Thursday, July 12, 2012


The core lesson of economics is that specialization and exchange are the road to prosperity. The idea predates Smith and Ricardo.  They and many others articluated the idea, but humans had spontaneously practiced it for millenia.  There is some speculation that Neanderthals never got the hang of it and lost in the competition with our ancestors.

I have to conclude that economists have done a poor job of teaching the core lesson of their field.  Michael Kinsley writes in today's LA Times about "Outsourcing's bad rap ... Even if Mitt Romney sent jobs overseas, is that so terrible?"

It seems reasonable to assume that most of the likely voters had some class in their background where some economics was taught.  If so, and if any of it stuck, the current debate would not be hobbled by the kind of flat-earthism where one candidate seeks to capitalize on an outsourcing accusation and the other does a horrible job of explaining that there are serious benefits from specialization and trade. There would be plenty of sneering from commentators if party leaders argued over whether the moon was made of blue cheese. 

If this level of economics cannot be explained in ways that people get it, why bother with all the rest?