What Economics Means to Me
by Manasi Deshpande
When I first arrived at the University of Texas, I wondered why the University had one College of Liberal Arts, rather than separate colleges for the humanities and social sciences. The humanities foster in us an appreciation of cultural differences and common challenges, while the social sciences empower us with the tools and thinking to confront those challenges. The humanities teach us that liberty and equality are birthrights, but the social sciences teach us that these rights are incompatible.
To me, economics is a discipline that combines rational thinking and mathematical rigor to find a balance between the human values of liberty and equality. When the humanities demand that all children have health insurance, economics helps us decide to what extent we are willing to sacrifice liberty to ensure equality. When the humanities implore us to bequeath a healthy world to our children, economics guides us in our unforgiving goal to fulfill our own wants while conserving resources for future generations. And when the humanities teach us that markets should be free, economics reminds us that free markets are not just free from government; they must also be free from centuries-old hatred, from unfair labor practices, from environmental degradation.
Though neoclassical economics emphasizes the efficiency of the market, to me the most important role of an economist is examining when and why markets fail and the role that government plays in correcting market failures. Economic health and environmental quality, for example, have traditionally been seen as tradeoffs. But well-designed taxes and emissions trading systems can minimize infringement on individual liberty by using the market itself to correct market failures.
Education in economics can change the world by changing minds. It can help women in the developing world make better decisions for their families, it can help citizens vote in their self-interest rather than succumbing to false promises of quick fixes, and it can help leaders appeal to this self-interest to catalyze public good. As our society confronts pressing problems from climate change to poverty, the economic principles of rationality and cost-benefit analysis must play a central role in upholding the human values of inclusion and equality.