Why I Love Economics
Ever since I took my first economics course as a freshman in college, I fell in love with the field. As I continued my studies, both in the classroom and outside of it, my love for economics increased.
I am not sure why I am so fascinated by the subject, to be honest. It might be because I am reasonably good at it. It might be that after a mediocre high school career doing really well in the economics course I took in my first semester in college made me feel very good about myself. Maybe I attached those good feelings to the field of economics and I would feel the same way about another subject had I taken that subject instead.
The above is possible, but I think it’s much more than that. Here are a few reasons why I love economics:
- I am a curious person by nature and economics allows me to learn about a lot of things, especially how some very important parts of our lives and our society work. It also gives me a way to express that curiosity. By studying economics I can combine mathematics with the social sciences in unique ways that, in addition to the core concepts and principles of economics, reach into the subjects of psychology, technology, engineering, sociology, history, politics, urban planning and development, and even religion.
- Studying economics is in a way like studying a language. Some fields require memorization or a certain degree of acclimation, but to be a successful economist (in my opinion) one must have the “economic mindset.” One has to be able to view the world in a particular way to be good at economics, and it’s very difficult to do that right away. One has to diligently study the subject and allow oneself to be immersed in it to learn this way of seeing the world. Once you are able to see the world in that new way, your world is forever changed. You now have a set of goggles you can put anytime you desire that will allow you to view the world in a way that is more holistic and in a way that will provide unique and interesting insights and connections.
- Economics helps me make much better decisions about almost everything. Understanding some basic economic principles allows me to make better decisions about how to use my time, my energy, and my money. For example, the principle of arbitrage helps me make better investment decisions by making me aware of the fact that it’s exceedingly unlikely that I will be able to make easy money in a scheme. Another example is the principle of opportunity cost, which helps me better weigh decisions and helps me understand that there’s always a cost to every single one of my actions and moves. These are just two of many examples in which relatively basic core principles of economics help me make better everyday decisions and allow me to live a more fulfilled and informed life.
- Studying economics and econometrics has made me understand statistics better. This better understanding has made me more cynical when it comes to statistical reporting because I am aware of the various statistics games that can be play in both data gathering and data analysis. Here’s a running joke in Economics that should illustrate the point in a humorous way: A mathematician, an accountant, and an economist apply for the same job. The interviewer calls in t
- Studying economics in general, and learning about the Austrian School particularly, has made me aware of the difficulty of really obtaining real knowledge about our world. This understanding helps me take what politicians, policy-makers, think tanks, and even some consultants say with a grain of salt when they attempt to design systems and incentive-structures. I think to myself (as Hayek has taught me to think): How can they design something when they don’t really understand it in the first place? Studying economics has taught me the difference between correlation and causation and how people often confuse the two to sometimes disastrous ends. Economics has taught me spontaneous order exists and that things are very often much more complex than they appear, this complexitly lending to make things much more difficult to really understand. For example, we can ask the question “Why is City A so successful?” Many people can attempt to answer this question. Here are a few reason that could be given as answer: (1) low tax rate, (2) fertile soil, (3) excellent climate, (4) excellent schools, (5) low barriers to immigration, (6) high barriers to immigration, (7) lots of state funding of projects, (8) lots of federal funding of projects, etc. Hundreds or even thousands of reasons can be given to answer the above question. Economics has made me realize that it could be none of those reasons, a very specific combination of some of those reasons, or all of those reasons. It could be that even if we have 99 out of the 100 reasons down, we won’t be able to replicate City A’s success if we don’t have that magical 100th reason. Knowledge is difficult to obtain, especially knowledge of very complex and organic systems where scientific experimentation is pretty much not possible, as is the case in economics (contrasted with a field such as physics, which is much more conducive to scientific experimentation).
Studying economics has made me a more educated and intelligent person allows me to live a more informed life. I love this field of study and I believe anyone who takes the time and puts in the effort to study this social science which tries so hard to be a real science will fall in love with the subject as well.