Thursday, 7 November 2013

Why study economics?

Matt Nolan at TVHE posted a couple of times in the last few days on topics which broadly relate to why students should study economics. This is of interest to me because, as part of my role of Undergraduate Convenor in the Department of Economics at Waikato, I present at Open Day, on school visits, and so on. The topic of those talks, unsurprisingly, is why students should study economics, and why they should study economics at Waikato.

The first post "Economics sucks, it is just the study of 'common sense'" is interesting because it relates to a line I have heard many times - that economics is essentially "applied common sense". Of course if that were true, then nobody (with common sense, at least) would need to study economics. And if it were true, then I'd be much less likely to see  the weirdest of exam answers I get in first-year economics and we wouldn't see stuff like this in the media. Maybe, as Voltaire wrote in Dictionnaire Philosophique, "common sense is not so common". As for "applied common sense", Matt has the right idea:
economics describes situations where common sense beliefs are right, and when they are wrong.
Which is exactly how we teach first year economics at Waikato (and pretty much everywhere else). 'Here's some things that economics can tell you, that seem to make a lot of sense', plus 'here's some things that economics can tell you, that you might not have guessed'. The latter can be the most interesting things to teach - one of my favourite questions, borrowed from Robert Frank, is "why do female models earn more than male models?".

The second TVHE post is "On studying economics". I love the quote from Joan Robinson at the beginning:
The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.
I may have to use that when students who are not intending to major in economics ask why they should have to do two economics papers in their business management degree. Of course, it sits well with that famous John Maynard Keynes quote:
 The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist.
So, to save yourself from being the slave to some defunct economist's thinking, it's probably best to understand what they are talking about. That's as good a reason as any to study at least some economics, I think.

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