My late friend and colleague Paul Heyne believed that free market economics holds the key to productivity and happiness for people everywhere. One of my fondest memories of Paul is of his Last Lecture, in which he gave a piece of advice that I've tried to act on ever since.

Paul Heyne was a master teacher. He won the University of Washington's Distinguished Teaching Award and over his long career taught an estimated 20,000 students, most of them in freshman Principles of Economics. Paul was a demanding teacher. Despite his high standards, or perhaps because of them, he was a beloved campus figure.

Paul was a fervent believer in the free market. I mean a really, really fervent believer in the free market. One of his proudest accomplishments was that following the fall of communism hundreds of thousands of copies of his textbook were used in Russia and eastern Europe to help teach the newly freed peoples how a market economy operates.

Paul and I mostly disagreed with one another about academic economics. Paul thought that the market approach was practically always the best solution to our problems. I tend more towards the view that sometimes the market needs a helping hand. Our disagreements led to many hallway discussions, which were often enlightening and always amiable.

Toward the end of Paul's career, UW had a lunchtime lecture series called the Last Lecture. Faculty were asked to imagine that this was their last opportunity time to teach and to give a talk on a topic of their choosing. Paul volunteered to present a Last Lecture. I decided to listen in, joining the hundred or so students who skipped lunch to hear Paul speak.

What I knew and what Paul knew, but none of the students knew, was that Paul was dying.

Paul talked about how throughout history economic development has led to more activity taking place through the formal market and less through people joining informally to accomplish a specific task.

This "marketization" is good for two reasons, he said. First, the market is more efficient than the barter system and other idiosyncratic arrangements. Second, the market supports individual liberty. In the old days, if you were on the political outs with your neighbors you'd be in real trouble if you needed a barn raising. Nowadays, you just write a check to the barn building company. There's much less pressure to conform.

Then Paul took a turn that I hadn't anticipated. The market is a better way to organize an economy, all things considered, he argued, but something is still lost when community becomes less important.

Raising a barn in a group or bartering with the fellow down the road had the side effect that you got to know your neighbor and everyone learned to make an effort to get along.

Today, you can get money out of the ATM and spend it at the self-checkout scanner at the grocery store without ever needing to talk to another human. When people reduce their people-to-people interactions, they lose the informal support networks that are still so important even in an increasingly market-based economy.

Paul had a very specific policy recommendation. Wave.

Wave to let someone into the flow of traffic. Wave when someone lets you in. Wave, smile, or nod, when you walk past a stranger.

Paul was reminding us that as the economy becomes increasingly depersonalized, we need to be proactive in finding other ways to make small personal connections in order to maintain a healthy community.

Paul -- ever the champion of the free market -- was also making a recommendation about something we can do as individuals; something very cost effective; something requiring neither government regulation nor subsidy.

Wave.

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Dick Startz is Castor Professor of Economics and Davis Distinguished Scholar at the University of Washington. He can be reached at econcol@u.washington.edu.