Notes from the Fringes of Academia
Some Thoughts on Teaching Economics
My dalliance with another research organisation, recently led me to revisit earlier teaching experiences and think about how economics is being taught at the undergraduate and graduate level these days.
I feel that increasingly the default entry point for instructors is to treat economics as a bundle of facts, teaching it as a set of jargon surrounding the economy, and leaving students with a vague idea of what some terms mean/imply. What this invariably leads to, I feel, are a group of people who throw around terms and concepts that are economics-sounding, without actually engaging with economics-thinking.
The “what is economics” question is also treated as a definition to remember at the back of ones head. From page 1 of whichever textbook one picks up.
Yes, economics is fundamentally the study of how society functions—and how individuals make (often difficult) choices—in the face of finite resources. But when teaching, if we were to elevate the concept of scarcity to a universal constant, it could have the ability to provide the essential “why” behind every economic process, from global production chains to everyday household livelihoods. In the end, every human action is a negotiation (leading to an exchange) between parties with some constraint.
…and this then could lead to the fundamental building blocks of “exchange” and “trade”.
This could then lead to an appreciation that exchange/trade is not exclusive to just humans—it’s a social function. Even animals exchange/trade (and now AI agents as well). It is a mechanism used by all entities to become “better off” in the face of scarcity.
We could then broaden the concept of “value” by bringing in the idea of “opportunity cost”, which could drive home an understanding that the “price” of an exchange could be anything one wants to trade—it could include time, energy, bartered commodities, or whatever else one can imagine. Money is just one standardised way of valuing these underlying trades.
And then build an understanding of what a “market” is—a model to understand how exchange/trade happens for certain commodities.
And then build an understanding of what a “model” is—a simplified representation of the real world.
And then introduce concepts like welfare, development, inequality….
…the point I am trying to make is that a typical curriculum in economics these days tends to forget deep engagement with the fundamental tenets. We prefer to get bogged down in trying to drill home certain points of view, and then training students to learn tools and methods to replicate that point of view.
For example, certain curricula nowadays start with the perspective that the markets are not able to solve any observable social problem, so one should teach the idea of perfect equilibria as a state that can never be real. If we instead start with the idea of exchange, and how to facilitate exchange so that welfare improves, automatically the student will be forced to think about different types of scenarios where exchange happens, how buyers and sellers try to improve their own outcomes, how only when everyone is better off is a notion of welfare achieved. If some subset in this scenario is structurally better off or worse off than others—there you go, inequality introduced.
Tools and methods then become a second order problem—to study very specific questions—not the entire basis of one’s existence. More often than not, entire research programmes/projects are centred on the use of a particular method, and then structuring a question around it. The examples are numerous: in a doctoral student’s presentation recently I noted that an entire chapter was being created to use a particular method to show something that the previous chapter already established; in an upcoming seminar, it seems that the entire study is being conducted to showcase a currently “cool” method.
(Not to blow my own horn, but some years back, when teaching undergraduate urban planners introductory economics, I remember introducing them to the basics of game theory. Just the idea of how to make decisions under uncertainty. A year or so later, I came to learn from colleagues that an entire group of students from my class had used concepts of decision making under uncertainty in a research project on when and where a city should install traffic lights versus roundabouts. Such are, in my opinion, ways to get students to engage with concepts. Instead of teaching a tool and then getting students to use the tools with different datasets to answer questions that are already known.)
In a recent conversation with an established economist in my current country of residence, this topic of how economics is taught came up, and I was shocked to learn that the default entry point for teaching economics in this country is that everyone in society should target profit maximisation. I, on the other hand, had been taught that profit maximisation is one of the many behaviours that an economic agent could employ when exchanging/trading, but in the end, the universal objective was improving outcomes for everyone involved.
Maybe this is me being naïve and assuming that everyone else had teachers like mine. But that single difference in viewpoints—me thinking of both sides of the exchange, versus the Prof starting to think from the perspective of the seller—and the debates that ensue, can only arise, in my opinion, if the student is taught the fundamental tenets, the idea of exchange, the market being a model to view where exchanges of a type occur, etc. etc. Not sure if we are enabling such ways of thinking.