Stocker: We must refrain from treating economics as gospel


Alexi Stocker, Columnist

Economics is an extremely popular major here at Northwestern. Students from a wide variety of backgrounds and with a diverse range of interests major in economics, often in conjunction with another field of study — from political science to psychology to engineering.

As an economics major myself, I do not believe the popularity of the field of study here at NU is a problem. A problem has arisen, however, through the creation and profusion of what I like to call the “economics as gospel” mentality among NU students. In student organizations, classes and on social media, students often misunderstand or oversimplify economic theory to support political and historical arguments. Students who have completed introductory level courses in economics frequently trot out basic theories and models from their courses as irrefutable evidence supporting their worldviews. The reverence paid to economics displays a disturbing lack of critical thinking and skepticism on the part of many students at this university, and an increasingly unempirical approach to a field that, at its essence, is built on quantitative observations of the way markets function.

One of the key problems with the “economics as gospel” mentality is treatment of economic theory and models as representative of real-world situations. Neo-classical economists make a number of assumptions that are important to keep in mind: People are assumed to be rational actors who maximize their welfare based on full access to all relevant information. Economic models are not representative of the real world — rarely, if ever, do people have access to all information pertinent to their market choices, and I would be hard-pressed to convince anybody that the majority of people in a given market are truly acting rationally and in their own long-term, or even short-term, self interest. Economic models are a simplification. They cannot perfectly represent the real world. Nonetheless, economic models based on highly simplified assumptions are frequently used to support arguments about real-world situations without consideration of how the assumptions of the model differ from the realities of our world.

In addition, economics is both a divided and ever-changing field. Macroeconomics, for example, has changed rapidly over the past century. As The Economist explains, “There is little consensus on even the most basic questions in macro. Ask top academics why America’s post-crisis recovery has been so slow and you will get many different conflicting answers.” One of the major problems with macroeconomics is that “existing models seem to work until something comes along that forces a rethink.” In short, macroeconomic models are based on past events, which, due to the ever-changing nature of the global economy, are little help in predicting future macroeconomic conditions. Despite the obvious faults of many macroeconomic theories — from Keynesianism to classical liberalism — students at NU too often treat the models of either, or, in an often-contradictory way, both theories as gospel. Theories that have failed to predict major economic catastrophes and disturbances, from stagflation to the Great Recession, cannot be examined or employed without a highly critical eye.

The most troubling aspect of the “economics as gospel” mentality is a trend toward unempirical thought. Undergraduates, graduate teaching assistants and faculty members are all at fault in developing an increasingly theoretical approach to undergraduate Economics courses. I have been fortunate to take numerous field courses in topics ranging from public finance to environmental and natural resource economics that discuss empirical studies dealing with the issues discussed in class. Many fellow undergraduates who have only taken introductory courses, or the intermediate 300-level core courses, report little discussion of empirical studies. My experience with the 300-level sequence was similar. Purely theoretical discussions of policies such as the Earned Income Tax Credit and other welfare programs are pointless. Analyzing real-world policies solely through simplified models is unempirical and inherently dishonest, a betrayal of the purpose of economics as a discipline. NU Economics students do not have complete control of the material we are taught; we can, however, treat economic theories with greater skepticism and question the conclusions we are presented with.

When studying economics here at NU, it is crucial that we remember that economics is not a gospel. Economics faculty members are not prophets — they are researchers and educators, and the conclusions they reach and teach should be approached with a critical mind. Economics is a valuable discipline, but it must be recognized, and approached, as an empirical field dealing with complex and constantly changing real-world situations.

Alexi Stocker is a Weinberg senior. He can be reached at [email protected]. If you would like to respond publicly to this column, send a Letter to the Editor to [email protected]. The views expressed in this piece do not necessarily reflect the views of all staff members of The Daily Northwestern.