August 16, 2021 Reading Time: 4 minutes

In just over a week I’ll meet the 283 students in my Fall 2021 ECON 103 – “Principles of Microeconomics” – course. And barring any last-minute change, I’ll meet them in person rather than over Zoom.

These students are mostly 18-year-old freshmen. While a petite handful of them will have taken a decent economics course in high school, the great majority of these students will have, as they file into the auditorium of George Mason University’s Enterprise Hall for the first day of class, no earthly idea what economics is.

Most of my students will begin the course with the mistaken notion that economics teaches skills at running a business, or for doing finance. Or they’ll suppose that economics is about the practice of entrepreneurship – or about predicting the trend in the prices of precious metals or of stock indices. But I’ll immediately correct these misimpressions. I’ll tell my students this: Forget what you think you know about economics. Economics is a way of thinking about society. Specifically and ultimately, economics supplies indispensable mental habits and analytical tools for gaining a better understanding of why and how it is that each of us, every moment of every day, enjoy the fruits of the labors and creativity of literally billions of strangers.

I’m biased, of course. But I sincerely believe – believe to the point that I know – that principles of microeconomics is the most important economics course any student will take. Ever. By far. Indeed, it’s one of the most important among all college courses that a student will take. If taught properly, and learned with an open and critical and attentive mind, a course in the principles of microeconomics will impart to the student more understanding of the operation of economies than will all other economics courses combined – and I include here even well-taught PhD econ courses.

Far too many academic economists are bored with economic principles. Such principles are so basic. No genius is required to understand these principles or to teach them well. Teaching economic principles provides little opportunity to showcase cleverness, to display brilliance, or to push out the frontiers of understanding or research. It is, instead, to spend a few months of class time repeating timeless verities almost all of which have been known and understood by wise economists for more than two centuries.

But no matter. There’s absolutely nothing that I enjoy more than teaching principles of microeconomics. I live to do it. And every semester, in the hours leading up to the first meeting of each such introductory class, I feel the surge of excitement that I felt (and still recall as if it were yesterday) back in January 1977 when as a student I first encountered the power of supply-and-demand reasoning in my own first economics course.

My goal in teaching Principles of Microeconomics is not to launch my students on a path to earn graduate degrees in the subject, or even for them to become undergraduate econ majors. While I’m always pleased when a student, after taking my class, switches his or her major to economics, I teach the course on the assumption that mine is the only economics course these students will ever take. (Empirically, this assumption is valid.) So unlike many other intro-econ courses, I do absolutely no mathematics; I even refrain from drawing any of the cost curves that I encountered as a student in my first economics course. I do define a handful of esoteric terms, such as the “law of diminishing marginal utility” and the “law of one price,” but I never mention many other terms – such as “perfect competition” or “marginal rates of substitution” – that are typical fare in most other principles-of-microeconomic courses. I wouldn’t even dream of doing, in this introductory course, the likes of indifference-curve analysis.

I open my course with some economic history. (“Have you any idea how magnificently, materially prosperous you are compared to the vast majority of your ancestors? Because you’re too young to remember a world even without smartphones, of course you don’t appreciate just how prosperous you are. So let me tell you!”) I next tell my students about Adam Smith and Julian Simon. Then I do my best to rock their world by introducing them to the principle of comparative advantage.

I’m not embarrassed to confess that when I demonstrate comparative advantage I am intentionally theatrical. It’s a powerful principle that I want my students never to forget.

After some additional introductory material – not the least of which includes a warning against the commission of various logical fallacies (such as the fallacy of composition) – it’s on to the course’s core: supply and demand. I later devote two whole sections to international trade, another to public choice, and one to public goods and taxation. (Each section is two-and-a-half-hours long. And I cover some other topics in addition; I mention these only to give a flavor of my course.)

My goal – by teaching basic, foundational, principles of microeconomics – is to inoculate students against the bulk of the common economic myths that they’ll encounter throughout their lives – myths such as that the great abundance of goods and services available to us denizens of modernity is the result of a process that can be easily mimicked or understood in detail by smart people or planners – that the market value of goods or services can be raised as desired by price floors (such as a legislated minimum wages) or lowered as desired by price ceilings (such as rent controls) – that benefits can be created without costs – that government is an institution capable of rising above the realities that ensure that private institutions never perform ‘perfectly’ – that intentions are results – that destruction of property is a source of prosperity – that exchange across political boundaries differs in economically meaningful ways from exchange that takes place within political boundaries – that the only consequences that occur or that matter are those that are easily anticipated and seen.

If I have a calling in life, that calling is to teach principles of microeconomics. I’m inexpressibly grateful for having the opportunity to do so regularly.

Donald J. Boudreaux

Donald J. Boudreaux

Donald J. Boudreaux is a senior fellow with American Institute for Economic Research and with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University; a Mercatus Center Board Member; and a professor of economics and former economics-department chair at George Mason University. He is the author of the books The Essential Hayek, Globalization, Hypocrites and Half-Wits, and his articles appear in such publications as the Wall Street Journal, New York Times, US News & World Report as well as numerous scholarly journals. He writes a blog called Cafe Hayek and a regular column on economics for the Pittsburgh Tribune-Review. Boudreaux earned a PhD in economics from Auburn University and a law degree from the University of Virginia.

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