Argue The Point, Not The Person

There’s no end to the number of scenes in movies and television series in which you’re told to play the man, not the hand, when it comes to poker.

This is because the objective is to win, and poker is, by definition, a zero sum game.

But arguments are not zero-sum games, although most (all?) of us tend to think so, at least when we’re actually arguing. We get so caught up in winning that we often choose to defeat the person making the argument, rather than the argument itself. And we’re much likelier to do this if we realize that our own argument is unlikely to carry the day. The fancy-pants word for what we are likely to do next is ad-hominem. We’ve all used this strategy, if nowhere else, at least in school while growing up. And I’m not proud of this, but I’ve used it well into adulthood too.

And the reason this happens is because we think the point of an argument is to win it. Which is wrong, of course. The point of an argument is to figure out what is right (or true). But this simple point is hard to remember, and so we end up turning arguments into a battle for preserving our egos.

There has been a bit of a kerfuffle in a subset of Twitter in the recent past, and while you will be able to click your way through and figure out what it has all been about, I’d much rather you didn’t, not right away at least. Focus, instead, on what the thread is telling you about how to argue:

While the thread itself doesn’t mention it, my biggest takeaway from reading it is to ask myself what the point of an argument is. Or, to put it in a way that resonates with one of my favorite questions, what should one be optimizing for in an argument? And my own answer is that one should be optimizing for figuring out what is right (or what is true), rather than winning the argument.

Note that this is hard to do, and note that the person dispensing this gyaan to you right now (i.e., me) often isn’t very good at following his own advice!

But that being said, it still is advice worth pondering over.

By the way, if you’ve been wondering why I’ve been careful to distinguish between that which is right and that which is true, I have a movie recommendation for you.

And on a related note, learn to read the news in such a way that you end up updating or changing your beliefs, rather than being in a rush to confirm them. Statisticians will say that I’m simply asking you to be more Bayesian in your outlook, and they wouldn’t be wrong (click here and read hansn’s answer).

I’d urge you to spend some time in thinking through the paragraph immediately above this one, making sure you understand what Baye’s theorem is and why I bring it up in the context of reading the news, and then read this excellent post by Tyler Cowen. It is excellent (to me) precisely because it isn’t clear the first time you read it.

But the reason I bring that post up here is because I would argue that the Twitter thread and this post are making the same point: arguing should not be about feeding your ego, and neither should learning more about the world be about feeding your ego. Arguing and learning more about the world should, instead, be about figuring out that which is right (or true).

Note to self: this is, of course, much easier said than done.

Let me be clearer: whether while reading something or while arguing with someone, continually ask yourself this question: in what ways might I be wrong? How does this article/video/movie/podcast/argument help me update my understanding of how the world works?

And if you find yourself resolutely saying “it doesn’t! I’m obviously right!”, be very afraid!

Do border regions have better food?

Do border regions have better food? What exactly counts as a border region? The parts of the United States near Canada? The best food in Italy is not obviously at the (rather skimpy) borders. China and India might be the best food countries in the world, but because they are so large most of their cuisine is not “border cuisine.” So I say no.

As always, read the whole post – and in particular, the Wikipedia link to James Steuart (not a typo). But given my deep love of all things gastronomical, I wanted to expand on this point a bit.

  1. Tyler’s first question is worth thinking about (what exactly counts as a border region?), and the way I choose to define it more or less defines the direction in which this post is going to go. A border region, for the purposes of this post, is where a confluence of two or more cultures is observed. That is a ridiculously loose definition, I know, but this is a blogpost, so please let’s go with this for the moment.
  2. Does that definition necessarily mean better food? Well, that requires a definition of the phrase “better food”, but more variety and a greater degree of syncretism can reasonably be expected.
    • Think Massaman curry in Phuket, for example. Read this paragraph from that Wikipedia article to get a sense of what I’m trying to get at. This spice, frequently used in both Chinese cuisine and coastal Indian cuisine(s) is another good example.
    • Will the food in Chennai be necessarily better than in the interior parts of Tamil Nadu? Not necessarily, but it will be more varied in terms of influences, and especially as a tourist, that’s a good thing. It’s a good thing in general too, if you ask me!
  3. A confluence of culture is likely to be positively correlated with greater commerce, and that is likely to imply higher rent for real estate. Higher prices will imply a greater incentive to be better at making and selling food, so the quality will likely be higher (so long as you know where to look and how to choose). You could make the same point for costs of labour.
  4. More trade is also likely to imply fresher ingredients, and therefore better food.

