Economics can predict, prevent misery
TEXT OF COMMENTARY
KAI RYSSDAL: Seeing as how it’s college graduation time, we’ve decided to ask three future economists what ought to be a fairly simple question: Why? What drives an otherwise bright and ambitious young person to subject himself to a lifetime of deciphering regression analyses and using words like “resource allocation”?
For our second installment Faress Bhuiyan says, for him, economics is personal.
Faress Bhuiyan: Growing up in Bangladesh, I saw poverty eye to eye. The orphan children eating from a dustbin, a family of seven cramped in an 8-by-8 feet slum hut. The fate of millions in the hands of natural calamities. Widespread poverty is the most malignant cancer faced by humanity. And economics is at the forefront of researching the cure.
We live in a world where we’re constantly trying to balance personal free will against the reality of scarce resources. To make matters even more difficult, there’s the problem of all those self-motivated agents — also known as people. It’s not easy stuff and the prescriptions offered by economists often bear a bitter taste.
So, yes, the allocation of resources in a civil society is a tricky business. Economists constantly have to engage in zero-sum games that offer benefits for some at the expense of others. Should we choose free trade to bring cheap products for local consumers but in the process expose some of our important domestic industries to extinction? Will a dollar spent on education lead to more growth than a dollar invested in infrastructure?
Trade-offs are not the most pleasant things to deal with. A world without trade-offs would be real fun. But they exist and someone has to make these important calls.
I realize that dismal predictions of what’s to come, if societies follow their current trend, are a hard pill to swallow. But I strongly believe Thomas Carlyle was very short-sighted, unless he was joking, when he dubbed economics the dismal science. Economics predicts and tries to prevent the escalation of misery. If a poor, rural woman in Bangladesh can use micro-credit to become a businesswoman overnight, and if the East Asian tigers can tackle poverty with miraculous growth over the last 60 years, then surely it’s not a bad idea to find the reason behind these success stories.
RYSSDAL: Faress Bhuiyan is a doctoral candidate in economics at Northwestern University.
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