
find good jobs, enjoy rising living standards and wealth, get the education they desire, and enjoy an array
of creature comforts. And we want to enjoy this good life while protecting the environment, caring for
the poor, and pursuing world peace.
How are we going to get all this? Is “the economy” some sort of perpetual motion machine that will
keep churning out more goods and services every year? Clearly not. During the Great Recession of
2008–2009, the economy churned out less output, eliminated jobs, and reduced living standards and
wealth. A lot of college graduates had to move back home when they couldn’t find jobs. What went
wrong?
Even after the Great Recession ended in June 2009, economic pain persisted. The growth of the economy
was agonizingly slow, and unemployment remained high for another six years. Was that much distress
really necessary? Couldn’t the Economist in Chief have fixed these problems? These questions were
debated intensely in the 2016 presidential election. Donald Trump promised “to make America great
again” by creating more jobs, building more bridges and roads, strengthening the armed forces, and
limiting both illegal immigration and unfair foreign competition. Voters decided to give him the
opportunity to serve as an Economist in Chief.
The 2020 elections were largely a referendum on President Trump’s performance as Economist in Page 3
Chief. Voters gave Trump high marks for the growth of the economy during his first three years in office.
Millions of new jobs had been created, incomes were up, wages were higher, and unemployment had
fallen to record lows. Unfortunately, the coronavirus pandemic that swept across the world in early 2020
wiped out nearly all of those prior gains. In November 2020 the U.S. economy was still struggling to
regain its footing: millions of Americans were still out of work, incomes were depressed, and people
were fearful of a COVID-19 resurgence. They decided to vote for a new Economist in Chief.
The challenge for President Biden is to accelerate the economic recovery, while assuring people that the
U.S. is well prepared to deal with any future viral attacks.
To succeed requires a knowledge of what makes an economy tick. How are prices, wages, employment,
and other economic outcomes actually determined? Does Wall Street run the system? How about selfish,
greedy capitalists? The banks? Or maybe foreign nations? Are incompetent bureaucrats and self-serving
politicians the root of our occasional woes? Who, in fact, calls the shots?
The goal of this course is to understand how the economy works. To that end, we want to determine how
markets—the free-wheeling exchange of goods and services—shape economic outcomes—everything from
the price of this text to the national unemployment rate. Then we want to examine the role that
government can and does play in (re)shaping economic performance. Do we need the government to
assure adequate wages, fair prices, access to health care, or equal educational opportunities? Or can
market forces alone give us these desirable outcomes? Once we’ve explored these issues, we’ll be in a
better position to evaluate what the Economist in Chief can do—and what he should do. We’ll also better
understand how we can make better economic decisions for ourselves.

Limited Resources
We’ll start our inquiry with some harsh realities. In a world of unlimited resources, we could have all the
goods we desired. We’d have time to do everything we wanted and enough money to buy everything we
desired. We could produce enough to make everyone rich while protecting the environment and exploring
the universe. The Economist in Chief could deliver everything voters asked for. Unfortunately, we don’t
live in that utopia: We live in a world of limited resources. Those limits are the root of our economic
problems. They force us to make difficult decisions about how best to use our time, our money, and our
resources. These are economic decisions.
In this first chapter, we’ll examine how the problem of limited resources arises and the kinds of choices it
forces us to make. As we’ll see, three core choices confront every nation:
WHAT to produce with our limited resources.
HOW to produce the goods and services we select.
FOR WHOM goods and services are produced—that is, who should get them.

We also have to decide who should answer these questions. Should people take care of their own health
and retirement, or should the government provide a safety net of health care and pensions? Should the
government regulate airfares or let the airlines set prices? Should Microsoft decide what features get
included in a computer’s operating system, or should the government make that decision? Should
Facebook decide what personal information is protected, what posts should be permitted, or which ads
can be targeted, or should the government make those decisions? Should interest rates be set by private
banks alone, or should the government try to control interest rates? The battle over who should answer
the core questions is often as contentious as the questions themselves.
 Page 4

