Studying Economics:
A First Encounter

Why do students choose to study economics?

What surprises do they uncover?

What are the abiding lessons?

Definitions of economics vary, and reveal the influence of certain perceptual lenses, but they all deal with allocation of resources among competing uses. Adults have long acknowledged the fundamental role of economic forces in world, local and even personal events. Students taking economics, however, are just beginning to ponder those forces, and the related interdependencies: philosophy, politics, ethics, environment, law and social conditions.

A ‘how-to’ course for entrepreneurs?
During the late ’90s, some students thought taking economics would help them nail down the steps to earning their first fortune, divulges history department faculty member David Ball ’88. That theme ebbed as the economy slowed; but David, who teaches economics, still asks new students what their expectations of the course are, and begins the course with a definition of economics, lest they think the course is a practicum on investment management.

Today, Class I students decide to dip a toe into economics because they have sensed its relevance to a larger, intricate web. They’re searching for the missing piece of a number of nagging puzzles. Even without a working knowledge of the principles, they know that economic issues have been causal agents in the history they’ve studied and forces influencing today’s choices. Students who find history and law and politics compelling want to reckon with economics, so also do those who imagine being film directors, sports managers, philosophers or professors.

Epiphanies, or at least surprises
Two sides
Students found themselves drawn to the objectivity of economic analysis—judging a case on its own merits. Examining factors, policies and outcomes over time with dispassionate rigor was a revealing exercise and an intellectually maturing experience.

“Very intelligent people can utterly disagree,” Josh Bone ’04 notes. “Mr. Ball so eloquently states both sides,” he says. “We honestly get the best articulation of two opposing points of view.”

“We had lots of hard-core conservatives and hard-core liberals in our class,” Armeen Poor ’04 remembers. “Mr. Ball would respond counter to both arguments. He taught us the importance of giving credit to both sides. You learn from both, and it’s possible that what you learn can strengthen your own argument.”

“There are always several sides to an issue that you don’t always understand. Often, though, you need to make a statement or offer a thesis. I learned that the most obvious thesis is not necessarily the correct or even most defensible thesis.”
—Greg Kantrowitz ’04

“Between the articles we read and [Mr.Ball’s] skill,” we are forced to confront both sides. Economists are smart; they’re not making value judgments about things, rather they are asking some good questions. It’s not that they think in a dehumanizing way; they think comparatively. People enjoy grasping for an ideal plan, and, ultimately, you have to make a choice. At the core, two opposing groups or individuals can share a set of values, or at least be working for the same thing. That’s the point of talking about all this. It’s easy to brush off details and generalize if you’re driven by ideological considerations, but you can’t do that when you’re faced with the details of an economic argument.”
—Dina Guzovsky ’04

Microeconomic models work.
Macroeconomic theories are flawed.
The relative certainty of predicting human behavioral responses within microeconomic situations was startling to students, especially compared to their perception that theoretical constructs inadequately predict macroeconomic outcomes.

“Sort of in the same way science can be applied knowledge, economics can be applied to the real world. With mathematical analysis you can predict behavior and decisions. There’s no guarantee, though, that any economic theory will work. Economics helps you understand that each individual piece can function separately, but it’s how the pieces work together that’s the key. No theoretical model can show the full equation. There are just too many factors to graph. There’s always some unknown, and then there’s the whole moral side. Every concept fits into a short-term model and into a longer term model: Choosing what outcome you want is the key to the policy choice.”
—Jordan Raphel ’04

“‘Micro’ provided a structured form for you to think about, observe and predict rational behavior—the dynamics of individual decision-making.”
—Dina

“Microeconomics in particular was intuitive, like a game. You could see how this works, with the math involved.”
—Armeen Poor ’04

“‘Micro’ is really cool. You read a problem and you interpret it with a diagram, represent it graphically. You quantify the abstract. It’s clean and you have an enclosed world, so that you can come up with a reliable plan, a solution, and you can pinpoint events in the short and long term. But I needed to understand ‘macro’ to reference political decisions in my speech competitions—like the Reagan cuts. There are all these grand theories, but reality always bucks the theory in numerous ways. Therefore, both theories on tax policy are flawed in their ability to predict growth. There’s no such thing as a cut-and-dried case in economics.”
—Josh Bone ’04

“Economic realities have to play a part in decisions; you can’t depend upon a model or a system that will not work. But ideology counts; it is best, for instance, if our relationship with other countries is taken into account.”
—Jelena Djordjevic ’04

Things are not what they seem.
Understanding the substrata beneath economic news or arguments, they found, is a crucial tool for those seeking a more sophisticated awareness.

“Even if you read the newspapers, you may not get the right understanding. Take the unemployment numbers, for instance. How would the average person know what’s measured, and what’s not? “I am very environmentally oriented, but now I am shocked at how shallow and ideologically driven the arguments are from some of the major national environmental organizations, in support of one initiative or another.”
—Jelena

“Although the Great Depression was not in my world, I did see the technology bust. This course helped me understand why it wouldn’t work, why the factors were out of whack, why the bubble couldn’t be sustained.”
—Josh

“When you change any one thing, it’s amazing, but the whole system moves.”
—Jordan

Even a little bit helps.
Studying economics provides another strategy or approach for thinking about things, and even an entry-level contact with the fundamentals significantly improves a person’s competence.

