April 14, 2016
"The show tells the story of Alexander Hamilton, the first U.S. treasury secretary, using hip-hop tunes," Rousu said. "As you might imagine, given its subject, there's some really great stuff in there about economics."
Let's start with the second act, and the song Cabinet Battle #1. It features a debate between Hamilton and Secretary of State (and later the third U.S. president) Thomas Jefferson about Hamilton's financial plan for the new nation. The plan contained three recommendations: for the U.S. to create a central bank, for the U.S. to assume the debts of the individual states, and whether the U.S. should pay back the national debt accumulated during the revolutionary war.
"This song is a brilliant introduction to Hamilton's financial plan," Rousu said. "It also makes for a good introduction to many modern topics, such as the controversies over having a central bank. In the U.S., the Federal Reserve Bank, which came into being in 1913, is still controversial, with some major contemporary political candidates wishing to abolish it."
The tune My Shot illustrates several economic concepts including the value of higher education. University education is one of the main ways that individuals can improve what's called their human capital, Rousu said, to get better jobs and live better lives. That was true in the late 1700s and is still true today.
Rousu's insights into Hamilton join a collection of nearly 50 videos on his website, Broadway Economics, which lists songs from various Broadway musicals and pairs them with an explanation of the economics principles they illustrate.
"My advice for those who haven't seen Hamilton yet or heard the soundtrack, is to go, or listen, and just take it all in the first time. But the next time you hear those songs, listen more carefully for the economic concepts and principles they mention," Rousu said. "Hamilton is such a great show that it makes learning about economics a really engaging and enjoyable experience."