What Are You Optimizing For, Weird Art Edition

A Danish artist who pocketed large sums of money lent to him by a museum – and submitted empty frames as his artwork – has been ordered by a court to repay the funds.


So begins an article in the Guardian (h/t John Burn-Murdoch on Twitter). It is a short article, won’t take more than a couple of minutes to read it. But it will take you a fair bit of time and effort to understand its implications in their entirety.

An artist called Jens Haaning was commissioned by the Kunsten Museum in Aalborg to recreate two earlier works by him. One of these was titled An Average Danish Annual Income. It simply displays krone notes in a canvas. Another work by the same artist is apparently pretty much the same idea, but using euro notes instead.

So this time around, the Kunsten Museum provided about 61k Euros, give or take, to recreate the work. The result?

But when staff unpacked the newly delivered works, they found two empty frames with the title Take the Money and Run.The museum put the new artworks on display, but when Haaning declined to return the money, it took legal action.


Well, is it a crime or not? Did he create a work of art or not? What does the law say, and what does economic theory say?

Here’s my understanding from an economic perspective:

  1. Yes, he created a work of art. One may not like it, one may not approve of it, but it is there all right.
  2. Was he obligated to use the currency notes that had been supplied? My take is that he wasn’t, unless this was explicitly specified in the contract. I have of course not seen the contract, but I found this interesting: “The work is that I have taken their money. It’s not theft. It is breach of contract, and breach of contract is part of the work”.
  3. I find this interesting because the artist seems to be making the argument that even if the contract was explicit about using the supplied currency notes in the artwork, his interpretation of the commissioned project involved breaching the contract. What is more important when it comes to a case like this? The legal interpretation of the contract or the (artistic) interpretation of the same document by the artist?
  4. As regards that last question in pt. 3, how should the artist think about this? How should a lawyer think about this when on the prosecuting side? How should a lawyer think about this when on the side of the defense? How should an economist think about this? How do you think about this?
  5. The article ends with this (deeply troubling for me) quote: “I encourage other people who have working conditions as miserable as mine to do the same. If they’re sitting in some shitty job and not getting paid, and are actually being asked to pay money to go to work, then grab what you can and beat it”
  6. “Working conditions as miserable as mine”? Who decides? On what basis? By what benchmark? Is the benchmark a universal one, or does it change by country? Or by some other variable(s)? How do we decide?
  7. Does this apply to all creative endeavors? What if I don’t teach Principles of Economics well, or at all? Do students learn better when they are forced to learn on their own? If yes, am I actually being a good teacher by refusing to teach?
  8. Writing contracts out explicitly matters. Institutions matter. Repeated games in game theory matter.
  9. And dare I say, ethics matter.

Po and Ice-Cream

More tales from the joy and delight that is teaching principles of economics.

I explained what Goodhart’s Law is in class the other day, and if you’re wondering what it is, here you go:

Vishesh emailed to ask a very good question (note that I have paraphrased the question to make it easier to understand, this is not verbatim):

Say you want to be more regular at your gym. In order to build this habit, you decide that you will treat yourself to an ice cream after you go to the gym.

At the outset, you want to go to the gym because you want the ice-cream, not because you want to go to the gym.

But eventually, you will start to want to go to the gym for its own sake, rather than for the reward of the ice-cream. The ice-cream won’t matter, managing to deadlift a 100 kilograms will matter more.

So is Goodhart’s Law not applicable here?

My answer to the question went something like this:

Well, if going to the gym has become important, you no longer need to measure it, and so yes, Goodhart’s law is no longer applicable. Note that it hasn’t failed – it is not applicable. Why is it no applicable? Because you aren’t measuring gym attendance, or targeting it. It “just happens”, now for its own sake.

That’s one way to explain it. This is the better way:

Not Even Sunlight is Free

Teaching the Principles of Economics course to the first semester students at the Gokhale Institute is my absolute favorite thing to do. Both of these things matter – teaching this specific course matters, because I get to help young people realize how awesome economics can be. But teaching at the Gokhale Institute also matters, because it is the place where I myself learn economics.

We just finished the first week of teaching this past week, and in the last class I just about got enough time to introduce to students the concept of opportunity costs.

There is no such thing as a free lunch.

Read that line carefully, and tattoo it onto your brain. That’s the easy bit – tattooing it onto your brain. Applying it ceaselessly, day in and day out, to everything that you do – that’s the really, really hard bit. I wish I could say I practice what I preach, but let’s quickly move on.

