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Econ 101

from David Ruccio

It’s time to get back to blog writing—after a 6-month hiatus during which I taught my final two courses at the University of Notre Dame (A Tale of Two Depressions and Marxian Economic Theory) and prepared for my retirement (which involved, among other things, sorting through, packing up, and moving decades of “stuff”). Now, after 38 years of teaching, I am officially Professor of Economics Emeritus. But, rest assured, I plan to continue this blog and other writing projects. 

For the first time in almost four decades (aside from a few research sabbaticals), I don’t face the prospect of returning to campus and teaching economics. But, I can’t help it, I still worry about what millions of students in the United States and around the world will learn—or at least be subjected to—when they enroll in their economics classes this fall.

One of the major issues for any economics class, especially an introductory or principles course, is how to make it useful for students. My own approach has always been to teach the basics of mainstream economics—the key assumptions, the standard models, the relevant conclusions—and then to teach the critique of mainstream economics (including alternative theories within the discipline of economics). Two for one, I used to tell the students. In my view, they would be better students and citizens of the world when they understood both how mainstream economics affected their lives and how they could criticize and explore alternatives to the hegemonic theories within economics.* And I updated the content, and made it more useful to students, as mainstream economic theories changed and as particular issues were taken up in the media and political discourse.

That’s certainly not how mainstream economists approach teaching. For example, Justin Wolfers, a liberal mainstream economist at the University of Michigan, recently announced that he wants to make introductory economics useful to students by teaching them “a set of tools that can empower them, providing insight that will guide them toward better decisions.” And those “better decisions”? Exactly the presumptions and pronouncements that mainstream economists have celebrated since their approach was invented by Adam Smith and then reinvented in the late nineteenth century as neoclassical economics. It’s the entire arsenal of comparative advantage, rational choice, opportunity cost, given scarcity, and so on.

The approach introduced by Wolfers with such fanfare is no different from the miserable and misleading analogy invoked by Harvard’s Greg Mankiw between international trade and hiring someone to shovel snow. And it accomplishes nothing more than demonstrating that current economic arrangements are exactly as they should be because, in the view of mainstream economists, free trade is always mutually beneficial:

Start thinking this way and you’ll quickly see that the ideas that guide your everyday decisions also propel international trade, which is why American engineers design iPhones, while foreign workers — who have fewer alternative opportunities — do the laborious work of putting them together. By assigning tasks this way, Americans have gotten cheaper iPhones, and Chinese and Indian consumers have gotten greater access to advanced technology.

Fortunately, there are many other economists who are devising courses that are much more useful to today’s students. Last year, Aditya Chakrabortty wrote about one such course, in which students learned that the rules of the economy “aren’t laws of nature.” And just last week, Andrew Simms and David Boyle published a new beginners’ guide to economics for non-experts:

In it we ask some heretical questions that that could get us expelled from most university economics departments, such as: is the price mechanism so clever, or rising productivity always a good thing? We talk about the trouble with growth, and why working less might be better. Our common starting point is that the economy should serve rather than dominate people, and that it must work within planetary ecological boundaries.

As against what Wolfers, Mankiw, and so many other mainstream economists teach their students, these approaches are useful to students because they serve to denaturalize both existing economic thought and economic arrangements, thereby creating space for alternative ways of thinking about how the economy is organized and creating other possibilities.

I’ll only be able to rest easy in my retirement when the teaching of economics is taken out of the hands of mainstream economists and the millions of students who enroll in economics classes are taught to think critically and creatively about the economic dimensions of their lives and the world around them.

 

*So, I was heartened and gratified when, on the occasion of my retirement, some of my former students shared their thoughts about what they’d learned along the way:

Ruccio Gift1

  1. EDWARD K ROSS
    August 7, 2019 at 12:43 am

    Even though I am not an academic or economist, from a mature age in the real world, I think professor Ruccio, describes the importance of teaching students the importance of learning how to think with an open mind in order to understand the real world. Ted

  2. Frank Salter
    August 7, 2019 at 7:47 am

    The quantity calculus is essential critical analysis which needs teaching to all economists at every level. With it, one can PROVE that there is no conventional quantitative economic analysis which can be correct. All are invalid.