What else am I missing?

So my answer would actually be yes, but it very much depends on how you define “border cuisine”.

Choosing Where to Eat

I just got back from a lovely holiday in Goa. Oodles of good food, loads of fantastic beer, hours of staring out at the sea, and not a laptop in sight for miles and miles. Just wonderful.

But if you know me at all, you’ll know that the first of these was the most important bit. Duh.

I spend a large chunk of my day thinking about food – what to make next, what to eat next, where to eat next. And today’s blogpost is about the last of these – where to eat next. How should one go about choosing where to eat?

  1. The book to begin with if you want to use economist-y principles is Tyler Cowen’s excellent “An Economist Gets Lunch”. The book is full of delightfully Cowenian advice:
    • Choose a restaurant where the patrons aren’t smiling (because that means the regulars are here to eat, not socialize)
    • When it comes to cuisines not native to the town you are in, choose a restaurant located on the outskirts of town rather than in the centre, it is more likely to have genuinely good food (lower rents, closer to recent immigrants into said town, both of which are likely to be good indicators of genuinely good food.)
    • The weirder a dish sounds relative to the rest of the menu, the more likely it is to be worth ordering (for why else would the restaurant choose to include it in the menu in the first place)
  2. Krish Ashok had a nice post on Instagram recently, where he pointed out that you should ignore negative reviews of restaurants, since the internet incentivizes one to be nasty and negative with one’s opinions.
  3. Here are my own tips, noting that your mileage may vary when it comes to adopting them:
    • Triangulate – if a restaurant has good reviews on Zomato, and on Google Maps and on blogs, it is likely to be good. A high rating only on Zomato is, to me, a worrying sign.
    • I tend to rate reviews on Google Maps higher because Google Maps seems to go out of its way to make putting up reviews more difficult (a somewhat unintuitive interface) and unrewarding (the gamification for reviewers simply isn’t good enough). So if somebody has taken the time and trouble to write a review, and that too a positive one, it is likely to be a very good restaurant.
    • YouTube reviews merit their own separate bullet point. There’s tons of stuff out there, but rely on folks who have put out a lot of stuff regularly, and tend to have a balance of 60:30:10. That is, 60% positive reviews, 30% so-so reviews and 10% negative ones. Note that this is a thumb rule! Once you find a channel you like, optimize for the very top of the 60%.
    • A limited menu and only one cuisine is a huge plus. This implies that the restaurant is focusing on what it knows best, and is not pandering to everybody. I’m even more reassured if the waiter informs me that certain items are not available, and my confidence in the quality goes up even more if they do so brusquely. I take it as a sign that they are focused on quality, and that they couldn’t care less if you leave. This must mean that there are enough “regulars”, and that can only be a good thing, right? I am from Pune, please note, so this may just be my genes having gotten used to rude service.
    • Make friends with the chef, the senior most waitstaff member, or both. I am a hopeless introvert in most social settings, but people who talk about food with passion are my people, and I have no problem striking up a conversation. Ask them to teach you how to appreciate the food they’re serving – what should you be looking out for on your palate, what details should you not be missing, and what variants of this dish are possible. Folks love to teach self-declared amateurs, and this will go a very, very long way in a restaurant.
    • I wish this weren’t true, but there is a very low bar for striking up a conversation in a restaurant in India. Politeness and a friendly demeanor are seriously underrated, use this fact to your advantage.
    • A corollary to the last point: try and visit a restaurant as early as possible. Most folks in urban India prefer to have late dinners – if you sit for dinner at 7 pm, you are likely to have fresher food and a not quite so busy staff who will be that much more willing to chat with you.
    • Avoid buffets like the plague. Unless you know the chef or the senior most staff member (or both). They will then not only recommend the best things to try, but will also give you freshly made dishes that they would like you to try. If you find such a restaurant, you’ve struck gold.
    • Avoid glitzy restaurants that are prominently located. They are more likely about signaling then about eating.
    • Well established and cheap watering holes are likely to have very good food. My favorite example in this regard is Pecos, in Bangalore, but there are lots of examples in all cities in India.

