Index Investing News
Sunday, May 25, 2025
No Result
View All Result
  • Login
  • Home
  • World
  • Investing
  • Financial
  • Economy
  • Markets
  • Stocks
  • Crypto
  • Property
  • Sport
  • Entertainment
  • Opinion
  • Home
  • World
  • Investing
  • Financial
  • Economy
  • Markets
  • Stocks
  • Crypto
  • Property
  • Sport
  • Entertainment
  • Opinion
No Result
View All Result
Index Investing News
No Result
View All Result

At Least Four Reasons to Learn Economics

by Index Investing News
January 13, 2023
in Economy
Reading Time: 4 mins read
A A
0
Home Economy
Share on FacebookShare on Twitter


There are many reasons to learn economics, preferably in formal courses and preferably at an age where learning new things is easy. I count at least four.

The first reason is that economics is essential to understand the social universe. Basic economics is necessary to understand how prices are determined by supply and demand, if only on black markets when regular markets are prevented from working. (My EconLog post “A Frequent Confusion and the Yo-Yo Economic Model” can be thought of as short and incomplete introduction.) There is more than that in the social universe. Without some knowledge of economics, one will have problems reading many books of political philosophy or with major political and social implications—say, philosopher Robert Nozick’s Anarchy, State and Utopia, an academic best-seller of the mid-1970s, or Anthony de Jasay’s The State.  It is not an acceptable exit for a reader who cannot understand such books to say that the author is wrong.

The second (related) reason to learn economics is that it is otherwise impossible to think in an organized way about public policy or the fundamental issues underlying it, whatever your final opinion will be. For example, suppose that a cost-benefit analysis realized by the government shows that the cost of expropriating low-rent apartment buildings on a given urban block will be $1 million, mainly reflecting the trouble of poor renters forced to move, while the benefits will be $2 million in profits for the owners of the mall to be built there. How can we say that this is a good policy or a bad policy? Can we really compare these costs with these benefits, and if not, why not? Another example of question one cannot seriously answer without some economic reasoning is, What happens if the expected punishment for shoplifting (expected fine or jail term multiplied by the expected probability of being caught) decreases? Gary Becker, laureate of the 1992 Nobel prize in economics, contributed much to the analysis of this sort of issue. (See Becker’s Nobel lecture; see also Jason L. Riley, “San Francisco Has Become a Shoplifter’s Paradise,” Wall Street Journal, October 19, 2021.) In fact, economics, which is a method of analysis, is as useful to study “social” as “economic” issues.

We can relate this to an important point made by James Buchanan, who received the 1986 Nobel prize in economics “for his development of the contractual and constitutional bases for the theory of economic and political decision-making,” as the Royal Swedish Academy of Sciences summarized its decision. In his book Why I, Too, Am Not a Conservative, Buchanan stressed the importance of understanding “simple principles of social interaction”:

Institutionally, classical liberalism depends critically upon the workings of markets, and without either a generalized understanding of basic economics or a widespread willingness to defer to the warnings of those wo do understand, maintenance of any liberal order becomes impossible.

The third reason to learn economics is that it opens a door to the realm of knowledge. Any science or theory-laden field of study opens a door to knowledge because everything is related to everything in some way. One has the choice of which door to use. However, economics is one of the best entrances as it is closely related both to social phenomena we observe daily around us, and to other important fields of social study such as philosophy, political science, history, and statistical analysis.

I would also say that economics is closely related to the realm of aesthetics not only because learning is beautiful, but also because the commercial adventure of mankind has been magnificent. Economics explains how markets liberated individuals from societies based on stifling customs or coercive commands. On this, you may want to read A Theory of Economic History, a small book by John Hicks, another Nobel economist, which also provides an introduction to economic reasoning.

A fourth reason why one should learn economics is that it helps earn a living better than many other fields of knowledge. Some analysts, including George Mason University economist Bryan Caplan, have argued that the main if not the only practical benefit of a college degree (at least outside narrow technical fields such as accounting or nursing) is to signal to potential employers that the new graduate is patient, disciplined if not submissive, and hard-working, not that he actually learned anything useful. But an economics graduate (at least from a good college) do learn something about the “real world,” even if he may not immediately realize it. He or she has acquired useful tools of analysis that help them think about any social (including political, narrowly “economic,” and financial) phenomenon.

The economically literate person cannot easily utter just any social nonsense.  Perhaps this should count as a fifth reason to learn economics. My short EconLog post “Logical and Praxeological Impossibilities” gives some simple examples.