So one of the keys to thinking like an economist is always remembering that everything has a cost. This may be one reason economists have fewer friends than they otherwise would. Sometimes people are very happy holding on to the naïve view that something is free. We like the idea of a bargain. We don’t want to hear about the hidden or non-obvious costs. Thinking about foregone opportunities, the choices we didn’t make, can lead to regret. Choosing this college means you can’t go to that one. Marrying this person means not marrying that one. Choosing this desert (usually) means missing out on that one. Sometimes, people just want to eat their cake and have it, too, without being reminded that they missed out on a spectacular piece of pie.
All true. But if you want to get the most out of life, you have to take account of the opportunity cost, the foregone alternatives. Better to make good choices and learn how to live with them than make bad choices in blissful ignorance that lead to ruin.


Again, there is no such thing as a free lunch.

Part of the reason teaching this is so much fun – besides it’s innate importance – is challenging students to come up with a “free lunch”. And I enjoy extending this challenge to my students: give me an example of a free lunch!

Here’s Raghav Agarwal:

In today’s session you said nothing in life is free and there is always an opportunity cost. That got me thinking about and identifying all the costs I incur in my daily life but there is one thing I failed to identify a cost to and that is sunlight. So the purpose of me writing this mail is to understand the price we pay for sunlight (if there is any) and that’s about it.

Whatay enjoyable question! Before you read my answer, try answering it yourself. Is not sunlight free? Once you’re done, read my take:

Whatay lovely question!
1. How do we use sunlight? If it is something as simple as sitting in the sun, and basking in it’s warmth, the opportunity cost is doing something else with that time (sitting in an air-conditioned room, for example)
2. If sunlight is used to generate electricity, there will be opportunity costs in terms of the capital (the machinery) used to generate this electricity. That machinery (and the raw material used to make it) could have been put to different use.
3. If sunlight is used to make plants grow, something else could have been done with that land (construct buildings, for example).So if you ask me, there’s opportunity costs at play here too!

So if you ask me, nope, not even sunlight is free.

I hope some of you disagree with my answer. I hope some of you have other contenders for “But this is free, surely?”. Let me know, and I and my students shall ponder over your responses!

Here are other posts on EFE with the tag “opportunity costs“.

Assignment No. 1 (and No. 3)

Vidya Mahambare has a fun assignment for her students, and I fully intend to copy it this upcoming semester.

Roughly one-third into her microeconomics course at the Great Lakes Institute in Chennai, she asks her students to go take selfies. Not just any old selfie, note. She asks her students to go out into the world, and take a photograph of something that reminds them of a topic they’ve learnt in class.

Maybe a photograph of a coffee seller right outside college. Maybe differential rates of admissions at a tourist site ( x rupees for Indians, 10x for foreigners). Maybe a rickshaw driver whose rickshaw doesn’t have an operational meter. Each of these selfies should have something in the background that is related to a topic they’ve learnt in class.

And, of course, they’re supposed to write a little bit about it. The student who selected the coffee seller outside college might hypothesize that the seller is a monopolist, for example. The differential rates of admission could be price discrimination at work. And maybe the rickshaw driver with the non-existent meter is an example of information asymmetry.

Don’t worry just yet about whether these are good examples of the topic being discussed. This assignment is more about learning to see the world as an economist – or least, that’s how I understand it. Now that you’ve learnt how to think like a microeconomist, are you able to relate what you’ve learnt to the world around you? Show me!

And then, at the end of the semester, the assignment is repeated. Repeated doesn’t mean that students go out and take another selfie. It simply means that they get to look at the same photograph, but now with the benefit of a better knowledge of microeconomics.

Now that you know more about microeconomics, how does your understanding of (and therefore description of) that photograph change? Is the coffee seller really a monopolist? Is the permanently broken meter really an example of information asymmetry? Whatever your answer now, why has it changed? Or why has it not changed?

This is the first slide of my presentation with which I begin my principles of economics class, and you can see why I like Vidya’s idea so much. I give my students a similar assignment, and recently wrote one up myself. I look forward to writing one again this year, complete with a selfie.

I do have one question for you, and I haven’t asked Vidya this yet.

What is your best guess for making it a selfie with the topic in the background, and not just a photo of the topic itself?

Public Policy: The SenKulkarni Household Edition

If you thought economics was hard, wait till you get to public policy.

Last week on Monday, I’d written about screen-time in the SenKulkarni household. If you’d like the TL;DR version here it is:

  1. We had a contest about who would have the least screentime between I, my wife and my daughter.
  2. Winner gets to choose what to do for Sunday lunch, while the loser has a horrific (personalized) punishment inflicted on them.
  3. I promised an update a week down the line.

And so here’s the update: we’ve learnt that designing interventions is tough.

