According to legend, on long flights when seatmates ask him what he does, economist Andreu Mas-Colell avoids annoying conversations by saying, “I’m a mathematician.”
This seems to generally cut off chit-chat and saves him from admitting that he’s an economist, and thus having to hear: “You must know about making money! What stocks will be good next week?”
People are always surprised (and students are disappointed) when they hear that economics is not about “making money.”
So what is economics about? It’s the study of how choices are made in the presence of scarcity. Everything is scarce, especially the days of our lives, as Sept. 11 made all too clear.
We can’t have everything we want, so what do we choose and what do we leave out? For instance, time I spend writing letters of recommendation is time I don’t have to prepare lectures — or sleep. Time I spend doing administrative tasks, as a Weinberg College of Arts and Sciences adviser or director of undergraduate studies in economics, is time that I don’t have for research. Time I spend advising student groups such as Associated Student Government is time that I don’t have to advise senior theses and independent study projects. I value doing all these things, and I could go on listing such trade-offs, but The Daily only gives me 550 words!
Economics is all about limited resources and trade-offs. This framework goes a long way toward explaining how a university works. Just like the limits on my time, Northwestern faces many trade-offs, like those with money, campus space, and which students and faculty it lets in.
In this column this quarter I hope to discuss how some aspects of NU work, aspects that most people may not have thought much about. I’ve got a good background for doing this: I’ve been hanging around universities my whole life, much of it at NU as a graduate student, then as a teacher and lately also as an administrator. Economics grants some insight into why our university does a lot of what it does, and doesn’t do a lot of things that many of us wish it did.
One example comes to mind whenever I hear people suggest that “it’s a shame that NU doesn’t have a program in” X, where X variously equals architecture, oceanography, some study of some social group or, so frequently, undergraduate business training. Economists love choices, but they recognize that variety comes at a cost.
Suppose we did start a new department here, phrenology perhaps. Suppose it was small, with just five faculty members. Even before budgeting the salaries and recruiting and finding classrooms for the classes, we have to face the question: Where would we put them? That’s five offices, and on NU’s campus, we’re more likely to find five basketball players with mad NBA skills than vacant offices. So if we don’t have five empty offices, what departments do we cut back? What faculty do we let go?
Oh wait, we can just build new space and surely get great people to come here. NU has an endowment of a bazillion dollars! It’s money that’s just sitting there, doing nothing! (Or not, but that’s a future column.)
