This is my last column for the Daily. My boss Rachel Van Gilder ordered me to make it “end-of-the semester-y.” She suggested writing about finals. That seemed both boring and depressing.

But looking back through my columns, there has been some consistency in the things I’ve said. Since I’m the only graduate student instructor on the Daily staff, perhaps it isn’t too arrogant to pretend that my columns constitute a “class” of sorts. Besides, I turned 32 on Sunday, which means that I was applying to college when Van Gilder was tooling around the neighborhood on her first two-wheeler. I feel my role as the Daily’s wise/crotchety old man entitles me to give a review session and a lecture or two (aside from yelling at Van Gilder to get off my lawn, of course).

So, “class,” let’s review — if you’ve been paying attention, hopefully the Daily’s elder statesman has managed to convey three things to you over the last two years through my (occasionally questionable) wit and (alleged) wisdom.

1. Free markets usually work.

Willing sellers and buyers meet to trade goods and the prices that get set generally clear the market without much help from outsiders. This is generally a positive thing for most goods. If you set the price too low, demand outstrips supply and we end up like the Soviet Union – long lines of people waiting for underpriced scarce resources. Take the example of street parking: It may be free in most places in Ann Arbor, but it’s impossible to find a parking place during business hours.

2. Judicious government intervention underpins successful markets.

Markets are marvelous things, but they don’t spring out of a state of nature – just reading a bit of English philosopher Thomas Hobbes or looking at the situation in Somalia reveals what a bad idea having no government is. At the most basic level, government provides protection for private property and a court system to settle disputes over trade.

Government intervention can also correct market failures. Markets are set up to take advantage of individual incentives. When individuals bear all the costs of an arrangement, any trade that occurs is beneficial to society. But when costs of trade aren’t borne directly by an individual, the exchange doesn’t help society. Pollution is the classic example. If a factory owner doesn’t pay for dumping mercury in the water, the economic drag created by the resulting destruction of the environment and increased human illness are borne by society. Government regulation of pollution helps individuals realign their incentives to benefit society.

Government can invest in things that benefit the public that private markets emphasizing individual benefits don’t. The majority of education in the industrialized world is conducted by the public sector – or at least non-profit entities. Governmental or quasi-governmental institutions construct and maintain transport infrastructure like roads, rails and airports, which let workers get to the job and permit businesses to move goods around the country efficiently. You might call it socialism. I call it getting to work without wrecking my car in a pot hole.

3. People overestimate the risks from high-profile events.

Citizens tend to over-estimate the risk of unusual events, while underestimating the damage that everyday risks can cause. Stop worrying about dying in a plane crash, a terrorist attack or a gang land shoot out. Instead, quit smoking and cut down on binge-drinking. When you drive, wear your seat belt and don’t speed or talk on your cell phone. Wear a bicycle helmet. And if you ever get elected to Congress, stop worrying about legislation to deal with exotic things like underwear bombs and missile defense and start worrying about boring things like meat inspections and bridge repair.

Here’s the part of the column where Rachel glares at me and asks what this has to do with Michigan and Michigan students (Wait, kid, didn’t I just tell you to get off my lawn?).

Well, when my columns were at their best, I hope it could serve as a basic course in political economy – explaining why the world of economics and policymaking works as it does and giving some reasonably informed views on how to improve those workings.

And here’s the take-home point: Remember, though I’m ending my column and you all are ending your courses, the semester’s final exams aren’t really final. The University exists in part to give you the knowledge to do well in the real world.

What I’m saying is that your real final exams start when you graduate. How well you do on the job will affect the well-being of all of us in Ann Arbor, Michigan, the United States and the world at large. Good luck. We’re all counting on you.

Oh, and one other thing – go easy on your GSI in the end-of-semester evaluations.

Patrick O’Mahen can be reached at pomahen@umich.edu.

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