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The Best Way to Get People Interested in Economics

For better or worse, our society is becoming more political. It was once considered uncouth to bring up politics in many contexts, but this social convention has diminished. People are voicing their opinions on politics more loudly and more often than at any time in living memory, and politics is even becoming more important to people’s personal decisions.

Economics is by far the most important subject to know when constructing your political beliefs—with the arguable exception of moral philosophy. Economics is the science of trade-offs and incentives. While many other fields are sometimes important for certain political questions, economics is always vital.

Consider the government’s response to Covid-19. An understanding of virology can be helpful in determining the correct response to a virus because it can tell us how the virus is likely to respond to various interventions. However, virology is not the only relevant field. As economist Benjamin Powell put it:

“People told us this last year, “follow the science,” and when they did, they always seemed to mean “listen to epidemiologists or medical doctors.” But that’s not the relevant science. That’s just measuring one type of outcome that has to be weighed against other ones. I know a science that deals with weighting values against each other when we have scarce resources—it’s called economics.”

Virology can not tell you what the impact of a lockdown will be on GDP, nor can it tell you how we should weigh up the value of slowing the spread against other values. Economics, on the other hand, provides ways to estimate these things, or at least decide which systems are likely to optimize for them.

So it is with any other political question. Answering a political question about climate change requires knowledge about climatology and economics, answering a political question about education requires knowledge about pedagogy and economics, and so on.

Given the growing role of politics and the vital nature of economics to sound political ideas, how are we to go about getting people interested in the topic?

Appeal to Duty

Some favor the brute force approach. This approach is to explain the social importance of economics, and then expect people’s sense of moral duty alone to inspire them to slog through the long-winded textbook explanations and intimidating graphs. After all, given the growing importance of economics, surely it is incumbent upon each person to become educated in this vital topic!

Perhaps, but this approach fails to account for human nature. The broader social benefit of economic literacy is a public good, and comes with all of the normal economic problems inherent to the production of public goods. It benefits me to live in a society in which a large number of people understand economics because that society will have better political ideas, and thus better political institutions. However, I am only one person. My learning economics will have an imperceptible marginal impact on the average economic literacy of my society, and so the marginal benefit of doing so is not worth the effort for me.

Financial Incentives

Economics is useful for some jobs. Perhaps our potential learner is an investor, or runs a large enough business for economic science to provide insights into how best to manage it. If so, then there is an obvious financial incentive to learn economics. However, most people do not have jobs like that, so for the majority, we will need a different approach.

Simplification

A better approach is to lower the cost (in hours of effort) of learning economics by making it simpler. A good example of this is Thomas Sowell’s Basic Economics, which explains key economic ideas and implications in simple words, avoiding the use of graphs, charts, and most jargon.

The book, which is described as a “citizen’s guide to economics, written for those who want to understand how the economy works but have no interest in jargon or equations,” is an improvement. But it cannot be the whole solution. However low you make the cost of learning economics, people still need a positive reason to want to pay it. I would absolutely recommend Basic Economics for someone who’s already interested in the subject, but someone who is not will simply not read it.

Give Them a Mystery

I believe that a better approach is instead to focus on the greatest side-benefit of learning economics. This benefit is not a public good, but a fully private one: Economics is interesting. Economics begins with the investigation of one of the most gripping mysteries of human society. This mystery is probably best summed up with a simple line from economist David D. Friedman’s intermediate economics textbook Price Theory: An Intermediate Text: You are in the middle of a very highly organized system with nobody organizing it.”

A masterclass in inspiring that sense of mystery can be found in Leonard E. Read’s famous 1958 essay, I, Pencil. By taking the perspective of the humble pencil, and tracing the paths of all of the factors of production used to make it, Read illustrates the seeming impossibility of pencil production.

For those who haven’t read the essay, I do recommend pausing here to do so. But the short version is that to get a pencil you need wood, to get that wood you need chainsaws, to get those chainsaws you need steel, to get that steel… and this is only to follow one line in the tree. I could have pointed out that to get pencils you also need graphite, or that to get chainsaws you also need plastic, and followed one of those lines instead.

Each of these lines of production involves the coordinated action of thousands, perhaps millions of people, most of whom have never met, and often don’t even speak the same language. To be efficient, any increase in the demand for pencils must be accompanied by an increase in the number of people producing oil for the chainsaws, trucks to transport the logs, and so on. And this is just talking about one product. Ultimately we are left with a problem that seems complex to the point of insolubility. Surely there must be some unknown genius organizing our titanic, interconnected system of production!

But as Read’s essay explains, there is not, and could not be any such person. Nobody knows how to make a pencil. And yet you can buy pencils for less than a dollar, so clearly the system is being organized somehow, and with spectacular efficiency. That is the mystery, and economics is the field of study which is dedicated to investigating it. If you are someone who has any chance of becoming interested in economics, then that should do it for you.

To get people interested in economics, it isn’t enough to explain the social benefit, nor is it enough to simply make it easier, and most people will not have a strong financial motive to learn it. Instead, I believe that the best approach is to give them a mystery, and then offer the tools to solve it.

Content syndicated from Fee.org (FEE) under Creative Commons license.

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Danny Duchamp

Danny Duchamp creates essays and videos on philosophy, economics and politics from a consequentialist libertarian perspective.

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One Comment

  1. This is a good point but with Americans graduating high schools not able to read, write, or do basic math, how CAN they understand economics? Yes schools can likely do a better job of educating students in basic economics, but like other subjects, you’re going to find those that are “smart in it” and those that just aren’t. So maybe try to determine who those are and focus on educating them to be our leaders in any field requiring a strong understanding of it, more so than is being done now. I happen to think the same about higher math. Not everyone can learn it, so maybe instead schools and colleges should do a better job of teaching business math to ALL students. It would be easier to grasp and have a more practical application to a broad range of jobs upon graduation. And those who show ability in pure math can be steered into taking the regular advanced math. I think we apply a broadbrush of subject matter too much in schools, and instead, need to do a better job earlier on in assessing individual student strengths and tailoring a more personalized curriculum for them around those strengths.

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