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Source link: http://archive.mises.org/6046/why-be-an-economist-to-be-happy-thats-why/

Why Be An Economist? To Be Happy, That’s Why

December 20, 2006 by



Murray Rothbard at his typewriter in the 1960s

I have of late become embroiled with a colleague and friend of mine who shall remain nameless in order to protect the guilty.

My advice to my very best students, the ones who are bright and, more important, have been really bitten by the Austro-libertarian bug thanks to both our efforts and those of our several other colleagues, is to major in economics, and either double-major in economics and mathematics or minor in the latter and then go off and get a Ph.D. in economics.

In contrast, my colleague’s advice to our students is to major in economics, either double-major in economics and finance or minor in the latter, and then go off and get a really high paying job on Wall Street or some such.

What is my thinking on this matter? Why do I give this advice?

FULL ARTICLE

{ 26 comments }

Ben December 20, 2006 at 7:40 pm

Great photo. There’s something distinctly Thompson-esque about it. I even had to look twice at that pen to make sure it wasn’t a cigarette in a holder.

matthew December 20, 2006 at 8:48 pm

Many aspiring Austro-libertarians recognize the importance of pursuing a career in academia. Which colleges they should attend in order to receive their Phd, however, is much more challenging and requires advice from those who already occupy positions as university professors. Could someone please comment to this post by listing possible universities graduate students could attend that are sympathetic or supportive of Austro-libertarian thought? George Mason University is the only one I can think of, but then again, I have not devoted much study to the subject at hand.

Blake Riley December 20, 2006 at 8:54 pm

Is Rothbard wearing any clothes in that photo? He is definitely shirtless, but I don’t see pants either!

Phinneas December 20, 2006 at 10:02 pm

I don’t know — I go back and forth on the issue. I think there’s a lot to be said for taking the finance route.

There are really only 3 ways of earning a large amount of money:

1. Finance (i.e., money lending, in all its various forms);

2. Speculation (i.e., buying things that you predict will either appreciate on their own, or will appreciate with a minimum of effort on your part); and

3. Selling a product or service (usually a product, but not always) that you can commodify, unitize and promote with a brand. This can lead to great wealth because doubling your sales of commodified, unitized products requires less than double the amount of work. Efficiencies, I think economists call that.

People think that there is a fourth way, but it’s really just an illusion. It’s the highly-skilled service-provider option. Lawyers. Doctors. Architects. Commercial artists. Anyone doing highly skilled piece-work.

You might make an upper-middle class income doing these things, if you bust your ass and work twice as hard as everyone else and do nothing else all the time. But the truly successful (in monetary terms) members of these vocations are the ones who figure out a way to commodify and unitize what they do. Like the artist who does more than work on commissions, but creates something that he can replicate (i.e., unitize). Or the lawyer who spends his time schmoozing clients while other (younger) lawyers are back at the office doing all the actual work like a factory. He commodifies his legal services, establishing himself or his firm as the brand.

Who makes all the money — the fashion designer who sells goods with his name on them in hundreds of stores, or the custom tailor who makes fantastic suits one at a time? The tailor on Saville Row who studied as an apprentice for decades may be a genius and a virtuoso, but his product isn’t commodified and unitized, which means that in order to earn twice as much, he has to work twice as much. He has no leverage.

The person who is going to have the greatest impact on promoting libertarian ideals is going to be the one who writes the popular books (or produces movies, or TV shows, or or songs, etc.) that express libertarian ideals. In order to create a broad, social movement, you have to have broad appeal. It’s going to be someone who is able to commodify and unitize his message, and then build a brand that sells that message to people far and wide.

John Hall December 20, 2006 at 10:05 pm

Matthew,

Professor Block has previously made such a list:
http://mises.org/classroom/gradschool.pdf

In regards to the article itself, I thought it was very good. I previously sent an email to Professor Block regarding this same issue since I’m one of those Austro-libertarians thinking about going into business.

