You hear about Econ 101 all the time, but never hear about the real Econ and that is Econ 103. That's right, Econ 103. It is so simple that it really should be taught in high school rather than at Econ 103 or maybe it is Econ 203 or 303 or 403. You pick the number.
I always like to start out with the objective of a class or a major in college and then put together the classes that will support that objective. In my book, all objectives are "do" objectives. That is, what is the graduate supposed to be able to "do" once they graduate. I really don't care about what they know, that is just some kind of a mental game that makes a person feel good when they run out of beer and don't have anyone to talk too. Exactly what is a person supposed to be able to "do" once they graduate in "Economics". If it is be able to sit around and bull shit about what is happening in the world, they appear to be well prepared, but what if they are called on to "do" something? Then what? That in a nut shell is the rub. This is because they never had an objective in the first place. They did not know what the "do" was and still don't. Do you? See, you never thought about it and you too have been taken in by the system. I'll give you my definition of the "do" and see what you think.
We all or we should all want this place to be a better place to live and for us to have and our fellow man to have a better quality of life. The bottom line and the way that we measure this is "wealth". It is not a dirty word, so get over it. Wealth is the objective and if that is the case, what is the "do"? Well now, it is getting a little more complicated. There are several kinds of "do", like what do I have to "do" and what do other people need to "do"? Starting to get the idea? What do we all need to "do" to optimize the wealth of the system? Now we are getting some place. We are part of an economic system and we need to "do" what it takes to create the most wealth. I have to use this word because it is the only one that I have. I am not going to get into the argument about the distribution of wealth, because if there is "no" wealth, there will be nothing to unevenly distribute.
Another concept that I like to use is what happens in the limit. It comes from advanced math, but it works every where. What is the ultimate limit in wealth generation and how do we know when we have gotten there. How will be know? This is easier. It should be our objective to get to that ultimate limit as soon as possible and to try to remain there as long as we can. Seems simple to me. Notice That is because they are teaching bull shit and not about "do". I don't think that you ever head any professor talking about what or how to "do" did you? If the objective is to get to this ultimate limit and hold there, what do we need to "do"?
The total system and all of us will be at that ultimate limit when we are all working as hard and efficiently as we can utilizing 100% of our physical and intellectual talent and making decisions that are also the "best" decisions. At that point, we will be generating the most total wealth. At that point we will all be as rich as we can be. Now that is the objective and every thing that we "do" that is less will prevent us as individuals and as a system from ever getting to that optimum. If the government makes an dumb decision, it is like pulling a block out of one of those puzzles. If you don't hit the books in high school and learn as much as you can, it is another block out of the puzzle. If you use your own money to invest in a wind machine, that is another block out, and can never put the block all the way back in if you make a mistake. Every action and decision that is not right limits how near optimum the system can ever become. If we don't "do" the right thing every time we won't get to our objective. It is like getting to the top of the flag pole and being able to stay there. There is only one top and it would seem that Economics would teach us what we needed to "do" to get there, but it does not. That's the problem.
Next time you hear some economist shooting off their mouths, ask them, "what should we do", or "what did we do wrong"? It is always easier for them to look backwards and see what we did wrong, but even this they are not very qualified to do. You know the old saying, "if you don't know what you did wrong, then how can you know what to "do" right? You have to understand the "objective" and you have to know what to "do" to get there. Isn't that simple?