DallE-2 and Microsoft Designer

I’ll be the first to put my hand up and admit that I’m a sucker to try out new things. But even discounting for my puppy-like enthusiasm for new shiny tech baubles, it’s hard not to get excited about Microsoft’s announcement regarding Microsoft Designer:

For the first time ever, I’m excited to announce Microsoft Designer, a graphic design app in Microsoft 365 that helps you create stunning social media posts, invitations, digital postcards, graphics, and more, all in a flash.
Microsoft Designer is powered by AI technology, including DALL∙E 2 by OpenAI, which means you’re able to instantly generate a variety of designs with minimal effort. Our cutting-edge AI supercharges your ideas.
With Designer, there’s no need to spend time building cards or social media posts from scratch. And you no longer need to search through thousands of pre-made templates. Designer invites you to start with an idea and let the AI do the heavy lifting. For example, with ‘start from scratch’ within Designer, you can simply describe an image you want to see, and the app does the work for you to create something totally unique. As you work in Designer, every surface of the app is powered by AI to help ensure consistent, aligned, properly scaled, and beautiful designs, even with or without any inherent design ability.

Students introduced me in the past couple of years to Canva, and I have been trying to develop some sort of a design aesthetic ever since. I can’t say I’ve become very good at it, alas, but I’m certainly better than before. Which is not saying much, but leave that be for the moment.

With Designer, I no longer have to try to be good, it would seem. Most excellent.

And please do read this blogpost by Tyler Cowen:

It almost goes without saying that the AI revolution currently underway is impressive. It is likely to have a huge impact in some parts of art world, such as the commercial sphere — consumers are generally not interested in who made any given ad or logo. It either works or it does not, and those conditions favor the machine. AI will also give the world quality (automated) personal assistants and autonomous vehicles, among many other advances.

AI will also give students the ability to submit excellent assignments:

There will undoubtedly be many collaborations between AI and human creators, with the humans put forward as the public face of the joint effort. Periodic scandals about authorship will surface (“did he write any of that song?”), just as allegations of cheating with AI have risen to prominence in chess. AI-generated art will attract the most interest when the aesthetic of the creation and the personality of the human accompanist appear to be in sync.

What a time to be alive.

Which Textbooks Are We Recommending Our Students Read?

I chanced upon this excellent website via Marginal Revolution yesterday.

What is Open Syllabus?

Open Syllabus is a non-profit research organization that collects and analyzes millions of syllabi to support novel teaching and learning applications.  Open Syllabus helps instructors develop classes, libraries manage collections, and presses develop books.  It supports students and lifelong learners in their exploration of topics and fields.  It creates incentives for faculty to improve teaching materials and to use open licenses.  It supports work on aligning higher education with job market needs and on making student mobility easier.  It also challenges faculty and universities to work together to steward this important data resource.
Open Syllabus currently has a corpus of nine million English-language syllabi from 140 countries.  It uses machine learning and other techniques to extract citations, dates, fields, and other metadata from these documents.  The resulting data is made freely available via the Syllabus Explorer and for academic research. 
The project was founded at The American Assembly, a public policy institute associated with Columbia University. It has been independent since 2019.

