Interdisciplinarity

How Economics Lost Its Identity (Australian Edition) Interdisciplinarity
Adam Smith has his eyes on you. (Photo: Charles Clegg/Flickr)

How Economics Lost Its Identity (Australian Edition)

October 27, 2014 1326

Adam Smith statue

Adam Smith has his eyes on you. (Photo: Charles Clegg/Flickr)

I will never forget the late summer day on which Johnny Smith (not his real name) came to my office at UNSW full of excitement about his incipient undergraduate career. “I want to work as an investment banker!” he told me passionately. “That way I can maybe retire when I’m 30. I chose economics since it’s all about money.” I paled. “So, what can I read to get a head start on how to make money? Do you have some articles you can recommend?”

Young Johnny is not the only one. The word “economics” has been the victim of identity theft all across Australia.

The Conversation logo

This article by Chris Edwards originally appeared at The Conversation, a Social Science Space partner site, under the title “How economics lost its identity in Australia, and how to get it back”

Countless individuals have over the years searched for a neat word to capture something they find important about society, and “economics” has just seemed to fit time and again. What was really meant might have been “greed”, “corruption”, “business”, “power”, “class warfare”, “cost-benefit analysis”, “stock-market activity”, “social injustice” – any number of abstractions – but “economics” just sounded so mysterious and erudite, not to mention blameworthy. This definitional dog’s breakfast has permeated our society, and now we have a whole generation of school-leavers who have not the faintest clue what economics is really all about. And neither, in many cases, do their teachers.

How did we get into this situation? Is it really a problem, and if so, what can be done about it?

Mixing business and economics

Modern misconceptions of economics, which arguably begin to take shape in high school, result in part from the conceptual heaviness of the discipline. It is hard even for PhD economists to explain to a layperson what economics is really all about. The discipline’s heaviness makes it a natural target for violating simplifications and incorrect associations.

The blending of economics and “business” together in the school curriculum is a good example. While economics (together with law and psychology) is a founding discipline of many business-related areas of activity, such as marketing, management, and accounting, it is fundamentally different in terms of orientation.

The lens of economics is oriented impartially, toward trying to understand how the greatest possible good can be brought to an entire society given resource scarcity; the tools of most other business disciplines fit more naturally into a partisan analysis, such as determining how a company can write the most effective advertisement or attract the most productive employees. If we’re going to teach economics or business in high school at all, then not acknowledging this fundamental divide sets economics up already for an identity crisis.

Moreover, truly understanding the most enlightening ideas of economics requires a degree of sangfroid that does not come easily to high school students or even to their teachers. Far easier to declaim in a passionate essay against Tony Abbott’s latest policy faux pas than to think through strategically what might really work to address the issue, in view of the incentives and opportunities facing governments, regulators, and players on both sides of private-sector markets.

Knowing this, those tasked with writing an “economics curriculum” may be sorely tempted to punt and fill student hours with definitions to memorize and cookbook recipes for how one vague and disembodied economic aggregate affects another. They may even be tempted to use the opportunity of setting the curriculum to pass along a teaspoonful of their own philosophy in the guise of standard economic thinking.

Economics or social studies?

Is this a problem? Arguably yes, not only because it’s misleading, but because it crowds out other information. We as parents and as a society should worry if our school-leavers do not know, at a minimum, the ingredients in clear-headed decision-making and the basic structure of how our society functions.

To make sense of the daily news and to make sensible decisions in their private and professional lives, children should be taught that investing resources in one activity entails a sacrifice of both those resources and the next-best activity that could have been pursued; that incentives matter for the behaviour of everyone, including groups like lobbyists, terrorists, and company boards; that most of our society’s wealth is generated in the private sector, which employs most of us; and that the main role of our modern, democratically-elected government is to tax economic activity and use the proceeds to produce public goods that everyone enjoys (like security, infrastructure, and education) and make welfare payments to the least well-off 20% or so of our citizens.

Australian students should have these topics illustrated with examples from around the world and from Australia, in the course of which they will learn basic socioeconomic facts about their country: what do we make, what and with whom do we trade, and what do we do all day in our work? What are our regulatory structures and our political, legal, and financial institutions in broad terms, and how do they provide the stability and services required for productive activities to take place? How are our federal and state budgets spent, in broad terms? How does our country compare along all these dimensions to the OECD, to our neighbours in Asia, and to developing countries?

I wouldn’t label the topics above “economics” – they are more like what used to be called “social studies,” blending bits of economics, political science, and law. This type of no-nonsense primer is enough to prepare school-leavers to make their way in the world without pretence about how it works. If they later study economics at university, fine: the academy is arguably better positioned than high school teachers to teach them what the discipline is really all about.

Putting custody of the discipline’s identity back into the hands of the international academy makes sense. After all, it is we who have the biggest incentive to help economics find itself again in Australia.The Conversation


Gigi Foster is a senior lecturer with the School of Economics at the University of New South Wales, having received her BA from Yale (majoring in ethics, politics, and economics), and her PhD in economics from the University of Maryland. Her research interests and contributions lie in the areas of education, econometric methodology, behavioral economics, and the multi-disciplinary analysis of human behavior in groups.

View all posts by Gigi Foster

Related Articles

The Authors of ‘Artificial Intelligence and Work’ on Future Risk
Innovation
December 4, 2024

The Authors of ‘Artificial Intelligence and Work’ on Future Risk

Read Now
Why Might RFK Jr Be Good for US Health Care?
Public Policy
December 3, 2024

Why Might RFK Jr Be Good for US Health Care?

Read Now
Tenth Edition of The Evidence: Why We Need to Change the Narrative Around Part-Time Work
Bookshelf
December 2, 2024

Tenth Edition of The Evidence: Why We Need to Change the Narrative Around Part-Time Work

Read Now
Joshua Greene on Effective Charities
Social Science Bites
December 2, 2024

Joshua Greene on Effective Charities

Read Now
The End of Meaningful CSR?

The End of Meaningful CSR?

In this article, co-authors W. Lance Bennet and Julie Uldam reflect on the inspiration behind their research article, “Corporate Social Responsibility in […]

Read Now
Deciphering the Mystery of the Working-Class Voter: A View From Britain

Deciphering the Mystery of the Working-Class Voter: A View From Britain

How is class defined these these days – asking specifically about Britain here but the question certainly resonates globally – and when […]

Read Now
Doing the Math on Equal Pay

Doing the Math on Equal Pay

In the UK, it’s November 20. In France, it’s today, November 8. For the EU, it’s November 15. It’s the day of […]

Read Now
0 0 votes
Article Rating
Subscribe
Notify of
guest

This site uses Akismet to reduce spam. Learn how your comment data is processed.

0 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments