Nothing dismal about real study of economics

One of the great crimes of higher education is that many entry-level economics courses have been stripped of anything remotely interesting and instead boiled down into a bewildering array of baffling concepts such as demand curves, GDP and elasticity.

Having sat through both macroeconomics and microeconomics during my college years, I can recount with vivid detail the monotonous confusion that accompanied both classes.

In retrospect, personal experience has led me to understand that economics is actually a fascinating subject, despite the best efforts of many professors and teaching assistants to have their undergraduates believe differently.

That’s because, in my own view, at least, economics represents at its simplest the study of human action and reaction. It considers why people do what they do in order to get what they want.

Fortunately for today’s generation of college students, it appears an increasing number of economists understand that the field entails more than droning on about the marginal propensity to save and the paradox of thrift are gaining popularity.

One of the most enlightening pieces I’ve ever come across was written recently by economics professor Deirdre McCloskey writing at Bleeding Heart Libertarians.

McCloskey, who teaches at the University of Illinois at Chicago, argues that simply because an historical or economic premise appears in the media does not make it fact, no matter how many times we are hammered over the head with said premise.

Further, basing one’s knowledge on such premises can not only be foolish, but dangerous.

She then identifies the creed of “High Liberalism,” beliefs that gained currency in the late 19th century and today are regularly held out as undeniable truths by media standard bearers at the New York Times, Time magazine, MSNBC and other national media outlets.

McCloskey sums up the tenets of High Liberalism as:

Modern life is complicated, and so we need government to regulate. Government can do so well, and will not be regularly corrupted. Since markets fail very frequently the government should step in to fix them. Without a big government we cannot do certain noble things (Hoover Dam, the Interstates, NASA). Antitrust works. Businesses will exploit workers if government regulation and union contracts do not intervene. Unions got us the 40-hour week. Poor people are better off chiefly because of big government and unions. The USA was never laissez-faire. Internal improvements were a good idea, and governmental from the start. Profit is not a good guide. Consumers are usually misled. Advertising is bad.

McCloskey points out that the previous century served as a petri dish for social and government experimentation, and that “anyone who after the 20th century still thinks that thoroughgoing socialism, nationalism, imperialism, mobilization, central planning, regulation, zoning, price controls, tax policy, labor unions, business cartels, government spending, intrusive policing, adventurism in foreign policy, faith in entangling religion and politics, or most of the other thoroughgoing 19th-century proposals for governmental action are still neat, harmless ideas for improving our lives is not paying attention.”

She backs up the above statement with numerous examples. Among them:

• In the 19th and 20th centuries ordinary Europeans were hurt, not helped, by their colonial empires;
• State-armed psychiatrists in America jailed homosexuals, and in Russia jailed democrats;
• Some of the New Deal prevented rather than aided America’s recovery from the Great Depression;
• Unions raised wages for plumbers and auto workers but reduced wages for the non-unionized;
• Minimum wages protected union jobs but made the poor unemployable;
• Rent control makes the poor and the mentally ill unhousable, because no one will build inexpensive housing when it is forced by law to be expensive; and
• Malthusian theories hatched in the West were put into practice by India and especially China, resulting in millions of missing girls.

McCloskey isn’t promoting a specific political agenda; she’s interpreting information by identifying and examining real-life examples rather than tossing out nebulous charts and concepts. I heartily recommend you read her entire piece, which I cannot do full justice.

What I would have given to have had an economics professor with her talents when I was in college.

(HT: Cafe Hayek)

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