I think the choice really comes down to where you think you’ll fit in best. I love studying economics, but I hate writing papers. I love reading papers and coming to my own conclusions, but I find that there’s so little out there that needs to be said when others are doing it so well.

When I think about my dreams in life, I’ve almost always thought of succeeding in business. I know that I would be able to get through a Phd and could probably teach, but the reason I would want to go into business is the same as when Professor Block mentions that its hard to make two large contributions to different fields. For the student that thinks they’ll make the largest contribution to economic theory, I’d say go for that. However, I think my comparative advantage is much higher when it comes to being a portfolio manager than being a researcher. Not everyone will be able to make as many good contributions to economics as Professor Block.

The simple solution to me is certainly encourage students to study economics or get Phds. Also, though, encourage students that go into business to continue their education of Economics and libertarianism, in general. The Mises Institute is obviously a good mechanism for this. Also, George Reisman offers a home-study course of Capitalism on his website. I think there are other home learning systems that could be developed though.

Daniel M. Ryan December 21, 2006 at 6:04 am

I heartily concur with Prof. Block’s advice for students to double major in economics and mathematics, before going for the Ph.D. Rothbard himself got a B.Sc. in mathematics and statistics, so if the field wants another Murray N. Rothbard, then they should welcome in anyone who takes Rothbard’s own educational track, if only partially through a double major in math & economics.

P.M.Lawrence December 21, 2006 at 6:27 am

The way I heard it, the only three ways to get rich these days are to marry it, inherit it, or steal it. I gather some people have tried all three. (Sorry, I can’t give a reference.)

Of course, these ways aren’t incompatible with the ones given earlier, but it seems likelier to me that if the earlier ones work in some particular case, there’s a good chance that one or more of these later ones are at work behind the scenes as well.

Barton December 21, 2006 at 7:47 am

…well, some fundamental questions that immediately come to mind about such career choices (from a non-economist):

What exactly to “economists” contribute to society in exchange for their individual salaries ?

What is their specific product/service in the overall economy ?

Are economists generally under/over paid ?

Who/What hires most economists ?

If there were no “economists” at all in today’s America– what would be the effect ?

adi December 21, 2006 at 8:11 am

Barton, here are answers for your questions:

1) Nothing
2) Big Words
3) Over paid
4) Govt and Fed
5) No one would notice (or it would be a good start)

Previous is true about modern mainstream econ..

I have to mention that I have masters degree in economics (specialty is time series econometrics)..

M E Hoffer December 21, 2006 at 8:35 am

The pic of ol’ MNR and the recently commented on story about the ‘Electric Grid’, really put square the idea that we are of our Environment.

Angelo December 21, 2006 at 8:42 am

I wonder if there are any schools (and I realize that is a long shot)that don’t require a lot of math to be an economics major or professor of economics there. I’m terrible at math, but I’m almost entirely self-educated on economics. I would never complete a graduate degree in math and econometrics simply because I can hardly understand the stuff.

I’m trying at my school to help get econometrics and neoclassical theory reduced at my school and get attention for Austrian economics.

Pete Canning December 21, 2006 at 9:00 am

I sell a service. People in my industry make a great deal of money, and I dare say the contribution to society is quite valuable. There is no money lending involved, at least my firm.

As to the article, as much as I would have liked to be an economist, it would certainly be great fun, I don’t think there is enough money in it. Further, I doubt I could stomach another economics course taught by someone who knows little to nothing about correct economic theory. Let alone the pain of majoring in something as dry as mathematics.

As to what we would do with a lot of money? Buy a country.

RogerM December 21, 2006 at 9:00 am

I don’t disagree with Block’s career advice, but would like to offer another thought: only about a third of Americans go to college, and even fewer take economics classes. I would like to see more libertarians go into journalism, especially TV journalism, and motion pictures. The left has succeeded so well because they dominate those media. Politics is important, too, because so few politicians understand real economics. More libertarian students should consider double majors, or at least a minor in economics from a school that teaches Austrian economics, and journalism or politics.

adi December 21, 2006 at 9:56 am

Angelo, I dont think that you can escape all powerful forces of linear algebra and math stats in any university if you have plans to learn econ in modern way.