THE ECONOMY IS US
To learn how the economy works, let’s start with a simple truth: The economy is us. “The economy” is
simply an abstraction referring to the grand sum of all our production and consumption activities. What
we collectively produce is what the economy produces; what we collectively consume is what the
economy consumes. In this sense, the concept of “the economy” is no more difficult than the concept of
“the family.” If someone tells you that the Jones family has an annual income of $42,000, you know that
the reference is to the collective earnings of all the Joneses. Likewise, when someone reports that the
nation’s income is $22 trillion per year—as it now is—we should recognize that the reference is to the
grand total of everyone’s income. If we work fewer hours or get paid less, both family income and
national income decline.
The same relationship between individual behavior and aggregate behavior applies to specific outputs. If
we as individuals insist on driving cars rather than taking public transportation, the economy will
produce millions of cars each year and consume vast quantities of oil. If we prefer to stream movies
rather than watch them in theaters, then the economy will build fewer theaters and expand streaming
services. If more consumers choose plant-based burgers rather than beef burgers, then cattle farms will
shrink and plant processing expands. We also make choices on a collective level. We “produce” over
$700 billion of national defense (e.g., military personnel, ships, planes, etc.) every year. This is a choice
we make. If we want a different outcome, then we have to make a different choice. In each case, the
output of the economy reflects the collective behavior of the 340 million individuals who participate in
the U.S. economy.
We may not always be happy with the output of the economy, but we can’t ignore the link between
individual action and collective outcomes. If the highways are clogged and the air is polluted, we can’t
blame someone else for the transportation choices we made.
 SCARCITY: THE CORE PROBL EM
Although we can change economic outcomes, we can’t have everything we want. If you go to the mall
with $20 in your pocket, you can buy only so much. The money in your pocket sets a limit to your
spending.
The output of the entire economy is also limited. The limits in this case are set not by the amount of
money in people’s pockets, but by the resources available for producing goods and services. Everyone
wants more housing, new schools, better transit systems, and a new car. We also want to explore space
and bring safe water to the world’s poor. But even a country as rich as the United States can’t produce
everything people want. So, like every other nation, we have to grapple with the core problem of scarcity
—the fact that there aren’t enough resources available to satisfy all our desires.

Factors of Production
The resources used to produce goods and services are called factors of production. The four basic
factors of production are
Land.
Labor.
Capital.
E ntrepreneurship.

These are the inputs needed to produce desired outputs. To produce this text, for example, we needed
paper, printing presses, a building, and lots of labor. We also needed people with good ideas who could
put it together. To produce the education you’re getting in this class, we need not only a text but a
classroom, a teacher, a blackboard, and maybe a computer as well. Without factors of production, we
simply can’t produce anything.
Page 5

Land
The first factor of production, land, refers not just to the ground but to all natural resources. Crude oil,
water, air, and minerals are all included in our concept of “land.”

Labor
Labor too has several dimensions. It’s not simply a question of how many bodies there are. When we
speak of labor as a factor of production, we refer to the skills and abilities to produce goods and
services. Hence, both the quantity and the quality of human resources are included in the “labor” factor.

Capital
The third factor of production is capital. In economics the term capital refers to final goods produced
for use in further production. The residents of fishing villages in southern Thailand, for example, braid
huge fishing nets. The sole purpose of these nets is to catch more fish. The nets themselves become a
factor of production in obtaining the final goods (fish) that people desire. Thus, they’re regarded as
capital. Blast furnaces used to make steel and desks used to equip offices are also capital inputs.

Entrepreneurship
The more land, labor, and capital we have, the more we can produce potential output. A farmer with
10,000 acres, 12 employees, and six tractors can grow more crops than a farmer with half those
resources. But there’s no guarantee that he will. The farmer with fewer resources may have better ideas
about what to plant, when to irrigate, or how to harvest the crops. It’s not just a matter of what
resources you have but also of how well you use them. This is where the fourth factor of production—
entrepreneurship—comes in. The entrepreneur is the person who sees the opportunity for new or better
products and brings together the resources needed for producing them. If it weren’t for entrepreneurs,
Thai fishers would still be using sticks to catch fish. Without entrepreneurship, farmers would still be
milking their cows by hand. If someone hadn’t thought of a way to miniaturize electronic circuits, you
wouldn’t be able to text your friends.
The role of entrepreneurs in economic progress is a key issue in the market versus government debate.
The British economist John Maynard Keynes argued that free markets unleash the “animal spirits” of
entrepreneurs, propelling innovation, technology, and growth. Critics of government regulation argue
that government interference in the marketplace, however well intentioned, tends to stifle those very same
animal spirits.

Limits to Output
No matter how an economy is organized, there’s a limit to how much it can produce. The most evident
limit is the amount of resources available for producing goods and services. One reason the United
States can produce so much is that it has nearly 4 million square miles of land. Tonga, with less than
300 square miles of land, will never produce as much. The United States also has a population of more
than 340 million people. That’s a lot less than China (1.4 billion) but far larger than 200 other nations
(Tonga has a population of less than 110,000). So an abundance of raw resources gives us the potential
to produce a lot of output. But that greater production capacity isn’t enough to satisfy all our desires.
We’re constantly scrambling for additional resources to build more houses, make better movies, and
provide more health care. That imbalance between available resources and our wish list is one of the
things that make the job of Economist in Chief so difficult: He can’t deliver everything people want.
The science of economics helps us frame these choices. In a nutshell, economics is the study of how
people use scarce resources. How do you decide how much time to spend studying? How does Google
decide how many workers to hire? How does Tesla decide whether to use its factories to produce sport
utility vehicles or sedans? What share of a nation’s resources should be devoted to space exploration, the
delivery of health care services, or pollution control? In every instance, alternative ways of using scarce
labor, land, and capital resources are always available, and we have to choose one use over another.
Another random document with
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 same place again and again till the skin heals
in a raised scar.
It is essential that the director of an
ethnographical museum should be a good
man of business, even in Europe; but the same
man, if he would collect successfully in Africa,
must be more acute, patient, and
unscrupulous in bargaining than any
Armenian. I have already had occasion to
mention the unexpected difficulties met with
in this direction, and need not, therefore,
express my feelings now, but the Makonde are
certainly not disposed to make my task an
MAKUA WOMAN easy one. The black crowd is moving up in
WITH KELOIDS ON close order.
BACK
“Well, what have you got?” asks the
collector affably enough. By way of answer a
worn-out wooden spoon is put into his hand, probably fished out of
the rubbish-heap, as being quite good enough for the mzungu.
“Mshenzi!—you heathen! You may just take your treasure back
again. Let me see what else you have. Where is your mask?”
“I have none, sir?”
“Oh! indeed—then I will give you time to look for it. Come back to-
morrow, and mind you bring your mdimu, and don’t forget your
snuff-boxes.”
 MAKUA WOMEN WITH KELOIDS

