December 28, 2003

Profits without honor: part III

Thomas Sowell discusses the widespread ignorance of economics and its causes:

In a hugely complex world, there is no way for the average person -- or any person, for that matter -- to be knowledgeable about even half the things that affect their lives. Most of us are necessarily ignorant of many fields, from botany to brain surgery.

We can simply avoid discussing such things and we would not dream of working in those fields or advising those who do. But people who know nothing about economics often voice opinions on the subject nevertheless.

Misconceptions about profits are just one symptom of this lack of understanding of economics. Some people even think that policies based on their uninformed notions should be imposed by the government. But no one would dream of imposing uninformed policies on those engaged in botany or brain surgery.

However, we cannot opt out of economic issues. Every citizen and every official they elect has an affect on the economy. Our only options are to be informed or uninformed when making our choices in the economy or in the voting booth.

Unfortunately, those who are uninformed -- or, worse yet misinformed -- when it comes to economics include the intelligentsia, even when they have Ph.D.s in other fields.

Economics as a profession has some responsibility for this widespread lack of understanding. Highly sophisticated economic analysis can be found in courses on campuses where a majority of the students have no real understanding of something as elementary as supply and demand.