Thursday, November 20, 2008

Just Enough to Get Me into Trouble

I know just enough economic theory to get me into trouble. Economists hate that. Probably just like I tend to get a little annoyed when someone tries to tell me what is wrong with "their lake". But let me back up a bit. 20 years ago, I was just starting graduate school at Auburn University. I was lucky to be there and I knew it; my undergraduate days weren't exactly exemplary and I was fortunate to find an advisor who was willing to take a chance on me (only to find out later that he had trouble finding anyone dense enough to take on the research project I was assigned!). The project that I ended up working on was examining the role fluctuating populations of fish, in this case crappies, played on local economies. The task was three-fold, find out how predict when the fluctuations (termed recruitment) would "boom" and "bust", determine how these cycles affected fishing-related businesses and see if there was a way to dampen the "booms" and "busts" through regulations or other means. Due to the second task, my advisor wanted me to take some courses in economics. Because the School of Fisheries was in the College of Agriculture I ended up taking a few courses in Agricultural Economics. The instructor was a supply-sider, which was pretty interesting. We discussed a number of models and such and about half-way through the first course it dawned on me that not one of the models took into consideration a certain human behavior. Basically they were all predicated on everyone being honest. I recall asking how they took greed into consideration and was actually scolded in class for trying to put feelings into a deterministic model. I had no real feelings about this, I was just curious how I was going to account for human behavior in some of the surveys I was developing to assess the economic affects of a fishery. These last few months I've thought a great deal about that class and that particular day in class, wondering why in the course of 20 years apparently no one has figured out the importance of incorporating greed into our economic models and regulations. Perhaps this has been done and the results weren't what people in power wanted to hear. Who knows. It seems to me though, that until we can account for certain human behaviors it is going to be extremely difficult to move to the kind of sustainable economy that we, and the resources of this world, really need.

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