Economist Writing Every Day

Disclaimer: This post might throw shade.

The vast majority of business majors across the US are required to take two or more Economics courses. You can look across the spectrum. All of the top 20 business schools require two or more econ classes. In fact, Wharton is the top-ranked business school and their business program is actually an *economics* program. They don’t have finance/accounting/business degrees. Instead, they have an Economics degree with the various business concentrations. Again – the top business school in the country is an Economics program.

What about at the other end of the spectrum? I live in Florida. Every single Florida state school requires both Micro and Macroeconomics for business majors. These schools include everything from Florida State University to the local Florida state college down the road. I didn’t look at other state-run higher education systems in other states. There are a lot of states…

I teach at a private Catholic university. We’re listed in something called ‘The Newman Guide’ which recommends 17 Catholic schools. Many of these are liberal arts schools, but the list also includes Catholic University of America, which is an R1. Most of these schools also require two or more Economics classes in their Business major programs. The only exception is University of Dallas, which has Economics in the core curriculum.*

So, overwhelmingly undergraduate business programs across the country require two economics courses. But, why? The students are often not happy to be there, and I’ve even heard business professors demean the math as performatively rigorous and superfluous. They argue that plenty of people get rich or are otherwise successful without all of the quantitative skills that economics leverages.

I think that the fear of math is both a red herring and a scapegoat. Rather, Economics confronts students with the liberal arts – whether they like it or not. Be careful. Liberal Arts are not the same as Humanities. They include argumentation, the ability to write and communicate, clear and consistent logic, and, yes, even math. Accounting can tell you how to keep track of the money, but it doesn’t include a theory for when you should produce more or less in contrast to your competitors. Finance does better since it has the time value of money and ‘with vs without’ analysis. That’s closer to marginal thinking. But finance lacks a theory of markets outside of portfolio theory and arbitrage.**

They all need supply and demand. They all need general equilibrium. They all need the logical principles. That’s what economics offers to business students. If it was just about the math, then those students would take business calculus and call it a day. After economics majors, finance majors tend to be the most mathematically inclined. If Econ classes simply provide a quantitative hurdle for students to leap over, then those finance students would all get A’s. But they don’t. That’s because liberal arts require understanding what the formulas mean and not just how to use them. Believe it or not, economics may be the closest many business majors come to using mathematics as a quantitative language rather than a tool of calculation. The equations contain logic.

Economists get a lot of heat for caring about money, making unreasonable assumptions, and, yes, being too quantitative. We use strict logic and apply it to the real world, relaxing assumptions as needed. Some deride economics as being utilitarian. But I prefer to think about economics as the philosophy of prudence. For many people, philosophy is hard and prudence is a downer. Add math, and the result is a perfect storm of resentful business majors who can’t live without economics and don’t understand what they don’t understand.

*One might think ‘Great! Economics does belong in the core!’ But core classes tend to be easier since all students must pass in order to graduate. So, I do wonder about the quality of that single Econ class.

**Quibble with my details. Agree with my overall point.