Tyler Cowen linked to a Davis Kedrosky thread about the most cited papers, and the thread is well worth your time. Here are the top five papers assigned as readings in economics since 1990, worldwide:

But I dug around on the website to see what textbooks have been recommended. And worldwide, this is what comes up:

If you’re wondering, The Wealth of Nations comes in at number 13, and the General Theory comes in 22. I don’t intend this as snark or criticism, and I would in fact argue that the General Theory is not the best book to read if you’re starting on a study of macroeconomics – but that’s a topic for another blogpost. The top 5 is actually a pretty good list, although my personal preference would be to have it reversed. That is, a book on the principles of economics ought to be number one, in my opinion. Should it be N. Gregory Mankiw or some other book? Some other book(s) if you ask me, but that too will be a topic for another blogpost!

Take a look, however, at India’s most recommended textbooks (you can filter by country):

And personally, I find it worrying that a Principles text doesn’t make the top 5, and neither does an introductory text on micro or macro! Modern Microeconomics by Koutsoyiannis makes an appearance at number 7 and the first macro text is Shapiro, in at number 10.

I have nothing against any of the textbooks mentioned in this list, and I have (genuinely) fond memories of doing battle with all of them when I was a student, but I do ask myself if these five ought to be the most assigned texts for Indian students.

Which, of course, begs the obvious question, and that will be tomorrow’s blogpost. But for now, a request: if you are (or have been) a student of economics in an Indian university, what would your top 5 list look like? Much more importantly, if you are a professor of economics in India, what would your top 5 look like?

If you can spare the time, I would love to know!

Econ Ain’t About Money

A somewhat less sexy, but more accurate title would have been ” Economics Isn’t Just About Money”.

But the decision to jettison the word “just” is deliberate, and not just for the sake of a headline that makes you want to click through. It is, instead, to emphasize the point that economics is about so much more than just about making money.

I have some close friends to thank for inspiring this post, with whom I had a conversation about tomorrow’s blogpost. They told me that they had been under the impression that economics is about money, and to my surprise, that seems to be an idea that most people I have spoken to are comfortable with.

But these people I have spoken with, and whoever has taught them economics, have less than half the right answer. Economics isn’t about money alone.

I’d written a post a while back about Choices, Horizons, Incentives and Costs. And to me, that’s what economics is about.

No matter what you do in life, you have a range of choices to choose from. Should I watch Netflix for an hour or study for an hour? Should I read a couple of pages from a book, or should I quickly scroll through Twitter? Should I enroll in an engineering course, or should I pursue law instead? Should I start with the salad at a buffet, or should I start with desserts instead?

Life is all about choices, every single second of your life. Economics helps you be clear about your choices, and also helps you potentially expand your choice set. One option regarding the last question in the paragraph above, is to say neither, and fast instead. Be aware of your entire choice set, and only then set about choosing one.

Horizons is about thinking about the long term, rather than the short term. My favorite example in introductory economics is to ask my students if I should have a second gulab jamun for desserts after lunch today. I tell them that present day Ashish will definitely say yes, and seventy year old Ashish (assuming I live for that long) will definitely say no. Because the consequences of choices I make today truly matter in the long run, bur are underestimated in the short run.

Incentives are about what motivate you to do (or not do) things. Economics teaches you how to use your own incentives, and those of others, to Get Things Done. My favorite example comes from Tyler Cowen, who helps us understand how to use incentives to not be bored in a museum. Ask yourself, he suggests, which painting would you choose to steal from each room, to install in your own home – and you cannot choose more than one per room. Your incentives have flipped – now it’s not about “seeing” each and every painting having paid the price of admission, but instead about asking yourself which painting will look best in your home.

And costs are about the realization that nothing in life comes for free. No matter what you are doing, you could always be doing something else. Instead of having read this far (thank you!), you could have given up halfway through and watched funny cat videos instead. Opportunity costs are everywhere, and whatever your choice, it ain’t for free.

