Microeconomics in theFramework: A Reconsideration

Abstract

Myra Strober's paper, The Scope of Microeconomics: Implications for Economic Education, is an interesting review of the critiques of the neoclassical consensus in the discipline of economics as reflected in the Framework for Teaching the Basic Concepts. She has briefly, but effectively, analyzed several of the assumptions underlying microeconomic theory. She has focused on the assumptions that individuals are rational and maximize; efficiency is always desirable; individuals are hedonistic; welfare is approximated by income; and individuals are atomistic and exhibit constant tastes. She has emphasized that these assumptions and the related controversies should be included in our teaching at the precollege level. I am sympathetic to her concerns with the state of economic analysis. My only objection to her comments is that she may be setting up false propositions to attack. That efficiency is always desirable is true only if equity considerations are not included in the social welfare function. That welfare is approximated solely by income is true only in limited, formal models. Preferences may indeed not be consistent, but her probability-of-death illustration may demonstrate illiteracy in mathematics more than inconsistency. Strober has also suggested the addition of several topics to the Framework, implying that additional materials should be included in the elementary and secondary curriculum. Among her proposals are discussions on the nonmarket sector, focusing on households and families; increased emphasis on labor markets, including issues related to discrimination; more on income distribution; and the inclusion of welfare economics. Finally, she has proposed clarifying the goals of teaching economics and has specifically recommended changing the broad goal from enhancing students' abilities to make reasoned to enhancing students' abilities to make evaluations and, in the process, making students more caring and better able to fully recognize the role of value judgments in critical evaluation. Throughout is the suggestion that we increase our discussions of our assumptions and demonstrate how much we do not know through presentations of alternative models. Let me discuss these issues one at a time. A story attributed to presidential candidate Al Smith demonstrates political candidates' using humor to demolish their adversaries. A heckler yelled to Al Smith, Tell them all you know, Al; it won't take long. Al Smith responded, I'll tell them all we