  1. Our daughter simply parked her tablet in our car. Her personalized punishment was ugh vegetables in her lunchbox, and the thought filled her with such horror that she chose to forsake screen-time altogether. That’s the good news.
  2. The better news is that she finished one book, and got started on another. Since she’s not a bookworm, this is a particularly welcome development. (The Young Pandava series, if you’re curious.)
  3. My wife was trailing badly at the end of the first day, and she simply gave up and conceded defeat for the entire week. Lesson learnt.
  4. What lesson, you may ask. Well, if you design a policy, a very long time horizon probably won’t work. Seven daily contests might have been better than one weekly contest.
  5. Since she conceded defeat, she would have to live with our dog’s fur on her favorite sofa in the living room, for that was the punishment for her. She got around the issue by saying that she wouldn’t clean the sofa, but nor would she make tea in the morning.
  6. This is what comes of having two people who’ve been taught game theory in the same household. Pah. Designing incentives is tricky, folks!
  7. My screen-time went down by 20%, roughly speaking, this past week. But that’s not saying much, since it was pretty bad the week before. I simply had no incentive to reduce my screen-time once the contest was “over” after the first day.
  8. I’m not going to be in Pune for much of this week because of work, so we’ll get back to this contest with some tweaks next Monday.
  9. If, in the meantime, you have suggestions and tips, send ’em in.
  10. Navin tweeted about last week’s post, and got some fascinating responses. This one was my favorite:

11. Goodhart’s law is everywhere!

But in all seriousness, think about this:

This was a simple policy designed to get three people in one household to reduce their screen-times, and the first iteration has been a glorious failure. The next time you want to blame any government the world over for a poorly thought out public policy, do keep in mind that it is harder than it seems. Don’t get me wrong, blame ’em, make fun of ’em, and feel free to lament about how things never work around here.

But throw in a sprinkling of grudging respect for having tried at all in the first place 🙂

Incentives Matter, The SenKulkarni Household Edition

The other day, I, the wife, and the daughter were driving somewhere in the car. We stay near Baner Road in Pune, and with the ongoing Metro construction, and the top-notch condition of Pune’s roads, traffic was inching along at best.

And so I wondered how to pass the time.

I keep fiddling around with the home screen on my phone. The row of icons on the dock stays the same, the folders above it stays the same, but I like trying out different widgets every now and then. And one of the widgets that I had tried just that morning was a rather sobering one. It was the Digital Wellbeing widget.

Three hours isn’t, I suspect, all that bad. But that was on a Saturday. As you can see from the graph, Tuesday and Thursday were particularly bad days for me this past week – nearly six hours on both these days!

Now, in my defence, I read a fair bit on my phone. Feedly, Chrome and the Kindle app are all part of the six hours, so it isn’t quite as bad as all that. But, I must confess, I am being rather manipulative in my reporting. The biggest culprit is YouTube.

YouTube’s accursed algorithm has figured out that I like watching cricket, tennis and football videos, along with recipes. And so the damn thing will parade an endless list of videos for my viewing pleasure, and I will happily watch ’em all. And don’t even get me started on YouTube shorts.

My phone addiction, in other words, is a major problem, and my YouTube addiction is a rather large chunk of my phone addiction.

“So how about this”, I said by way of conversation in the car the other day. “How about we have a contest to see who has the highest amount of screentime between the three of us?”

“We can all check our stats, Monday through Saturday, both days included. The person who has the least amount of screentime can decide where we go to have lunch on Sunday afternoon.”

We’re big on celebratory Sunday meals in these parts. It’s usually either mutton at home, or pigging out at some suitably gourmandish restaurant. A lavish Sunday brunch, in other words.

This idea was met with wholehearted approval on part of the rest of the car’s population, and all would have been well if that’s where we had stopped.

But do I even deserve to call myself an economist if I don’t complicate a simple fun game?

Positive incentives are all well and good, but with the carrot should also come the stick. What about the person who has the most amount of screentime? What “punishment” should that person get?

And by the way, it’s not just because us economists don’t know when to stop. Negative incentives work better than positive ones (of course).

And so we spent a pleasant few minutes thinking about what punishment would work best for all three of us. And after some moments of mirth, this is what we have:

  1. If the daughter should end up having the most screen-time, she will have to take the most ugh vegetables ever in her school tiffin for three days running. Most ugh vegetables ever is an intensely subjective call, of course, and I’ll spare you the gory details. (We all agreed that karela would be taking things too far, if you were wondering).
  2. If the wife should end up having the most screen-time, we will remove a protective drape over her favorite piece of furniture in the living room. Said drape protects a particularly cozy sofa in our living room from being liberally festooned with our dog’s fur. I, the daughter and the dog are perfectly fine with fur on the sofa, but the wife isn’t. So for three long days, she can’t clean the sofa of all that fur, and nor can she cover it with a protective rug. Oh, the horror.
  3. And me? If it is me, then I have to make the first cup of chai in the morning, three days running. This is a horrific punishment, since I only take on a somewhat human form about ten minutes after the first cup of chai in the morning. And even that, my near and dear ones will tell you, isn’t a guarantee.

