Money On The Ground

I hear the following joke far too often:

Economist 1: Look, there’s $20 on the ground!
Economist 2: No there isn’t. If there were, someone would have picked it up already.

It annoys me because it makes fun of a point of economic theory which, when phrased a little more realistically, is not only clearly correct but actually useful even in the context of this analogy.

Imagine the first economist had said “There’s $20 on the ground in the middle of Times Square, and it’s been there all week.”

It’s not so unlikely that you’re the first person to notice a bill that has just been dropped on the ground. It is so unlikely that a bill on the ground would go unnoticed for an entire week in Times Square, and if it looks like it has, you should start wondering if something more sinister is going on, like somebody spray-painting a picture of a bill on the sidewalk.

But that’s exactly what the original economic principle is trying to tell you!

So if there is what seems to be a drop-dead simple, no-risk money-making opportunity that no one has picked up on, and it’s been available more than a very short amount of time, expect it to be something more sinister.