What Economics Is (and What It Isn’t)

Perhaps it is because I am neck-deep in it, but economics seems to me to be one profession with a lot of myths surrounding it.  Outside of the few of us in this exclusive club, few truly understand what economics is.  Some see it as money, but that’s merely part of it.  Some see it as business, but that’s just a single part of it, too.  Others see it as politics.  While I wish it weren’t true, that is a part of economics as well.  Economics is hard to describe, but I think Don Boudreaux said it best:

For me, economics is largely about sparking the right questions.  Asking the right questions, even if it is impossible to give 100% correct or very detailed answers to those questions, goes a surprisingly long way toward ensuring that thinking about the economy is sound.

I couldn’t agree more.  Economics is a philosophy first and foremost.  Like all the philosophies (biology, sociology, mathematics, etc), the answer isn’t so much a destination as it is a journey.  By asking the right questions, and by exploring the answers, we can achieve better knowledge.  Economics is a form of thinking.  The best econ textbooks and “layman’s” books I’ve read have focused on this aspect of it.  There’s a rather fantastic book out there by Robert Heilbroner, “The Worldly Philosophers,” that explores the great thinkers of my chosen field.  I highly recommend it.  Other great books include Henry Hazlitt’s “Economics in One Lesson” and Steven Landsburg’s “The Armchair Economist.”  They all focus, not on models and formulas, but on thinking and reasoning.  They focus on the logic of these models and teach readers to look beyond the “seen” to the “unseen.”

The economic way of thinking can (and should, but I’m biased) be applied to things far more than the stock market or profits.  It can solve social issues (“how to best feed the poor?” or “how to end discrimination?”), entertainment (“how to build a good baseball team?”), politics (“how to determine and pass good policy?”), and so much more.  It’s damn near impossible to separate economics from life because economics is life.

6 thoughts on “What Economics Is (and What It Isn’t)

      • “Economics In one lesson” is a book I have to buy about 3 or4 times a year as I keep giving away copies to people. In my view it’s the best, most concise books ever written on the subject.

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      • I’ve done that too, and I could be wrong, but it seems like a “book in the hand is worth 2 on the inet”. In addition I pretend I’m loaning my one and only copy. to instill some sense of obligation.

        Am I being dishonest by “nudging” people to read Hazlitt & other Austrian sources?

        Methinks & I once had an ongoing joke about “Helicopter Ben” dropping thousands of copies Economics In One Lesson over college campuses (campi?) instead of money.

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