Phone calls are fine, they do not count towards screen time. Ordering groceries, ditto. But everything else does, and today onwards, we’re off to the races.

I’ll let you know come next Monday who won, promise.

But half a day into the contest, here’s where we stand:

  1. My daughter doesn’t even have her tablet with her. She’s kept it in our car, rather than at home.
  2. I’m at 19 minutes for the day (of which 11 minutes have been on the phone, so 8 in all)
  3. The wife was at 20 as of three hours ago.

God help that sofa.

Tusks, Slavery and Economics

MRU.org is just a magical website if you are a student of economics, and one of my favorite videos on it is the one below. It’s only four minutes long, please do watch it if you haven’t seen it already:

The noblest of intentions, you’ll agree – but one of the most important lessons of economics is that the principles of economics really and truly matter. And in this case, the noblest of intentions had one of the most tragic outcomes possible.

That’s slavery. Now let’s talk about elephant tusks. Specifically, burnt and powdered elephant tusks:

If you visit Nairobi National Park, you will see rhinos, hippos, and giraffes, all within sight of the city skyline. You also will see an organized site showing several large mounds of burnt and powdered elephant tusks. They are a tribute to the elephant, and along with the accompanying signs, a condemnation of elephant poaching.
Starting in 1989, the government had confiscated a large number of tusks from the poachers, and as part of their anti-poaching campaign they burnt those tusks and placed the burnt ashes on display in the form of mounds. There are also several signs telling visitors that it is forbidden to take the ashes from the site. There have since been subsequent organized tusk burns.
In essence, the government is trying to communicate the notion that the elephant tusks are sacred, and should not be regarded as material for either commerce or poaching or for that matter souvenir collecting. “We will even destroy this, rather than let you trade it.”


If you have seen (or are already familiar with) the video, how might you make use of your knowledge to think about this problem? Will burning these tusks make the situation better, or worse? Tyler answers the obvious question in his post:

“The economist of course is tempted to look beneath the surface of such a policy. If the government destroys a large number of elephant tusks, the price of tusks on the black market might go up. The higher tusk price could in turn motivate yet more poaching and tusk trading, thus countermanding the original intent of the policy.”

Why does he say that the “higher tusk price could in turn motivate yet more poaching”? Why does he not say it will motivate more poaching? Well, he’d have to calculate the elasticity of the supply curve to make a definitive statement one way or the other.

Read the rest of his post for some typically delightful Tylerian takeaways, including an academic paper called “Elephants“.

But whether it is the poaching of elephants or the slave trade, there is a deeper question at play here which Tyler alludes to towards the end of his post. But before we get there, a little anecdote which I once read in a cookbook. I’ve forgotten which cookbook (of course!), but the idea was that while in the process of cooking dinner for everyone, the author would simply fry some onions and garlic to start with. The aroma of these ingredients being fried would let everybody know that dinner was Being Prepared.

That is, Something Was Happening, And That’s Good Enough For Now.

Why do I bring this up now? Because in some cases, under some time horizons, and for some areas of optimization, a non-optimal response from an economic theory perspective may actually be… optimal.

Should vaccines be free or not? Should healthcare be free or not? Should education be free or not? If this raises your hackles, go with these: should tusks be burnt or not? Should slaves in a slave market be purchased and then set free or not?

Well, in the first set of questions, ask these additional questions: should be free or not for whom? For how long? Are you optimizing for more people staying alive and healthy, or are you optimizing for the fiscal health of the government? What if the long term fiscal health of the government allows you to save more lives in the future? What if giving vaccines away for free allows you to save lives that are here and present now? Will the government be able to run such programmes efficiently? Is it worth running these programmes even after knowing that governments can’t run these programmes efficiently? Why? Why not?

Or as Tyler puts it:

Many non-economists think only in terms of the sacred and the symbolic goods in human society. They ignore incentives. Furthermore, our politics and religious sects encourage such modes of evaluation.
Many economists think only in terms of incentives, and they do not have a good sense of how to integrate symbolic goods into their analysis. They often come up with policy proposals that either offend people or simply fall flat.


