Your economics education: how to travel the path to enlightenment, rather than the road to hell

Gigi Foster


February 25th, 2015

Ten critical pieces of advice for all new economics students, from academic Gigi Foster.

Economics students around the globe have clamoured in recent years that Something Be Done about the way economics is taught (see, for example,  The basic message is that economics, as usually taught to undergraduates, does not accurately depict the real world – an assertion that is self-evidently true and hence draws adherents like a flame draw moths.  The most radical of such adherents, some of whom have never taken an economics course, summarily reject the entire discipline on this basis.

During your adventures as an economics undergraduate, you will most likely encounter zealots of another stripe:  those who worship economics so fanatically that they cannot truly see its weaknesses.  You may encounter this stance, for example, in professors who are so personally wedded to the subfield where they have made their careers that they will greet criticism of the subfield with a torrent of rationalizations.

I hope that you don’t want to emerge from your education as a statistic on either hellish extreme of this distribution.  To that end, let me sketch what students of economics should expect to encounter during their programs today, and what actions they can take against losing their religion in either direction by the time they graduate.

Most Economics 101 courses contain a blend of students who will eventually go on to careers as economists, and students who will never take another economics course. The conventional approach is to retain standard spiels, such as Mankiw’s Ten Principles of Economics, in first-year courses hoping that those who never see economics again will have a roughly accurate conception of the discipline’s main tenets, while those who go on to further study in economics will have the gross generalizations and simplifications presented in first year unpacked, and the discipline’s weaknesses and frontiers illustrated and addressed, as they deepen their studies.

For many reasons, this does not always happen.  Some, if not most, people who graduate from undergraduate programs in economics have never been pushed to reflect critically on the usefulness of the discipline’s main models for decision-making, development, cooperating, or transacting.  This lack of reflection can be deadly.  Like a fresh graduate of a religious school, a student of economics who has not found strong reasons during his education to retain the system of thinking he has been taught is particularly vulnerable to being swayed by critics of that system once he emerges from a cocoon of true believers.  At the same time, blindly accepting every word uttered by the true believers is a recipe for graduating as no more than a weak disciple, unable to think independently.

With this in mind, let me suggest the following Ten Principles of Successful Economics Students.  These will not inoculate you against swallowing untruths, nor guarantee that you end up enlightened rather than enslaved upon graduating, but they at least serve as a strand (of garlic, beads, or rabbit’s feet) to grasp during your weakest hours.

1 – Listen carefully, and seek to understand fully, before you judge.  Some core principles of economics, such as the idea that the design of material incentives is often the most effective way to influence people’s behaviour, go against many people’s gut feelings about how the world works.  Suspend your criticism until you completely comprehend the nature and strength of any assertion being made.

2 – Stay in touch with reality, which is after all where most professional economists must operate.  Some economics courses are almost completely divorced from the RealEconomik that will be faced by graduates.  After applying Principle 1, challenge yourself and your teachers by applying the models or assumptions you are learning to real-life scenarios that you know of from your engagement in civic life – which, incidentally, needs to start now if it hasn’t already.  Work at being introspective and observant.  Resist the temptation to compartmentalize what you are learning in the classroom separately from what you know about yourself and other humans.  Do not cower at the back of the classroom tweeting about the uselessness of what you are being taught.  Sit up front and make your teachers work.

3 – Take time to notice the incredible progress that our societies, complete with their free markets, have delivered.  Perhaps the most common type of woeful pining I hear from students in my Economic Analysis course is that today’s world is full of corruption, pollution, violence, and many other ills, and that if only we were to Change the World System (sometimes communism gets a mention here), these problems would go away.  Do not be naive enough to think that these human problems are the fault of free markets.  People who gain a personal advantage from polluting will do so, free market or not, unless they have to pay a high cost of doing so; and economists have played a huge role in finding ways to use markets to internalize pollution costs and thereby reduce pollution.  Violence has dramatically fallen since the time of the hunter-gatherers: we now mainly trade with each other rather than destroying each other’s resources.  Corruption will emerge whenever people can get away with it, and is a main focus of whole subfields of economists looking to work out ways that people can be co-opted into not cheating (see, for example, here  it is not an inevitable result of any free market.

4 – Don’t be lazy.  If you really care about using your time on this earth to help the world, which is essentially what the economics profession takes as its purpose, then get on with it.  Do your reading, do the problem sets, come to class.  Take your purpose seriously.  When you get older you will reminisce about how great it was to have all the resources of an entire university at your fingertips, and the time to soak it all up.  Choose the path of least regrets.

5 – Don’t succumb to the temptation to feel self-righteous or bigoted in relation to those with other views.  No matter how devoted an economist you become, respect other ways of thinking and keep an open mind.  Adopt the bits of other world views that you think are valuable.  Don’t be precious, insular, or condescending.  Don’t preach.  Lead by example.

6 – Remember that economics is a growing and inexact science.  For proof of this, scroll down the list of Nobel prize-winners from our discipline:  they chart the sometimes meandering path that economics has been seen by society to cut through the wild underbrush of human behaviour.  No one gets a Nobel in economics for delivering a particular estimate of a particular coefficient in a particular model.  We are muddlers-through, and even the best of us only manage the lift the fog by a few inches.

7 – Know your competition.  What do the other social sciences have to say about a certain social problem?  What would the legal view be of a particular issue?  You will probably be working with other types of professionals once you graduate, and it will greatly ease your ability to communicate and work effectively with them if you know a bit about the ways in which they think, and how those ways differ from the mindset of an economist.

8 – Invest in your life outside the classroom.  If there is nothing else going on in your life except studying economics, then your self-esteem will become inordinately bound up with the ideas of economics and/or your performance in your classes.  This is not a good recipe for producing an objective scientist.  Have loves, see movies, sing, dance, paint.  Do stuff that gives you strength outside the classroom that you can draw upon when your ego is under threat from whatever is happening at university.

9- Remember that economists are people, with the same materialism and vanities as the rest of the world.  This means that sometimes an economist – even, and especially, an established one – faces personal incentives to toe a particular line of reasoning or follow a particular model even when it does not actually advance social welfare (the uber-maximand of the entire discipline) or assist in our understanding of the world.  Forgive these people as you would forgive anyone for his greed and selfishness.  These are unavoidable parts of human nature.

10 – When you encounter an assumption you think is silly or unrealistic, consider what the alternative is.  Perhaps the most important principle, this open-souled consideration of alternative systems of thinking involves confronting the incredible difficulty of modelling reality in all of its wondrous complexity.  The very complexity faced by social scientists forces us to make simplifying assumptions in order to make any headway at all in understanding our world or trying to predict the behavior of people in it.  The different social sciences are defined in large part by the different assumptions they are prepared to make.  If at the end of the day you find yourself unable to escape the sense that another set of assumptions would be better than those economists make, in terms of ultimately advancing our understanding of the world, then that is a sign that you are not cut out to be an economist.  Cut your losses and change churches.

Remembering these principles will help you navigate your study of economics with objectivity and reflection, two pillars that will support you in your effort not to emerge from the university cocoon either a radical priest – with loyalties either for or against the discipline – or naive and vulnerable, easy prey for those who would try to sway you into their camp.  You are here to open and to strengthen your mind, not to close it down or frustrate it, and it is you and your classmates who will one day have the chance to mould what economics becomes and stands for in the future.  This, if you accept it, is your cross to bear.

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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