Tuesday, December 8, 2015

Economics- A Foreign Language

Economics is not spoken in English. Let me explain with a story. I can remember when I walked into my Economics class after a two year break from studying the subject. The professor immediately walked in and started writing things on the board and speaking a language that was completely foreign to me. I started to panic. I truly could not understand a single word he was saying. He was not speaking English, he was speaking Economics. Now obviously the was using words rooted in the English language (We were in Utah after all) but the reality is that it deterred my desire to continue learning because I didn't believe I could learn the language. Luckily I decided to stick it out despite my lack of desire and as I continued to study, my desire grew and I now have a much easier time following the concepts. This has been a huge benefit to me because it allows me to see things in the world in a different light. Unfortunately though, many others choose not to study Economics, not because of a lack of ability to learn, but rather, their desire to learn is diminished by the complexity of the subject. As a result a large amount of individuals miss out on the perspective that an understanding in Economics brings only because their initial impression was too complicated for them. The reality is, although its roots lie in both antiquity and a statistical foundation which inherently causes complexity, Economics needs to be presented in such a manner that it attracts interest rather than deters, because having a vast majority of individuals who understand the subject will have a heavy weight on our prosperity in the future.
Why is Economics so Complicated?
Admittedly, the complexity of Economics lies in its roots. With a foundation in both the philosophical reasoning of ancient Socratic's and sophists, combined with a twentieth century analytical development called statistics, Economics lends itself to not be easily understood. Justin Ptak, A Harvard graduate and former member of the Ludwig Von Mises Institute wrote a paper(1) that discussed some of the early thinkers of Economics prior to Adam Smith who is formerly identified as the “Father of Modern Economics”. According to Ptak, the first Economist was Hesiod who first presented the idea of Scarcity in the 8th century B.C. This is significant because the underlying ideology in the study of Economics is that resources are scarce and if we can allocate those resources efficiently then we can be made better off. Ptak also mentions other notable Greek Scholars such as Democratis, Xenophon, and Aristotle. He notes Aristotle for his contribution of thought on Private Property. In “The Republic” Plato advocated for communism in the ideal city. Aristotle refuted this by stating that ownership of property by an individual gives incentive for progress. This contributes to one of the most essential assumptions that the study Economics is based on, that is, people are self-interested and respond to incentives. Adam Smith would not have been able to develop his argument on the Division of Labor in his famous “Wealth of Nations” without the western thought Aristotle presented almost 1500 years previously. Although Economic thought can be traced into antiquity,  the development made within the last 200 years far surpasses the progress made in the previous 9 centuries. According to my Professor Dr. Sims, Economics has its roots in statistics. He claimed in the beginning of the semester that all Academia can be boiled down into three categories: Literature, Philosophy, and Statistics. This was a bold argument but he claimed that in economics we were not searching to find ultimate truth. Rather, it is a quest to make a best guess given circumstances. If Dr. Sims is right, true Economic thought really started to develop with statistics within the last 70 years. If you have ever studied statistics in depth, you will know that understanding comes very slowly and it is difficult to grasp concepts that are presented to you.

Is there a Solution?
In 2005 an Economist decided to take the inherently complicated concepts of Economics and present them in a way that was appealing to his audience. He titles the book “Freakanomics.” The book was a hit and now has over five volumes. Why was Freakanomics so successful? first, because people naturally desire to explain the world around them. They want to know why things happen the way they do and understanding economics is one way the can do just that. Economics provides a tool to explain why people do the things they do. The second reason Freakanomics was so popular is that it was present in a way that people could understand. People could read a chapter on cheating in competition and study it through the lens of the Teaching industry and Sumo Wrestlers rather than equations and numbers. This is appealing to people and it allows them to understand the concepts and increase their desire to learn more while doing it. Now I am not suggesting that Freakanomics should be the standard textbook for all introductory Economics classes and I am definitely not suggesting that advanced Economic principles need to be done away with. I am suggesting that we need to change how we speaking when we are talking about economics with those who are unfamiliar with it. I am suggesting that Educators take the time to explain difficult concepts in a way that people can understand. I am suggesting that we find new and creative ideas to present topics that increase interest in this important subject because the truth is that our future as mankind depends on it.

Why Does it Matter?
Economics is the study of how we use the resources that are given to us. It really is a study of how people think and why they do what they do. This can provide us with significant insight into the future and help us solve the problems that we have created for ourselves today. Unfortunately, Politicians use the fact that individuals do not understand basic economic principles to push items on their agenda through our system past the voters whom it directly affects. This is a sad manipulation tactic that is not rooted in the mind of a crazy conspiracy theorist but rather is a reality to those individuals who understand how an Economy truly works and the effects that certain policies have on our future. It is very apparent when our Economy is not doing well, even to the uneducated individual. For example you don't have to have a P.h.d. in economics to realize that people all around you are losing their jobs and can't feed their families. But it is a more difficult task to know what to do about it. If Economic principles were understood by a larger majority of individuals, it would make a big difference in the amount of corrupt policies that are pushed through the system. Societies can no longer be kept blind by their lack of knowledge and allow manipulation and false rhetoric to continue. But the education necessary will never happen if the desire is not there and the desire will never be there if people are not attracted to it.

I often think back to that class where I felt like I was sitting among people who spoke a completely different language. I think about what would have happened if I decided to not stick it out and learn how to follow along. I think about all the things that I have learned and the perspective I have gained and think about how it would be if I lost all of it. It is important for people to have an understanding of the principles of Economics so that they can gain that perspective for themselves. So they can make educated decisions in their day to day activities and do what is best, not only for themselves, but ultimately for society around them. As we present the complex ideas in Economics in such a way that people increase in their interest in the subject and seek further learning, our society as a whole will be better off.
Work Cited
(1) https://mises.org/library/prehistory-modern-economic-thought-aristotle-austrian-theory

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