If you want to learn how the economy works, what do you study? Most people would respond with “economics.” But today, there is a growing concern that the field is getting farther and farther away from the study of the economy – which means fewer people understand how it really works. That can have far-reaching consequences for all of us.
“If you want to learn about business organization, the structure of public utilities, government regulation, social insurance or waves of innovation and technology, the last place you would go to learn about these fundamental aspects of the economy is an economics department,” said Michael Lind, Policy Director of the Economic Growth Program at New America.
To put it a different way, Lind suggests it would be like going to an Astronomy department, and saying, “I want to learn about stars, sunspot cycles, and the rings of Saturn,” and the professors responding, “You are in the wrong place. We do orbital mechanics, we map the orbits of hypothetical orbits. Go somewhere else if you want to learn about the rings of Saturn.”
Across the country, many of our economics students are not studying the real world, said Ha-Joon Chang, an economist at Cambridge University. The prevailing theory of economics in the United States, the neo-classical viewpoint, has transformed economics from the study of the economy into the study of everything, according to Chang. In practice, this means that students are spending their time doing abstract mathematical models that may or may not have any real use. The difference is subtle, yet important, and is the reason why economics has been moving slowly away from the study of the economy.
So how can we shift economics from the abstract, model driven field to one that actually deals with the real world economy? One way could be to break down the barriers that average people feel when trying to lean economics. With it’s own jargon and complex mathematical formulas, many are intimidated to begin to understand even the basics of the field of economics.
Breaking down the barriers of economics so the average person can understand it is the idea behind Chang’s new book Economics: A Users Guide, a rebuttal against most economics books that idolize their own profession. Chang writes his book that 95 percent of economics is common sense (the other five percent, he says, can be taught). While many economists have learned that there is only one correct economic theory – whether it be Austrian, Keynesian, Marxist or another – the reality, he says, is that each theory has its strengths and weaknesses, and economic progress depends on a whole bunch of other factors like value systems, political willingness, and modes of production.
“Professional economists don’t have a monopoly on the truth,” said Chang at a recent event at New America. “It is the duty of every responsible citizen to learn a bit of economics.”
In his book, Chang sets out to do just that, and make the study of economics as user-friendly as possible. He uses examples from the Simpsons, Mary Poppins, and even includes a guide on how to read the book if you only have 10 minutes, a couple of hours, or just a half day. These features are not an attempt to make a “baby version” of economics, but rather to make it more accessible to everyone. For Chang, a more accessible version of economics that everyone understands, even if it is watered down, is still an improvement over the current situation of misinformation and misunderstanding.
“Throughout history, too many lives have been ruined by people with excessive conviction in their own views – from the Khemer Rouge on the left to the neo-liberal market fundamentalist on the right,” Chang writes. “...The 2008 global financial crisis has been a brutal reminder that we cannot leave our economy to professional economists and other technocrats.”