Very much worth reading:
battlepanda: Neither Dismal nor a Science (Or, how the way we conceptualize the discipline of Economics have hobbled actual education in economics. But that's a slightly less snappy title):
Those of you who have been reading this blog knows that my friend RJ is a economics skeptic. Especially of macroeconomics, which he regards as little better than astrology -- relevent insofar as it's widely believed, but with bullshit where the underlying concepts should be. I identify with RJ because we went to the same college and took the same intro to Econ class, Econ 11, that left us with the same impression of economics as an unempirical science, blind to its own inherent ideological bent. A misguided attempt to distill human behavior into laughably simple graphs. Consisting entirely of arguments standing on assumptions so broad and unwarrented that the conclusions reached have no meaning. Basically, a pseudo-science so divorced from reality and rife with fudge factors that it should be dismissed out of hand for being intellectually inelegant, if nothing else. And don't think that RJ and I just didn't 'get it'. We both recieved good grades in Econ 11 for very little work, and if nothing else that only added to our contempt for the subject, especially for RJ, who is very mathematically inclined.
I'm assuming that if you've read this far you actually agree with me that RJ is dead wrong and that economics is actually an essential area of study.... So let us discuss where the way we teach economics went so wrong and what we can do to make it right....
- Economics is not like the other sciences. Acknowledge that. There is no giant econ lab where we can hold all other variables constant and vary the money supply or tax rate.... By necessity, the study of economics often have to work backwards from real-world occurances, occurances so mired in culture, history and politics that it's often difficult just to deduce what factors are significant.... Why not embrace this need for all kinds of intellectual skills instead of retreating into the kind of defensiveness I hear so much of: 'Yuh-huh! We are soooo a science. Like physics. And biology. Just as good. Look, we use graphs and shit.'
- Always think to yourself: Would this sound crazy to the proverbial man-on-the-street?... We make broad stroke assumptions such as 'each individual will act to maximize his utility' or 'if the price is driven down to zero, demand is infinite' not because we are intellectually lazy, but because making those assumptions allow us to simplify a real-life situation to the point where we can apply logic.... Imagine a theoretical physics class in which you are told to memorize the twin paradox and be prepared to regurgitate a schematic drawing of Schroedinger's Cat's without being walked through exactly how those counterintuitive outcomes came about? It's what Econ students are being told to do every day -- to accept what's in front of them at face value and memorize which little square to color in as the consumer surplus. Is it no wonder that students who are intelligent often wind up insulted rather than educated?
- Separate the normative from the positive. It is notoriously hard to keep one's politics out of one's economics. But it is important to strive to be as objective as possible because when ideology trumps reality, economics becomes as dangerous as a faulty chart of a rocky shoal.... A corollary: Problem sets are not a good place for editorializingLook graph 78a on page 234. The government has put a ceiling on the rent of properties in Jenny's town. Is Jenny better off? Do you even need to look at the graph? That would be a bit of a waste of time, wouldn't it, since this is blatently a 'government-actions-have-unintended-consequences-that-end up-hurting-the-very-people-they-are-trying-to-help' question.
- Economics is all around us. The way economics is taught is very compartmentized.... I think economics would be much more compelling if professors really hammer home its most fundamental definition -- the study of the distribution of scarce resources. You pay 28 extra cents for a box of brand-name flakes rather than generic after seeing $500,000 worth of commercials. That's economics. Your parents were able to buy the house they always wanted after interest rates dropped below 6%. That's economics too. This is why I am so psyched about Freakonomics -- it's economics as a tool that cuts away the noise and reveal the fascinating underlying patterns in everyday life rather than the abstract and rarified realm of widgets.
- 'Humans aren't Billiard Balls.' But sometimes we have to treat them as if they are.... [I]f you're not willing to pay $500 for a safety device in your car that will have a 1/10,000 chance of saving your life. Multiply $500 by 10,000 and hey presto, your life as valued by you is worth five million bucks. Nifty? I didn't think so at the time. There is something that is very off-putting about the way economics reduces humanity to numbers, from our motivation, to our values, even our lives. Again, I think the way to get over this aversion is to hammer home the whys and wherefores of economics -- without quantification we cannot see patterns in the aggregate, and without seeing the patterns we cannot use economics to make our lives better....
Heck, this post is already too long. So I'll just end with an exhortation to everyone teaching Econ out there.... Try and tell your students why economics is important in our lives. Leave widgetland behind.... Praise the free market, but also show its limitations. Teach the history of economics, how Adam Smith's invisible hand is a reaction to the overbearing government of the day, and how Keynes is in turn a reaction to Smith. Don't forget to note the hubris of the economists who thought they had recessions licked in the 60s. I'll let commenter Colin Danby, fellow ex-econ-skeptic and now turned econ teacher have the last word: "When I teach this stuff now, I try to build in student research projects that help them learn to use real-world data, so that at least I can show them by the end of the class that the world is more transparent. But I'd never talk about 'believing in' economics -- it's not a religion, it's a social science and still a rather inadequate one."