This scene would be repeated a dozen times or more in the course

of an afternoon; in some cases the penitential pilgrimage was
efficacious, in others the men never turned up again. Since noticing
this we have adopted a different procedure, and now simply render
the village headman responsible for the production of the articles.
This makes matters quite easy, and every evening, Knudsen, the
boys, and the more intelligent of the carriers have their hands full
making the inventory and packing the day’s purchases.
This country well repays the collector, though East Africa is
considered a rather dull ethnographical area compared with the
Congo basin, North Kamerun, and some other parts of West Africa.
It is true that one must not be very exacting as to the artistic quality
of weapons and implements produced by these tribes. I was all the
more surprised to find among the specimens of wood-carving,
collected in my district, some veritable little gems. The dancing-
masks are for the most part mere conventional representations of
human faces (those of women being distinguished by the pelele and
ear-ornaments), or of animal heads. A few specimens in my
collection are supposed to be portraits of celebrities—some heroes of
the late insurrection, a young girl famous for her beauty, and sundry
others, but on the whole, it cannot be denied that they are very
roughly executed. Of a somewhat higher type are the statues of the
Ancestress alluded to in a previous chapter. They leave, it is true, a
great deal to be desired on the score of anatomical knowledge and
harmony of proportions, but, on the other hand, some of these
figures are, so far as I know, the only ones from Africa in which the
feet have been worked out in detail.

MAKONDE WOMEN WITH ELABORATE KELOIDS

But it is above all the mitete, the little wooden boxes in which the
people keep their snuff, their medicines, and sometimes their
gunpowder—which show real taste and a style and execution which
can pass muster even from our point of view. The ornamentation
which the elder generation of men carry about on their skins in the
form of keloids is applied to the lids of these boxes. Some of them
take the shape of heads of animals: various kinds of monkeys, the
gnu, the bush-buck, and other antelopes, but oftenest the litotwe.
This is a creature of all others likely to catch the artist’s eye and
tempt him to reproduce it. It is a large rat, about the size of a rabbit,
and with a head which, by its shape, suggests that of the elephant, or
at least the ant-eater, the snout terminating in a long delicate
proboscis. At Chingulungulu Salim Matola caught one of these
creatures for me, but it escaped before I had time to sketch more
than its head.
 AFRICAN ART. CARVED POWDER, SNUFF AND CHARM-
BOXES FROM THE MAKONDE HIGHLANDS

Human heads, too, are found among these

carvings, and are executed with the same skill
in technique. Most of them have the hair
dressed in a long pig-tail, and the face still
more cicatrized than the Makonde; these, I
learn, represent members of the Mavia tribe. I
cannot discover whether they are the work of
local artists, or of the Mavia themselves. The
vendors either give no answer at all when
asked or say, as all natives do when ignorant
of the origin of an article, “mshenzi,” that is to
say, “some unknown person away at the back
of the bush.” However, this does not affect our
critical judgment.
In the practice of one kind of art the
Makonde seem to be deficient. As has been my
custom elsewhere, I occupy all my spare time
in long walks, in order to observe the natives
in their own homes. This, however, is not so MAKONDE MAN WITH
KELOID PATTERNS
easy as it was in other places. I think it would
be possible to walk over the whole Makonde
plateau without finding a single settlement, so closely are the little
hamlets hidden away in the bush. But we have here an ideal guide,
Ningachi, the teacher, whose name means, “What do you think?”
Ningachi is a very decent, honest man, but thinking, in spite of his
name, does not appear to be his strong point. Indeed, he has but
little time for thought, being my courier and interpreter, and in that
capacity kept busy from morning to night. He has even made himself
useful by walking enormous distances to fetch plump young fowls for
our table.

