For more than a hundred fifty years, economics has been feared by students, lay people and economists themselves. Not the least source of this fear has been the fact that economics has been labeled as “the dismal science.” The study of economics has been living with its moniker ever since English philosopher Thomas Carlyle ascribed the incorrect predictions of Robert Thomas Malthus concerning overpopulation and the eventual lack of the world’s food as “dreary, stolid, dismal, without hope for this world or the next.”
Malthus’ fears ultimately were far from justified. Technology and science in the intervening century more than solved worldwide starvation. Unfortunately, economics remains the “dismal science” to this day. Harvard’s Walter S. Barker Professor of Economics recently released his book The Dismal Science: How Thinking Like An Economist Undermines Community. The book not only repeats the unfair moniker but misses the point made by thousands of economists, which ultimately leads novices to shy away from the study of economics in general.
The problem lies largely in the assumption that economics is a “science” just like biology or basic logic. It’s not. Economics is just another method of trying to solve the age-old question of what, how and to whom to distribute finite resources. As such, economics is just as much subject to debate as psychology.
The Science of Assumptions
Ever since Adam Smith, the foundations of economics have been presented as scientific fact. The facts presented as economics are really two: an assumption regarding the nature of man as well as a strict belief and usage of logic. Unless someone can show an alternative to thousands of years of developed logic based on fact, we should be able to live with that assumption. More difficult, of course, and subject to endless debate is the assumption regarding the nature of mankind.
Unfortunately, most beginning studies in economics merely accept without questioning the classical economist’s assumption that mankind is greedy and selfish or wants mainly material things. Whether true or not, without stating or questioning that assumption, economic studies immediately delve into the mathematics of graphs and charts and formulas. Some even create the impression that the movement up and down a curve or graph actually makes the economy move! Nothing could be more absurd.
For whatever reason, only a few simple paragraphs and no more might be devoted in a textbook to logic and fallacies in thinking. Some beginners in economics might readily recognize the confusion between facts or values. It is, however, much easier to settle back, comfortable in accepted beliefs, rather than learn why those beliefs first developed. Nearly everyone can recognize the post hoc, ergo propter hoc syndrome, or the difference between “positive” and “normative” economics, after one or two courses in economics. But even professional economists quickly fall into the trap of simple assumptions regarding the nature of man.
Dialogue vs. Mathematics
Perhaps it would dispel once and for all the notion of a “dismal” science if we divided basic economics into two: a discussion of mankind’s nature in its non-quantifiable form as well as a strict mathematical quantification of material things based on fact.
At the graduate level, the latter is known as econometrics. That study, of course, already assumes that you have a reasonable outlook on the nature of mankind through psychology, politics, sociology or religion. Econometrics should be especially suited for those with a mathematical bent rather than those who prefer to focus on lengthy philosophical discussions.
The key for all these “soft sciences” – including economics as we practice it – is that they are all subject to change with the current vogue. Was Karl Marx writing essentially about economics or a solution to political problems? Although basic logic has propelled western civilization forward since the Age of Reason, other societies have chosen different routes, especially in value systems.
Most of economics really depends on a “positive” rather than a “normative” assessment of society’s problems. Whether government or private individuals should make the crucial decisions about resources is virtually irrelevant. It is more a question of politics. The major concern depends on your own view. The questions are the same, as are the quantifiable economic answers.
Economics can be fun, especially when one can illustrate and question the nature of mankind through examples of watching people’s behavior at a local Wal-Mart on a given day.
Too many would-be economists in graduate school or beyond may never really have had asked themselves about the fundamental nature of man.
Once we understand and accept the essentials of mankind, bolstered with valid facts, we should be able to look at the “dismal science” with a much brighter perspective.