“I’m astonished at what a big impact just a little exposure to economics has, like in reading the newspaper. I didn’t think it would have such a big impact.”
—Jelena

“Now when I read things written for public consumption, I can decode them so much better. I know what happened, on another level.”
—Jordan

“I needed the economics fundamentals to decipher the context of history—the social and political problems, especially the macroeconomic, theories that played out in the ’80s and ’90s. It was easy to see the connections between economic principles and historical events. Now I have a whole different context for looking at history. My perspective will be different for the history I study from this point forward.”
—Andrew Baird ’04

“Economics helped me clarify my thinking. I was already prone to this ‘rational weighing,’ but in class I was able to apply it much more formally. Asking economics questions (like the cost-benefit analysis of something) becomes the way you reflexively think about things.”
—Dina

“Listening to opposing points of view could be painful—like listening to my grandparents’ political opinions—but now I have some understanding of why they’re passionate about their issues. They, too, are grounded in principle.”
—Greg

Major changes in outlook
We asked students what questions the course raised for them, and whether studying economics changed or challenged any of their beliefs. Since they had all witnessed the collapse of the technology bubble, they were understandably sanguine about economic cycles: the market’s ups and downs. Each of them, however, carried deep, big-picture concerns. Our role as a nation within a global community; the underappreciated complexity of most contemporary problems; the intellectual apathy Americans demonstrate; the potential effect of a degraded environment; the confrontation of ethical considerations and economic policy—each senior paired a general faith in “the system” with an abiding concern about our shared future.

“This course made me far less optimistic about the role of economics in politics. Rather than help organize issues that relate to a problem, politicians use the shock factor. They throw out numbers without acknowledging the source or the implications, without following through on the meaning. I am discouraged by how simplistic politicians on both sides are.

“They do a disservice to their supporters. And the average American doesn’t understand: He doesn’t have the will or the information. Our problems are impossibly big; the set of costs and benefits is so complex. People just don’t see how complex it is. Everything is so interrelated; predicting full outcomes is impossible.”
—D.J. Mauch ’04

“I’m not a set Democrat or Republican, but this course has changed the way I look at policies. There are different ways to examine certain things. I can look at a policy and predict how one person, or another, would interpret it. Economics is helping me understand more fully what’s happening now.”
—Andrew

“I’ve always been interested in where financial and political issues intersect. I find the debates among economists on the big questions of the era interesting. Questioning what politicians say, their black-and-white positions, is always important. But I have a basic faith in the American system. The models are idealistic and on some levels, they’re flawed, but all these disparate forces keep moving along, and the system works pretty well. “My big worry is how big corporations are getting. It’s hard to imagine that could be a good thing.”
—Dina

“I’m a budding politician, so I’m interested in the impact and the intersection of decision-making. I come away asking how someone measures the validity of an argument. How can I use what I know to compare arguments—for instance, whether a corporate tax cut or a sales tax increase is best to increase revenue. Decisions on a national level will make a big difference. This course challenged lots of my beliefs.”
—Josh

“I have a better feeling now for how important the environment is to the economy. It should move to one of our top national priorities. After all, oil is a finite resource. Why aren’t we investing millions of dollars in alternative energy sources, research that could change the economies of the world forever? Maybe alternative energy is ‘the next big thing’ that will set off a new economic cycle, like trains, cars, planes and computers did in the past.”
—Greg

“I went into economics caring deeply about politics, but accepting my own ignorance about economics. I couldn’t develop my own opinion about politically relevant economic views. I needed to have the tools, and this course was my opportunity to begin to have a point of view. This is where you start, and I am definitely going to continue.”
—Armeen

“Our general economic situation, when it comes to our relationships with other countries, and the economies of other countries, is scary. The linkages between us and the global economy are very clear. Our destinies are connected. What is the U.S. deciding to support and why?”
—Jordan

“It’s not that politicians are ignorant or simplistic; the list of what they need to be conversant in is long. How many topics can they know deeply and discuss fully? Also, every American is apathetic except about issues that directly affect him. Your everyday person may listen to negative comments about the impact of Wal-Mart on his community, but he won’t support action against Wal-Mart because Wal-Mart represents his job. “I worry about the issue of energy; scientists, economists and politicians are all missing certain bases in their arguments. Energy issues are complex, economically volatile, and relate directly to political stability. Any country dependent on a single industry—like oil or another natural resource—is very vulnerable.”
—Jelena

Milton seniors began the course with the sense that they would explore the connections among numerous disciplines, and their sense was confirmed. They were excited by the concrete and practical applications of economics, as they were chastened by the long-term implications of economic policy decisions. Each of them was thrilled by the intellectual exercise and attributed their ongoing interest and study plans to the extraordinary quality of David Ball’s teaching. Watch for the names of these politicians, writers, filmmakers, entrepreneurs, social activists and economists in the future.

“My biggest reaction to economics is that there’s so much to learn. It’s not difficult to grasp but to use it you need to take much more. You can apply economics; it’s a great way to look at things.”
—Andrew

Cathleen Everett

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