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 it can be remembered easily. Each of these principles has a long history. During that time, each has provided insights on a very wide range of important puzzles. Each leads to questions commonly asked by economists when trying to understand new puzzles. Therefore, I hope to convince readers that these principles provide wisdom and inspire curiosity.
The posts use recent news, memorable quotes and interesting bits of data to complement the kind of formal models seen in a textbook. Readers can expect to learn how the five principles appear in many different disguises, which should encourage readers to apply their curiosity to related situations.
Seeing past the disguises is important to gaining wisdom because debates about economics 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.
Each post in this blog is intentionally short: about 600 words (i.e., about 3 minutes of reading). 600 words is too short to provide the kind of discussion seen in a textbook or in an academic journal. 600 words is enough to encourage readers to think that the topic is interesting and to learn more by following the links embedded in each post.
About Me
I have taught a 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 time, experience and 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 or social preferences. These differences are not irrelevant but, similar to the importance of focusing on the iceberg and not on rearranging deckchairs on the Titanic, wise people focus on the principles first. Focus ensures that you do not waste time, energy and resources on a question which seems related but is, in fact, a distraction.
The number five is interesting because so many other fields borrow ideas from economics, such as Marketing, Accounting, or Human Resources/ Organizational Behavior. I have asked instructors in those fields about the principles or foundational ideas they want their students to remember. Their lists never seem to stop at five or even 10. I feel sorry for students in such courses who are asked to memorize the 20 pages of jargon included at the end of the required textbook: the students have little assurance that their next instructor would use the same jargon or that, after graduation, the jargon would be useful. 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, nearly all of these books will have been forgotten and been replaced by newer books with titles such as “The 16 New Rules of Business” and “27 Secrets to Success”. Further, I worry that people who reads books on tactics do not have a strategic perspective on the problems to be solved.
I hope that you enjoy. I look forward to reading your comments.
Paul Anglin
5 Basic Principles of Economics 