YAO WOMEN WITH KELOIDS

Under Ningachi’s guidance we inspected more than one Makonde

village. They are picturesque—not even envy can gainsay that; but
not one of the wretched, airy, round huts, in which the generations of
these people dream away their dim lives is comfortable even
according to the modest standard of the native. They are not even
plastered with clay, in the usual fashion, and this of itself makes
fresco decoration impossible. In one sense this fact is a relief to me,
when I think of the miles I have tramped at other times, on hearing
of beautifully painted houses in such or such a village. Painted they
were, but the beauty was a matter of taste. We do not admire the
scrawls of our children, and just such—clumsy, rudimentary, utterly
devoid of perspective—are these beginnings of native art. In fact,
wherever artistically untrained man gives way to the universal
instinct of scribbling over all accessible surfaces, whether blank walls
or smooth rocks, the result is very much the same, whether produced
by the European tramp or street-boy, or by my Wangoni and Makua.
 The mention of sketch-books suggests what will probably be my
most enduring monument in this country—if, indeed, the people
here in the south, or even my own men, preserve any recollection
whatever of the Bwana picha (the man who takes photographs),
once the expedition is over. If they do so, I feel it will not be my
unpronounceable name (my Wanyamwezi once, and only once,
succeeded in saying “Weure,” and on that occasion laughed so
consumedly, that I gave up all further attempts to accustom them to
this uncouth word), nor my title (Bwana Pufesa = Herr Professor)
nor the magical character of my machines, which will keep my
memory green, but the many books of thick white paper in which
they were allowed to scribble to their heart’s content.

THE LITOTWE

It was at Lindi that this artistic activity on the part of my native

friends first manifested itself in all its intensity. Barnabas especially
was indefatigable; every day, proud and yet anxious as to my
judgment, he brought me fresh masterpieces, only one of which is
reproduced in these pages, the herd of elephants on p. 190, but this
alone is quite sufficient to characterize the artist. Can we deny him a
certain power of perception? and is not the technique quite up to
date? It is true that the animals, taken separately, have with their
short legs a somewhat unfortunate likeness to the domestic pig,
while their heads suggest the chameleon; the upper line of the trunk
is seen in three of them behind the left tusk; and the mtoto, the baby
elephant on the right of the picture, has no body, leaving off just
behind its ears. But, nevertheless, the man not only knows
something about perspective, but knows how to apply it, and that by
no means badly.
With all his artistic virtues, Barnabas has one failing. He is no
mshenzi, no raw unlettered savage of the bush, but an educated, even
a learned man. By birth a Makua, from a distant part of the interior,
he has passed all the examinations in the Government school at
Lindi, and now attends to the stamping of letters and the weighing of
parcels in the little post-office of that town. In his spare time he
writes for the Swahili paper Kiongozi, published at Tanga.
Barnabas, therefore, cannot be considered as a representative of
primitive art. But not one of those who have produced my other
specimens, whether carriers, soldiers or savages from the interior,
has ever had pencil and paper in hand before.
Marine subjects appear to be in high favour.
My askari Stamburi (Stambuli, i.e.,
Constantinople) is a smart soldier while on
duty, off duty a Don Juan; and now he shows
himself possessed of an unsuspected gift for
marine and animal painting. He is a
landsman, born far inland on the Upper
Rovuma and has therefore succeeded better in
depicting the adventure of the Matambwe
fisherman (p. 347) than he has with the Arab
dau (p. 25). The latter is, indeed, drawn
accurately enough; it has just anchored; the
sail is bent to the yard; both flag and rudder
are shown. We have in addition three paddles,
floating above in the clouds. These are
intended, so the draughtsman tells me, for use
“BWANA PUFESA” if a calm comes on. But what is that
(THE PROFESSOR). amidships? Has the vessel sprung a leak, or,
FROM A DRAWING BY
ONE OF MY ESCORT
indeed, two? No—they are the two hatchways.
Stamburi knows that such openings exist on
the ship and therefore it is his duty as an artist
to put them in. Having no knowledge of perspective, he simply turns
them round through an angle of ninety degrees, so as to bring them
into full view from the side. Genius recognizes no limitations.
 WANGONI WOMEN AT NCHICHIRA