The point that unites each of the examples above is that none of them are about money! They are economics-y concepts: choices, horizons, incentives and costs. But what to have in a buffet, whether to have a second gulab jamun, deciding which painting to steal and watching cat videos are not about money.

You could put a monetary value to all of them using subjective valuations, of course, but some things shouldn’t have numbers attached to them. Not because they’re not important, but because they’re fundamentally unquantifiable. What price (and I’m not joking here) can you possibly put on a parent choosing to read a story to a child? Economists have an answer to this question, of course, but it isn’t one that I am entirely comfortable with, especially if it involves a definitive number.

And that’s what I mean when I say that economics is about so much more than just money.

That still does not answer the question of what economics is about – I have written about it earlier, and will defend my answer in tomorrow’s post.

The Economist on What To Read To Understand How Economists Think

Here’s the article, and I hope you’re able to access it.

Just in case it is behind a paywall for you, here is a quick summary:

  1. The Economist says that thinking like an economist is primarily about two things:
    1. There is no such thing as a free lunch, which is another way of saying you can never avoid opportunity costs
    2. When possible, try to put numbers on things
  2. The article then lists out five books that help you think along these lines:
    1. Capitalism and Freedom, by Milton Friedman
    2. The Worldly Philosophers, by Robert Heilbroner
    3. Africa: Why Economists Get it Wrong, by Morten Jerven
    4. Capitalism Alone, by Branko Milanovic
    5. Freakonomics: A Rogue Economist Explores the Hidden Side of Everything

I’m about to share my own list, but before I do that, a couple of points.

I’ve read the first, second and fifth book, and they’re all great books to read. I look forward to reading the other two, and the description of the fourth in particular sounds particularly exciting to my ears:

This is the book to read if you want to understand why capitalism—and economists’ way of thinking—has triumphed the world over. By the beginning of the 1990s, it was clear that the capitalist system had defeated the communist one. Today, however, many people yearn to move to a new system, such as “millennial socialism”. A left-leaning scholar, Mr Milanovic sympathises with these feelings. But ultimately he finds many radical prescriptions unconvincing. A country which tried to de-marketise on the scale envisaged by socialists would, he says, be unstable and dissatisfied in other ways. Shifting towards a much shorter working week, for instance, would leave it poorer than its neighbours. For how long would people put up with that? Capitalism is far from perfect, his book shows, yet it is hard to shake the notion that it is the only system that broadly works.

In a way, this reminds me of Churchill’s quote about democracy being the worst form of government, except for all the others that have been tried. And it rings true – there’s many things that we all wish could be “better” when it comes to capitalism, but one of my favorite econ questions is very apposite here: relative to what? That is, if you say capitalism is not good/not perfect, you need to answer the question “relative to what”?

Second, please don’t interpret this blogpost as a critique of the list put out by the Economist. This blogpost is very much in the spirit of “Yes, and” rather than “No, but”. But that being said, my own opinion of the main features of thinking like an economist are slightly different. I couldn’t agree more with the first feature (opportunity costs), but I do disagree with the second one. I would argue that it is entirely possible to get the most out of life without having to put a number on it. In fact, as Russ Roberts recently pointed out in a podcast, it simply isn’t possible or desirable to put numbers on some things. I haven’t read the book yet, but the podcast was instructive in many different ways. Here’s one apposite quote (Russ is answering a question by Tim about how to decide whom to marry):

Alain de Botton has a wonderful YouTube video I recommend on that; I think the title is “You’re going to marry the wrong person.” Fantastic short video. Don’t show it to my wife because she thinks she married the right person, I don’t want her to see it and depress her. But seriously, there’s no best. And part of the theme of my book is that most of life is a matrix. And by that, I don’t mean the movie, the red or blue pill. What I mean is that it’s a set of complicated attributes that are pluses and minuses for all kinds of things.
So the person you’re with, that you’re seeing now, whoever’s listening out there, there are certain levels of attractiveness, there’s a certain level of kindness, there’s a certain level of intelligence, or a certain level — many, many, many attributes. And then there’s chemistry and sexual attraction. We’ve got all those things working. And so, which is the best one? Oh, well I need a formula to add up all those measurements so I can get a single number, and then I’ll just pick the one that gets the best score. And I’d argue that’s the wrong way to think about life. It’s the wrong way to think about how to pick your friends. It’s the wrong way to think about how to find the best job. It’s the wrong way to think about most things.