Wisdom in balancing these two perspectives, he ends his post, is often at the heart of good social science (and, I would add, therefore at the heart of good policymaking). Or, as I like to put it, the truth always lies somewhere in the middle.

Economists would be better off if they didn’t use only economic analysis all the time. Non-economists would be better off if they used economic analysis some of the time. The trick lies in knowing when to stop in the first instance, and when to start in the second instance.

If only we had definitive answers to both, life would be so much easier.

But then again, I would then have had no reason to write here on EFE either.

So it goes!

Put Me Out of a Job – 2

Let’s begin with the second class today. Your outline mentions the topic “Time Management and Opportunity Cost”. Before we begin the class, outline a definition of both terms, and explain their importance to my life. When you focus on the importance of time management to my life, make sure that you remember I am an eighteen year old. Why should I bother with managing my time? I have my entire life ahead of me – time isn’t a constraint, surely? When then do I need to manage it?
Once you explain your answer to these questions, proceed with the outline as discussed, as per the format I have asked for.

You might think this (time management and opportunity cost) to be a weird topic for a second class in a course called “Principles of Economics”. You would certainly think it to be unconventional. Not the latter half of the topic – opportunity costs – but the first one. What does time management have to do with economics? Well, think of it this way – if you are an Indian student who has learnt economics, you have almost certainly come across Lionel Robbins’ definition, and have most likely memorized it back then.

Here it is: the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.

What is more scarce than time? We all have a limited amount of time, and we all have ends to achieve. The ends we would like to achieve in our lives are much more than the time that is afforded to us, and so we must choose which of these ends to pursue, and which to sacrifice. That’s a pretty good, and if you ask me, useful way to understand opportunity costs. The weirdness, or the unconventional choice (to some) of the topic, is a direct consequence of my request to ChatGPT from yesterday’s post:

Optimize for helping me understand the principles and their applicability to various aspects of my life (professional, personal etc), and it is fine if the outline doesn’t match what is usually taught in introductory economics textbooks. Given this, would you like to change your outline in any way? If yes, please show me the new outline. If no, please begin with the first class.

I am seeking to learn economics not to write an examination at the end of the semester in a college or university with this course. I am seeking, instead, to learn economics in order to apply it to various aspects of my life. Of course, as a student enrolled in a university, you may seek to optimize your learning geared towards doing well in a examination at the end of the semester, and that’s fine. Just let ChatGPT know accordingly, that’s all:

A minor tangent before we get back to our course. What if I asked you to change your course outline for these thirty classes to help me write an examination in an Indian undergraduate course? What would the new outline look like? In your answer, show me both outlines together, per lecture. That is, the first line in the description of lecture 1 (out of 30) should be your original lecture, and the second line should be the course tweaked for doing well in an examination, rather than applicability to various aspects of my life. Ditto for the second course, and so on and so forth for all thirty.

I won’t show you the whole output, but simply how the second lecture’s outline has changed:

Here’s a revised outline for the thirty lectures, with the original lectures designed for applicability to various aspects of life (Lecture A) and the modified lectures tailored to help you succeed in an Indian undergraduate economics course (Lecture B):
Lecture A: Time Management and Opportunity Cost
Lecture B: Opportunity Cost: Definition, Types, and Examples

ChatGPT-4’s Output (in part)

I know which one I prefer, and why. The good news, as a student, is that you can do both! Learn in order to score well in an examination, and also learn in order to figure out how to apply economics better in the case of your own life. Why should the two be different? Ah, some questions you should reflect upon, rather than ask ChatGPT.

Anyway, back to our lecture du jour. I asked ChatGPT to explain why it chose time management, and I do not think I would have asked that question as an eighteen year old. The older you get, the more aware you are of how limited your time is. And at least in my own case, the converse is also true. I count this as a mark in my favor – that while a good prompt may get a student going, said student will still need help and advice on an ongoing basis.

So far, at any rate.

Further proof of that fact that I’m not out of a job, just yet, is below. The context is that I read the answer, and felt it to be incomplete. So I prodded it a bit, and then just a little bit more:

I’ve often read the phrase “all costs are opportunity costs”. Please explain what this means. Remember that I know no economics, and as usual, give me one example from the Mahabharata, and one from a real-life situation

My professor wondered why the word “TINSTAAFL” hasn’t come up in your answers yet. I didn’t even know this was a word! Is he joking, or is this word relevant to what you’re telling me right now?

