Economics: not as bad as I thought

I chose my college major by reading through the course catalogue, thinking “Anthropology sounds pretty neat,” continuing until I got to sociology, and then thinking, “No, this is the field for me.” I never really considered anything else.

I took classes on topics like “Women in the Global South” and “Sociology of Oppression.” I was drawn to them because I saw the world as an unfair place and I wanted to fix it.

I don’t remember having any friends who studied economics. I did have a sociology professor who said it was bad that so many people who cared about social justice studied sociology instead of economics, because the world could use more economists who cared about social justice. At the time, this was eye-opening to me — it hadn’t occurred to me that someone who cared about other people would study economics! I figured that was just for greedy people who wanted to be rich.

One night I went out for doughnuts with an econ major who wanted to talk about great it was that you can translate all the things people want into dollar values and just compare them. “What about love?” I scoffed. He didn’t have a good answer. I came away thinking econ majors were not only selfish but also probably fools.

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Five years later, I started to think economists weren’t all bad. Bruce Sacerdote’s study on adoption, Bryan Caplan’s book on parenting, and later Emily Oster’s work reshaped my parenting plans. I admired Rachel Glennerster and Michael Kremer, development economists who pioneered the use of randomized controlled trials to find better anti-poverty measures. I found Robin Hanson’s writing irritating but often illuminating. 

It also turned out that my favorite podcasts were by libertarian economists. And surprisingly to me, they turned out to care about things other than money. 

Russ Roberts, in an interview with Peter Singer:

“I think in economics, there is an enormous implicit mistake: that somehow self-interest, because it is natural, is therefore good. And there are cases where self-interest is good. . . . But I certainly agree with you that overcoming our natural self-interest is sometimes what it means to be an adult, to be what might be called a mensch — a person of dignity and an honorable human being, a person more than one can achieve just following one’s own instincts and appetites.”

I’d describe my college-aged view as “It’s bad to care about money. You should do things because they’re the right thing to do.” Of course, I cared about money — I thought about it a lot! I knew it was a tool for making the world better, and donation was a big deal to me. But I missed basic ideas like “since money is so useful, maybe I should try to earn more of it so I can donate more.”

I wanted a world based more or less on redistribution. But I didn’t think nearly enough about whether or how I could get other people on board with this. Mostly I focused on how to be the Right Kind of Person, and on how to show other people that I was the Right Kind of Person. (Hanson would have a thing or two to say about that, I’m sure.)

It turns out economics had a lot to say about why people do stuff, including join idealistic projects. I now think of it as the study of incentives. People are motivated by money, but also by the desire to look good, to uphold a certain image of themselves, etc. It blends into sociology and psychology. And it’s useful for looking at a lot of the things I care about.

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I didn’t think of my decision to ignore economics in college as related to gender. Partly because I was at a women’s college, and all the sociology majors and all the econ majors were women. But I now see that as part of the picture.

Here’s Claudia Goldin on the gender ratio in undergrad economics:
“One of the problems that we have, as a field, is that when students — before they even come into their freshman year, and they’re asked what do they want to major in, women will — if they want to major in the social sciences — will put down psychology, and men will put down economics, so we lose them before they even unpack their suitcases.”

Goldin started a program for students

“to explain to them that economics is not just about the things that their parents have told them about, which they find boring, which don’t involve people, but economics is a very people-oriented subject. It involves inequality, it involves children, it involves obesity, it involves health, it involves everything.
We moved the needle a bit. We’re still trying to figure out exactly how much we moved the needle. But the problem is, we do very, very poorly in our PR ourselves. So if you read the textbooks — and they are changing, and there are a number of recent textbooks that understood these problems — that economics is X and Y; it’s agents.

Most young people don’t want to deal with agents. They want to deal with humans, and particularly, it seems as if women, more than men, would like to deal with humans. And so women will tend to go into this field called psychology or sociology, which indicates in their writings that it’s about people. We indicate in our writings that it is about agents or Greek letters, and so we just have to do a lot better.”

Rachel Glennerster writes: “​​Imp for people (esp idealistic high school students of all backgrounds) to understand that econ is about solving social & econ problems not making money. “

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I still have a pretty superficial understanding of the discipline, based more on tweets than textbooks. I started to take a Marginal Revolution University course but didn’t stick with it once it got into formulas. And if I had actually studied it, I’m sure we would have spent a lot of time on money and formulas and not just on what motivates people.

But I now think of economics as an essential tool for people who want to make the world better.