Strong quantitative skills seem to be in demand nowadays and also some knowledge about computer science would be helpful too (that is something that I lack but I didnt have time to take any extra courses since my degree ballooned already).

I have knowledge about SAS, SPSS, Minitab, R and Eviews programs. Some knowledge about these could probably be useful.

Gilles P. December 21, 2006 at 10:05 am

Very interesting article indeed. As a young kid, I was always told by my parents and others that in life one must pursue studies in what we really like ( but I always wondered why they always described their lives as pretty boring… of course this is discoverd when one reads in between the lines). At the age of fourteen after following an economics course, I had subconscioulsy decided I would become an economist. For practical reasons, I decided to pursue a degree in business at university; I learned a lot of stuff but the economics bugg was still there and I found the economics courses pretty low-level. After graduating, I went for the real thing; I did a masters in economics, wow what a very intense intellectual adventure. Those were the best years of my life ( I am only 35). After graduating, I worked for an organization(read lobby group) for a bit and was disappointed by the politics of my job.
Today, I am no longer a practicing economist ( I am now a closet economist) but I keep reading lots of scientific economic journals. I just love that. Just the same I find my professional life a failure; I pursued my desire to be an economist but I am not able to conrtibute to economics in anyway. Was I right to do that or should I have been more pragmatic and run after a high paying job? That is my failure.

Francisco Gutierrez December 21, 2006 at 10:09 am

I’ve gone back and forth between wanting to be a professor and wanting to be an entrepreneur. The professor road seems attractive for all the reasons mentioned in the article (interesting work, long vacation, leisurly lifestyle, dealing in ideas, molding young minds, etc.), but the reason I could not just be a professor is freedom. I don’t want to choose a path where some person or group of people above me has a lot of power over over the income I need for my livelihood. As an entrepreneur, you control your own destiny, nobody can fire you, or exhert subtle pressure under the veiled threat of firing you. So after much deliberation throughout my life, I am convinced that doing both is the best path. I would first find a way to become wealthy, or at least financially independent, in business. Not as an employee, which combines the worst of being a professor (somebody else controls your life) with the worst of being in business (not interesting enough subject matter), but as an entrepreneur for the freedom. Then, once you have secured your livelihood from entrepreneurship, and learned how to start and run a business so that you can do it again if need arises, then you can afford to be an academic, truly independent from any pressure by those controlling your paycheck.

Paul Marks December 21, 2006 at 11:46 am

People who do not go to college are still influenced by people who do.

The days when someone like the British free market journalist Frank Johnson could drop out of school at 16 years of age and work his way up are long over.

These days graduates dominate both the media and the film industry – and they are influenced by what they were taught at college (even if they formally oppose what they were taught), so it is vital that the Austrian school’s understanding of economics is taught.

“nowadays, gradate schools teach economics as a mere branch of math”.

That is one of the problems. Surely one of the objectives of the Ludwig Von Mises institute (and of Austrian school economists generally) should be to run graduate programs that do not do this.

It is not just that not all good prospects for future economists are either good at or interested in mathematics – it is that to teach economics as part of mathematics is simply mistaken.

K.MacDonald December 21, 2006 at 1:27 pm

O.K. How about putting out a t-shirt which reads:

“BE AN AUSTRO-LIBERTARIAN AND BE HAPPY!”

I’ll buy one.

K.MacDonald

K.MacDonald December 21, 2006 at 1:28 pm

O.K. How about putting out a t-shirt which reads:

“BE AN AUSTRO-LIBERTARIAN AND BE HAPPY!”

I’ll buy one.

K.MacDonald

Adam Knott December 21, 2006 at 2:25 pm

The question is whether one can become a full time academic without becoming a full time Academic.

