Economics

[Ed Weick]

The list has see considerable discussion of the nature of economics recently. I haven’t been able to participate because I’ve been busy on other things, though I’ve tried to read some of the material. The problem in at least some of the postings is a failure to distinguish between economics as something that is taught in the classroom and economics as one must use it as a practitioner. In the classroom, economists are taught macro and micro economics. They encounter economic thinkers of the past – the physiocrats, the classicists, Marx, neoclassicists, Keynesians. They encounter self-interest, rational choice, and welfare theory. Some of this is presented algebraically, some geometrically, and some as words. All of this is well and good because it makes young minds work. The intent, as I understood it when a student, is not to learn about the real world, but to learn how economists imagined the world, and still imagine it. When one gets out of the classroom, and even before, one encounters the real world, where real issues must be resolved with real answers. As an economist in the Canadian public service, I was never able to satisfy my superiors by drawing indifference curves or citing the iron law of wages. What they demanded of me was short, snappy and well reasoned answers, something they could use to move a particular issue forward. Undoubtedly, what I had learned in the classroom helped because it had sharpened my ability to think rationally and provide helpful, if not necessarily correct, responses. That, in my opinion, was the real value of what I had been exposed to as a student. I still don’t know if what my professors taught me was right, wrong or relevant. All I know is that it helped to make me a useful thinker. Real world issues don’t often come in a way that make the tools of economics directly applicable. Mostly they come as very difficult questions. For example, why has Argentina had to repudiate its debt and why is it now in a deep recession? Classroom economics can provide some insights into this, but if I really had to provide an answer, I would consult someone with several years of experience in international finance and monetary policy – someone who knew the turf, so to speak. I would also search out people who knew about the history and culture of Argentina, because I suspect that what has happened there is far larger than something that economists or monetary experts can deal with. One aspect of globalization and mass communication is that issues now come thick and fast and from all over the place. Rather than discreet and separable events, they pound in on us as a babble of noise. Here again the specific content of the individual bits and pieces learned in the classroom may be of little use. Drawing indifference curves would not be very helpful and one probably wouldn’t have time to draw them anyhow. Yet I would maintain that the fact that one had to use those bits and pieces as tools to try to sort things out in the imaginary world of the classroom was helpful. It helped one to learn how to pick apart the various strands of the noise and to rank or sequence them in ways important to finding real world solutions. So, to end this, I would suggest that we not get too hung up on the "nature" of something like economics as a received body of thought or theory. Certainly, one should not hesitate to question its premises. But to me the important question is whether what one learned in academe has helped one to think and solve problems. Even though I have not drawn a single indifference curve since leaving the classroom, I would answer this in the affirmative. Ed Weick