Why Be An Economist? To Be Happy, That's Why
I have of late become embroiled with a colleague and friend of mine who shall remain nameless in order to protect the guilty.
My advice to my very best students, the ones who are bright and, more important, have been really bitten by the Austro-libertarian bug thanks to both our efforts and those of our several other colleagues, is to major in economics, and either double-major in economics and mathematics or minor in the latter and then go off and get a Ph.D. in economics.
In contrast, my colleague's advice to our students is to major in economics, either double-major in economics and finance or minor in the latter, and then go off and get a really high paying job on Wall Street or some such.
What is my thinking on this matter? Why do I give this advice? The better to promote liberty, of course. I am motivated by the fact that Austro-libertarianism is a rare and precious flower, yet is crucially important to the prosperity and even survival of the entire human race. Since I am wildly in favor of my own species (confession: I'm a pro-human speciesist) promoting Austro-libertarianism is one of the most important things in my professional life.
There was even a time when people such as Mises and Hayek thought this political economic philosophy would end with their own passing. Thanks to the efforts of groups such as the Mises Institute, this is no longer a reasonable possibility. But, we are still a voice crying out in the wilderness. There can be no more important goal for men of good will then to do what they can to aid and abet this effort. Of course, curing cancer, enhancing general education, improving sports, music and entertainment, conquering space and the deep blue sea, etc. are also good goals to have. It is not an all-or-nothing proposition. But economic freedom and libertarianism, in addition to being an end in and of themselves, are a necessary means to these other ends as well.
Given this, why major in economics, and specialize in mathematics as well? This is in order to obtain the Ph.D. in economics and become a professor, teacher, writer, or public lecturer in this field. (In a bygone era, math had very little to do with economics; nowadays, most graduate schools teach economics as a mere branch of math).
This, of course, is hardly the only way to promote liberty. There is, surely, also, the law for example. However, legal practitioners cannot devote their entire professional careers to the promotion of liberty. If they want success in this field — e.g., be promoted to partner — they must concern themselves with wills, trusts, tax avoidance, criminal innocence, marriage, etc. These things do of course directly impinge on liberty, but they do not promote it in the sense of helping to promote a movement to this end.
What about becoming a law professor? Or maybe a professor of history, political science, sociology or some other field of relevance to our concerns? Unhappily, these fields are almost totally dominated by our friends on the Left. Economics, fortunately, is perhaps the discipline most open to liberty — to say nothing of Austrian economics. To be sure, great contributions to our cause have been and continue to be made by journalists, members of free-enterprise think tanks, etc. But even here economics is perhaps the most helpful of all the disciplines. I am enough of a methodological individualist not to think that the study of economics is a must for everybody. But I am also a sufficient devotee of the dismal science to think it makes a unique contribution to our cause.
Why does my colleague stress finance? For two reasons: one horrid in my opinion, the other of great interest. His first motivation is that he wants our students to become rich, and is convinced that dealing with stocks and bonds, commodities and futures markets, is the best way to do so, at least for students with a temperament to be in the business school in the first place. I cannot see my way clear to disagreeing with him on this. Engineers, chemists, doctors, singers, actors, athletes, computer wizards also earn good salaries. But the students in our classes have already, by the very fact of being there, demonstrated disinclination for such callings.
No. Where I disagree with him is on the emphasis he places on amassing great wealth. What is the point, say I? Would my life change in any significant way if I had, say, twice as much money as I now have? I already enjoy as good a car, house, TV, computer, food, entertainment, travel, etc. as I want. Greater wealth would not change my life in any significant way along any of these margins. I already have enough money to leave to my kids without spoiling them. (If I had tons of money I would donate all I didn't need to the Mises Institute, but that is another story, to be discussed below.)
As it happens, apart from that one motivation, I really do not want to be fabulously wealthy. In that direction lie fears that my loved ones will be kidnapped for ransom. I would then have to hire bodyguards to protect them, and would go to sleep at night wondering if I can trust these guardians. Thanks, but no thanks. No one with a middle or upper middle income need worry about things like that.
