How to Fix Economic Education

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In this essay, I argue that it is badly broken.

Unfortunately, the conventional misrepresentation takes seriously the economics of a camping trip. There are resources to be allocated, including the time that campers have available to pitch a tent, light a fire, cook a meal, and so forth. And there are goods to be allocated, including sleeping bags, food, and water. Thus, from the conventional standpoint, there is nothing wrong with using the camping trip as a metaphor for the economy.

Read the whole thing.

6 thoughts on “How to Fix Economic Education”

  1. Perfect timing, Dr. Kling. My class read Hayek last week and is reading Smith this week. This complements really well.

  2. This general point – economics is way more complex and much more about development and specialization than trading of commodity outputs amongst commodity people – is one of your (Arnold Kling’s) best points, and one of the key points that anybody who thinks about how industry works understands.

    A related point, which I’ve not seen well addressed, is that large parts of economic activity are search functions. Salespeople looking for customers. Consumers of something looking for someone to supply it to them. Searches for the best product at the best price. Searches for the most profitable product to provide.

    • Great point about the search function. That gets forgotten too often as well.
      Reading Kling’s article, I’m struck by an analogy with evolution; this kind of “camping trip” thinking is like thinking of biological evolution as nothing more than a disconnected series of competitions over resources, seeing only a snapshot instead of a process.

    • To be fair, Mortensen and Pissarides won the 2010 Nobel Prize in economics for their work on search functions in economic activity. To quote wikipedia:

      “The Mortensen-Pissarides model that resulted from this paper has been exceptionally influential in modern macroeconomics. In one or another of its extensions or variations, today it is part of the core of most graduate economics curricula throughout the world.”

  3. A kind of microcosom of economic development can be seen in the software industry, and maybe that’s a better source for a model.

    In the beginning of the industry, everybody wrote all of their own code for all tasks. There was no endowment of software and nothing but development, a great deal of which was improvement.

    New software people often start out thinking they want to work in this same way.

    Over time the industry matured, and experienced players figured out that they’d never get anything interesting done if they started from scratch every time. So past work became a kind of endowment.

    As a software engineer matures, their skills and reusing function however and wherever possible, and focusing their efforts on what is truly new, different, fixed, or otherwise really improved, grows.

    In short, specialization grows, trade betterment across time grows, and so on.

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