Archive for the 'History' Category

May 11 2007

Why learning Economics is SO important!

caveman economics, not so complicatedHere’s a fascinating article about the importance of learning economics in order to overcome our innate, perhaps genetically ingrained understanding of human exchanges as a zero-sum game, where one person’s gain comes at another’s loss.

Paul H. Rubin – Evolution, Immigration and Trade –

Rubin finds several fascinating links between evolutionary biology, psychology, and economics.

“Our primitive ancestors lived in a world that was essentially static; there was little societal or technological change from one generation to the next. This meant that our ancestors lived in a world that was zero sum — if a particular gain happened to one group of humans, it came at the expense of another.”

“Economists have argued for more than two centuries that voluntary trade, whether domestic or international, is positive sum: it benefits both parties, or else the exchange wouldn’t occur.”

This ingrained belief of one person’s gain coming at the expense of someone else leads to dangerous policies such as protection and trade barriers, which as we know limit an economy’s growth and improvements in standards of living. Therefore, learning economics is as important to society’s progress as learning to read is to an individual’s education. Rubin concludes with this interesting insight:

“A useful analogy is between speech and reading. All humans growing up in a normal environment learn to speak, but reading must be taught because it does not come naturally… A deeper understanding of economics is like reading — it must be taught.

America’s success in lowering its barriers to outsiders shows that we can and do learn. But like reading, we must teach each generation anew.”

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