James Kwak is the latest to take up the point that Economics 101 isn’t all that good as a basis for designing public policy. To which the answer is, well, yes, of course. Why is anyone in the least bit surprised at this? We don’t use people with two semesters of college French as translators either. Introductory college courses are introductory college courses: that they provide an introduction to a subject and not full access to the deeper secrets of the profession is a surprise to whom? Well, obviously, apparently some rather large number of people but why there’s all this pearl clutching over it being true about economics and economics only is the mystery I suppose
[…]
What worries me far more about this discussion is this. Sure, it’s entirely obvious that we shouldn’t be designing public policy on the basis of what econ 101 tells us. But all too many people take that to mean that we should be designing public policy in entire violation of what econ 101 tells us. That the introductory course is not complete, does not contain all of the subtlety of all of the arguments is entirely true. But that doesn’t mean that those basic concepts are wrong, nor that they should be tossed on the bonfire of political wishes either. And that, sadly, is what all too many do. We see it all the time: econ 101 isn’t complete therefore the minimum wage doesn’t cost jobs. Econ 101 isn’t everything so therefore trade is a bad idea. As economists agree econ 101 doesn’t describe everything therefore my pet idea in violation of basic principles is right.
That to me is where the danger is: not that people are incorrect in agreeing that there’s more to it than just that introductory class, but that people incorrectly assume that because that is so they can reject what that first class is telling us about the basic of the subject.
Tim Worstall, “Yes, Of Course Economics 101 Is Useless At Designing Public Policy”, Forbes, 2016-05-14.
January 22, 2018
QotD: Expecting far too much from Economics 101
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