Moreover, economics students believe all sorts of fantasies that most normal people would easily identify as obvious nonsense were they not told otherwise by 'wise' economists. And if a certain problem becomes especially difficult, the answer surely lies in giving the central bank even more power. The theoretical foundations behind such things are mentioned, of course, but at many institutions they are most certainly not emphasized.įar more likely, one learns in these programs that central banks can be relied upon to fix almost any economic problem faced in the course of a business cycle.

There's no reason to believe that a student with an economics degree is going to graduate with a deep understanding of how government intervention distorts markets or impoverishes consumers. They learn that bailing out billionaires in the financial sector again and again has no real downside, morally or otherwise. They learn that people can't be trusted to make decisions for themselves. In the sorts of 'economics' classes that focus on such topics, one learns that government planning is what gets a poor country out of poverty. They then slap some new labels on the research and give it names like 'behavioral economics.' Those old 'assumptions' are what many people wrongly think is a focus of economics instruction. Last year, for example, Vox happily reported that in a new introductory economics course at Harvard 'here’s little discussion of supply and demand curves, of producer or consumer surplus, or other elementary concepts.' Moreover, it's getting easier to get through an economics program without any knowledge of economics because economists are increasingly less interested in economics proper.Īs I noted here at last year, economists nowadays seem to spend a lot of time ripping off the insights of historians, sociologists, psychologists, and political scientists. This is now what's fashionable, and a December article at Quartz tells us, 'the new era of big data…has led economists to revisit the wisdom of some long held assumptions.' Out of this has come the drive to make economics into a discipline that depends on tinkering and trial and error. Some now insist we can't really guess what the results of a policy might be until we 'test' it using methods from the physical sciences. But as the correlations can be interpreted any number of ways, they often end up being used to support whatever policy the researchers prefer. These model builders claimed they could predict the future, but of course, they completely missed the huge financial crisis of 2008.Īnother trend in recent decades has been toward conducting an enormous number of studies that produce statistical correlations.

Instead, by the late 1990s economics was well down the road of constructing elaborate and purely hypothetical mathematical models that had little bearing on everyday life. For decades now, economics has been moving further and further away from teaching microeconomics and how firms and households work. But microeconomics of that sort is now about as fashionable as other relics of that time, such as the Backstreet Boys.īasic principles that were once a given-i.e., the notion that making labor more expensive means that employers buy less of it-are now out the window.īut this trend didn't start yesterday. Sure, twenty years ago that sort of thing could still often be observed. The idea that economics is the dispassionate study of understanding how hiring is affected by an imposed price floor (i.e., a minimum wage) or how opportunity cost affects consumer choices is rapidly becoming hopelessly outdated. And any bias that may have once existed in favor of unhampered markets in these departments is vanishing. The emphasis is now on using economics to justify state action in the economy. The truth is that there is little emphasis on understanding markets in economics programs, and little emphasis on the value of markets.

But why is it so hard to believe that she has a degree in economics? It seems that far too many people have rather inaccurate ideas about what is taught in economics programs nowadays.

Was aoc bartender after college