The Matambwe fisherman in the other

picture has just anchored his boat at the bend
of the river, and then cast his line with the
uncouth iron hook. A few minutes after, he
feels a jerk,—then, a mighty pull—a broad,
round object swings through the air and lies
on the grass. The fisherman is just letting the
line run deliberately through his hand to draw
the booty up to him, when some monster,
probably of unearthly origin, dashes at his
fine, large turtle. It is only a common snake,
after all, though an unusually large one, and
the old man is not going to give up his spoil so
TWO NATIVES. tamely, but is holding on to the line for all he
DRAWN BY PESA is worth.
MBILI
Most of these drawings represent incidents
actually witnessed by the artist, and the
figures, whether of men or animals, are intended for portraits of real
individuals. Some, however, are purely genre pictures, such as the
woman pounding at the mortar under the eaves of her hut (p. 165),
and the mother with the baby on her hip (p. 345), which are typical
figures from everyday life, with no attempt at portraiture. So, too, the
two natives drawn by Pesa mbili are not intended for anyone in
particular. The fact is that, on the day when this was executed, at
Mahuta (October 21st), I had been chiefly occupied with the study of
keloids, and a number of men had been induced to remove their
garments and submit to my inspection. This stimulated the
headman, who was more intelligent than most of his companions, to
attempt the reproduction of two such figures.
The majority of the other drawings, not only represent actual
incidents, but are derived from the artist’s personal experience. The
drawing of the s.s. Rufiji (p. 18), done from memory, far inland, by
the Swahili Bakari, has a huge shark in the foreground, because it is a
reminiscence of a voyage in that vessel, when he saw that particular
shark at a certain place which, no doubt, he could point out with
unerring accuracy. When the carrier, Juma, brought me his
“Monkeys breaking into a plantation” (p. 168), he accompanied it
with this explanation—“But, Bwana Mkubwa, that is my shamba,
and I threw stones at the monkeys, and drove them away; there were
seven of them—great big ones.”
Of portraits in the strict sense, “Bana Pufesa” (the Professor), by
one of the soldiers (see p. 368) and the stilt-dancer on p. 237 by my
cook, Omari, both belong to the early days of the expedition, when I
had not yet lost the charm of novelty, and the Bondei man had only
seen one masquerader on stilts. Poor as Omari’s work is in other
respects, he on this occasion showed considerable courage in
attempting to represent his subject in full face, which a beginner very
seldom ventures to do. That my right eye should be seen wandering
through space like a star, is not surprising; that eye exists, and
therefore it must appear in the drawing.
A number of these drawings depict whole scenes from native life in
the district I have traversed. Here we have the chain-gang (p. 26), to
the number of seven men, marching slowly through the streets of
Lindi, five of the convicts with large tins on their heads, the last two
without loads. They are going to fill the bath in some European’s
house, an unpleasant task, because of the high ladder which has to be
climbed, in doing which the heavy chain drags uncomfortably at the
back of the man’s neck, but the soldier on guard behind is very strict,
and there is no shirking.
 It is true that the large whip is not really part of his insignia, being
due merely to a stretch of the artist’s imagination, but he always
carries a loaded rifle, I am told, since a recent mutiny, in which the
guard was murdered. A likwata dance (p. 45) appeals to us as a
much more cheerful subject, especially when the Bwana picha is
engaged in conjuring the scene on to one of those remarkable glass
plates which are contained in his three-legged box, and on which all
the black women are white and their white peleles jet black. The
white man’s caravan, too, is a tempting subject. How proudly the two
boys, Moritz and Kibwana, are carrying their master’s guns, while he,
seated on his nyumbu, the old mule, is just turning round to survey
the procession behind him. The Imperial flag flutters merrily in the
morning breeze at the head of the long line of carriers laden with the
cases and boxes on which they are beating time to the march with the
sticks in their hands, all of them in the highest spirits, true to the
character of Pesa mbili’s friends from distant Unyamwezi. (See p.
104.) Another pleasant subject is the hunt commemorated by Salim
Matola (p. 77). In the sportsman armed with a bow the artist has
depicted himself striding along after his dog, in hot pursuit of a
buffalo. Kwakaneyao, the brown dog, is a keen hunter by nature—his
name means that he will drive away every other dog who may
attempt to dispute the quarry with him. In spite of this, however,
Salim Matola, by way of taking an extra precaution, before starting,
rubbed his companion’s teeth with certain roots, and gave him a
piece of the last-killed bush-buck to eat. Thereupon Kwakaneyao
rushed off into the pori like an arrow, so that his master could
scarcely keep up with him.

