This blog is dedicated to showing people how to think like an economist, by emphasizing five basic principles repeatedly. Those five principles are, very briefly,
This list of principles is short enough that each principle can be remembered easily. Each of these principles has a long and useful history. Each leads to questions commonly asked by economists.
Each post in this blog is intentionally short: I aim for about 600 words (i.e., 3- 4 minutes of reading). Each post also includes links to a more complete discussion and one or more puzzles to consider if you want to extend the discussion. The posts use recent events, memorable quotes and interesting bits of data to complement the formal models seen in a textbook. They demonstrate how the principles offer useful, and overlooked, insights when thinking about a very wide range of important puzzles.
This blog shows that the five principles appear in many different disguises. So, you can apply my short posts as analogies or examples during discussions or debates. Economics debates often include zombie ideas. In my opinion, many of the flaws in their seductive (but wrong) arguments can be traced back to a failure to understand one or more of these principles. Learning analogies should help you to see through disguises and to think like an economist: i.e., to ask questions about details which should not be overlooked.
About Me
I have taught a wide range of courses in a range of settings. I have taught courses in microeconomics at all university levels from introductory to Ph.D. I have taught large classes and tutored individuals. I have taught “economics” courses on international trade and on urban economics. I have taught “business” courses on business-government relations, on sales and negotiation, and on market analysis. I have worked in a “business school”, a faculty of social science and a faculty of science.
Over more than 40 years, I have discussed ideas with many economists and non-economists. I have listened to researchers and public policy experts. Sometimes, I agreed with them. Sometimes, I was confused. With practice, I realized that I could connect the source of my confusion to one or more of these five basic principles. I hope that this background gives you some confidence that my thoughts are not based on a narrow perspective.
Only 5 Principles?!
The idea that five principles, and only five, might link all microeconomics courses may surprise non-economists. There is an old joke which says that, if you put 12 economists in a room then you will end with 13 opinions. People can disagree for many valid reasons, including which data to rely on and differences in personal preferences. These nuances and details are not irrelevant but, similar to rearranging the deckchairs on the Titanic, spending too much time on them can distract and mislead from bigger questions. These five principles focus on the most important stuff. While they may not reveal the answer to a question directly, they can ensure that you do not waste time, energy and resources on a question which is related but confused.
When I ask instructors in departments such as Marketing, Accounting, or Human Resources/Organizational Behavior about the principles or foundational ideas they want their students to remember, their lists never seem to stop at five. I feel sorry for students in such classes who are asked to memorize the 20 pages of jargon included in a glossary at the end of the required textbook with little assurance that everybody uses the same jargon. I feel doubly sorry for people who try to learn from books with titles such as “The 15 New Rules of Business” or “28 Secrets to Success”: next year, these books will fade from memory and be replaced by newer books with titles such as “The 16 New Rules of Business” and “27 Secrets to Success”.
Occasionally, my style of writing may be boring, for two reasons. First, despite efforts over many decades, my writing quality is still a work in progress. Second, I will force certain words into the writing unnaturally because I want to be clear about which principle applies. So, my writing is for a good purpose.
I hope that you enjoy.
Paul Anglin
5 Basic Principles of Economics 