Tomorrow is Passover and my wife and I will be hosting our (quasi)-traditional Seder. My Economists Chanuka song amused a few people, so I thought continuing in the Jewish economist tradition, here is an economic look at the ten plagues. If you recall in the Passover story, Moses declares “Let my people go!”, however the Pharaoh does not so God punishes the pharaoh with plagues. Below is a brief economic analysis of the plagues.
Plague #1: Blood: sure blood all over the place is not going to foster trade and economic growth. Particularly, if that plague turns the rivers to blood. In a sense this plague attacks the very foundation of Egypt agricultural society that benefited from the waters of the Nile.
Frogs #2: A plague with Malthus in mind. Frogs not only ate a bunch stuff, but they quickly multiplied much like Malthus predicted with the human population destroying resources.
Lice #3: An itchy worker is a less productive worker. A large line of economic literature shows that healthy workers are more productive, clearly these lice were aimed at decreasing labor productivity.
Flies/Beasts #4 and Pestilence #5: The plagues are going right at the live stock now, both plagues were aimed at killing live stock. Given that in many developing countries wealth is held in livestock, this is the equivalent of screwing with the stock market.
Boils #6: Again attacking labor productivity
Storm/hail a#7 and locust #8: These were aimed at orchard crops and the current harvest, basically striking right at the heart of cash crops.
Darkness #9: You try being productive in the dark.
Death of the first born #10: Hitting likely the most productive workers. Since first born were likely to inherit businesses they likely held the most human capital.
A more theoretical framework. So what you have is a two player repeating signaling game between Jews and Pharaoh. Jews have two choices plague or no plague. Pharaoh has two choices “Let the people go” or “not”. Given the backing of God, Moses threats were not cheap talk, it appears the plagues were a dominant strategy, but one might question the rationality of the Pharaoh to continue to go with the strategy do not “Let the People Go”.
Happy Passover everyone!