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Money makes the world…

Dan Crawford | July 25, 2017 8:25 am

Law

Politics

Taxes/regulation

US/Global Economics

Even though Angry Bear has as an audience of people who are more than beginners in economic thought, I think it worthwhile to pursue basic stories about what we demand and value from our way of life, which includes the “economy”.

I had a recent experience where an acquaintance came up to me and asked about Angry Bear and then proceeded to explain what formed the basics of his economic narrative. In rough form and I think my summation accurate enough for casual conversation: Capital is like stocks, debt is like bonds, and rents are had by all…government (I think he meant taxes and ?), companies arbitage?, monopolies (profits and ?). He also asked who I read to get my information (I assume he was asking for a reference or two for Econ 202 information).

I actually wasn’t sure how to respond given his perceptions and also I wasn’t sure how great an interest he had in sorting out his stories or math on economics…I had mine, but there needs to be common ground somewhere. At least we had not begun with the tweet kind of economics spouted by political figures and slogans for PR campaigns. And he actually might be interested and willing to re-think basics. What might the format be to encourage him to be more thoughtful?

I think this worth pursuing beyond the tired story line of avoiding Uncle so and so at Thanksgiving dinner or the neighbor who has clearly and unequivocally bought into simple political memes. Barkley Rosser’s Could the US default due to a Complexity Catastrophe? offers another example.

Where does one begin with experience and smart people in one’s circles of activities?

How to think like and economist of that is what you wish by Brad DeLong

I have long had a “thinking like an economist” lecture in the can. But I very rarely give it. It seems to me that it is important stuff—that people really should know it before they begin studying economics, because it would make studying economics much easier. But it also seems to me—usually—that it is pointless to give it at the start of a course to newBs: they just won’t understand it. And it also seems to me—usually—that it is also pointless to give it to students at the end of their college years: they either understand it already, or it is too late.

By continuity that would seem to imply that there is an optimal point in the college curriculum to teach this stuff. But is that true?

What do you think?

(Dan here….also lifted from comments)

George said in reply…

Why dichtomize this? Olivier Blanchard in the preface of his textbook, Macroeconomics, says that he explains everything three ways, algebraically, graphically and in words. He also always relates theoretical result to the real world. I think is sound pedagogy and a good model for students to following as it will deepen their understanding and allow them to more easily convey that understanding to different audiences.

Brad D

Because many students understand only the algebra and think that they have got it. And others who understand the words find their understanding of the words destabilized by incomprehensible diagrams…

5 Comments

Terry says:

July 25, 2017 at 10:07 am

Do not know if I think like an economist and I did not pursue economics beyond college primarily because I was uncomfortable with the math, but to the extent I do, it really is the result of every economics course I took in college and applying that way of thinking over the next 43 years. I do not think it is something you can learn by attending a lecture or even a course and you have to keep whatever skill level you have sharp by looking at events like an economist and then reading what real economists have to say about it. Unfortunately, most of what I have read in the last 40 plus years has been through the prism of politics and there has been a lot of bad thought on both ends of the political spectrum. It is a little bit like asking a professional in any field for the answer to a question and getting the response” I can answer your question, but first I need to know what answer you want”. At least in economics, if done right, you can assign probabilities to the answers really working in real life.
coberly says:

July 25, 2017 at 3:33 pm

I don’t think so.

The economics I “studied” in college began with a set of axioms (they did not know they were “assuming” the case) that were not true and mutually inconsistent. By the time I was in the second year I was worn down enough to accept the argument for “free trade” because the math was cute. It took me about another thirty years (of doing other things) to realize that “the math” was meaningless if it did not account for all relevant factors… which NO economist I have ever heard seems able to do or interested in doing. They have their revealed, and “proven” truths no different from any other religion, and of course it takes a 30 years war to change anyone’s mind.

Now, you might be able to talk sensibly about economics, even academic economics, if you could find a way to free yourself and the other guy from unexamined concepts.

I have tried the Socratic method, with the same results. (They killed him.)
The Rage says:

July 25, 2017 at 7:03 pm

Without “free trade”, the US would be in trouble. Product shortages up the ying yang for the price it takes the free market to “dispose” of them would make Americans think they are in Kenya. Maybe instead of whining about “trade” you will whine about the lack of industrial policy and subsidies we need to have a “national economy”.

Sorta like the Democrats needs to stop “Frankfurting” consistently. First in the Great Depression/WWII era for white workers, then in the post-JFK era for blacks. Now it is Muslims. Always obsessing over that poor flock of Muslims are we?

The Jesus Christ Poses must stop.
sammy says:

July 25, 2017 at 9:14 pm

I used to think Economics should be required high school curricula, or else we take their Federal lunch money away.

Now I’m not so sure that’s a great idea: 1) I don’t think they would retain anything 2) Microeconomics is very intuitive, most people get it 3) Macro is highly political and no one really gets it (see “Obama Stimulus”).

I think Statistics would be a more useful requirement for high schoolers.
Longtooth says:

July 27, 2017 at 11:50 pm

Economics cannot be separated from gov’t which means political belief systems and or objectives are inherently embedded in “Economics.” It’s actually too bad that we shortened the term “political economy” to “economics” as if economics isn’t part and parcel of politics.

I only took one macro class in college, but I’m also an astute observer and over time I began to understand the foundations of western thought that determined the politics of economics, and thus the discourse of political economists and their various schools of belief and value systems.

In discussions of political economy before one actually gets into any serious discussion one must first define what one’s value system is, and once this is clear it’s also very clear that any discussion of economics is a fruitless waste of time. This is true whether the value systems are substantially the same or highly dissimilar, since what you are really discussing is economics as a means to an end …. e.g. supporting a value system.

I’m overstating this somewhat, but what I find is that the discussion breaks down rapidly as soon as there is a divergence of the economic policy or means or objective from the value system’s objectives.

And needless to say there are many value systems, hence many economic belief systems designed to support them. Of course this is a direct result of the fact that humans differ in what they believe is in their best interests.