Friday, May 19, 2017

On Teaching Economics

Quote of the day from Paul Heyne's essay "Teaching Introductory Economics,"
It is certainly appropriate for economists to insist, in season and out, that government-funded projects also have opportunity costs and to call constant attention to the realities of what must be sacrificed to obtain desired goods. The question is how this can be done most effectively. It will not be by drawing production-possibility curves and extracting marginal rates of transformation, because that radically misstates the problem. Except in a dictatorship, no one economizes for society as a whole or for the government sector. In a democracy, public policies emerge from interactions--exchanges!--among optimizing parties: citizens, elected and appointed officials, and interest groups of many kinds. When the marginal benefits and the marginal costs accrue to different parties, an optimizing model just doesn't fit.

[from Chapter 17 in Paul Heyne, "Are Economists Basically Immoral?", Geoffrey Brennan & A.M.C. Waterman (eds.) Liberty Fund, Indianapolis (2008), p 308]