Only the federal government has the power to spend beyond its current revenue. It shouldn't do that when the economy is at full employment. But it's an essential step for an economy mired in recession.

One reason that might motivate a worker to accept a riskier job at higher pay, for example, would be that doing so would enable him to bid more effectively for a house in a better school district. But if other workers did likewise, none would achieve the goal they were striving for.

When people bump up against one another in the course of pursuing their goals, it is in everyone's interest to resolve any resulting problems in the least costly ways possible.

No society has ever succeeded without a decent government.

When the rich build bigger, they shift the frame of reference that shapes the demands of the near rich, who travel in the same social circles. Perhaps it's now the custom in those circles to host your daughter's wedding reception at home rather than in a hotel or country club. So the near rich feel they too need a house with a ballroom. And when they build bigger, they shift the frame of reference for the group just below them, and so on, all the way down.

Adam Smith's uncritically enthusiastic modern disciples portray his invisible hand theory as saying that market forces reliably harness selfish individuals to serve the common good. That's often true, but as Darwin recognized clearly, many traits that serve the interests of individual animals make life more difficult for larger groups.

In short both the things we feel we need and the things available for us to buy depend largely—beyond some point, almost entirely—on the things that others choose to buy.