Talking Like an Economist

There’s a comparative advantage in using Ec jargon

For several years economists have longed for a “Goldilocks” economy, an economy that is neither too hot nor too cold but instead just right. This nice turn of phrase was, according to William Safire, first notably used by former Secretary of Labor Robert B. Reich to describe an imagined period of moderate growth and low inflation.

It has recently resurfaced over the past few weeks in articles on the current economy, which has been characterized as an “economy of extremes”—in some ways the very antithesis of the “Goldilocks economy.”

If the past is any indication, Harvard undergraduates will almost certainly bandy about phrases like the “economy of extremes” and the “anti-Goldilocks” economy once they descend upon Cambridge for fall exams.

The dismal science reigns supreme among undergraduates at Harvard, and it is discussed almost endlessly. With roughly 750 students, economics—that fertile training ground for future i-bankers, equity analysts and portfolio managers—is the single most popular concentration at Harvard. And Harvard’s economics department is one of the best in the world.

With all of this interest in the subject, economics has a substantial amount of “market power” to influence the culture and vocabulary of undergraduate life far beyond the halls of Littauer.

Many students have been baptized into economics by Baker Professor of Economics Martin S. Feldstein ’61 or Freed Professor of Economics N. Gregory Mankiw, who currently teaches Social Analysis 10: “Principles of Economics,” better known as Ec 10, the introductory course in economics that is one of the most popular courses at the College. But even those who have never crowded into Sanders Theater each year for an Ec 10 lecture often use terms taken from economics jargon.

The jargon of economics has, in fact, become a sort of lingua franca for many at Harvard, a bizarre pidgin used to express not only financial concepts but also more mundane matters. Often, the language of economics provides a neat bit of shorthand to express what would otherwise be complicated to explain.

In deciding whether to watch an episode of Grey’s Anatomy or study for a chemistry midterm, a Harvard student might express the tradeoff in terms of “opportunity costs.” The same student who failed to calculate his “opportunity costs” properly might comfort himself when failing that midterm the next day by remembering that he has a “comparative advantage” in lots of other subjects.

Similarly, a group of roommates might invoke the “Tragedy of the Commons” to describe why their common room is so cluttered. And if any in the suite have taken Ec 10, there might even be an “enclosure” proposal to create an incentive for tidying up the room by dividing it among them into separate personal spaces.

The language of economics might even rear its head in buying textbooks. A student who has discovered a textbook online for half the cost that he could get it at the Coop might describe this situation to a friend as an ideal “arbitrage opportunity.”

Even in the most intimate matters of life, many will turn to the language of economics. Simply look through the posts on boredatlamont.com, an online discussion board named for Harvard’s Lamont Library. Some of the posts there use language of economics to discuss relationships and even sex.

One post, which cannot be printed here verbatim because of obscenity, reads something to the effect that “it’s Pareto suboptimal to have girls wanting to be with guys, guys wanting to be with girls, and everybody just sitting by themselves.”

This boredatlamont.com poster seems to have carried economic jargon to its most ridiculous extreme. The post’s mixture of the crude and the academic is somewhat disconcerting, although quite funny (especially in the uncensored original).

His post, as well as the general tendency for Harvard students to talk like economists, may seem slightly pretentious and even a bit silly, but overall it’s a good thing that students sound like young Paul Krugmans and Milton Friedmans.

Many of the Harvard students that can be found carrying “The Economist” with them around campus hope someday to use the tools of economics to effect positive change. Many students are quite interested in “microfinance” and “development,” and others are equally interested in creative market-based ways to reduce pollution.

Others are dedicated to furthering the growth of globalization, in order to reduce poverty and want throughout the world. Still others are interested in the economics of education and health care both in the U.S. and abroad. Even those who look forward to being wealthy masters of the universe on Wall Street will be providing essential services to society.

The language and approaches of economics provide a powerful lens through which to look at the world, and it’s a good thing that Harvard students make liberal use of this lens, even if they may sound a bit ridiculous at times.

I suppose that even in our anti-Goldilocks economy, talking like an economist can be “just right.”

Charles R. Drummond ’09 is a history concentrator in Adams House. His column appears regularly.