THE BUSH COUNTRY AND ITS FAUNA. DRAWN BY SALIM

MATOLA
 The same Salim Matola shows us this pori with its characteristic
animals in another drawing which, sketchy as it is, reproduces the
character of the country with the utmost accuracy:—the scattered,
straggling trees, and the harsh, tall African grass between them,—the
dark green tree-snake in the tamarisk on the left, a hornbill on the
right, and in the background a small antelope. In short, this is in its
way a little masterpiece.
The Makua Isaki illustrates the superstitions of his tribe in the
little picture reproduced on p. 212. The comical little bird there
depicted is the ill-omened owl (likwikwi), which, crying night after
night, brought death to Marquardt’s little daughter. No native likes
to see or hear it.
The little sketch on p. 305 is a scene from Makonde life.
Mtudikaye, “the hospitable,” and her daughter Nantupuli, who has
not yet found a husband, though not for want of seeking, are taking
their turn to fetch water, as all the men are busy breaking up ground
in the bush, and, burdened with the carrying-poles and the great
gourds, have just accomplished the long, rough walk to the stream at
the foot of the plateau. The two banana-trees with their heavy
bunches of fruit, mark the place for drawing water: from the stepping
stones in their shadow one can get it much clearer than by standing
on the trampled, muddy bank.
Now we come to science. My men must have a marked
topographical instinct—otherwise it is difficult to explain the large
number of maps with which they have overwhelmed me. I have
reproduced only one of these (p. 9) the first, which quite took me by
surprise. The author is Sabatele, an unsophisticated child of nature
from the far south-west of our colony—the southern end of Lake
Tanganyika. He produced it at Lindi, quite in the early days of our
expedition. It gave rise to a great discussion, carried on with the aid
of Pesa mbili, the headman and other representatives of intelligence.
In a quarter of an hour we succeeded in identifying all the mysterious
signs, and I discovered to my astonishment that the orientation of
this first cartographic attempt was quite correct, and the topography
only wrong as regards some of the distances. Pointing to the curious
object marked in my reproduction, I received the unhesitating
answer “Mawo-panda”—Kinyamwezi for Dar es Salam. No. 2 is
“Lufu”—the Ruvu of our maps, the large river always crossed by
Wanyamwezi carriers on the main caravan road. No. 3 is explained
as “Mulokolo”—that is to say, Morogoro, the present terminus of the
great central railway, which will put an end once for all to the old
caravan traffic of the Wanyamwezi and Wasukuma. The
Wanyamwezi have a difficulty in pronouncing “r” and usually
substitute “l” for it. The contrast between these sturdy fellows and
the softness of their speech is a curious one.
No. 4 is “Mgata,” the Makata plain between the Uluguru and the
Rubeho mountains, the whole of which is a swamp in the rainy
season. “Kirosa” is the sound which greets me when I point with my
pencil to No. 5. “Of course, where there is no ‘r’ they pronounce it,” I
grumble to myself, delighted all the time with the splendid trill
produced; “therefore we must set it down as Kilosa.” No. 6 is the
“Balabala”—the caravan road itself. No. 7 is “Mpapwa,” the old
caravan centre, once the last halt on the inland march before the
dreaded Marenga Mkali, the great alkali desert, and hostile Ugogo.
Conversely, on the march down to the coast, it meant deliverance
from thirst and ill-treatment. Hesitatingly I place my pencil on No. 8,
which according to the drawing, must mean a stream of some sort,
though I know of none in that neighbourhood. In fact, the name
Mutiwe, which Sabatele now mentions, is quite unknown to me; it is
only on consulting the special map that I discover it, flowing past
Kilimatinde—N.B., when it contains water, which, needless to
remark, is not always the case. It must have impressed itself on
Sabatele’s memory as a water-course—otherwise, why should so
matter-of-fact a fellow have remembered the spot?
Now, however, we have reached the heart of German East Africa
and find ourselves in regions well known to my followers. No. 9 is the
lofty altitude of Kilimatinde, and No. 10 is called by Sabatele
Kasanga. I take the name for that of Katanga, the copper district far
to the south in the Congo basin, and shake my head incredulously,—
it is impossible that the young man can have travelled so far. On
cross-examination it comes out that he is from the Mambwe country
at the south end of Tanganyika, and his Kasanga is identical with our
station of Bismarckburg. No. 11 is my original goal Kondoa-Irangi,
and No. 12 is the post of Kalama, in Iramba. At Tobola, as my map-
maker calls Tabora, he even enters into detail. No. 13a is the present
Tabora with the new boma,—No. 13b is “Tobola ya zamani,” Old
Tabora, with the former boma. Nos. 14 and 15 are respectively Ujiji
on Lake Tanganyika and Mwanza, on Lake Victoria; these two
trading centres are Sabatele’s “farthest west” and “farthest north,” as
he explains to me with proud satisfaction.
Even without counting his comrades’ performances in the same
kind, Sabatele’s route-map is not an isolated phenomenon; on the
contrary, whole volumes have already been written on the subject of
cartography among the primitive races. Yet this unpretending little
sketch is by no means without psychological interest. We are
accustomed to look at every map from the south, considering the top
of it as the north. All my native maps are oriented in the opposite
direction—they look at the region represented as if from the north
and place the south at the top of the map.
This is likewise the case in the original of the one here reproduced,
which I have turned round through 180 degrees, merely in order to
bring it into agreement with our maps. The distances between the
various places are wrong, as already remarked, but otherwise it is
wonderfully correct, considered as the work of an entirely untrained
man.
The last of the native drawings reproduced is a combination of
landscape-painting and topographical diagram—in it Salim Matola
has represented the mountains of his home at Masasi (p. 65). None
of my attempts to photograph this range were successful. When, in
my excursions, I reached a spot far enough off to see it as a whole, it
was even betting that the air would be too hazy; and when near
enough to see any of the hills well, I was too near to get a good view
of all.
Salim has therefore supplied this want, and by no means
unskilfully. It is true that the native hunter on the top of Chironji,
and his gun, are both out of all proportion to the height of the
mountain itself, and the vegetation also errs in relative size (though
not in character), but everything else is right:—the series of gigantic
peaks—Mkwera, Masasi, Mtandi, Chironji, is given in the proper
order, and, on the left, the smaller outlying knobs of Mkomahindo,
Kitututu and Nambele. The steepness of the individual mountains is
well rendered, as also the rounded dome-shape of their tops;—
perhaps it would not be too much to say that Salim has tried, by
parallel and concentric strokes, to indicate the
structure of the gneiss.
The early rains appear to follow me
wherever I go. At Newala they began at the
end of September; at Nchichira, a few weeks
later, and here at Mahuta they set in with
considerable violence at the end of October.
Fortunately I was able, before they began, to
enjoy the natives even to excess. The Makonde
have for the last few weeks, been celebrating a
veritable series of popular festivals on a small
scale, on the fine large arena within the boma
enclosure. As these festivities were quite
spontaneous, I was able to feel assured of
their genuinely native character. More than
once I saw the stilt-dancers, with their
gigantic strides, rigid, masked faces and
waving draperies, stalking through the crowd.
One afternoon, a dancer, cleverly disguised as
a monkey, earned universal applause by his
excellent imitation of the animal’s movements
and gestures. The African is fond of laughing
—perhaps because he knows that this reflex
movement displays his magnificent teeth very MAKONDE WOMAN IN
becomingly, but on this occasion the gambols HOLIDAY ATTIRE
and somersaults of the mimic furnished a
sufficient excuse for the echoing volleys of
mirth.
MAKONDE HAMLET NEAR MAHUTA

