Educating Economics: Observation or Dictation

There is nobody living today that does not think about the economy. You can be a student, a fishmonger, a parent, a businessman, or a salesman; but you’ll never be someone that is free from the overwhelming effects of the economy because at the heart of economics is survival. Every time we are given a paycheck, we think of whether we can still provide for little Abdi in school and his future education in university. We think about whether the pocket money father gave yesterday will be sufficient for our month in college. With those powerful effects in decision making being omnipresent, economics becomes an omnipotent influence in voting. That is why the economy has always been brought up as an issue in every election. The question that begs to be answered then is, are we making the correct choices? Are we choosing with the knowledge of what is true or what was told to us to be true? Meaning, since the people’s knowledge of economics comes mostly from public schools and universities, is the study of economics as factual as empirical observation or is it just a self-fulfilling dictation?

Economics started as a study of decision making with regards to scarce resources. We needed this to organize societies that are exponentially growing which would be destructive if left unchecked. To do this, economists use models to scientifically pin point the things that need to be done to distribute resources effectively. To allow those models to function, they needed a basic assumption to build on. That assumption is that people are rational. That people always want to benefit themselves first, by comparing the marginal cost and the marginal benefit of every decision, this view is justified as factual observation. The problem with this is that how people behave in society aren’t set in stone. We are not robots that have the same screws and bolts, nor are we a species with identical make ups; in fact, no species are like that. We are humans with different upbringings, environment, and personal experience that make up our own ideological convictions. For example, an agricultural community might be pre-disposed to sharing instead of focusing on personal gain. Chefs, soldiers, and painters cite love of what they do instead of what they materially get.

However, classical economics has in large part chosen to ignore this fact. The willingness to ease themselves in creating models and theories sacrifices the acknowledgement of humanity. Classical economics dehumanizes people. Now, acknowledgement should be given where it is due. The study of economics is slowly progressing to include studies such as Behavioral Economics that takes into account the limitations of the original assumption that people are rational, recognizing the concept of bounded rationality. But the study is still young and needs a unified agreement on basic principles that it currently lacks to be taught in pre-tertiary education. Danger then ensues when the only thing taught to the majority of people through public education is neo-classical economics. Worst of all, it is thought as fact and backed up by rhetoric.

Our education on economics is defeating our own intellect. We, the public, are forced to think in only one way. To, in large part, agree with what neo-classical economists suggests. To allow unintuitive decisions sound good in the eyes of the public. The public gets eaten up when politicians point to the GDP growth as a rate of economic success even when the policies that trigger that aren’t necessarily policies that benefit them. People tend to agree on the liberal rhetoric that the current economic playing field is already fair and what’s needed is only more tax cuts to encourage more work. And who can blame them? This is what they’ve been taught in Highschool. “Though shalt love thy neighbor as thyself” is conveniently abandoned. Economics has become dictation, and it will stay that way unless we reframe the way we teach it.

by Derril Pramana Tungka | Staf Kajian Kanopi 2017

References:

1. N. Gregory Mankiw. Ten Principles of Economics. In, Principles of Economics, 7th edition, United States of America, Cengage Learning, 2015, 6-7.

2. http://www.econlib.org/library/Enc/BehavioralEconomics.html - Behavioural Economics. In, Library of Economics and Liberty