To be clear, it isn’t so much about the phrase TINSTAAFL, as it was about the fact that I felt its explanation to be incomplete. This prompted me (no pun intended) to ask it to be more thorough:

I have an ongoing request. I’m looking to make my professors job as easy as possible, or even make him, in some sense, redundant. Optimize your answer for thoroughness, and if you think you can’t fit all of what you want to say in a single output, end with a line that says, “I can tell you more, please let me know if you’re interested to know even more” This will always be applicable in our conversations.
Now, back to the second lecture’s outline. Expand upon the three sub-points from the broad contours. I am particularly interested in the third one, so give more details, explanations and background in the case of “recognizing and evaluating opportunity costs in decision making”

This is an important lesson in and of itself. Feel free to tell ChatGPT to give more (or less) detail, or ask it to modify how it gives you the answer (more examples | simpler language | write like person X | show your output as a debate between person X and person Y). Get your “teacher” to be the kind of teacher that you like to learn from!

With regard to your explanation of “Recognizing and evaluating opportunity costs in decision-making”, I’m confused about how to think about short term and long term factors while making my choices, and the short term and long term consequences of my choices. How should I think about this, what framework should I use, and is there an underlying principle at work here that I should know about?

I count this as a pretty important miss on ChatGPT’s part. My personal opinion is that you haven’t fully explained opportunity costs without talking about the importance of how your evaluation of opportunity costs changes given different time horizons. Time matters! ChatGPT actually agrees with me (see below), but only after prodding. And this after making explicit the fact that I was interested in learning about time horizons! And so I asked it again:

Is it useful to think of time preference as a separate principle of economics? More broadly speaking, how should a student of economics think about time preferences? Give me answers from a theoretical perspective, but also from an application perspective.

I’m two days in, where I’m the “student” and ChatGPT my teacher. Today’s class wasn’t great. I don’t think ChatGPT’s output was good enough to stand on its own, and it needed additional prompts to deliver what I would consider to be a good introduction to the concept of opportunity costs, its many nuances and its many applications. It wasn’t bad, but it was far from being good, in my opinion.

Should I take this as a sign that I need to get better at writing prompts, or should I take this as a sign that AI isn’t good enough to replace me yet? How should I change my mental model about whether the average student in a typical college can learn better from AI?

If you are a regular reader of EFE, you know what’s coming next: the truth always lies somewhere in the middle.I need to get better at writing prompts, yes, but also AI isn’t good enough to replace me yet. Both of these things will change over time, of course, but for the moment, less than ten percent into the course, I am inclined to think that I am not out of a job, just yet.

And even better, the complements over substitutes argument just got stronger – I’ll be a much better teacher of a course such as this the next time I get to teach it. Tomorrow we tackle “Supply and Demand: Basics and Market Equilibrium”.

I’ll see you in class tomorrow!

Put Me Out of a Job – 1

Let’s say you’re a student who is going to start learning economics in the coming semester (starting July 2023). Let’s assume that you’ve never learnt economics in a classroom before, save for a brief introduction to it in high school. If you chose to learn from an LLM instead, how should you go about it?

Leave aside for the moment the question of whether you should be doing so or not. The question I seek to answer over many blog posts is whether you can do so or not. Whether or not this is a good idea for you depends in part on my abilities to add to the value that an LLM generates for you from such a course. And once these thirty (yes, thirty) blog posts are written out, I’ll write about my thoughts about whether a student still needs me in a classroom or not.

My current thinking is that I would still be needed. How much of this is hope, and how much dispassionate analysis is difficult to say right now. For that reason, I would like to tackle this problem at the end of this exercise. For the moment, I want to focus on helping you learn economics by teaching you how to learn it yourself, without the need for a human teacher (online or offline).

In each post, I’ll give you a series of prompts for that particular class. I will not always give you the output of these prompts – feel free to run them as they are, word for word, or tweak them as per your likes, fancies and hobbies.

My motivation in this series is twofold. One, to find out for myself just how much better ChatGPT is than me at teaching you principles of economics. Second, to help all of you realize that you ought to hold all your professors (myself included!) to a higher standard in the coming year. We have to do a better job than AI alone can, along all dimensions – let’s find out if we can.

Buckle up, here we go.

