Are you a natural born
economist?
I've taught Principles of Microeconomics since the fall of 1982,
and I think I've taught well over 20,000 students. One
thing that has always struck me is the distribution of natural
economic talent among students.
In every class the top 10% of students are often incredible in
terms of their economic intuition and ability to see through the
mess of some situation and get to the economic heart of the
matter. At the same time, in every class there is another
group for which such understanding is just impossible.
Robert Frank calls the former "Economic Naturalists" and I think
that's a pretty good name for them.
Are you a natural born economist? If you are, here are
some characteristics you probably possess:
1. You don't think that people are "basically good."
You may not think that people are "basically bad" (but you might
lean that way), but to paraphrase a line from the movie
"Unforgiven" you just don't think "goodness has anything to do
with it." When you think of people going about their
business, you think they are basically trying to do the best they
can in the situation they are in.
2. You don't like the cliche "Anything worth doing is worth doing
well." You know in your own life, and the life of every
other person you know, that there are many things worth doing, but
you suck at them. It is worth coming to SFU, that doesn't mean it
is worth getting a 4.3 GPA.
3. You think that competition has benefits. You don't always like
it when others compete with you, but you admit that it ups your
game and produces better outcomes for everyone ... most of the
time.
4. You think incentives matter. If you tax some behavior,
there will be less of that behavior. duh. If a virus comes along
and makes it dangerous to go to the store, you'll not go to the
store as often ... even if no one says to stay away. duh. You know
deep down that behavior isn't fixed or set in stone.
5. You're skeptical when others use income to drive every one of
their arguments. You have a deep feeling in your gut that
when the price of a hot dog goes up 10 fold, it still doesn't have
a big effect on you.
6. You don't think that prices are *determined* by costs. Costs
matter, but they are not sufficient to determine prices.
7. Accounting makes no sense to you.
8. You believe that profits are a good thing, and that a business
owner doesn't get to choose their profits (otherwise, they'd
choose an enormous number!). You also don't think that
losses should be subsidized. Losses are bad, why encourage them?
9. You're skeptical of conspiracy theories, and you don't think it
is free to collude with others. This is especially true for large
groups ... like "all men".
10. You think a dollar today is worth more than a dollar tomorrow.
And you think a dollar today is worth exponentially more than a
dollar 100 years from now.
11. You know that life is not a zero sum game.
12. You don't think the right amount of pollution is zero.
13. You don't think there are any things that we "need" in the
contexts that we live in. Sure, we need to breath air, but no one
is threatening to take that away,
If this generally describes you, then you're probably an economic
naturalist.
If, on the other hand, you strongly disagree with these
sentiments, then you should probably stay away from economics (or
have a very open mind).