If, in order to fit in and fulfill bureaucratic requirements, one must study and become proficient in mathematical economics, then what other implicit or explicit concessions must one make to government education? (work place rules, forbidden speech, patronage system, tenure, etc…) The regulated time spent in absorbing their world view, is free time not available for developing one’s own.

Isn’t it somewhat contradictory to attempt to become the best possible libertarian, by means of becoming the best possible welfare state academician? Don’t the added rules of conformance necessary to succeed, change the person substantially? I believe they do.

We all live in a welfare state. Granted. But aiming for greater levels of self regulation and personal restrictions seems contrary to purpose.

Mises and Rand were shunned by academia for good reason. They refused to conform.

At this point, with the popularity of Austrian Economics and social thought gaining wider support, why not consider an Austrian school on the Hillsdale model, rather than trying to please the government establishment? Let free people flock to a free school, not a government controlled one. With the Internet, it is now feasible.

Encouraging people to become part of the welfare educational establishment, is like encouraging young people interested in medicine to become part of an HMO. At some point, one must become a bureaucrat.

I believe the Rothbardian strategy to promote liberty by making liberty what is taught at government schools, fundamentally flawed. What ever brand of liberty that can be taught by a compulsory institution, is suspect as being approved by that institution. It is tainted.

It is probably no coincidence that the brand of libertarianism most popular today is “coercive” or “monopolistic” libertarianism; libertarianism conceived as a body of rules everyone must follow.

The forms of thought of welfare establishment culture, are not suited to nurture new forms, especially ones potentially detrimental to its own interests and survival.

Jeffersonian December 21, 2006 at 10:01 pm

I am sorry if I am missing something, but most bright students of Austrian economics these days do not get a Bar Mitzvah gift enabling them at 18 years old to purchase a prime piece of real estate entailing “a four-family apartment house in the Sheepshead Bay neighborhood of Brooklyn, New York, right near the ocean” at the 1960′s price.

Nor, a few years later, the ability to close on a “10 family house on East 84th Street between 2nd and 3rd Avenues.”

Part-time and summer jobs included.

Dr. Block certainly had the luxury of never having to contemplate a 9 to 5 job and thus could choose a life of easy hours and the mind instead of being “only” a landlord collecting rent.

It just isn’t that easy these days for a student interested in Austrian economics confronted by the tedious 8+ years of math, econometrics, and ludicrous economics in front of him to obtain a PhD to eventually break the barrier of entry to be admitted to the club.

Unless, you have a fanatical zeal or you “inherit, marry, or steal,” as someone else has mentioned, you have a few better options elsewhere.

I want all the Austrian economists in the world possible, but this article makes it seem so easy and the “happy” choice when in reality it is a long, hard road made easier with four families paying you rent from 18 years old on.

rtr December 21, 2006 at 11:15 pm

Degrees are nothing more than union membership cards in every field except hardcore scientific fields like chemistry, physics, biology, medicine, and maybe engineering. The future educational classroom is right here, on-line. It’s far cheaper, it’s more efficient, and it doesn’t shield government b.s. from rapid upbraiding by embarassment. The traditional media, the traditional classroom, is becoming hundreds, thousands, million-folds bigger, and will of course take advantage of the division of labor benefits that will bring. Capital is more mobile, humans are more mobile, communication is more free than ever. It’s just a matter of common sense taking its course.

Was America always run by the Democratic and Republican political parties? I think we will see a viable Libertarian party in the next couple decades. What demographic knows better than any other the effects of inflation? Teen and twenty-something mmorpg on-line game players. Virtual economies, virtual societies, virtual classrooms. Russia has a flat tax. China is going capitalist. If you see an Asian stock exchange become more influential than New York and London, you can learn a new language on-line, for free.

Global competition will have serious effects. How many more people have even heard of the name Mises than had just 20 years ago? Thousands? Tens of thousands? Hundreds of thousands? Millions? A helluva lot more than when The Freeman was being sent out to college newspapers. It’s not even a democratic process. It’s about influencing the key people. Key people don’t like to be wrong or embarassed. Companies headquarter in off shore tax havens. It’s reality out there, and truth counts.

