Econtalk Summary

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On an episode of Econtalk, Russ Roberts played host to a guest by the name of Yanis Varoufakis. Varoufakis was the former economist-in-residence at Valve, a video game design and game distribution company. Varoufakis was also a professor at the University of Texas at the time and had previously taught at the University of Athens in Greece. They discussed his time as an employee at Valve and the seemingly unique working conditions that occur their. This episode helped me realize that even in an extremely odd case such as Valve’s, the laws of economics that we were taught in AP economics class apply to almost everything consistently and precisely. The phenomena described by Varoufakis as happening at Valve is the idea of “Anarcho Syndicalism”. This idea continues as a theme throughout the podcast, being reflected on the different aspects of Valve’s economic and social structures that were talked about. This was described as the philosophy on how to …show more content…

The invisible hand that guides consumers and producers towards the decisions the make is highly apparent in Valve. In their case it takes the form of social norms and maintenance of status and self-respect. The idea that these employees are able to work passionately to create a quality product solely for the respect of others is astonishing. This situation was not taught in AP, but it is analogous to simple supply and demand markets that we learned about. However, in this case the y-axis of the model is labeled community response/peer respect, rather than price. I believe that this is exemplary of the truth in economic law. These employees are being paid ridiculous amounts of money and do not need to do their jobs extraordinarily well (relatively) to maintain a position at the company and continue receiving pay. However, it is the new motivation found on the y-axis of this new supply-demand model that inspires them to keep production up and at a

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