What real world experiences should an economist have?

by on September 8, 2006 at 1:24 am in Education | Permalink

A loyal MR reader (who perhaps occasionally reads Greg Mankiw as well) writes:

I'm a freshman at the University of Pennsylvania. I'm about to start Econ 001.  I know it's important to get an academic background in economics, but I think some of the best learning I've done in most fields has come outside of the classroom.  I was wondering if you could tell me about some of the key moments in your intellectual development as an economist, and where these moments took place.  My goal here is to figure out how I can supplement my Econ education with real-world schooling.

I am hardly a paragon of practicality, but I will recommend the following real world experiences for anyone wishing to be an economist....

1. Go live in a very poor country for a while, and I don’t mean in the fancy part of town.

2. Go live in a wealthy but distant country for a while.  Canada doesn’t count.

3. Try raising some money for your university or non-profit and maintain regular contact with the donors for a period of years.

4. Try meeting a payroll for at least twelve months.

5. Work for a short period of time (or longer) on a trading floor or rapid-fire trading environment of some kind.

6. Testify in court.

7. Consult for a local business; the stupider the owner the better.

8. Work as an editor.

9. Work as a manual laborer; in my case I wrapped produce in a New Jersey supermarket for two years as a teenager.

10. Fire someone, especially someone you like.

11. Spend at least one year in government.

12. Work on at least one major project with a multilateral institution.

I am weakest on #5 and #11, with involvement on #4 but relying on the competent help of others.  The other experiences have all contributed significantly to my views on economics and of course politics.  My lack of #11 truly is a big gap, but I am simply physically unable to put myself in one of those rooms downtown and stay there all day long.  Brad DeLong and Greg Mankiw are stronger he-men than I am.  Much stronger.  Qué lástima!

Surely Arnold Kling can add to this list…

edwardseco September 7, 2006 at 11:07 pm

Excellent list, I did all but 2. The firing should involve someone with a spouse and a baby. When you match the victim’s tears you do mature. I think #6 could better be done as a litigant. Then you take a B Law class and learn why you won or lost. Participation on a community board or association is also supurb training..

joan September 7, 2006 at 11:21 pm

Live in an American inner city, a depressed rural area, an upscale suburb and Manhattan for at least one summer.

ElamBend September 7, 2006 at 11:45 pm

#10, with the caveat; is tough.

Scott W September 8, 2006 at 12:15 am

Read the paper everyday, any paper. NYT, Washington Post, WSJ, any of the major ones…once you know what’s going on in the world, it makes economics (and econ blogs) exponentially more interesting.

Bill Stepp September 8, 2006 at 8:24 am

Work in a business and get as close to the customers and executives making
the key strategy decisions as possible. The best way is to work in a start
up and have a sales job.
The biggest lacuna in my economics training was not studying accounting,
which is the lingua franca of business. IMO accounting should be
part of the program in all economics departments.
I remember the explicitly anti-business sentiments of several of my
economics professors, who were (surprise) left-wingers. They didn’t have a clue
about business and customers.

Ted Craig September 8, 2006 at 8:56 am

I would add live in a small town in the United States. When I got out of college, I did that rather than going to graduate school and received a far superior education.

jim September 8, 2006 at 9:24 am

I learned about the inefficiency of government relative to private enterprise by working in both a government (VA hospital) kitchen and in a for-profit restaurant kitchen.

rrrr September 8, 2006 at 10:01 am

I always wanted to do #5…to try it. I graduated with an econ degree about year ago and had the choice of either working as an entry-level trader at CBOE or working for a large insurance firm. I’ve never felt as if insurance was my calling, but at least I know I will most likely have a paycheck and a job a year from now.

Josh September 8, 2006 at 11:30 am

Write. As much as you can, for whoever will let you write for them.

mk September 8, 2006 at 12:06 pm

Spend some time working in an environment where your pay is directly correlated to the amount of work you do and how well you do it. For instance, waiting tables or sales.

rjh September 8, 2006 at 12:43 pm

Good list. Another item is to work on a project team that takes some product from concept into full production and then end of life. It’s useful for a lot more than just economists to understand the important differences in the problems at all these stages.

David Malmstrom September 8, 2006 at 1:40 pm

Jacob,

I guess b/c Canada isn’t distant – maybe it is too influenced by the US and you will not benefit as much as you could if you went across the sea.

J September 8, 2006 at 3:07 pm

“I remember the explicitly anti-business sentiments of several of my
economics professors, who were (surprise) left-wingers. They didn’t have a clue
about business and customers”

13. Just for fun, when you’re done with the other 12, rent and watch the movie “Back to School”, particularly the scene where Rodney Dangerfield lists all the things the professor forgot to include in his business plan.

michael September 8, 2006 at 3:47 pm

Oh, and read Marginal Revolution :-)

mike September 8, 2006 at 4:17 pm

Program manager on any complex project or product, for-profit or not-for-profit, it doesn’t matter.

Not very practical for a college student, but man did I learn a lot. Tons of moving parts, marginal alignments of interests, competing priorities, and the only way to move things along is your charm.

Barkley Rosser September 8, 2006 at 6:04 pm

Ted Craig,

Kansas City is full of Post Keynesians.
You don’t want to send people there…

Scott September 8, 2006 at 7:19 pm

Spend some time working in a business where you can participate in product pricing decisions. It’s eye opening. Also engage in the annual budgeting process for any corporation. To complete your education, get a major capital project through the approval process in any large corporation.

Neal Meyer September 9, 2006 at 12:20 am

I spent 17 months in a town 45 miles southwest of Beijing in 1991 – 1992 working for a previous employer. At that time the per capita income of China was in the $400 per year range, probably about 20 – 40% of what it is today. Add in the boredom and the nightmare of living in a totalitarian state into the mix and stir. The concoction bent my mind.

When I was leaving China for my trip back to the U.S., I met a Japanese businessman who had been travelling to China on and off for about six years. He told me that he usually stayed for a period of 2-6 weeks at a time when conducting business, then would go back to Japan for many months before returning. When I told him that I had toughed it out for the length of time that I had, he said to me, “Congratulations! You have done something very few people have been willing to do. I couldn’t do what you did.”

I am sure many things have changed since I was in China, but there is no doubt in my mind that as long as there is a Communist Party in command, there will be many other things that will stay the same.

I strongly recommend that any would be economist spend some time in a deeply impoverished part of the world for a lengthy period of time. You will kiss the ground of your homeland when you return.

econ_professor September 9, 2006 at 3:03 pm

-Take the IRS free on-line tax training for volunteers and spend a few evenings a week during tax season helping low-income working families and senior citizens file their tax returns.

http://www.irs.gov/app/vita/index.jsp

-Work as an aide in a nursing home

Scott Grannis September 10, 2006 at 2:44 pm

5 a) Put billions of your clients’ money at risk in a strategy that is based on your prediction of what is going to happen in the economy (inflation, interest rates, etc.).

5 b) Defend the losses that will inevitably occur in front of your client’s executives. Convince them that what you think will happen will indeed happen.

This does wonders to focus the mind on risk, reward, and the strength of your convictions.

hamburger September 21, 2006 at 4:08 am

I am a senior student in beijing university of chemical technology in China . After I read all the advices above, I get a big surprise: working as a good economist is not easy, but rather meaningful.

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