I am perfectly content with the lifestyle a professorial salary can afford me, to say nothing of the long, long, long (did I mention long?) vacations I enjoy, during which I can do exactly as I please (mainly, research and writing). The typical work week is nine hours (that is not a typographical error); yes, you have to mark a few exams, and sometimes attend a committee meeting or two if you are not smart enough to get out of that sort of thing, but nine hours a week? Give me a break. It is a pretty good life. You are constantly challenged by bright young students. You can profess about things you hold near and dear. Heck, you have a semi- (you have to keep them awake) "captive" audience paying attention to your every word. Pretty heady stuff. As a professor, if you have a penchant for travel, you can usually do so for free, and you have plenty of time to do so as well (did I mention long vacations and short work week?)
As it happens, this position of my colleague constitutes something of a performative contradiction. If the rich life on Wall Street is so desirable, why is he a professor? Does he regret his own decision? Is he living his life through those of our students he encourages to enter finance and commerce? I very much doubt all this. He is just about, well, maybe, second to me, the happiest person I know in this entire profession. He is such a weirdo on this matter that he does not even take sabbaticals. (For the uninitiated, in addition to short work weeks and long vacations, if you play your cards right you get to take off an entire sabbatical year every seventh year. Oh, the horror of the overwork of which professors complain!)
But there is a second reason for recommending finance, and, presumably, greater riches, for our students. This is the one "great interest" mentioned above. My colleague does not rely on this scenario in our arguments on this subject, but in the interests of fairness, it must be discussed. The idea, here, is that there is more needed to create, publicize, and otherwise promote and defend a free society than intellectuals and their ideas. Also needed are the requisite finances see Joe Salerno pp. 112-115) with which to support these activities. And who provides this vital support? Why businessmen, entrepreneurs, financiers, the denizens of, yes, Wall Street surely amongst them.
Take the Mises Institute as a case in point. Yes, it has attracted quite a number of world class Austro-libertarian scholars. But there is also an entirely different cast of financial supporters who work behind the scenes to make the Mises Institute as it is presently constituted possible. Those, preeminently businessmen, are also responsible for the great success of the Institute. So, why do I not join my colleague in recommending finance and other such subjects that can lead to a career in business, help enrich these youngsters, so that, eventually, they too can contribute financially to groups like the Mises Institute?
There are several reasons.
Let me begin with some personal ones. When I was about 18 years old I purchased my first bit of real estate. It was a four-family apartment house in the Sheepshead Bay neighborhood of Brooklyn, New York, right near the ocean. I thought that one day it would become quite valuable. It was rent controlled and the rents were extremely low, so I was able to purchase it from the proceeds of part-time and summer jobs, plus my Bar Mitzvah presents received on my 13th birthday, pretty much all of which I had saved. My next venture, a few years later was 10 family house on East 84th Street between 2nd and 3rd Avenues, potentially a very high-rent district.
During the time I was studying for my Ph.D. degree at Columbia University, I was renting an apartment in a 24-suite building nearby, on 122nd Street, between Broadway and Amsterdam Avenue. Too close to Harlem to be considered a luxury area, it was the only building on the block not owned by the Jewish Theological Seminary, also located there. I soon purchased this one, too. Right before I left this business I was hot on the trail of an even bigger proposition: an 80-family building on Broadway in the 90s, right near where Murray Rothbard lived on West 88th Street. I had had success at each step of my real estate career, and was contemplating even further expansion.
Why did I quit? Because I went to sleep thinking about the roofing problem on the Brooklyn house; or the lady in apartment 2F who needed a new refrigerator; or the man in 4B whose toilet was leaking; or the plumbing in the house on 122nd Street. I simply didn't want to concern myself with issues of this sort. I was a landlord only as a means toward the end of amassing wealth. I didn't enjoy any of it for its own sake.
Instead, I wanted to be contemplating such issues as anarchism versus minarchism; what was all this about Austrian economics that I was reading for the first time; could the oceans really be privatized? I was in the midst of writing essays that would eventually become the chapters of Defending the Undefendable and all these topics were more and more coming to intrigue me. Intrigue me? No. It was much more serious. I would now say in looking back that I was devastated at having to spend virtually any time on anything else.