As I mentioned, I haven’t read the book yet – sometimes I think I should get a T-Shirt with this line printed on it. But I very much belong to the school of thought that would argue that not everything in life need be quantified.

So if I disagree with “if possible, put numbers on everything”, what according to me are the main features of thinking like an economist? If I had to pick just two, here they are (and I’m going to cheat, so there):

  1. Opportunity costs are everywhere
  2. Incentives matter
  3. Life is a non-zero sum game

Getting incentives right, and worrying about what happens if incentives go wrong ought to be part and parcel of your toolkit an an economist. And if you asked me to recommend a book about this topic, my pick would be Discover Your Inner Economist, by Tyler Cowen.

Bonus: check out the podcast between Russ Roberts and Tyler Cowen on this book.

Bonus Bonanza: reflect on the very first comment at the top of the page!

More Bonus Bonanza: Learn about callbacks.

And re: life being a non-zero sum game, I would recommend In The Company of Strangers, by Paul Seabright. If you do end up reading the book, you might end up coming away with the “complaint” that it is about much more than just life being a non-zero sum game, but in my world, that’s a feature, not a bug. But for the moment, here’s a relevant excerpt from the book:

Once bands were willing to make tentative peaceful contact with other bands, they could exchange with them, thereby enormously expanding the kinds of foods, tools, and resources to which they had access. We have evidence of exchange between hunter-gatherers from many thousands of years before the foundation of agriculture, although their lifestyle must have made such contacts sporadic and limited by comparison with the opportunities available to sedentary farmers in later millennia. Some of the oldest known symbolic artifacts, carved beads dating back over forty thousand years, may have played a role in facilitating such exchanges.7 In more recent times, the Yir Yoront aboriginals of Northern Australia had stone axes even though they lived many hundreds of kilometers from the nearest stone quarries (they exchanged stingray-tipped spears for them with neighboring tribes) and even steel ones, well before their first contact with European traders at the end of the nineteenth century. Trade allowed access not only to their neighbors’ skills but to those of their neighbors’ neighbors, and so on.

Seabright, Paul. The Company of Strangers (pp. 46-47). Princeton University Press. Kindle Edition.

And a final recommendation: please also do read The Undercover Economist and The Undercover Economist Strikes Back, both by Tim Harford.

Showing Up For Work

I ended up not posting on these pages this past Wednesday.

I’m not proud of it, and I wished I had posted on that day, but let’s talk about showing up for work. The phrase isn’t mine, in the sense that I associate it with Seth Godin. And this practice, of trying to write here every weekday, and post links to interesting Twitter threads and videos over the weekend, is partly because of Seth’s practice of writing daily without fail. And also, of course, due to that other blog that has daily updates, come rain or shine.

And trust me, it is hard to do! I don’t feel quite so bad about not posting for long stretches over the past two years, because there were days where I simply didn’t feel like writing. And I was completely fine with that. But this past Wednesday, it was part laziness, part lots of other things to do, and part logistical issues.

But I should stop wussing around and ‘fess up. These are all excuses, and if I aim to post daily, then failure to post is I not prioritizing this task above all else. Generally speaking, I try to schedule posts a week ahead, and a good Friday is when I have posts lined up all through next Sunday.

But alas, this doesn’t always happen. And so you might see me hunched up over my laptop, a gently sympathetic cup of coffee next to me in a café, typing away furiously to meet my self-imposed deadline of posting by ten am. A bad day is one on which I miss the deadline, and a horrible day is one on which I don’t post at all.

