Making economics exciting to teach…

Peter Boettke has this superb note on one of the most universal aspects of world of economics – teaching the subject poorly.  And if at GMU he feels this, one can just imagine the plight of thousands of students in other parts of the world.

Because economics is often taught poorly, I find that, when I meet people who discover that I am an economist, I can pretty much count on one of three reactions from them: (1) ―Ugh! That was my least favorite class. How can you study that?‖ (2) ―Oh, that‘s interesting. Do you know where interest rates are going?‖ (3) ―Yea. I really enjoyed my economics class‖—which remark is usually followed by a set of policy questions and, more often than not, a set of policy pronouncements randomly left, center, or right.2 In the aftermath of 2008, I have often met people who, upon learning that I am an economist, blame me and my colleagues for the current financial crisis and insist that economists know absolutely nothing of value. Rarely, and I mean really rarely, I encounter someone who says, ―Oh, how exciting. I loved my economics teacher. He/she really changed my life and the way I think about the world.‖ The few people who express an attitude of that sort are apt to be graduate students, or perhaps other colleagues, if graduate school hasn‘t beaten all enthusiasm out of them. They are not apt to be people you just happen to meet in your neighborhood, at your church, or out in the community at large.

For someone who was told in his first economics class ” You don’t know what you course  you have entered into…Better focus and study hard otherwise you will fail…” I fully understand what all this means…

He looks at some issues wrt teaching economics:

If you emphasize the exceptions to the principles at the principles level, the students learn the exceptions, not the principles. Thus, students walk away thinking about monopoly, externalities, public goods, income inequality, macroeconomic instability, and the corrective government policies launched to address each of these ―market failures,‖ rather than the role played by private property, relative prices, and profit-and-loss accounting in an economic  system—i.e., structuring incentives, generating information that guide decisions, inspiring innovation, and providing disciplinary feedback on decisions.

In short, the principles class doesn‘t cultivate an understanding among students of the gains from trade and the gains from innovation that explain the wealth and poverty of nations. Instead, it simply teaches a set of models and techniques of social control. The ―worldly philosophy‖ of economics and political economy becomes the ―dismal science‖ of optimal taxation, regulatory control, and macroeconomic fine-tuning. Both the science and its application are ill-served by these lame attempts at teaching the economic way of thinking and demonstrating its relevance. Perhaps more importantly, the students are ill-served as the stuff of economics is presented in as boring and, ironically, as arrogant a manner as possible.

He points the key insight to teach students of economics is that people make economic decisions even without studying it. At the end of the day we all are econs in our own limited way looking at costs and benefits:

One of the great joys of teaching basic economics is taking students who are completely innocent of the economic way of thinking and getting them to see that they are ―all doing it, but none of them know they are doing it.‖6 When I introduce the basic ideas of marginal benefit and marginal cost decision calculus to my introductory class, I draw the curves and label them correctly (marginal benefits declining, marginal costs rising), and then I ask, ―How many of the young ladies in the room have been on a date?‖ Several hands are raised. I continue: ―How many of you married that guy?‖ This is usually followed by some chuckles. And continue: ―How many of you went on only one date with him?‖ Hands rise and the murmur in the room is  audible. So I say, ―OK, I see. The marginal costs of going out with Ed another  time exceeded the marginal benefits of another date with him…

Read the dating example fully to understand the linkage with economics. Well if it is taught this way, who will not remember it…It is so boring to read marginal costs and revenues the textbook way…As he says you dont really need econs to explain basic economics to people…

Though I do not buy this all humans able to calculate costs and benefits and take decisions. It is all too complicated and that is where behavioral econs come in…

He says the fundamental issue with economics is presence of scarcity in anything we do. Everything we do we have some constraints.

The economic way of thinking begins with understanding that human choice in all walks of life is always exercised against a background of constraints. The fundamental constraint is the fact of scarcity—not material or merely financial scarcity, but the logical fact of scarcity. Poverty and scarcity are not identical, and it is important to stress this point. Bill Gates must make choices just as you and I do; he also makes his choices against a background of constraints, and his choices reflect his trade-offs. But we do often identify the additional constraints that include financial constraints, technological constraints, time constraints, and resource constraints.

Read the whole thing…All waanabe teachers of economics should read this

I am becomg a big fan of Austrian school and Peter Boettke’s writings. More to follow in this blog…He is simply amazing….

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