So why don't I want to recommend the business path to the best of my students, the ones who have seriously been bitten by the beauty of Austro-libertarianism, as I was all those years ago? Because I do not think they will be happy contemplating price differentials in currencies, except insofar as these thoughts can help them get to the bottom of, and make the case for, the gold standard or free-market money. I don't think these kids will be fulfilled by digging into the essence of interest rates, only to earn money in futures markets.
In short, I think they will be deliriously happy, as I then was and now still am, if I could thereby in this way improve upon or better promote or defend against critics, the Austrian business cycle theory. If my students are interested in real estate, better to write the best new case against rent control, or public housing, or zoning, rather then to worry about scores of tenants in buildings they are managing, and the problems they are having with roofs, plumbing, heating or air conditioning.
Don't get me wrong. As an advocate of the free society, I full well realize that we cannot have an economy at all, let alone a civilized one, if no one, to quote a phrase, "takes care of business." I stand second to no one in my appreciation of what those who pursue commercial endeavors do for our society.
Further, I think that of all the academics associated with the Mises Institute, I am amongst those most appreciative of the role played by its financial supporters from the world of business and entrepreneurship. Without them, the edifice, the necessary capital equipment, simply would not be there. Lew would probably be still running the place, I am sure, but out of his basements or garage, and certainly not on anywhere near the present level of programs. He would have to earn a living to support himself and his family in some other way, and could only devote his part-time-after-hours of work efforts to these endeavors. But still, this does not imply that for those of my students who are on the fence concerning careers in business versus full time professional efforts to promote liberty, that I should push them in the former direction. I very much favor the latter course of action, for, as important as is business, those of us who strive mightily to ensure that businessmen are allowed to freely engage in commerce also make a crucial contribution.
Here is a second reason for this stance of mine. For every ten students I inspire, encourage, cajole or, OK, OK, nag to take up a life of the intellectual, oh, five to seven of them might succeed. However, I think I would be very lucky indeed with a one-in-ten success rate in the other direction. That is, for these kids to not only be successful in business, but to also keep that white hot appreciation of economic liberty burning over the many decades necessary for them to have enough money to contribute significantly to groups such as the Mises Institute. Why? Because just about everything they do in an academic field (certainly including journalism, working as a free market think tank analyst, etc.) will further buttress their beliefs, and encourage them in their libertarianism.
To be sure, we are not talking anything like 100% here. As a professor, there are still exams to be graded, committee meetings to attend, etc. But, in contrast, almost nothing in the business world promotes liberty (apart from exemplifying it, as does all marketplace activity). They will be concerned about the IRS, or the regulatory bureau, or staying one step ahead of their competitors, or satisfying consumers, or with paying off housing inspectors, or with building a better mouse (of the Disney or computer variety) or mouse trap. I think it is the rare young person, the very rare one, who can keep within him burning the flame of liberty after decades of this sort of thing.
It would be interesting to conduct a survey amongst the present donors of the Mises Institute: how many of them were fervent libertarians as young lads, and kept this "fire in their belly" going strong for decades while working in the business community? How many were, instead, "born again": later in life, after much success in commerce, they came to realize the contribution to civilization of this organization? I suspect that the latter will predominate.
What about doing both? That is, having careers both as an intellectual and as a businessman? I know of only a mere handful of cases where people have made important contributions in these two very different fields. This must be the overwhelming exception, not the general rule. This is due to the power of specialization and the division of labor. How many professional tennis players are also world class violinists? How many really good movie actors are physicians? Even Michael Jordan, perhaps the best basketball player who ever dunked a ball, was a total failure at baseball, a not completely unrelated enterprise.
So I shall continue to refer those of my very best students who are interested in promoting liberty and Austrian economics on a full-time professional basis to do just that. I hope that one day this colleague of mine will be convinced of the error of his ways, and join me in this endeavor. If there is one thing I am passionate about, it is passing on to the next generation the baton that Murray Rothbard a while ago passed on to me and my contemporaries.
Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.