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Friday, May 25, 2018

Econ 101: Why Teaching the Fundamentals Is So Important

The problem is not that politicians and pundits don't understand advanced economics, but that they don't understand even basic economics.

Image Credit: Wikimediaimages by Pixabay

Here’s a letter to a young man who will embark this coming Fall upon his graduate studies in economics:

Mr. Cody Thompson

Mr. Thompson:

Thanks for your e-mail. You critically observe that on my blog I ‘seldom rise above Econ 101.’ You’re correct, but my focus on economic fundamentals is by design.

I wholeheartedly agree that knowledge of advanced economics is valuable. But the economic knowledge ignored by the public, pundits, and politicians isn’t that which is found in ECON 999 but, instead, that which is found in ECON 101. Long before whatever truths that might be learned in ECON 999 become relevant, the insights and ‘way of thinking’ learned in ECON 101 must first be grasped.

Put differently, the flaws in real-world economic policies reflect not a naïve and uncritical application of the lessons of ECON 101 but, instead, a nearly complete ignorance of ECON 101 and, hence, a failure to apply its important lessons in the countless areas where they would do much good.

In this October 2015 blog post, I explain in much more detail why I believe that the problem with economic policy is widespread failure to grasp, not ECON 999, but ECON 101.

Much good luck to you in your future studies.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

Reprinted from Cafe Hayek.

  • Donald J. Boudreaux is a senior fellow with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University, a Mercatus Center Board Member, and a professor of economics and former economics-department chair at George Mason University.