The Other Economics

But that’s just what Kelly Markson was doing on October 29. When teaching her survey course in economics at Wake Technical Community College, she strives to introduce relevance and fun into what many perceive to be a dull, dry, and even dehumanizing subject. She shared the spirit and techniques of her approach with a group of community college economics instructors from around North Carolina at a seminar, “Engaging Students in Economics,” sponsored by the Pope Center at the Hilton at Research Triangle Park.

Last year, Markson, who has a Ph.D. from North Carolina State University, wrote about how she “threw out the textbook” for the introductory class and adopted a small book, Common Sense Economics, as her text. Now, with the support of a grant from the Searle Freedom Trust, Markson is formalizing her teaching into lessons and materials that North Carolina community college instructors can use for the survey course known as “Eco 151.” Markson is also developing an online version.

Johnny Shull was the master of ceremonies at the seminar. Shull, also an economics instructor at Wake Tech, in Raleigh, North Carolina, has been working with Markson on Eco 151. In addition to  Markson’s talk, the seminar featured a lecture on the Great Depression by North Carolina State economic historian Lee Craig and ended with a cascade of ideas about how to enrich economics classes, all provided by the participating instructors.

Markson started her talk with some lighthearted research that she conducted one evening at a cocktail party (and recorded on video). She asked forty-somethings whether they had liked economics in school. Nearly everyone had hated it and they had forgotten what they learned—if they had learned anything important at all.

The potential for disliking the survey course is probably even greater because it has been traditionally taught from standard textbooks, as if the students are economics majors and are going on to study additional economics. Yet most students are in a two-year terminal degree in business administration and this will be their only economics course. Furthermore, many students who take it are weak in math. (Those with stronger math skills are likely to take the two-semester micro- and macro- sequence.)

Traditionally, students had to plunge into math, calculating elasticities and figuring out how to depict complex activities such as production functions graphically. When Markson taught the course that way (for one year), she found that those chores took so much effort that students failed to learn the underlying principles—the ones worth remembering, such as the role of incentives, opportunity costs, and the value of trade.

By removing the mathematics (except for supply and demand curves), she can now devote weeks to the basics (which standard texts breeze through in the first two chapters). Markson draws on everything from class debates, videos such as John Stossel’s “20/20” clips (which are available for classroom use), and current events to make the course relevant. She gives extra credit to students who discover videos that illustrate economic concepts.

To illustrate marginal analysis, she directs class discussion to the puzzling question of why water, which preserves life, is cheaper than diamonds, which are useless except for cutting glass. Once students grasp the underlying concept of marginal analysis, she applies it elsewhere—such as the “cheating spouse” illustration. In this example, a husband or wife may be happy overall with the time spent with his or her spouse, but for a marginal (that is, extra) hour another person might be preferred. (Markson does not recommend acting on that marginal preference.)

Guns vs. butter? This familiar choice between military and consumer goods is presented in most economics classes through production possibilities curves. But Markson shows students the now-famous nighttime map showing the border between North and South Korea. With its focus on military preparation, North Korea is enshrouded in dark, while South Korea is full of light because consumers can purchase electricity.

A segment on personal finance (part of Common Sense Economics) is the most popular class module. It not only conveys practical information such as the benefits of “living below your means” but applies economic concepts such as comparative advantage to one’s life choices. In one particularly relevant segment, given today’s economy, Markson has introduced the job search, which incorporates the problem of asymmetric information.

Markson believes in the “learning pyramid,” a diagram showing that the more people are involved, the more they learn. People listening to a lecture (at the top of the pyramid) retain just 5 per cent of what they are told. Discussion (at about the middle of the pyramid) leads to 50 percent retention, and teaching others (at the base), to 90 percent retention. Thus, Markson has students debate (usually in small groups, so everyone takes part) such questions as, “Should there be a legal market for human organs?” or “Is Wal-Mart good or bad?” She has even introduced an element of service learning, in which students can teach others about how to get a job.

Markson concluded her lecture noting that  “imitation is the best form of flattery,” and she urged others to copy her examples, just as she seeks out ideas from every place she can.

Later in the day, the twenty or so participants responded by sharing their ideas about how they engage students in economics. Those ideas ranged from illustrating elasticity with surgical choices (demand for an appendectomy is inelastic; a tummy tuck, elastic) to illustrating opportunity cost by asking students why they are in class that morning. One instructor offers a $20 bill to anyone who can bring in any article from the daily newspaper that does not have economic implications. (The instructor has not yet had to pay.)

Reflecting the day’s spirit of relevance, Lee Craig, Alumni Distinguished Professor of Economics at N.C. State University and visiting professor of economics at Duke, addressed the causes of the Great Depression, a topic that once again fascinates students, given the severity of the current “Great Recession.” Indeed, Craig compared current statistics to those of the Great Depression (we have a long way to go to reach the depths of the Depression).

Craig presented his topic as a “whodunit.” He listed the four reasons that most historians and analysts identify as the cause: the stock market crash of 1929, the Smoot-Hawley tariff, the wave of bank failures, and the restriction on the money supply. Then he demolished them, one by one, as the single cause of the Depression. Although all of these factors contributed to the Depression, scrutiny of the evidence shows that each one can explain a decline of a only few percentage points in the gross domestic product, which fell by 30 percent.

Craig’s explanation is that a whole lot of factors occurred at the same time (and may have played upon one another, worsening their impact)—a “perfect storm” of forces. He compared the Depression to the fatal crash of the French Supersonic Transport (SST) in 2000, which started with a piece of debris on the runway at Charles DeGaulle Airport, but set into motion a complex series of events that caused the disaster. In Craig’s view, any single error or accident could have been fixed or overcome, but when they all fell into place at the same time, the result was catastrophic. So with the Great Depression.

The day concluded with a suggestion by Johnny Shull that economics instructors at North Carolina community colleges create a professional organization to maintain communication. One of its roles, of course, would be to share instructional material that is relevant and fun, taking the “dismal” out of the “dismal science.”