The reason I’m writing this post today, and the reason I’ve spoken at length about my failure this past Wednesday, is because I want to leave you with two messages:

  1. If you write (and preferably post publicly) regularly for long enough, you will reach a stage where it becomes an almost compulsive habit, and that is A Very Good Thing. As Seth himself says, there is no such thing as writer’s block. Just sit and write. Some days will be diamonds and some will be stones, but the point is to first write. Worry about quality later.
  2. If you feel as bad as I do about missing a day, that is An Even Better Thing! But keep at it, and show up for work the next day, and then the day after, and then the day after that. Each day is, as it were, a marginal revolution.

And while you are at it, wish me luck. For today is Friday, and I don’t yet have any posts scheduled for next week.

Ah well, onwards!

Work, Why Don’t You?

How should I beef up my CV is a question that will start to make the rounds on campuses all over the country, for it will soon be placement season.

LinkedIn will be awash with people happy to report, or excited to share (or in some cases, elated to announce) that they have completed course XYZ on platform ABC. Recommendation requests will come flowing in through the pipelines, and endorsements will abound. But simple Econ 101 should tell us that each of these have become so easy to acquire, and so commonplace an occurrence, that their value on your CV is commensurately lower.

Pamela Paul, writing in the NYT, has an idea that is fairly popular in the United States (although as the column explains, it could always be more popular), but doesn’t have quite as many takers in India: get a part time job.

Many instead favor an array of extracurricular activities that burnish their college applications, like student government and peer tutoring. This may be a mistake even for those parents and kids more concerned about college admissions than about what happens after that. Consider that having an afternoon job cultivates skills like time management and instills a sense of independence and personal responsibility — attributes that many college administrators say some students today lack.
But after-school jobs teach more concrete lessons as well. Personally, I learned more working outside school — starting with three afternoons a week when I was 14 and ending with three jobs juggled, seven days a week, my senior year of high school — than I did in the classroom.

The ability to get, hold on to, and do well in a job – any job – is a rare old skill, and one that you’d do well to cultivate. In fact, what better way to signal that you are ready for the hurly-burly of the labor market than by proving that you’re already a participant? Pamela lists out ten ways in which a job helped her, and while you should go ahead and read the whole column, I’ll list out the ten factors here. Note that this is my summary of her ten points:

  1. Being good at a job is a very different skillset when compared to being good at studies – which is a polite way of saying college doesn’t teach you all you need to know. Every single person who has left academia and joined the corporate world will nod appreciatively on reading this statement, guaranteed.
  2. Being fired, or quitting your job, is not the end of the world.
  3. You tend to appreciate money a lot more when you realize how little you are paid for an hour of honest work
  4. Promotions can be based on duration of employment, not on level of skill, and this is an important lesson for life
  5. You are paid for your time, and the work you put in during that time. Slacking ain’t appreciated!
  6. Bosses can be mean. Not all, and not all the time. but bosses can be mean.
  7. You will work with folks who are different from you, in many ways and with many consequences, and you have to figure out how to deal with it
  8. Some of these folks, simply because of who they are and how they made it to the same job as you, will pull you down to earth, by helping you realize how lucky you are to be where you are
  9. Boredom is part and parcel of all jobs.
  10. School skills can be acquired out of school – but the reverse isn’t true.

Any job is fine – it needn’t be a desk based job. In fact, the more physical labor is involved, the more you are likely to learn. I managed an art gallery while I was in college to earn money on the side, and also taught econ to students of commerce, and I learnt more by trying to handle the art gallery.

But a job interview is likely to go that much better if you are able to say yes in response to a question about prior work experience. The more interesting the job, and the more well thought out your responses to a question about what you learnt on the job, the better your chances!

Further reading: Tyler Cowen tells us about his first job (follow up post here), as does Alex Tabbarok (this post has more than a dash of surrealism!)

