Economics, Economists, and What the Field Does

What is economics? And, within one of my research areas, what is the rhetoric of economics?

These are good questions because so few people understand the field of economics and how economists are engaged in both rhetorical research (how to persuade) and policy debates (the search for the best solutions) to problems.

Paraphrased from a social media thread:

What is the rhetoric (persuasive nature) of economics?

My first guess would be the argument that it works. Because to me the whole thing exists only in theory and the practice is delivered in oppressive ways.

Money doesn’t even actually exist, right? It used to have based on gold and now it’s just number crunching done by people/systems who decide how much our money (and we) are worth.

Economists study many things, including media bias (Matthew Gentzkow), the language used during debates leading to decisions about wars (Itzhak Gilboa), why we make “bad” choices (Richard Thaler), and much, much more. They even study sexual orientation, gender identity, and relationships (Seth Stephens-Davidowitz).

It’s common to conflate “finance” with “economics” because financial matters are naturally ones of economy: the careful management of available resources and capital. What does that mean, this careful management of resources?

As stated in my “Understanding Economics” post, economics is the study of how individuals and communities allocate scarce resources (we use the word “capital” in economic fields) based on the criteria preferences of that person or group. From that 2018 post of my course lecture notes:

What is “capital” and why does everything require capital of some type Depending on the economist consulted, the forms of capital are:

• Human Capital
• Social Capital
• Natural Capital
• Financial Capital
• Manufactured Capital
• [Time, see below]

To these five, some economists offer internal and external distinctions; some add “time” as a unique capital; others add constructed as distinct from physically adding value. The consensus, however, is that everything we do consumes and/or creates capital. That’s true of all living creatures, not only humans.

I always add “Time” for my courses because time is definitely limited for most living creatures, and even the planet, sun, solar system, etc. A finite resource. (There are no “infinite” resources in economics, but certainly, scale matters!)

Let’s take the last question from social media first.

“Money” is a marker, a representation of one or more of the forms of capital, often in place of direct barter. The better term in economics is “currency” because currency can be “good will” or even religious currency. (“If I do X, I am earning future Y.”) We speak of someone having currency, some research data having currency. The current value of a thing is its currency, in whatever form or intangible conception the value takes.

Currency is quite real. It can be barter, beads, gold, paper (scrip), and based on whatever a society determines is easiest to track and exchange. The society sets a standard, yes, and they always have. The “Gold Standard” was simple because there was X amount of gold in security. But what gives salt, silver, glass beads, or anything else value is how we convert that to a proxy for barter.

I could then go off on very detailed lessons tracing this back through anthropological findings on barter and how currency became necessary.

I am a computer programmer and a playwright. I can, and do, trade my computer skills for dollars (electronically, usually, so there’s not even physical paper involved). I also trade my technical skills and knowledge for services, goods, and the warm feeling of being generous. That’s all “capitalism” because I, the individual, own the means of production: my brain. I bought and own my tools of the trade, too.

We could argue that the minimum wage or the base salary within a job indicates the agreed upon value of an hour of work as a society or specific community. Whatever you receive as a salary is what others have determined they would otherwise trade. An hour of my time is “worth” several times a base worker. Why is that? Because I have invested my time and energy (capital) in myself, creating human capital.

As a playwright? Well… to be honest, I usually end up paying out more capital than I ever receive in return. But I love the stage, so that’s reason enough to keep writing.

The “rhetoric of economics” is how people and groups debate their allocation preferences. Economists study and model the outcomes of those choices. Behavioral economics, where my field of rhetoric should be forming collaborations, studies such things as why you bought X instead of Y. How might we encourage some behaviors? Some call this nudging (Thaler, Cass Sunstein, others call this the “default proposition.” Consider the example of defaulting everyone as an organ donor, but allowing the choice to opt-out. You “nudge” the better choice, but allow the freedom to opt-out.

As to economics and the United States’ model being particularly oppressive, I disagree.

Economic models are used by oppressors, regardless of the model. Sadly, we have seen how this works. Sure, you could argue that there’s “no true example of Marxism” and “no true example of Capitalism” but the point remains: people seeking power muck up every system… sadly.

However, the economists dominant today around the world suggest Karl Marx, with the labor theory of value, created an extremely oppressive model of work and trade. We are only the value of our labor and the value of any good is measured by the physical labor required. Early Marxists argued thinkers had little value inasmuch as they increase production. Classical Marxism suggests your value to society is what you produce for others.

Marxism still requires economics, the study of the allocation of resources based on community criteria. The criteria for allocation might differ or it might not.

In the twentieth century, the Industrial Revolution was not limited to capitalist nations. What is good and right is not based on “Marxism vs. Capitalism.” A Soviet Marxist planner in 1930 might not care about the environment, because the common good as understood in 1930 called for massive industrialization. Values aren’t inherent to the system. (See China’s record on the environment.)

Economists simply apply the criteria given. They don’t set the values, though there are economic philosophers, historians of economics, and other cross-disciplinary scholars.

Capitalists are no less, and no more, likely to care about the environment or the welfare of the weak than Marxists. What matters are the cultural values used as constraints in planning. Sadly, again, people tend to be short-sighted and human-centric.

Imagine you have land with pine trees. You tell me: “I want to maximize my tree farm profits.” The economist’s first question is “Now, or over time?” If now, sure, cut it all down. Short-sighted. But, long-term? Careful rotation, planned replanting, sustainable approach.

The rhetorical question? How does the tree farmer decide short-term versus long-term? Why? How might others persuade the tree farmer to consider sustainable (and therefore likely more) profits and benefits to the community?

I study both persuasion using models from economics and the methods of persuasion within the field of economics. I am not an economist. My doctorate is in rhetoric, the study of persuasion, and my fascination with quantitative methods led to a focus on economics. Yes, I wish I had a master’s degree or doctorate in economics. I’m already over-educated as it is. That would not be an economical use of my time and energy now.

Plus, economists treat me respectfully and let me listen to them chat about cool mathematical problems like scheduling baseball teams or maximizing fuel efficiency when mapping delivery routes. I love this stuff.