Why economics matters?

As Henry Hazlitt said, “Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine — the special pleading of selfish interests.”

Unfortunately, this also includes government schools.

So much of the educational curriculum students receive in America today is built with a bias towards government intervention. This is on display with American history classes teaching about how FDR or WWII solved the Great Depression, tales about how Upton Sinclair’s book The Jungle saved American’s by regulating the meat industry, or by using figures like Alexander Hamilton to push the necessity of America creating a central bank to improve its financial standing in the world.

This bias towards government economic intervention is baked in long before students receive their first economics class. There, students are often taught to focus on figuring out questions involving changing supply and demand curves — completely disconnecting the science to what it is really about: better understanding human action, so that we can promote human thriving.

And, of course, this only gets worse at most American universities. 

That’s why, we began with a focus on thinking about economics beyond the scopes of money and markets. Opportunity costs are a basic part of human life, and we are constantly engaged in some form of risk-taking entrepreneurial behavior.

The importance of markets and exchange arises from the fact that human beings are social creatures, and we all have different strengths and weaknesses. It is money that allows us to specialize in a skill, like playing a guitar, and turn that skill into supplying all the various goods and services we don’t do on our own. 

Once you have a basic understanding of these core economic insights, it becomes easier to analyze various economic systems. While capitalism allows for markets to peacefully emerge, attempts to regulate leads to growing problems — like cronyism, shortages, and unsustainable booms and busts. This is true, not matter the motivations of the government.

There is no more important task for our civilization than to teach new generations of Americans to think seriously about the challenges of the world we live in. The ability to think like an economist is one of the best ways to accomplish this.

In the words of Ludwig von Mises himself,

“Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping toward destruction. Therefore, everyone, in his own interests, must thrust himself vigorously into the intellectual battle.”