It is true that learning economics has a cost: the time, mental energy, and other resources one spends on studying economics cannot be used to pursue other interesting or lucrative activities. This observation points to one of the first lessons of economics, a lesson that becomes more obvious after one progresses in the field. The lesson is that resources (labor, capital, land, time) and what is produced with them are scarce compared to unlimited human desires. It follows that useful or desirable things or activities have what is called an “opportunity cost.” The opportunity cost of something lies in the other opportunities one has to forego to get it or do it. Producing or consuming more of something means that less of something else will be produced or consumed.

There is much more to discover.



Source link

Tags: EconomicsLearnreasons
ShareTweetShareShare
Previous Post

Does Higher Pay to Legislators Lead to Better Governance?

Next Post

UK economy grows 0.1% as services activity strengthens

Related Posts

Billy Joel: My Life – The Massive Image

Billy Joel: My Life – The Massive Image

by Index Investing News
May 25, 2025
0

    Bob Lefsetz: We are inclined to assume life has an on/off change. You’re both alive or your useless....

How is the Federal Reserve reacting to Donald Trump’s commerce conflict?

How is the Federal Reserve reacting to Donald Trump’s commerce conflict?

by Index Investing News
May 25, 2025
0

Unlock the White Home Watch publication at no costYour information to what Trump’s second time period means for Washington, enterprise...

SoftBank’s Masayoshi Son floats thought of US-Japan sovereign wealth fund

SoftBank’s Masayoshi Son floats thought of US-Japan sovereign wealth fund

by Index Investing News
May 25, 2025
0

Unlock the White Home Watch e-newsletter without costYour information to what Trump’s second time period means for Washington, enterprise and...

The Ethics of Inequality – Econlib

The Ethics of Inequality – Econlib

by Index Investing News
May 25, 2025
0

In an period marked by rising tensions over social justice, wealth redistribution, and the position of the state, it's sensible...

Donald Trump makes dangerous guess by rekindling his commerce conflict with the EU

Donald Trump makes dangerous guess by rekindling his commerce conflict with the EU

by Index Investing News
May 24, 2025
0

Donald Trump likes to make offers. And he could also be calculating that his sudden escalation of tariffs on the...

Next Post
UK economy grows 0.1% as services activity strengthens

UK economy grows 0.1% as services activity strengthens

We Just Might Pull This Off

We Just Might Pull This Off

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

RECOMMENDED

7 Factors To Consider When Choosing A Career |

7 Factors To Consider When Choosing A Career |

June 15, 2023
China ‘keen’ to have interaction in Trump dialogue because it backs exporters

China ‘keen’ to have interaction in Trump dialogue because it backs exporters

November 22, 2024
Johnny Depp Congratulations! | HollywoodNews.com

Johnny Depp Congratulations! | HollywoodNews.com

June 11, 2022
Gen Z, millennials speak out on reluctance to become parents

Gen Z, millennials speak out on reluctance to become parents

August 30, 2022
Bitwise CIO says Bitcoin’s dip driven by ETF overenthusiasm, not Grayscale outflows

Bitwise CIO says Bitcoin’s dip driven by ETF overenthusiasm, not Grayscale outflows

January 24, 2024
Reddit now looking at IPO valuation exceeding  billion

Reddit now looking at IPO valuation exceeding $7 billion

March 10, 2024
Hong Kong stocks off to best start since 2018 on China recovery hopes

Hong Kong stocks off to best start since 2018 on China recovery hopes

January 7, 2023
Larsa Pippen’s New Man Marcus Jordan Caught On Video CHEATING With Instagram Model!

Larsa Pippen’s New Man Marcus Jordan Caught On Video CHEATING With Instagram Model!

November 18, 2022
Index Investing News

Get the latest news and follow the coverage of Investing, World News, Stocks, Market Analysis, Business & Financial News, and more from the top trusted sources.

  • 1717575246.7
  • Browse the latest news about investing and more
  • Contact us
  • Cookie Privacy Policy
  • Disclaimer
  • DMCA
  • Privacy Policy
  • Terms and Conditions
  • xtw18387b488

Copyright © 2022 - Index Investing News.
Index Investing News is not responsible for the content of external sites.

No Result
View All Result
  • Home
  • World
  • Investing
  • Financial
  • Economy
  • Markets
  • Stocks
  • Crypto
  • Property
  • Sport
  • Entertainment
  • Opinion

Copyright © 2022 - Index Investing News.
Index Investing News is not responsible for the content of external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In