A High School Economics Guide

Supplementary resources for high school students

Definitions and Basics

Entrepreneurship, from the Concise Encyclopedia of Economics

The term entrepreneur, which most people recognize as meaning someone who organizes and assumes the risk of a business in return for the profits, appears to have been introduced by Richard Cantillon (1697-1734), an Irish economist of French descent. The term came into much wider use after John Stuart Mill popularized it in his 1848 classic, Principles of Political Economy, but then all but disappeared from the economics literature by the end of the nineteenth century….

In the News and Examples

Abdallah on Hair and Running a Small Business. EconTalk podcast episode, December 2013.

Wafaya Abdallah of Oasis Hair Salon in Rockville, Maryland talks with EconTalk host Russ Roberts about the challenges and rewards of running a small business. Abdallah discusses her career path from would-be lawyer to owning her own salon with many employees and a management style that is different from the traditional one in her business. She discusses the economics of hair-cutting, how she motivates her employees to be part of the team, the openness of the salon’s financial situation, the educational training she offers, and the ways she works with employees to motivate and inspire. You’ll also learn how much her scissors cost….

Roger Berkowitz on Fish, Food, and Legal Sea Foods. EconTalk podcast episode, August 2015.

Seafood is highly perishable and supply is often uncertain. Roger Berkowitz, CEO of Legal Sea Foods talks with EconTalk host Russ Roberts about the challenges of running 34 seafood restaurants up and down the east coast. Berkowitz draws on his 22 year tenure as CEO and discusses how his business works day-to-day and the question of sustainability….

Elizabeth Pape on Manufacturing and Selling Women’s Clothing and Elizabeth Suzann. EconTalk podcast episode, April 2017.

Elizabeth Pape, founder of the women’s clothing company Elizabeth Suzann, talks with EconTalk host Russ Roberts about starting and running her company–a manufacturer and seller of high-end women’s clothing in Nashville, Tennessee. The conversation chronicles the ups and downs of her entrepreneurial story, the recent evolution of the women’s clothing market, and the challenge of competition from lower quality, lower-priced products….

Nathan Blecharczyk on Airbnb and the Sharing Economy. EconTalk podcast episode, September 2014.

Nathan Blecharczyk, co-founder and chief technology officer of Airbnb, talks with EconTalk host Russ Roberts about Airbnb, one of the earliest companies to use technology to allow individuals to share underused resources, and in the case of Airbnb, housing. Blecharczyk and Roberts discuss how a design conference and the Democratic National Convention got Airbnb started, how the company aligns incentives to overcome the trust problem of house-sharing, and the rise of technology and online social networks to make a new business model possible. Along the way, Blecharczyk gives his take on the role of luck vs. skill in entrepreneurial success and how Airbnb plans to expand its product offerings in the future….

Josh Luber on Sneakers, Sneakerheads, and the Second-hand Market. EconTalk podcast episode, January 2016.

How many pairs of sneakers do you own? Josh Luber of Campless and StockX talks with EconTalk host Russ Roberts about the world of sneakerheads–people passionate for collecting and trading sneakers. Each week people line up to buy classic sneaker models Nike re-releases. Luber has collected millions of transactions from Ebay on these sneakers and others and has analyzed the return to investing in various sneaker models. The conversation includes a discussion of how Nike has helped to create this market and Luber’s work creating a stock market for sneakers and other goods….

Lisa Turner on Organic Farming. EconTalk podcast episode, December 2012.

Lisa Turner of Laughing Stock Farm talks with EconTalk host Russ Roberts about life as a small organic farmer. She describes her working day, the challenges of farming, the role of the U.S. Department of Agriculture in her life and what some job applicants who want to work on her farm need to understand about business….

Megan McArdle on Failure, Success, and the Up Side of Down. EconTalk podcast episode, April 2014.

Megan McArdle of Bloomberg View and author of The Up Side of Down talks with EconTalk host Russ Roberts about her book. McArdle argues that failure is a crucial part of success in personal life and in the large economy. Topics covered include the psychology of failure, unemployment, and bankruptcy and parole….

Entrepreneurs react creatively to the changing marketplace: Virginia Postrel on Style. EconTalk podcast episode, November 2006.

Author and journalist Virginia Postrel talks about how business competes for customers using style and beauty, going beyond price and the standard measures of quality. She looks at the role of appearance in our daily lives and the change from earlier times when style and beauty were luxuries accessible only to the wealthy. She also talks about her donation of a kidney to a friend and how that affected the intensity of her feelings about the policies surrounding organ donations….

Summer Fun: The Economics of the Lemonade Stand, at SocialStudiesforKids.com.

