Paul A. Samuelson: 2 ideas worth knowing

2 ideas from Paul A. Samuelson, each explained in a minute and credited to the original work. Free on Savvy.

Everyone wants the lighthouse built. Nobody wants to be the one who pays for it.
Paul Samuelson formalized why goods like national defense or clean air are chronically undersupplied by free markets: once they exist, nobody can be excluded from enjoying them, so…
— Paul A. Samuelson, The Pure Theory of Public Expenditure
Free trade can make an entire class of workers poorer, even as the country gains
The Stolper-Samuelson theorem shows trade doesn't just shift jobs between industries: it raises real returns to whichever factor a country's exports use intensively, and lowers ret…
— Wolfgang Stolper and Paul Samuelson, Protection and Real Wages

Five ideas worth knowing, every week