Thursday, June 20, 2013

My love-hate relationship with economics



I did not fall in love with economics, the way I fell in love with history and politics. This is not to say I didn't like the subject, but it didn't excite me in the same way. There are parts of it that I find quite fascinating, and others that I find quite boring. But it is definitely one of my interests, and I'll talk a little bit here about my love-hate relationship with economics.



Economics was hardly covered at all before high school, and my only high school experience with it was in a required class taken mostly by seniors. That senior year of high school, I was expecting economics to be a bit on the boring side, but discovered that despite the boring voice of my teacher of that time, I found the subject quite fascinating. I learned a lot, and gained a glimpse of how interesting economics could be. This would affect my later decision to study it further.

But there was a worry for me, which was math. Majoring in economics often requires a fair amount of math, and though I was fairly good at math, I had seldom been very excited about it, and taking calculus at that time left me with a distinctively bad taste in my mouth. So majoring in economics did not seem like a good option for me.

But I had heard that economics majors made more money than the two majors I was thinking about at that time, which were history and political science. These two majors are not known for making enormous amounts of money, and I was mainly thinking about them then as a way of getting into law school. But I was curious about economics, both because of its money-making potential, and because I had heard that it, too, was useful for law school. So after my first real semester of college, I decided to take a college economics class.

I was then more interested in the political applications of economics than the business applications. But my first college class in the subject was microeconomics, which may be the economics class most applicable to business. One of the big focuses of the class is supply and demand, and this has enormous applications to what price businesses should charge for a product. In the common vernacular, the equilibrium price is the price where supply equals demand - in other words, where there is balance. Prices lower than that cause shortages, with demand greater than supply; and prices higher than that cause surpluses, with supply greater than demand. By definition, only equilibrium prices bring balance. I found this enormously interesting, and I describe it in some detail in one of my other posts. Suffice it to say here that I found it quite fascinating.

I was then doing research on economics as a major, and discovered that classes in accounting (and business generally) often help economics majors to find jobs as economists. So I decided to take some business classes, including accounting; and decided to go for an associate's degree in business from Yavapai College. My next semester involved my first class in accounting, and another economics class - specifically, macroeconomics. I hoped that I would be interested in the business classes as well, as I knew of the practical value of business education.

I had thought that I would enjoy macro-economics more than micro, because macro-economics is usually considered more political. This is where you talk about topics like recessionsinflationunemployment, and the output of the broader economy. This certainly has business applications (particularly in finance), but not nearly as much as microeconomics, and I found with some surprise that I enjoyed micro a lot more than macro. This would be important to me later.

By then, I was fairly sure I was interested more in the business applications of economics than the political ones, partly because I was greatly enjoying the accounting class I was taking at the time (my first class in the subject). I knew I would either major in business or economics; and even if I majored in economics, I had the option of doing it as a concentration within a business major, and was fairly certain that business would be my major.

My last semester at Yavapai College involved a class in business statistics, which I knew was basically an economics class. Despite my distaste for math, I actually enjoyed this a great deal, and this helped confirm my decision to major in business of some kind. But when I transferred to Arizona State University, I took Calc II, the first calculus class I'd taken in several years. I knew that advanced mathematics were needed for entrance to most graduate programs in economics, and hoped that my excitement about the math's applications would make me more excited about the math itself. But as in high school, I hated calculus, and these plans were soon abandoned.

The business school at ASU required some calculus, and I was thinking about abandoning my ambition to major in business because of this, when my dad suggested that I transfer to somewhere else, where the math requirements were less. So I transferred to Northern Arizona University, where the business school's only math requirements were classes that I'd already taken (like finite math, which I'd taken at Yavapai). This was a happy move, and I was much more at home at NAU. I loved the city of Flagstaff, and did well in their business program there.

By the end of my first semester there, I was sure that I didn't want to major in accounting, as I had not done well in my accounting systems class. But I was still thinking about economics or finance, and took a class in each subject during my second semester in Flagstaff.


The economics class was called money and banking (sometimes called monetary or financial economics), and it would have helped me if I had majored in finance. But I was not really excited about either monetary/financial economics or principles of finance, and didn't do particularly well in either subject. These classes were interesting at some times and dull at others, and I made a final decision not to major in economics or finance. But while the business school didn't allow business majors to minor in economics, they did allow them to get a Certificate in Business Economics, and I decided I would do that. (I would also take one more finance class - called "financial analysis" - which would teach me how to interpret financial statements.)

I took two more economics classes in my last year in Flagstaff, which was all that I needed to get that certificate. One was basically a statistics class (which I enjoyed immensely), and the other was an international economics class, which was interesting at times and dull at others. At the end of that year, I received the Certificate in Business Economics, and graduated with a Bachelor of Science in Business Administration with a Concentration in Marketing. Three more classes would have given me a double major in Business Economics, but I had taken my last economics class.



Since then, I have done some more reading on international economics & finance, and I also read some well-known historical works on economics, which were Adam Smith's "The Wealth of Nations" (a fairly long work), and Karl Marx's "The Communist Manifesto" (a fairly short work). Like the economics classes I'd taken, they were interesting at times and dull at others, and using the term loosely, I swore off hard economics reading after I finished these works. It was too hard and too mathematical to be my hobby any more, and I turned my attention to other things.


Adam Smith


Karl Marx

But my interest in economics still remains. I often post about economic matters (usually those related to politics), and I've been glad that I studied it. It taught me how to think and be analytical, and it had enormous applications to two great passions of mine - business and politics (not to mention history). My love-hate relationship with economics still remains, and it will probably continue to be a part of my life for years to come.

A follow-up to this story


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