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Teaching Principles

I conclude my latest column for AIER with a heartfelt appreciation for the opportunity – one that I’ve enjoyed now for decades – to teach Principles of Microeconomics. A slice:

My goal in teaching Principles of Microeconomics is not to launch my students on a path to earn graduate degrees in the subject, or even for them to become undergraduate econ majors. While I’m always pleased when a student, after taking my class, switches his or her major to economics, I teach the course on the assumption that mine is the only economics course these students will ever take. (Empirically, this assumption is valid.) So unlike many other intro-econ courses, I do absolutely no mathematics; I even refrain from drawing any of the cost curves that I encountered as a student in my first economics course. I do define a handful of esoteric terms, such as the “law of diminishing marginal utility” and the “law of one price,” but I never mention many other terms – such as “perfect competition” or “marginal rates of substitution” – that are typical fare in most other principles-of-microeconomic courses. I wouldn’t even dream of doing, in this introductory course, the likes of indifference-curve analysis.

I open my course with some economic history. (“Have you any idea how magnificently, materially prosperous you are compared to the vast majority of your ancestors? Because you’re too young to remember a world even without smartphones, of course you don’t appreciate just how prosperous you are. So let me tell you!”) I next tell my students about Adam Smith and Julian Simon. Then I do my best to rock their world by introducing them to the principle of comparative advantage.

I’m not embarrassed to confess that when I demonstrate comparative advantage I am intentionally theatrical. It’s a powerful principle that I want my students never to forget.

After some additional introductory material – not the least of which includes a warning against the commission of various logical fallacies (such as the fallacy of composition) – it’s on to the course’s core: supply and demand. I later devote two whole sections to international trade, another to public choice, and one to public goods and taxation. (Each section is two-and-a-half-hours long. And I cover some other topics in addition; I mention these only to give a flavor of my course.)

My goal – by teaching basic, foundational, principles of microeconomics – is to inoculate students against the bulk of the common economic myths that they’ll encounter throughout their lives – myths such as that the great abundance of goods and services available to us denizens of modernity is the result of a process that can be easily mimicked or understood in detail by smart people or planners – that the market value of goods or services can be raised as desired by price floors (such as a legislated minimum wages) or lowered as desired by price ceilings (such as rent controls) – that benefits can be created without costs – that government is an institution capable of rising above the realities that ensure that private institutions never perform ‘perfectly’ – that intentions are results – that destruction of property is a source of prosperity – that exchange across political boundaries differs in economically meaningful ways from exchange that takes place within political boundaries – that the only consequences that occur or that matter are those that are easily anticipated and seen.