A DIABOLO PLAYER ON THE

MAKONDE PLATEAU
 Another man, a muscular fellow of middle height, seemed to be a
popular all-round comedian. He first showed himself a skilled
contortionist—in fact, he might have appeared without hesitation in
any European circus. He next gave an equally masterly performance
on the swinging trapeze, four strong men holding up a long pole
which served as the axis of his evolutions. Finally, he distinguished
himself as a clown. In accordance with the mental constitution of the
race, however, the comic effect was produced, not so much by facial
expression as by his attitudes and the movements of his legs, as will
be seen by the cinematograph records I took of his performance. To
complete the proof of his versatility, he appeared in the second part
of the programme as the hero of a pantomime. This was a “problem
play” of sorts,—the husband a blockhead, the wife (played as in the
classic drama of antiquity, by a man) an artful coquette,—the lover, a
Don Juan, approved in all the arts of seduction. The foundation of
the drama, as will be seen, is so far cosmopolitan, but the naturalness
and simplicity with which all the incidents of actual life took place on
the stage was genuinely primitive and African, and equally African
was the imperturbable gravity of the public, who obviously followed
the progress of the action with the deepest interest. There was no
silly laughter at the wrong time; no one made audible comments.
If anyone is still inclined to doubt that the original and
uncontaminated culture of our primitive peoples is rapidly perishing,
I would request him to consider the following.
Again it is a lively afternoon: dancing, singing, and games going on
everywhere. I am fully occupied, as usual, but all at once, my
attention is directed to a figure apparently pursuing an individual
activity by itself. The arms move rhythmically up and down, holding
two sticks about half-a-yard in length, united by a string of twisted
bark. Suddenly the arms are abruptly thrown apart, the right being
stretched upward, the left spread sideways, and like a bomb a still
unrecognisable object descends out of the air, is cleverly caught on
the string, and runs like a frightened weasel backwards and forwards
between the ends of the sticks. Immediately afterwards it has again
vanished in the air, but returns repentant to its owner, and the
process continues. I feel that I have somewhere seen this before, and
rack my brain for some time—at last I have it. This is no other than
the game of diabolo, which as we read in the German papers, is
pursued with such enthusiasm in England and
other countries where games are the rage.
When I left home, it was still unknown to my
compatriots, who, in this as in other matters,
limp slowly but steadily after the rest of the
world; but I venture to prognosticate that it
will begin to flourish among us when other
nations have dropped it as an obsolete
fashion. Now, too, I can recall a picture of the
game seen in a shop-window at Leipzig, and if
I compare my recollection of this with the
action of the man before me, I must confess
that this solution of the technical problem
could not be bettered. The narrow wedge-
shaped notch cut all round the convex surface
of the wooden cylinder gives free play to the
string without appreciably diminishing the
weight of the whole.[69]
Had I not been aware that the rain is the
only cause for the daily falling off in the
number of my visitors, I should here, too, have
reason to consider myself a mighty magician;
but, as it is, the people tell me frankly enough
that it is now time to attend to their fields. To DIABOLO
be candid, the leisure thus obtained is not at
all unwelcome. I am, indeed, satisfied, more
than satisfied, and have several times caught myself passing over
with indifference the most interesting phenomena in the life of the
people. There are limits to the receptive power of the human mind,
and when overtaxed, as mine has recently been, it altogether refuses
to take in further impressions.
Only Ningachi and his school never fail to excite my interest. Our
baraza is the second house on the south side of the boma, beginning
from the east. The first is the alleged abode of some Baharia; but in
reality it seems to be a large harem, for women’s voices keep up an
incessant giggling and chattering there. In the third house lives His
Excellency the Secretary of State to the Viceroy, in other words the
officially appointed clerk to the Wali. He is a Swahili from Dar es
Salam, and an intimate friend of Moritz’s, but his relations with the
pillar of my migratory household have not prevented my giving the
rascal a good dressing down. For some time after my arrival, I was
unable to get a proper night’s rest, on account of the perpetual crying
of a baby, evidently in pain, which was audible from somewhere
close at hand. Before long, I had traced it to its source and cited
father, mother and son to appear in my consulting-room. Both
parents, on examination, proved to be thoroughly healthy and as fat
as butter; the child, about a year old, was likewise round as a ball, but
covered from head to foot with sores in consequence of the most
disgraceful neglect. And this man can read and write, and is,
therefore, in the eyes of statisticians a fully accredited representative
of civilization, and looks down with abysmal contempt on those who
do not, like himself, lounge about in white shirt and embroidered
cap.
But now as to the fourth house. On the first morning, I saw,
without understanding the meaning of the sight, some six or eight
half-grown boys assembled in front of it about half-past six. My first
thought was that they were going to play, and, as I watched them,
they arranged themselves in Indian file in the order of their height.
