About the Course

Economics evolved from the field of moral philosophy and has its origins in the works of Adam Smith, Karl Marx, and even Aristotle. Most importantly, however, markets existed long before economists and philosophers did. This is to say that to be a human is to be, at least occasionally, an economist. Most of you are already making all kinds of economic decisions even if you don’t realize it. Perhaps, this is the reason why Alfred Marshall, an early 20th century economist, argued that economics is “the study of mankind in the ordinary business of life.” And, the ideas of John Stuart Mill, Maynard Keynes, Milton Friedman, and many other economists have had a profound influence on shaping the world that we live in today.

This course is designed as a one-semester intensive study of the basic (micro)economic principles. The focus will be on learning not what to think, but how to think; not what kind of arguments to support, but how to weigh those arguments and make informed decisions. Indeed, those virtues are what inspired the founding fathers and gave rise to liberal democracy and the American constitution—we must solve our problems by untamed debate rather than through oppression of thought. Thus, class discussion is an important component of the course, and respect for the ideas of others is a quality you need to bring to the classroom.

We will start our study by asking a simple question: What is economics and what makes it different from other social sciences? Once we identify the basic economic problem and methodology, we will examine different solutions to it. We will find out that the system of social organization that is the most efficient and conductive to economic stability and prosperity is capitalism. Thus, the rest of the course will be dedicated to understanding how a free-market economy operates, what makes it so efficient, what happens when free-markets are regulated, and what kind of role consumers, producers, and governments play in it.

Along the way, of course, we will discuss many different issues such as: Is capitalism better than socialism? Should we legalize the market for drugs, human organs, or prostitution? Is war good for the economy? If economic progress has made us richer, are we happier? If capitalism is about competition, why do we see so much concentration of power? Is life invaluable as politicians often tell us? Are people perfectly rational, or do our minds play tricks on us? Why are Americans getting heavier if they can afford to eat healthier food? Is redistribution of income economically justified? Is the stimulus package working, and what are the long-run implications of an ever-growing national debt? to mention a few…

There will be no easy answer. The lack of consensus among economists shows that economics is a very ideological “science” (i.e. the predictions of its models are driven by the assumptions economists make about the world, which are often based on their own beliefs of how things should be, not on objective facts.)Your own acceptance of economic models will most likely also be prejudiced by your own intellectual history. The textbook that we will be using this semester does not make an exception in this respect either and will only give you one side of the story. As always there are many others. It is thus our goal to challenge our own preconceived ideas by exploring some of the alternatives for a richer and more complete view.

Finally, I can’t promise you that at the end of the semester you will “know” economics. There is no systematized body of knowledge that upon its mastery you will be able to solve economic problems with certainty as you do in physics or mathematics. This does not mean that we have to discard economics. On the contrary, economics is a powerful tool for understanding human action that can provide us with valuable insights about how people make choices and how these choices affect all of us in the global economy. What I can promise you, then, is that if you are motivated and spend the necessary time to explore new ideas and ways of thinking you will make one more step towards an educated life—and this is something valuable in itself. After all, you will have to make all kinds of choices—both for yourself and for your community—and this is something you can do either intelligently or not.