Everyone seems to have an incorrect notion of what an economist is. To test this hypothesis go ask a grocer, a barber, or your mother what an economist does. They'll probably tell you "they figure out what the interest rate should be"; or "they study the business community." If you talk to my wife she'll tell you they're people who talk about money but never have any. The problem is, most of our understanding about economics comes from either the business page of the newspaper or from watching "economists" talk about the stock market on TV programs. From these sources we conclude i) economists have an answer for everything; ii) they only worry about financial markets, GNP, interest rates, inflation, and government debt; iii) economics involves a lot of facts that are hard to remember ... but probably easy to look up; and iv) economics is pretty darn boring! Amazingly, economics isn't any of those things just mentioned. What is economics? Here it is:
Economics is a particular way of thinking about behavior.
Notice I didn't say it was a way of thinking about "market" behavior, or "rational" behavior - economics is about any type of behavior, and it applies to every aspect of our life. Economics addresses issues like: why did the divorce rate increase so much in the 1970s and 80s? Why do firms use coupons, rather than just lower their prices and save printing costs? Why do we think only-children (those without siblings) are more "spoiled" than children with lots of siblings? Why can't parents sell their children? Why can't anyone sell their kidney or their driver's license? Why does Canada import oil and produce oil at the same time? Why are auto parts the largest export from Canada to the U.S. and yet also the largest import? Why would some firms be non-profit and how do they stay in business? Why were some people allowed to duel with pistols while others would be charged with murder for the same activity? Why is wine so expensive at a restaurant? Why were the American and Canadian frontiers settled with homesteads rather than land sales? Some of these questions may appear more economic than others, but that's just because you're biased to thinking economics is only about the business section of the newspaper when, in fact, it covers the entire thing.
No comments:
Post a Comment