You set up shop on a sidewalk or in front of a house or business. You have at least one pitcher of ice-cold lemonade, and you’re offering it to anyone who walks by—for a very low price. You most likely got the lemonade from someone in your family, so you don’t really have any costs. So, everything you make is pure profit. If you sell your lemonade for 10 cents a glass, then you need to sell only 10 glasses to make a dollar. Sell about 50 glasses and you’ll have enough to see that cool new summer movie or buy that great new book or video game….

But what about that 10 cents you’re charging? Could it be more? You might charge 50 cents a glass. You might also end up like the boy in the graphic at right: He’s very sad because no one is buying his lemonade. Why? He’s charging too much….

Ethics in business: John Allison on Strategy, Profits, and Self-Interest. EconTalk podcast episode, May 2007.

John Allison, CEO of BB&T Bank, lays out his business philosophy arguing for the virtues of profits, self-interest and production. His definition of justice, one of the core values of his firm, is that those who produce more, get more. He argues that Bill Gates would do more for the world improving Microsoft than running his foundation and giving away money. Allison praises Atlas Shrugged and refuses to let his bank make loans to companies that use eminent domain to acquire property. Is this any way to run a company? Does Allison really run his company this way? How does he deal with the gap between his philosophy and our popular culture’s view of business and profits? Listen as Allison and host Russ Roberts discuss BB&T’s unusual business strategy….

A Little History: Primary Sources and References

Essai sur la Nature du Commerce in Général (Essay on the Nature of Trade in General), by Richard Cantillon on Econlib. Tr. by Henry Higgs.

Intrigue, murder, posthumous plagiarism, citations by Adam Smith, rediscovery by William Stanley Jevons a century later, and a stunning work on entrepreneurial risk, money, foreign exchange, and banking from the 1700s—what more could one ask for from an 18th century economist? Richard Cantillon offers fascination for historians and economists as much in death as he did in life….

We’ve left Higgs’s translation intact; but note that his arcane translations of some words like “Undertaker” for “entrepreneur” obscured Cantillon’s apparent coining of the word “entrepreneur”—see Mark Casson’s article, Entrepreneurship, in the Concise Encyclopedia of Economics for more on this…. [Econlib Editor’s Notes]

Joseph Alois Schumpeter, biography from the Concise Encyclopedia of Economics

Schumpeter was among the first to lay out a clear concept of entrepreneurship. He distinguished inventions from the entrepreneur’s innovations. Schumpeter pointed out that entrepreneurs innovate, not just by figuring out how to use inventions, but also by introducing new means of production, new products, and new forms of organization. These innovations, he argued, take just as much skill and daring as does the process of invention….

Advanced Resources

Sam Altman on Start-ups, Venture Capital, and the Y Combinator. EconTalk podcast episode, July 2014.

Sam Altman, president of startup accelerating firm Y Combinator, talks to EconTalk host Russ Roberts about Y Combinator’s innovative strategy for discovering, funding, and coaching groundbreaking startups, what the company looks for in a potential startup, and Silicon Valley’s attitude toward entrenched firms. The two also discuss Altman’s thoughts on sectors of the economy that are ripe for innovation and how new firms are revolutionizing operations in these industries….

James Tooley on Private Schools for the Poor and the Beautiful Tree. EconTalk podcast episode, December 2014.

James Tooley, Professor of Education at Newcastle University, talks to EconTalk host Russ Roberts about low-cost for-profit private schools in the slums and rural areas of poor countries. Tooley shows how surprisingly widespread private schools are for the poor and how effective they are relative to public schools where teacher attendance and performance can be very disappointing. The conversation closes with whether public schooling should remain the ideal in poor countries….

Chris Anderson on Makers and Manufacturing. EconTalk podcast episode, December 2012.

Chris Anderson, author of Makers: The New Industrial Revolution, talks with EconTalk host Russ Roberts about his new book–the story of how technology is transforming the manufacturing business. Anderson argues that the plummeting prices of 3D printers and other tabletop design and manufacturing tools allows for individuals to enter manufacturing and for manufacturing to become customized in a way that was unimaginable until recently. Anderson explores how social networking interacts with this technology to create a new world of crowd-sourced design and production….

Paul Graham on Start-ups, Innovation, and Creativity. EconTalk podcast episode, August 2009.

Paul Graham, essayist, programmer and partner in the y-combinator talks with EconTalk host Russ Roberts about start-ups, innovation, and creativity. Graham draws on his experience as entrepreneur and investor to discuss the current state of the start-up world and how that world has changed due to improved technology that makes it easier to start a software company. Graham talks about his unusual venture firm, the y-combinator, and how he and his partners work with start-ups to get them ready for more advanced funding. Along the way, Graham discusses why hackers are like painters and how to survive high school….

Risk, Uncertainty, and Profit, by Frank Knight on Econlib.

The particular technical contribution to the theory of free enterprise which this essay purports to make is a fuller and more careful examination of the rôle of the entrepreneur or enterpriser, the recognized “central figure” of the system, and of the forces which fix the remuneration of his special function….

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