Here’s my first prompt:

Remember, LLM’s work best when you give really detailed prompts. Note the following:

  1. I began by giving some information about myself – my limitations as regards economics, where in the world I come from, and what my interests/hobbies/passions are.
  2. I specified what I’m looking to learn from the LLM.
  3. I specified the quantum of output required (thirty classes).
  4. I specified how broad the output should be.
  5. I specified how I would like the answer to be customized for me
    • I would like to learn about economics by relating it to what I like to read about in any case (use examples from the Mahabharata)
    • I would like to learn about economics by relating it to real life situations.
    • It is amazing to me, regardless of how many times I experience it, that it “gets” what I really mean in spite of having phrased my question using really bad grammar.
    • The specific examples aren’t the point, the idea is the point. Learn calculus by relating it to mandala art, for example. Learn history by relating it to dance forms. Learn geography by relating it to food from different parts of the world. A teacher in a classroom cannot possibly do this for all the students, because of the size of the class, and because a teacher cannot possibly know your hobby in as much detail as you can. Make good use of AI!
  6. Should the examples from the Mahabharata be chosen for how prominent the examples were in the text, or should they be chosen for their relevance to economics? My preference is for the latter, and I made sure the LLM knows this. Ditto for the real life examples.
  7. I ended with a meta-prompt, that will stay true for the next thirty (or more questions) – ask if I need to learn more, and only then proceed with the next class.

Should you copy this prompt, word for word? Of course not! For one, you may not want to learn economics, but rather a different subject. The underlying principles still holds. You may not like to read about the Mahabharata, for another. You may want only ten lectures, not thirty. Or you may want two hundred! Feel free to tweak the prompt to suit your requirements, but it helps to “get” how to go about thinking about the structure of the prompts. That’s the point.

I took a look at the outline of the thirty course lecture series it prepared for me, and it was not bad at all. But I had a follow-up request:

Now, you might think that you need to know economics in order to judge the output, and tweak your request. And sure, you’re right that it will help. But regardless, even if you cannot judge the quality of the output, surely you know enough about what and how you want to learn. My apologies for going all meta on you, but if you don’t know enough about the supply side of the market, surely you know what you would like as a consumer – at least in part. So feel free to help the LLM become a better teacher by telling it more about you.

It went ahead and gave me the refined output, and also the broad contours of the first class. Here are the broad contours of the first class:

Again, note that I am quite excited about how this class is shaping up, because if economics is, indeed, the study of how to get the most out of life, Arjuna’s choice to fight in the Kurukshetra war is an awesome way to get some really thought-provoking questions in for discussion. But this may not be your cup of tea – so feel free to brew your own cuppa of econ, by customizing it to what you like the most (Avengers? Cricket? RRR? Bharatnatyam? Junk food? Anime? Go for it!)

I did have follow-up questions:

And based upon its answer to this prompt, I had yet another clarificatory question:

Note that your conversation will be (I would go so far as to say should be) different. You will have different questions, different prompts, different things that make you curious. And that’s not just fine, that is the whole point. Depending on how carefully you read its output, and depending on how probing and detailed your questions are, you can keep just this first class going for a long, long time. How long? That’s up to you!

Here are two examples:

You can, of course, ask it to answer any (or all) of these five questions. Ask it to create ten (or twenty, or a hundred) instead – and as a student, assume that this is how us professors might well be “coming up” with questions for your tests, assignments and exams.

Here are more, and note how they get wilder (more random?) with each passing question:

In each of these cases, you don’t have to have trust in, or agree with, the answer given by the LLM. Treat the output as a way to get you to think more deeply, to challenge what has been said, to verify that the answers are correct, and to have further discussions with your peers and with your (human) teachers, whoever they may be.

Note to myself (and to other teachers of an introductory course about the principles of economics):

  1. How can we do a better job than this in the classroom…
    • Without using AI (we’re substitutes)?
    • By using AI (we’re complements)?
  2. What is missing from the LLM’s output (this is assuming you’ve tried these prompts or their variants)?
  3. What stops us from recommending that students do this in class on their own devices, and we observe, nudge and discuss some of the more interesting output with everybody? That is, how does teaching change in the coming semester?

Feedback is always welcome, but in the case of the next thirty posts, I think it is especially important. So please, do let me know what you think!

India’s Institutions and Reasoning Using Principles of Economics

Shruti Rajagopalan has an excellent post out on Rahul Gandhi’s disqualification from the Lok Sabha. We live in polarized times, so it is inevitable that you will read this post (and her post) with your mind already made up on whether she is right or wrong. Thankfully, neither Shruti’s take on the issue, nor your opinion on Shruti’s take on the issue, is what I want to write about today. My post is, instead, on how a student of economics ought to think about this issue. Your conclusions from your thoughts, and whether they agree with your instincts, is a separate issue.

India’s situation is more a slow growing cancer that is infecting everything. India’s illiberal laws, a biased judicial decision and the Indian Supreme Court’s flawed guidelines on legislative disqualification, created a situation ripe for political opportunism. Consequently, Om Birla, the partisan speaker of the Lok Sabha, from the ruling BJP, has exploited his discretionary powers to disqualify the opposition leader.


