The Forum | General Education

William Luther on Economics and the Liberal Arts

August 14, 2019

William J. Luther is an assistant professor of economics at Florida Atlantic University, director of the American Institute for Economic Research’s Sound Money Project, and an adjunct scholar with the Cato Institute’s Center for Monetary and Financial Alternatives. Prior to joining Florida Atlantic University, Professor Luther taught at Kenyon College and has remained a champion of the liberal arts. 

Professor Luther sat down with ACTA's Erik Gross, his former student and advisee at Kenyon College, to discuss why economics is a vital component of a well-rounded liberal arts education. 

Erik:  Why is a solid grounding in economics an important part of a well-rounded liberal education?

Will: Economics is a framework for considering a whole host of questions, so anytime we’re thinking about individual decision making, we’re effectively thinking about economics. And if we aren’t thinking about the incentives that individuals face, what their trade-offs are, what their opportunity cost happens to be for a particular decision, then we’re just not thinking about it very much. So whether you are interested in financial markets and how should you allocate your portfolio; public policy; the effect of a tariff on domestic production or domestic consumption; or social issues like how a licensing requirement affects the least well off or how criminal justice reform affects marginalized groups—all of those questions require thinking seriously about individual decision making. Economics is really a framework for considering whatever it is that people are interested in.

Erik: Only 3% of colleges require a foundational course in economics. If requiring a course in economics feels like a tough sell, what are some steps colleges can take to encourage other students that aren’t focusing on economics to cross pollinate with the discipline?

Will: I think colleges can encourage students to cross pollinate with economics. I’m a big fan of interdisciplinary studies. In economics, it is important to talk about aspects of sociology and history and political science. My hope is that folks in those disciplines, as well as others, are introducing their students to economics as well. Anything that colleges and universities can do to encourage that cross-campus collaboration and encourage students to think in a more interdisciplinary way is a step in the right direction.

“Anything that colleges can do to encourage students to think in a more interdisciplinary way is a step in the right direction.”

Erik:  What are some specific themes or big ideas from economics that you wish more college graduates understood?

Will: I think the most important question is the old question in economics: What is the nature and causes of the wealth of nations? Why is it that some countries are so rich and individuals in other countries remain so poor? In terms of human flourishing, there is no more important question than that. It’s really difficult to live a well-rounded, meaningful life when you are hungry or when your child is dying of malaria. Yet that is still the case in a large part of the world. Getting students to think very seriously about that question has the potential to do more for human flourishing than any other question that we could possibly consider.

The economist Robert Lucas was writing about the economic growth in India, and he said that the consequences, in terms of human well-being, to paraphrase, are simply staggering. Such that when you think about economic growth, it’s hard to think about anything else. We often think a lot about short-term policies. What can we do to solve immediate problems? Say there is a recession, or maybe we think people consume too much sugar, or just insert your favorite current policy problem. Long run economic growth, in terms of human well-being, dwarfs all of those short-term issues. I would love to live in a world where more people are able to think critically about what that process is that generates economic growth and how we can get more of it in a way that is sustainable and genuinely productive—not just increasing output for output’s sake, but increasing valuable production so that individuals can live more prosperous, enjoyable lives.

“When you think about economic growth, it’s hard to think about anything else.”

Erik: Why should people focusing in economics pair it with a liberal arts education?

Will: Students who go to a liberal arts college are more inclined to think about big questions, to pursue those questions from a variety of perspectives, and to think critically and assess different kinds of arguments. And economics, as a discipline, is a very important set of arguments in those big conversations. If you want to ask a question like—What is the nature of the good and the beautiful? What does it mean to live a good life? How is it that we can make the world a better place?—then you need philosophy and history, but you also need economics. You need a sense of why it is that individuals are making the decisions that they’re making. How do the trade-offs they face affect those decisions? How do we know if things are better or worse by an individual’s own assessment? Economics is a useful tool in those conversations.

“Students who go to a liberal arts college are more inclined to think about big questions, to pursue those questions from a variety of perspectives.”

Q: We work a lot with governing boards of regents and with state policymakers. How would you pitch the argument for more emphasis on economics, perhaps as part of the revision of a general education program?

Will: If we just think about the empirics, economics as a discipline is the least skewed in terms of political viewpoints, out of all of the social sciences. There are folks on the left and folks on the right. The ratio of Democrats to Republicans in economics is something like 2.9 Democrats to 1 Republican. That’s about as close to even as you get in the social sciences. In sociology and anthropology, the ratio is something like 16 to 1. The reason I think this is the case is because economists are thinking about the decisions that are being made. They are perhaps less guided by their own policy views or political views when pursuing those questions. They are instead thinking through the logic of human decision making, and that leads some folks to hold views that are inconsistent with their political tribes. It leads some people to change their minds, and perhaps, if they change their minds enough times, to change their political tribes.

This framework helps us to be open about our ideologies, but also to be open about our policy views, too—to think through the logic of decision making before reaching a conclusion about what the appropriate policy is. Having a framework, a discipline, where political ideology is less extreme, encourages students to think more openly about important questions than would otherwise be the case.

It just so happens that this discipline is economics. It is the least skewed, in terms of ideology. If I were pitching this to a Board of Regents or state policymakers, I would say, “Do you want young, bright 18 to 22 year olds to be thinking critically about the most important questions?” If so, you should put them in front of a faculty who are thinking openly about those big, important questions. Economists, for all their faults, and there are many, tend to do that a bit more so than in other disciplines.


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