They were then joined by a man in a white shirt, and, at a sign from
him, vanished, one after another, in the same order, under the
overhanging eaves. A sound reached my ear soon after, which, it is
true, was in itself nothing extraordinary; a deep voice reciting words
immediately taken up by a chorus of high trebles,—but something in
the quality of the utterance induced me to approach within earshot
without knowing what attracted me. Standing at a distance of a few
feet from the house, I became aware that I was actually listening to
German words. An elementary lesson in arithmetic was taking place.
“Und das ist eins—and that is one,” began Ningachi, and the class
echoed his words. Then followed, in like manner, “and that is two,”
“and that is three,” and so on, up to thirty-one, which appeared to be
the limit of the teacher’s arithmetical knowledge, as far as
numeration is concerned, for he then proceeded to exercises in
addition and subtraction. Having listened to these lessons on many
successive mornings, I have reluctantly been forced to the conclusion
that they are a mere mechanical drill. The pupils are at once
embarrassed if asked to point out at random any figure in the series
so neatly written out on the blackboard by their teacher, and in the
sums they appear to be hopelessly at sea. “Two minus eight is six,” is
a comparatively venial error. Ningachi himself does not feel very
happy when going through this routine, but says that he was taught
so in the Government School at Mikindani, and is bound to teach in
the same way himself. It was no great consolation to the honest
fellow to hear that there are cramming establishments elsewhere.
I finished my notes on the Makonde
language in an astonishingly short space of
time. Like a god from the machine, my pearl
of assistants, Sefu, suddenly appeared from
Newala, and in conjunction with him and
Ningachi I have been able to convince myself,
in the course of seven very strenuous days,
that Makonde is most closely connected with
the neighbouring idioms, and that it is
probably only the absence of the “s” sound
which has led other writers to describe it as
very divergent from Swahili and Yao. The
want of this sound, however, I feel certain, is
intimately connected with the wearing of the
pelele in the upper lip. I suppose all of us
ASKARI IN FATIGUE have, at one time or another, suffered from a
DRESS badly swelled upper lip. Is it possible, under
such circumstances, to articulate any sibilant
whatever? This theory, indeed, supposes that the men originally
wore the same lip-ornaments as the women. But why should this not
have been the case? The Mavia men wear them even now, and the
Mavia are said to be very closely related to the Makonde.
Only with the Wamwera I have had no luck. I have never lost sight
of my intention to return and spend some time in the country of that
tribe; but the Wali, Sefu, and other well-informed men tell me it is
impossible. They say that the Wamwera, having been in rebellion
against the Government, were unable to plant their fields last season,
as they were in hiding in the bush.
“The Wamwera,” they say, “have been at war with the Germans,
and so they were living in the bush, for the whole of the planting
season, and could not sow their crops. They have long ago eaten up
the little store they had hidden, and now they have nothing more;
they are all suffering from hunger, and many of them have died.” My
next suggestion was that we should provision ourselves here and
make for the Rondo plateau, but my advisers were very much against
this plan. They said the people in their despair would fall upon us
and fight with us for our supplies of corn. Well, I thought, if the
mountain will not come to Mahomet, Mahomet must go to the
mountain, and a few days later, there appeared, summoned by
special messengers, the two Wamwera alleged to be the most learned
men in the tribe. They were two elderly men, emaciated to skeletons,
without a trace of calves, or any other muscular development, while
their sunken cheeks and hollow eyes bore eloquent testimony to the
terrible sufferings they had undergone. We waited patiently while
they were getting fed—they devoured such quantities of porridge that
their stomachs protruded like large skittle-balls from their bodies. At
last they were in a fit condition to be questioned.
In spite of their reputation for wisdom, there was not much to be
got out of Machigo and Machunya; a few dozen clan names, a longer
list of simple words—that was all. Every attempt to ascertain by their
help the forms of verbs or any of the mysteries of syntax was an utter
failure. Probably it was not intelligence so much as intellectual
training that was wanting; anyone who should attempt to ascertain
the structure of the German language with the assistance of a
bullock-driver, would doubtless fare no better than I did.
I dismissed the old men after a short time without resentment—in
fact, I loaded them with presents, and, cheered by the consciousness
of their unexpected gains, they stepped out manfully on their road
northward.
With the departure of the two gaunt professors of Kimwera, I have
really got rid of my last scientific care, and that is just as well, for, as
I have already remarked, my appetite is more than satiated. I have
accomplished a respectable amount of work in the past few months. I
have taken more than 1,200 photographs; but the non-photographer,
who imagines the art to be a mere amusement, will scarcely place
this to my credit; and only the expert can appreciate the amount of
exertion and excitement represented by the above number of
negatives in a country like this. I have already alluded to some
difficulties; these have only increased with time, for the sun is every
day higher in the heavens, and the intensity of the light between