Fun with Economics

I think I’ve mentioned before (several times) that I think economics is fun. I don’t do the heavy-math predict-the-market kind of economics, just basic common sense stuff about how markets work and what the terms mean. 

Greg Mankiw, blog photo

So this week I was amused by some incidents at Harvard. It seems some Ec 10 (Basic Economics) students protested Greg Mankiw’s class by walking out during his lecture and joining the Occupy crowd in Boston for a day.  

“I urge all students to walk out of Ec 10, [because it] represents the ideology that brought about our current economic situation,” shouted organizer Gabriel H. Bayard ’15 (quote from The Harvard Crimson on Wednesday).  

Greg Mankiw's blog on Wednesday points out what the protesters would miss: “Ironically, the topic for today’s lecture is the distribution of income, including the growing gap between the top 1 percent and the bottom 99 percent. I am sorry the protesters will miss it.”

The whole sequence of events was in his Wednesday blog, so I’m just giving you the highlights from some of the links here. First off, the Ec 10 protesters published an open letter to Prof. Mankiw, accusing him of right-wing bias.

Then former student Jeremy Patashnik, a self-proclaimed liberal, published a very supportive piece identifying what is actually taught in the course, and challenging anyone to find something biased in it. The article is long, but thorough and well done. There’s a philosophical explanation in the middle that is particularly informative: 

One lesson from the first day of Ec 10 that will stick with me for the rest of my life is learning to separate positive questions from normative ones. Most of the economics that we read about in the news involves normative questions (eg. Should Congress raise the marginal tax rate on the highest income bracket?) whereas most of what economists actually study involves positive questions (eg. What would happen if the marginal tax rate on the highest income bracket were raised?). Ec 10 is an introduction to the academic discipline of economics, and the vast majority of the course focuses on teaching students how to answer positive economics questions. 

Economics is not philosophy, and the primary goal of Ec 10 is not to teach students how to make the world a fair place. If protesters feel that the course spends too much time discussing how to make the economic pie as big as possible and not enough time discussing how to slice the pie equitably, I would point out that it is Professor Mankiw’s desire to avoid bias that drives this. After all, asking how to make the pie bigger generally entails positive questions; asking how to slice the pie fairly almost exclusively involves normative questions….  

Another criticism that some protesters have raised against Ec 10 is that its models are oversimplified and it is difficult to extrapolate real-life conclusions on important normative questions from the course. Again, I disagree here. You can’t hold informed positions on these normative questions without being able to answer the positive ones, and you can’t answer the positive questions without a fundamental understanding of the principles of economics. But building this foundations takes time. Premeds don’t grumble that Life Science 1a does not qualify them to practice medicine; Ec 10 students should understand that the class will not equip them to fully understand the vast complexities of economic policy. Ec 10 builds a foundation to begin to answer these questios intelligently, but as in all academic disciplines, if you want to be an expert, you’ll have to invest more than one year of study.

Mankiw describes walk-out day: “About 5 to 10 percent of the class participated in the walk-out. At the same time, some previous Ec 10 students came in to sit in the lecture as counter-protesters. The lecture then proceeded as planned.” 

The Harvard Crimson followed up with an editorial pointing out the lack of intellectual integrity of the protesters:  

Even if Ec 10 were as biased as the protesters claim it is, students walking out to protest its ideology set a dangerous precedent in an academic institution that prides itself on open discourse. This type of protest ignores opposition rather than engages with it. Instead of challenging a professor to back up his claims, it tries to remove him from the dialogue.

It was my experience in college that basic economics teachers had a great sense of humor and entertainment. That seems to hold true for Greg Mankiw. 

Now, if only our current president had taken enough basic economics to gain a fundamental understanding. More on that another day.