January 10, 2011
What Is Economics?
Recently, my wife has stopped calling me an economist. It is too hard to explain what I do, so she calls me a professor (which has far more cool points to Harry Potter or Gilligan’s Island fans). Her reticence begs the question, “What does an economist do and why would anyone want to be one?”
I went to college to become an infantry officer in the U.S. Army. On my first day at Virginia Military Institute, as I passed through the desks where one chose a major and service, I proudly announced I wanted to become an electrical engineer and infantryman. The captain just smiled, and told me the U.S. Army would never allow such a silly thing. I asked, “What is the next most difficult college major that would ensure I could get into the infantry?” He pointed to a nearby table and said, “Economics is a tough major, but it isn’t practical, so you can still be in the infantry.”
I suffered through three years of a liberal arts economics degree when, at last, as a senior, I fell in love with it. Economic modeling was a clear and wonderful insight into matters big and small. It offered a way of looking at problems and assessing the benefits and costs of a solution against a common standard. I was hooked. By then I was destined for another career, but, after eight years of soldiering, economics pulled me back into the fold and into a doctoral degree.
Graduate school in economics did not come easy to me, and I continue to struggle with new ideas and techniques every week—sometimes every day. When I hear today’s students groan and despair in their economics class, I fully understand why. Describing the behavior of people, businesses and governments in equations is intensely abstract, though, and not everyone is good at abstractions.
The most common mistakes I hear about economists are that we have some special insight on investing, or that there is some political litmus test we must pass (those distinctions belong elsewhere).
What makes economics exciting, and ultimately the most influential of academic pursuits of the past century, are the combination of two traits. The first is that through the use of mathematics and statistics, economic analysis is enormously transparent. This process takes several years of graduate school and a lifetime thereafter to master. Second, economists have long used a rigorous benchmark against which to measure the merit of a policy or program (who are the winners and losers, and what is the net gain). This is maddening to folks with a political agenda, and breeds a famously prickly reputation for economists. But these two features place economic analysis in an enviable position to address nearly every issue. So today the most influential research in management theory, social, education, health, taxation, environmental and legal policy all comes from economists. It may not be a practical field, but it sure is exciting. Now, if I can only get my wife to agree...
About the Author
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