    • August 7, 2019 at 2:31 pm

      Absolutely! If one has no idea what one is measuring in ‘utility’ or ‘indifference analysis’, then one is not measuring anything. Claiming to do so, especially when one is claiming to measure a benefit OR a pleasure –on the hypothesis that benefits always deliver pleasure/satsifaction– ignores far too many situations where one ‘benefits’ in some way without taking any pleasure/satisfaction in how those ‘benefits’ were gotten. Similarly, if I manage to get far less in terms of ‘benefits’ than I need to sustain myself, it cannot be claimed that I will be satisfied in any sense. An undernourished person gets benefits from the food he or she manages to purchase without necessarily deriving any pleasure or being satsified in any real sense.

      I want to thank David Ruccio also for his stimulating ‘thought’, not merely academie.

  3. Robert Locke
    August 7, 2019 at 9:11 am

    Welcome to the crowd. I retired on 1.01.1999 and have published more since then than before, although my post-retirement publications are based on the insights I gained from studying industrialization in Europe as it related to the formation of human capital in the 19th century. The sort of thing that Alfred D Chandler Jr. discussed in his comparative studies, Scale and Scope, 1990. None of this makes the slightest impact on economics, which is the prime reason it is failing to be a prescriptive science. It won’t learn from the specificities of time and place; it won’t make room for specificities in its thinking. It is narrow mindedly nomothetic.

  4. Ken Zimmerman
    August 12, 2019 at 2:10 pm

    David, if you could wave the wand and have your wishes granted regarding the content and teaching of economics as you describe here, what would then be the ideas and actions at center of economics. With economics so redesigned, how would economics then differ from economic anthropology, economic sociology, economic psychology, and even behavioral economics. In my view, there would be little difference. So, what’s the value of maintaining economics as an academic discipline?

    • David F. Ruccio
      August 12, 2019 at 7:25 pm

      Ken, I have no interest in defending the existence of the discipline of economics—both because mainstream economists have considered most of my teaching and research to be other than economics and because I find interesting a great deal of what is taught and investigated in other disciplines. In fact, I have long argued that one of the reasons scholars outside of economics have invented new areas of study (including economic anthropology, economic sociology, and economic psychology) is because of the vacuum created by mainstream economics. And over the years I have offered courses, to both students and professors in other disciplines, to teach them both mainstream economics and the critique of mainstream economics so that they know what is going on in the discipline of economics.

      Give me a magic wand? Well, then I would teach the ideas that pick up and extend the Marxian critique of political economy. That’s what I would most be interested in doing, inside or outside the discipline of economics—a critique of the “common sense” of both mainstream economics and of the economic and social system celebrated by mainstream economists.

      I also recognize the discipline of economics isn’t going away anytime soon. So, for those who teach economics, I advocate both a critical knowledge of mainstream economic theory and economic systems (including economic history and the history of economic thought) and of the many alternative theories (from Marxian to feminist economics). That’s the double duty taken on by critics of mainstream economics—to know “their” theory at least as well as they do and to present alternative ways of thinking about the economy.

      • Ken Zimmerman
        August 13, 2019 at 1:02 am

        David, I know academics like to theorize about other options and use that to advocate change. In my view this is a forlorn hope in today’s economics academic discipline. My approach is focused on the empirical. There are dozens of economies in the world, small and large that are not organized along neoliberal lines. Most are more efficient and more effective at meeting the needs (all the needs) of all the people who use them. They’re also democratic and allow more freedom than any form of neoliberal economics. I explain these examples and their many advantages, and then challenge anyone in love with neoliberal economics to prove to me their choice is better. In over 200 presentations in 5 years none has so far met this burden.

        Still and all, good luck in retirement.

  5. Craig
    August 12, 2019 at 10:51 pm

    Even though macro-economics has garnered a few insights since its inception shortly before the end of WW II it has largely become a plaything discipline to obsess over and obscure the real problem with modern economies, namely the money system and its problematic and dominating paradigm of Debt ONLY. That paradigm has been holding humanity and civilization down for over 5000 years. Again macro-economics was born into that fact less than a century ago and hence its analysis is very shallow and its cultural horizon is short and largely unconscious of the larger problem.

    When one analyzes from the paradigmatic level and has even an inkling of the historical signatures of imminent and accomplished paradigm changes the hunt becomes not for the complexities of problems nearly as much as for the singular paradigm concept and how its simplicity of operation and yet breadth and depth of problem resolving policies will be optimally integrated into the economy.

    Economics has become increasingly useless and has come to reflect the buddhist saying: If you come upon the Buddha on the road to enlightenment…shoot him!

    To paraphrase James Carville: It’s the monetary paradigm, stupid.

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