I finished reading a fantastic and important book called The Myth of the Rational Voter by Bryan Caplan. This book has important implications for Public Choice economics, but more interestingly (I hope) for the general reader of this blog, it has implications for how I teach my economics class.
Traditionally I started out by defining economics, talking about trade-offs, and then diving into the Production Possibilities Frontier and other models. Now I think I'm going to start out differently. Here's my very rough sketch of my introductory lecture so far (quoted section is in blue):
-Introduce self, check names, review syllabus
-Begin with questions; do not state category headings:
Before we start, I have some questions for you.
1) Raise your hand if you believe we should have farm subsidies to ensure that farmers produce enough food for us to eat.
2) Among those of you who raised your hands, keep your hand up if you believe we should have clothing subsidies to ensure that clothing companies produce enough clothes, computer subsidies to ensure that computer manufacturers produce enough computers, and automotive subsidies to ensure that automobile manufacturers produce enough cars.
3) Hands down. Raise your hands if you would be in favor of doing something that would help one million homeless people find homes, food, and medical care.
4) Among those of you who raised your hands, keep your hands up if you would be still be in favor of doing something that would help one million homeless people if it earned a business $100 in profit for each homeless person helped. $1000? $10,000?
1) Raise your hand if you are concerned about the destruction of American jobs and businesses by imported goods from
2) Among those of you who raised your hands, keep your hand up if you are concerned about the destruction of
3) Hands down. Raise your hand if you are concerned about immigrants from other countries taking American jobs or putting downward pressure on American wages.
4) Among those of you who raised your hands, keep your hand up if you are concerned about people from
5) Hands down. How many of you agree with the following: "Foreign aid makes up roughly forty percent, or less, of the budget."
6) Keep your hand up if you agree that "Foreign aid makes up roughly 30 percent, or less, of the budget". What about 20 percent? 10 percent? 2 percent?
1) Raise your hand if you believe that hurricanes, while devastating to the lives of the people they afflict, at least have the side benefit of creating a lot of employment for people who work in rebuilding and cleanup.
2) Keep your hand up if you plan to repeatedly tear down your own house so that you can have the benefit of doing the work of rebuilding it.
3) Hands down. It is currently illegal for car manufacturers to sell cars directly to consumers. Rather, you must, by law, go through an independent dealership. Raise your hand if you agree with the following: "This is a good law because it protects the employment of dealership employees, many of whom would be out of work if manufacturers could sell directly."
4) Keep your hands up if you believe that we could create even more jobs by adding a "dealership dealership", requiring buyers to contact an independent dealer in dealerships, who then puts you in touch with a dealership, who then sells you a car. How about a "dealership dealership dealership"?
1) Raise your hand if you believe that, compared to the average American in 1900, an average American today is roughly 50% wealthier, in terms of material goods.
2) Keep your hand up if you believe that an average American today is twice as wealthy. Three times as wealthy? Five times as wealthy? Ten? Twenty? Thirty?
3) Hands down. Raise your hand if you believe that, with the way the world is headed, the
This class is about correcting biases. The answers that economists give to the above questions are usually very different from the answers non-economist provide. One possible explanation is that economists are wrong, but I doubt that answer would occur to you if I were giving counterintuitive results from, say, physics, or chemistry. People tend to trust experts because experts tend to be correct. Another possible explanation is that economists are biased because they're all conservatives, but in fact, the average economist is a moderate Democrat. One could also argue that economists' beliefs are biased because economists are wealthy, and they're really just arguing for policies that are in their class interests. Yet if one looks at the economic beliefs of wealthy people, they are not the same as those of economists.
The best answer is that economists know something that you don't. Noneconomists tend to suffer from biases in their economic thinking. This could occur because of bad education, or cultural norms. These errors are so pervasive across time and geography that I tend to believe they are the result of evolution, hard-wired into us by tends of thousands of years of pre-historic subsistence, when exchange and trade as we know it today did not exist
Whatever the reason, these biases persist, and the goal of this class is to erase them, replacing them with economics. In Bryan Caplan's book The Myth of the Rational Voter, Caplan identifies four economic biases. There are other economic biases (for example, the tendency to think of the number of jobs as fixed), but Caplan's list is very good, and enough for this introduction. The four biases are:
Anti-Market Bias: Non-economists tend not to believe that markets work well. They are suspicious of profit motive, and tend to see exchange as zero-sum--that is, whatever one side gains, the other must lose. Economists believe this view is almost completely wrong.
Anti-Foreign Bias: Non-economists tend to be suspicious of trade with foreigners, and of immigrants from other countries. It is unclear exactly why this is so; non-economists are not usually concerned about similar movements by their fellow citizens. Economists tend to believe that an arbitrary and imaginary line is not important (at least when it comes to trade).
Make-Work Bias: Non-Economists tend to see conserving labor as a bad thing, rather than a good thing. That is, the destruction of jobs is abhorrent, and the creation of jobs is always and everywhere desirable. Economists, by contrast, believe that some job destruction is not only necessary, it is healthy. Furthermore, economists do not believe that creating more jobs (or preserving existing jobs) is always a good thing.
Pessimistic Bias: Non-economists tend to underestimate the effects of economic growth in the past, and underestimate the future growth of the economy. Economists complain quite a bit about policies that reduce growth (and policies which are generally harmful), but that is because economists appreciate the huge effect growth has had upon our standard of living. Economists also believe that economic growth will, for the most part, continue into the foreseeable future.
As to why these biases are wrong, and why you should think like an economist, we will get to that over the course of the semester. Some of these subjects will be covered in Econ 102, rather than this course. For example, Economic Growth is usually a topic covered in a Macroeconomics class, rather than a Microeconomics class. By the end of this course you should be able to articulate the simple arguments in favor of markets and trade, even if you do not agree with them.
How would you answer the questions? What biases do you have? For what it's worth, I can think of one more reason why people might not believe economists: Macroeconomic forecasts are not very good. people might infer from this that economics in general is not very useful, but that would be a mistake. There is much more to economics than economic forecasting, and while economists disagree over some subjects (such as macroeconomic theory), there is a great deal about which they agree.