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Opinion | Economic concepts offer critical knowledge for all college majors

Olivia Brough, broughol@muohio.edu

(ERIN KILLINGER | The Miami Student)

"Introductory economics is the gateway to a way of thinking that provides powerful insights into how and why the world works the way it does." This is how economics professor Gary Wolfram concluded his presentation about teaching introductory economics at a free market forum in 2007. Because of our current precarious economic situation and the spectacle of the Occupy Wall-street protesters, I've been wondering why such a course is not commonly taught.

Wolfram's "Intro to Economics" course is designed to benefit both those who are economic majors and those who are not. It stresses concepts and the workings of the economy, not mathematical analyses. There are obvious benefits for the economics majors, but it is significant to note that non-economic majors also benefit by gaining invaluable knowledge necessary to be able to analyze complex global issues.

In his presentation, Wolfram had three main points: first, "Intro to Economics" explores two types of effects as defined by Bastiat — the visible effect and the foreseen effect. Bastiat explains that good economists "take into account both the effect that can be seen and those effects that must be foreseen." With every issue, the person trying to make a solution must think of the possible results beyond the desired result and the visible result. Some may think that raising the minimum wage will put more money in the worker's pocket, but in reality, it may result in increased unemployment. Of course, "Intro to Economics" would elaborate on the logic behind such a concept so that students can learn to distinguish between correct and incorrect assertions.

Second, the course explores the market system, which results in providing a prosperous standard of living for society as a whole. It is the cooperation of rational self-interested individuals, each "producing what he or she is best suited for and exchanging this product with others." To understand the market system, the political system must be explored because it creates the environment for the system to thrive. The course would analyze what rules and institutions are necessary for markets to operate well or to operate at all. For example, there are smart and hardworking people around the world, but because of their political system, they are trapped in a cycle of poverty. Individual liberty, defined as being able to act according to one's own plan, is a crucial element to a market system, because the market system relies on individuals choosing their own rate of consumption, production and labor force participation. Thus, a political system based on individual liberty is the necessary environment for wealth creation. A political system that interferes with individual liberty inhibits prosperity and economic growth.

Third, the course examines the concept of the voluntary exchange system, which ensures that no one is forced into exchanges or forced to purchase anything. In a proper market system, producers are not in control — the consumers are. Economist Walter E. Williams eloquently expresses this essential, self-regulatory concept when he recently wrote, "The pursuit of profits forces producers to be attentive to the will of their customers, simply because the customer of, say, a supermarket can fire it on the spot by taking his business elsewhere."

Government interventions such as bailouts, targeted stimulus, overregulation, speculative loans and crony capitalism are symptoms of interference in the market system. This has resulted in an unintended but foreseeable ongoing sick economy. Soon crucial decisions regarding America's economic future will be made. My concern is that voters and politicians who lack basic economic understanding will make these pivotal decisions. An economic course as described above would provide the understanding and the critical thinking skills for people to make informed decisions about their own future and economic liberty.


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