P. Binder December 22, 2006 at 5:59 am

I agree with the goal, but not the advice. My life experiences tell me that one is better off doing what one loves as an avocation as opposed to as a vocation. If a person enjoyed sex, wouldn’t the worst possible advice be to become a prostitute. When one becomes a prostitute, one has to satisfy the customer and not one’s own desires.

Suppose you love playing the clarinet. If you become a professional, you must satisfy your customers and their desires might not be in harmony with your own.

A core of dedicated liberty lovers need not necessarily be a core of professional economists. It is important that they be everywhere and dedicated to their goals. Is the best way to sing the songs of liberty to enter an institution that is partially funded by the dirty lucre of taxes and to seek tenure that makes one immune to the desires of their customers? Just my humble opinion, but I feel a dedicated core of Austrian economists pursuing their course for the sheer joy of it is as important as a dedicated professional legion. The path of life can take interesting twists and turns. Lots of roads can lead to the same destination. If the fundamentals of Austrian economics are embedded in students, it won’t matter what path they take. They will be a force for liberty and will spread its seeds.

Zach December 22, 2006 at 8:23 am
Walter Block December 23, 2006 at 7:09 am

Dear :

To get the full story of my views on graduate education in economics, go to the Mises web and search for “Block, advice.” (Or see this: Block, Walter. 3/5/05 “Advice to Students for Graduate School” http://mises.org/classroom/gradschool.pdf). A short summary is that there are three PhD programs I am very high on: George Mason in the U.S., Angers in France, and Universidad Rey Juan Carlos in Spain. I am taking the liberty of copying on this letter my contacts at each of three places, Pete Boettke, Guido Huelsman, and Jesus Heurta de Soto, respectively. I also highly recommend San Jose State University for their Masters Program in economics, and am also copying my contact there: Ed Stringham. I recommend these four since, there, you can actually learn about Austrian economics in their official programs. There are very few other universities in the entire world that can make this claim.

The advantages of Carlos and Angers vis a vis Mason is that, as long as you have a masters in econ, and have some limited languages skills (Spanish and French, respectively), you can get a phd there very quickly, compared to a traditional phd program. The residency requirements, too, are very much less. This doesn’t amount to an online university, but it is as close as you can get and still get a respected (non diploma mill) phd. Also, you need have very little mathematical background, virtually none, and can focus, entirely, on Austrianism. Also, it is easier to get accepted by these programs than at Mason. My estimate is that with one year to get a masters, you would only need two more years to finish your phd, for a total of 3 years; I am assuming that you work on a full time basis for this. The importance of San Jose, in this underground railroad scheme of mine, is that there are 3 excellent Austro libertarians on their faculty, plus several other very good ones. I know of no other master’s program (with the possible exception of Mason’s own which I would rate second to SJ’s) that can even come close to matching this.

The advantages of Mason compared to these other two is that you can get a better job in the US with a phd there. Also, they have not one but two Nobel prize winners on their staff. This is a highly respected mainstream (plus Austrianism) program, with an excellent record of placing their graduates in very prestigious academic and non academic jobs. My estimate of the time needed to get a phd there is 5 years, full time study, just like at most other grad programs in the US.

If you are way less ambitious than all this, then I highly recommend the Mises University, a one week seminar (http://mises.org/events/94). I am a professor there.

Best regards,

Walter

Dr. Walter Block
Harold E. Wirth Eminent Scholar Endowed Chair and Professor of Economics
College of Business Administration
Loyola University New Orleans
6363 St. Charles Avenue, Box 15, Miller 318
New Orleans, LA 70118
c.v.: http://www.cba.loyno.edu/faculty.html
office: (504) 864-7934
dept: (504) 864-7944
fax: (504) 864-7970
wblock@loyno.edu

Walter Block December 23, 2006 at 7:13 am

I purchased my first house (4 family) for about $18,000 in around 1960. I paid about $3500, and got a mortgage for the remainder.

Walter Block

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