18.1.08

VOLUNTARY EXCHANGE, OPPORTUNITY COST, COOPERATION. The received way of teaching economics doesn't work terribly well, according to Cornell's Robert H. Frank. In The Economic Naturalist, he notes, (p. 8)
Most introductory economics courses (and my own was no exception in the early days) make little use of narrative. Instead, they inundate students with equations and graphs. Mathematical formalism has been an enormously important source of intellectual progress in economics, but it has not proved an effective vehicle for introducing newcomers to our subject. Except for engineering students and a handful of others with extensive prior training in math, most students who attempt to learn economics primarily through equations and graphs never really grasp that distinctive mind-set known as "thinking like an economist." Most of them spend so much effort trying to make sense of the mathematical details that the intuition behind economic ideas escapes them."
So true, so true. (I survived the first semester of graduate school because I knew the underlying stories well enough to be able to match up the marginal conditions to the stories.)

Professor Frank is not the first economist to recognize the problem, and the related problem of a principles syllabus that includes too much (is it really necessary to do shutdown analysis, monopolistic competition, prisoners' dilemmas, and corrective taxation?) and his known predilection for a more activist government helps rebut some economists' reasonable suspicion that the minimalist approach to introductory economics is a stalking horse for libertarianism (because Armen Alchian and William Allen and Paul Heyne were early advocates of the approach.) This Book Review No. 3 notes that Economic Naturalist makes for instructive reading. It collects a variety of student answers to an assignment Professor Frank includes in his survey of economics course at Cornell. (p. 2)
"Your space limit," I wrote, "is 500 words. Many excellent papers are significantly shorter than that. Please do not lard your essay with complex terminology. Imagine yourself talking to a relative who has never had a course in economics. The best papers are ones that would be clearly intelligible to such a person, and typically those papers do not use any algebra or graphs."
The sample essays reproduced -- and a professor would do well to have this book to hand should he or she make the economic naturalist paper part of a course so as to preempt academic misconduct -- include game theoretic and welfare economics problems for which the analytical framework might go beyond exchange, opportunity cost, comparative advantage, and competitive markets.

Another possible use of the book might be in motivating further discussion. The anomaly that Professor Frank presents first is the presence of Braille keypads on drive-up cash dispensers. Presumably any driver would be sighted. But it's cheaper to produce one set of keypads for all cash dispensers, whether they be drive-up or walk-up. A student demurs that the Americans with Disabilities Act requires Braille keypads on all cash dispensers, presumably to protect the taxi or limousine passenger who would otherwise have to ask a stranger to key in an identification code. Professor Frank invokes the useful cost-benefit principle to suggest that the law includes drive-up cash dispensers because compliance is relatively cheap. But a fundamental principle of much public policy is that other social goals often trump allocative efficiency, despite numerous peer-reviewed papers demonstrating the allocative inefficiency of social legislation, including automobile crashworthiness, workplace safety, and mandatory public accommodation.

There's also a lot of potential in one of the imponderables, which may be Professor Frank's own work: why do humanities professors write so unclearly? Sokal, Sokal. Buy it or borrow it, read it, sit down and think.

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