Diary of an Economics & Finance Student

Karl FitzgeraldCommentaryLeave a Comment

A new series on life as an Eco Fin student.tohmprof

Tohm Curtis

Week #1 Welcome to the School of Thumbs:

From the outset, what strikes me most is the recurring battle between standardisation & scepticism as befits education.

Most of education is about standardisation, and the ‘Great Intellectual Fraud’ of the Bell Curve. VCE/HSC/SATs are all about normally distributing a whole bunch of bright young minds over a bell curve, Higher Education is no less obsessed.

In a way, standardisation makes sense – it may well be good to have someone who knows every nuance of economic theory being hired by a bank and told ‘and here’s your computer’ and the graduate says ‘what’s a computer?’ There are just certain standards that have to be met for the University to do right by students and potential employers (including ourselves).

But there’s almost no room for scepticism, hence the ‘School of Thumbs’ being an apt moniker. It’s week one I know. Already I have one clear cut advantage in differentiating myself from your ‘standard’ Economics & Finance Graduate. Having already completed a Marketing degree, I would never ever make an assumption that Happiness is a function of Consumption.

It’s embarrassing to see a subject being taught like this. Marketing is generally derided for its success (even though the amount of success it achieves is dismal). At least it expresses an adequate level of epistemic humility when it is being taught. Marketing 101 kicks off like this:

‘We don’t know what is going on in an individuals mind, or what makes them happy. We call it a “consumers black box”, that’s what we are trying to find out.’

Economics is derided for its dismal failure, but in practice is oblivious to its own epistemic arrogance:

‘We assume people are rational utility maximisers (‘utility’ means happiness) and utility is a function of consumption, and consumption is a function of wealth. So the higher the GDP, the better… okay onto the science!’

I will never accept that people are ‘rational’, but I could accept that it is a good idea to build economic incentives where rational behaviour wins. It’s these ‘rules of thumb’ that the ‘science’ is built on that seem most pressing right now.

P.S. To those who like to rail against ‘the man’ or alternatively (and in my view more accurately) ‘the system’ you may be interested to know that 2/4 of my subjects mention ‘Land’ distinctly in their ‘factors of production’ though, there isn’t much discussion of the implications of this.

Leave a Reply

Your email address will not be published. Required fields are marked *