My original understanding of economics went something like this: “well it’s like a more practical philosophy”. I don’t mean “practical” as more valid, but naturally more applied rather than perceptive. Seeing as how our lives revolve around money and the exchange of it for goods, experiences, services, social needs etc., economics seemed to be all about the fine details of how this money is shifted around and how people, companies, organizations, governments, etc. decide where it goes.
For a while, I felt this definition perfectly encompassed Economics, so much so that I was suddenly very turned on to the subject and felt a compulsion to dedicate further study to it. I ended up researching some books that would introduce me to this relatively foreign realm and rented Mark Skousen’s “The Making of Modern Economics” from my local library. This only perpetuated my simple understanding. I didn’t make it through the whole book, of course not, but it was a beautiful analysis of the lives and theories of the people (fair enough to just say men) who shaped economics as it is defined and functions today. My interpretation was as follows: “look at all these brilliant guys with their creative interpretations of society!” Taking my interests to current publications, I even started following some popular economists. Paul Krugman of the NYTimes and John Cassidy of the New Yorker were quick to land on my twitter feed, and I gradually began to admire Jeffrey Sachs and read all of his Project Syndicate contributions (went so far as to participate in the 2013 Millennial Development Goals Conference – something I was barely aware of previously and did not have any direct connection to… besides being human and understanding the significance of reaching such basic objectives). Here again were some astonishing minds, getting me to think about the world around me in ways that I just hadn’t considered before.
In my initial experience with economics, I was not enlightened to how it is really taught and what makes up its essence. I started to get a slight idea when I took my [VERY rudimentary] Macroeconomics class. This though, was still perfectly approachable. Sure, analyzing CPI with inflation, production possibility graphs, flow models, the banking system, etc. didn’t exactly strike a fire in my belly, I wasn’t put off at all… I actually was never more proactive in a class of mine than that one. Then: I started to research master’s programs. Here was my wake up call. I knew I would face certain obstacles, seeing as how I am coming from a COMPLETELY different discipline, but I didn’t expect to be quite so off base in my comprehension of what is taught as economics.
These days, academic [and realms of professional] economics is basically a pseudoscience. It is so strongly dependent on mathematics, it is isolated and claims to be capable of working in certainties and sure fire predictions. I can’t speak from first hand experience; however I can see, in my casual and civilian perspective, how this is largely a fallacy. I have seen my fair share of “Great Recession” themed documentaries, and have spent plenty of time reading article after article recounting and analyzing the events that occurred. Each chronicle has a similar theme… “well, now we know how it happened, but no one saw it coming.” There were so few predictions that we were nearing a cliff, and yet the purpose of economics is to understand the nature of the economy, perhaps predict such events as they develop? Anyways, that’s all very vague and maybe I’m being more mystifying rather than illustrative, so let me provide an example:
The weekend before last, from September 12-14th, I was in New York City for the Rethinking Economics conference. Essentially, Rethinking Economics is a community of student groups from universities all over the world that are calling for a reevaluation of the economics curriculum, or said in their nice words: “We are an international network of rethinkers coming together to demystify, diversify, and invigorate economics.” I can’t remember how I discovered the group, a post of theirs was undoubtedly shared on one of the facebook pages I follow and it managed to draw my attention. So I have been following their activity on social media for the past few months, and just for kicks, I decided to participate in their conference (hosted at NYU, Columbia University, and The New School). I do not have the same background as many of the participants do, but it was still enlightening and great insight into the field which I intend to immerse myself in.
The session that really exemplified the grand issue that is found with economics today, was the workshop, Sunday morning, titled: “On the Nature of Exchange”. There were two speakers. The first, Kamilla, gave us the classical definition of exchange, as developed over the years by various prominent minds. Basically, it went something like this: Exchange is the action of giving something (goods, services) in order to obtain another thing (money, other goods or services), as carried out by 2 rational parties. Following Kamilla, was Charlie, who then presented the faults in this definition. The first simple note was that we humans are not consistently rational beings. Sorry for the shock, but it is very true. Rationality would suggest that we should all work to obtain a fair amount success and financial stability, and yet we are faced with statistics that iterate points like: the top 20% of the population in the U.S. posses more than 80% of the wealth and the top 1% take home 24% of the income… for what purpose? Certainly not for the greater good, rationality would insist that the income of the average CEO should not so vastly exceed the income of the average worker (300x more, or so), to the point that the average worker is unable to support their basic needs with their single income. And yet, say hello to one of the most important social issues we face in the United States. Then there was the argument against actual exchange, which Charlie used a few anthropological examples to invalidate (I cannot recount exactly, and therefore will not attempt to explain). These examples demonstrated exchange as a means for emotional reward (giving another person your time and attention for friendship), as participation in cultural customs (giving gifts at significant life events), and for the sake of personal gratification (to posses things that we believe have value, yet could mean exactly nothing to others). Certainly, there is a defined distance between analyzing market behavior and the nature of these interpersonal exchanges; however our world would undoubtedly be a more wholesome place if we took a more humanistic approach and consideration to the sterile topics of economics. This is another petition of the Rethinking Economics organization, to relate economics to the other social sciences, rather than making it stand starkly alone. It is foolish, or wishful thinking, to discuss the behavior of markets without acknowledging the behavior of people – markets and economies are “a form of social organization”. They do not occur on their own as some sort of phenomena. An economy is created by and for society, an organization of human beings. The relationships between human, society, and economy cannot be ignored, they are intrinsic to the operation. To better incorporate the behavior of people into the way economics is regarded would create a stronger discipline, something based in reality.
So it was good to get the memo, and once I join the ranks of students pursuing graduate level economic degrees, I will immediately join this coalition called Rethinking Economics. I’m looking forward to tackling this strange, and isolated, and definitive yet flexible subject. Obviously, I have more societal-oriented intentions with the qualifications I will attain, but they will be “economics” nonetheless!