I’m Not a Pessimist. I’m an Economist.

I’ve been lucky, in my time as a graduate student and now as a professor, to give talks on a variety of subjects to many different groups. From business owners, to my undergraduate students, to MBA students, to high school students and more, I never get tired of talking about what I love.

Unfortunately for me, many topics I discuss tend to rain on people’s parades. Informing my undergraduate freshman, for example, that things like a $15 minimum wage and free college would hurt them and others, is not something they like to hear. (They usually acknowledge, begrudgingly, that the economics makes sense.) In a similar way, explaining how arming “moderate” rebels will likely end in disaster, and that foreign aid may do more harm than good, tends to fly in the face of a lot of “conventional wisdom.”

Other topics I discuss are downright depressing. In presenting talks on things like police militarization, torture, and the surveillance state, people often ask me, “What can be done to fix the problem?” I attempt to craft an answer, but ultimately admit I have no step-by-step solution. In a world where politicians, teachers, and others freely offer their supposed solutions as gospel, my inability and unwillingness to offer prescriptions for the world’s problems often leaves people feeling as though I’m holding something back.

On more than one occasion, I’ve been called a pessimist.

Why are you so negative, Abby?! Geez!

 In reality, I’m a closeted optimist. I have more faith in humanity than I probably should. But when confronted with the accusation of pessimism, I always respond with the same thing.

“I’m not a pessimist. I’m an economist.”

Allow me to explain.

It seems that many people today are focused on the world as they would like it to be, and not how it actually operates. I observe this all the time–and not just with students. Take, for example, the most recent election and Trump’s new policies. People I follow on social media, who I would consider good acquaintances and friends, genuinely think Sanders’, Clinton’s, or Trump’s patently insane economic ideas would be good for the economy and society. Free college, free healthcare, $15 minimum wages, mandated paid maternity leave, building walls around the border, making Mexico “pay for the wall,” (and probably free unicorns for everyone,) have mass appeal.

Explaining that each of these policies would not only fail in their intentions, but would likely make many situations worse, is not a popular position. But it is not pessimistic.

I teach my students that the economic way of thinking requires us to engage in positive analysis. That is, we focus on what is. We look at how people respond to the incentives they face and how they make choices. We don’t engage in normative analysis. We don’t talk about how things ought to be or how they should be. We can talk about issues of “ought” and “should” all day long, but this does absolutely nothing in helping us determine what is actually possible.

We recognize that, as human beings living in a world of scarce resources, we face constraints. This leads to the fundamental question of economics: What do we produce? How should it be produced? Who should produce it? For whom should it be produced? Etc.

Good economists accept that we are limited in what we can achieve. We have to try and do the best we can, given all the constraints we face. We look at the goals of policymakers and others, and analyze if and how well particular actions achieve these goals. Unconstrained thinking, which dominates the political and social landscape, ignores that there are many things that, given the circumstances we face, are not possible, or will not work the way people wish they would. In many instances, the economist often plays the role of constant inquisitor, much to the chagrin of those in earshot.

In the coming weeks, months, and years, I image I’ll have plenty of occasions to question people’s ideas and policies. Last week, I wrote a piece examining the “danger” posed by refugees. Based on some of the responses I received, it looks like a lot of people weren’t pleased with my analysis.

Just wait until I tell them that Mexico isn’t going to be paying for the wall.

Abigail R. Hall is a Research Fellow at the Independent Institute and an Associate Professor of Economics at Sykes College of Business at the University of Tampa.
Beacon Posts by Abigail R. Hall | Full Biography and Publications
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