Parsing my Favorite Definition of Economics

My favorite definition of economics can be found at the start of Cowen and Tabbarok’s textbook:

Economics is the study of how to get the most out of life

There is another excerpt that is worth reading in this regard:

Alfred Marshall called economics “the study of mankind in the ordinary business of life.” This was the enterprise of Marshall and Adam Smith and Friedrich Hayek and Milton Friedman: they tried to understand what people do and the implications of their behavior for the society at large.
But my favorite definition of economics is a variant of Marshall’s. It comes from a student who heard it from another teacher of hers: economics is the study of how to get the most out of life. I like this because it strikes at the true heart of economics—the choices we make, given that we can’t have everything we want. Economics is the study of infinite wants and finite means, the study of constrained choices. This is true for individuals and governments, families and nations. Thomas Sowell said it best: no solutions, only tradeoffs. To get the most out of life, to think like an economist, you have to be know what you’re giving up in order to get something else. (Very minor edit in the first sentence to make it more readable)

So: economics is the study of how to get the most out of life. But what does this mean, exactly?

Three questions present themselves almost immediately to me when I think about this sentence:

  1. What exactly does “how to?” mean?
  2. Who defines what “most” means in each context?
  3. Whose life?

I’ll begin with the second question, move on to the third, and finish with the first.

  1. Who defines what “most” means in each context?

    My daughter – all of nine years old – has a very clear answer to this question on, say, a Saturday morning. As many hours as possible on her tablet.
    Given her world, and her time horizons, this makes perfect sense to her.
    As does my definition of “most” when I decide to take a “five minute” break from whatever I’m doing to “quickly” check Twitter, or watch “just one video” on YouTube.

    That’s the trouble with this definition – “most” is a very, very tricky word. It is my job to teach my daughter that “most” has long term implications, and it is my job to remind myself that “most” has long term implications. What seems best at the moment isn’t necessarily the best if you take the long view. Economics will tell you how to get the most out of life, assuming you know what most means for you right now.
    But what is the best definition of “most”, and why, is a question economics doesn’t directly answer. It’ll tell you about the benefits and costs of whatever definition of “most” you happen to choose, but evaluating between these options is left to you. Tricky little thing that way, economics.

  2. Whose life?

    When I make a choice about the word “most”, should I keep in mind just me or other folks too? Watching the tenth YouTube video instead of getting back to work gets the most out of my life is what my brain tells me, but does my income suffer? Does my family’s well-being suffer? How should I balance these conflicting interests? Does that mean that I shouldn’t watch a single YouTube video?

    It gets even more complicated when I realize that I really need to think about four different sets of lives. My own right now, and my own in the future (both near and distant). But also the lives of others, and those right now and in the future.

    Freebies just before an election might win a government an election now, but what about greater indebtedness in future generations? Congo deciding to give oil exploration licenses might mean more dollars in their coffers now, but at what cost to the future lives of everybody on this planet twenty years down the line?

  3. What exactly does “how to” mean?

    My very first manager in the corporate world drummed a lesson into me that I have found very useful, and worth remembering. Everything that I do in any organization, he said, must fulfill one of three aims. It must either help the firm increase revenue, or it must help the firm reduce costs. Or, he said, it should help the firm improve speed-to-market. You might quibble that the third is a restatement of the first, but the point is well-taken, and relevant in this context.
    Economics helps you get the most out of life by either giving you more of whatever it is that you’re aiming for, or by reducing the effort involved in getting it, or both. And the apparatus involved in this is where math and econ begin to intersect. But the idea is summarized very well in the rule my manager set for me.
    For example, if what I want to do is get the most out of writing an examination, there are two things that I can do. Try and maximize my marks (my grades) or try and minimize my efforts. Ideally of course, I should try and get the biggest bang for the buck – maximize my marks while minimizing my efforts. And that, of course, is why most (if not all) students are so curious to learn about the “important questions”, the “pattern of the paper”, the “syllabus” and the “recommended” textbook.

But should one be maximizing marks and minimizing effort in the first place? Isn’t the point to learn as much as possible?

Allow me refer you back to the first question in this series