“Murder of democracy” and “The law followed its own course, so what’s the problem here?” are the two usual, and entirely predictable reactions from both sides of our shrill spectrum. I would encourage you to enlarge the frame of your analysis if you are a student of economics. You very well may (and as a citizen of this country, you should) have an opinion on what has transpired, but as a student of economics, begin where Shruti does. She begins, I’d say, by making two points. First, that institutions matter. And second, that our Indian institutions are in slow decay.

The first of these points is well understood by watching this video:

I’m not saying we live in North Korea, and I’m not saying we live in South Korea. The video tries to help you understand the point that for any country’s development, institutions matter. This point is made in this video by using the extreme example (as Tyler mentions more than once) of North and South Korea. Over time, countries with institutions that exist and function well will do better than countries without institutions, or those with institutions that do not function well.

What does “well” mean in this context? Well, that depends on what you are optimizing for. And in this case, we should be optimizing for having institutions that make India a better place. What does the word “better” mean in this case? Ah, what a can of worms that is!

But regardless of where you find yourself on The Great Polarization Spectrum, hopefully you will agree with me that India’s institutions do not run as well as they might. This is not about pre- and post- 2014. This is about viewing India’s institutions independent of which government is or has been in charge, and their (the governments’) causal impacts on the quality of India’s institutions. A simple question: do you think India’ institutions are perfect? If no, as a student of economics, you would do well to ask why, and you would do well to think of how they could be made better. Your definition of the word “better” is a function of what you think India should be optimizing for, of course.

Shruti asks more than a few questions in her posts, and answers them. You may wholeheartedly agree, or wholeheartedly disagree with her answers. The reason you will find yourself in extreme agreement (or disagreement) with her take is because of the consonance of your definition of the word “better” with her implicit definition of that word. But ignore, for the moment, her answer and yours. Let’s ask ourselves if we agree with the questions she has raised. Here they are:

  1. Does India become a better place because we have criminal defamation in India?
    Note that your answer shouldn’t be a function of this specific case. That is, you might be tempted to say “No!”, if you are a Rahul Gandhi acolyte. Or you might be tempted to say “Yes!” because you are a Narendra Modi acolyte. Both approaches are wrong. Regardless of the specifics of the current issue, and as a matter of principle, does the existence of criminal defamation make India better or worse? Whatever your answer, why? I’m not going to answer this question for you, nor should you ask anybody else to answer it for you. Read the relevant section from Shruti’s post, and try and figure out the answer for yourself.
  2. Does the disqualification of Members of Parliament because they have been convicted of a crime make India a better place?
    I’m going to sound like a broken record, but note that your answer shouldn’t be a function of this specific case. That is, you might be tempted to say “No!”, if you are a Rahul Gandhi acolyte. Or you might be tempted to say “Yes!” because you are a Narendra Modi acolyte. Both approaches are wrong. Regardless of the specifics of the current issue, and as a matter of principle, does the 2013 judgment by the Supreme Court make India better or worse? Whatever your answer, why? I’m not going to answer this question for you, nor should you ask anybody else to answer it for you. Read the relevant section from Shruti’s post, and try and figure out the answer for yourself.
    As a student of economics, note her use of economic reasoning in two different places in this section too. Here’s the first, and here’s the second.
    Are you confused about how the second is economic reasoning? She’s saying that incentives matter, and that this rule can be misused by a trigger happy Indian executive. Again, note that this is not about the specifics of the issue at hand. Regardless of who is in charge and who is in the opposition, how should we think about this issue in principle? Whatever your answer, why?
  3. How much power should the speaker of the union and state legislatures have?
    I’m once again going to sound like a broken record, and you know the drill by now. Here’s the relevant link.

My point in this post is to encourage you to do more of long term, principles based thinking.

  1. Get better at separating out the specifics of the issue, and learn how to uncover the underlying principle.
  2. Learn how to think about these principles in the abstract, and when doing so, learn to think about the long term consequences.
    • If you are confused about how “long term” you should be thinking, my suggestion would be to use the thumb rule that a little more long term than your current line of thinking is always a good idea.
  3. Learn to think about what the word “better” means to you, when you try and think about the answer to the question “How should we go about making India a better place?”
    • Always remind yourself of pt. 2 above while thinking through this question. Guard against the temptation to not do so.
  4. Learn to ask more often why other people have different definitions of the word “better”, and learn how to not be dismissive of their definitions. Always ask what might be the strongest arguments for their definition, and learn how to argue against those strongest definitions. This necessitates being a very good student of history, of culture and of philosophy. That’s a lot of hard work, and you’ll never be perfect at it.

But as a citizen of a country, any country, what else is there to do.