090：学经济学的好处在于避免重蹈覆辙

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Hello,Himalaya’s subscribers. My name is Timothy Taylor, and today the topic of thisfinal lecture is remember the value of economic knowledge. The idea ofeconomics traces back about two thousand and five hundred years to the time ofancient Greece. The Greek word for economics was “oikonomia” and that word“oikonomia” was built out of two root words. One was the Greek word,“oikos”referring to the household. Now at that time, the idea of a household wasn'tjust a small, immediate family group.

It really referred to the managementof a least a moderately wealthy family. And so that management was sort of likea family business. It include farms or mining or production of certain goodsalong with hiring of workers and ownership of slaves as well. The other Greekroot word for “oikonomia” was “nomos”, which is often translated as management,meaning how some task is carried out. So if you put “oikos” and “nomos”together into the root word, overall, “oikonomia” that refers to how a familybusiness was managed and that word, “oikonomia” appears in the writings of the famous Greek philosopher Plato, ah, and aless well known writer of that time, named Xenophon, actually wrote a bookcalled "Oeconomicus", which essentially means one who knows economics，today we would say economists. Oneinteresting pattern from that long ago time. In Greek society of that time, thehighest and most worthwhile goals for wealthy men was to be involved inpolitics and in philosophy.

And as a result, in many cases, thejob of actually running the family business was given to the women in thehousehold. Men like Plato and Xenophon might do the writing about understandingthis idea of economics. But in the time of ancient Greece, when you referred tosomeone who was a good manager of the family business, a good economist, youwere typically referring to a woman who actually did the day to day management.Thus by taking this course in economics, you are joining into the conversationof a subject that has been talked and written about for thousands of years, ah,around the world. And in China, too.

I want to finish these lectures with afew thoughts about the value of economic knowledge. And as we have so oftendone, we'll talk about it in three parts. Being part of the conversation ofeconomics is the first part. Second, making choices in the economic roles youplay. And third understanding the future economic challenges for China. Let'sstart with our first part being part of the conversation of economics. Everyarea of knowledge has certain specific terms and ideas. And people who studythe subject use these terms and ideas all the time.

But for people who have not studiedthe subject, these terms and ideas can be hard or even impossible. These termsand ideas are sometimes referred to as jargon. These special terms this jargoncan really be very helpful for specialists to use it, because it's much easierto express some ideas quickly and clearly using the jargon. When an economistrefers to opportunity cost or supply and demand, or comparative advantage, ornon tariff trade barriers or lender of last resort or negative and positiveexternality or many many other terms we've talked about in these lectures, youdon't need to explain to other economists what those terms mean.

So jargon can be an easy way foreconomists to communicate with each other. But even though jargon can beuseful, it also has a danger. Remember, those who don't know the jargon in acertain area will often find it hard to understand in a full way what is beingwritten about or being discussed. In fact, I think sometimes specialists likeusing jargon, because it shuts out other people. By using jargon it means thatothers who are not specialists can't really argue with them, because the nonspecialists don't know the terms.

Now, the terms and ideas of economicsare very widely used. Economics isn't about running a business, but those whorun businesses often use the terms of economics. Economics isn't about how toinvest, but those giving investment advice often use the terms of economics.Economics isn't about how to run the government, but those who are running thegovernment often use the terms of economics. News stories often refer toeconomic ideas. Like, you might hear a news story about the monetary policiesbeing used by the People’s Bank of China or about the rising price of housingor about the international arguments over trade policy.

All of those terms should mean morenow than they did before you started. And of course, government officials are givinginterviews and speeches often using terms of economics as well. Over the yearsmany of the people who have learned some economics from me have told me laterthat they were in a conversation somewhere or listening to the news or at abusiness conference or making a decision about say investing money or buyingproperty. And they suddenly realized that they were thinking in economic termsand before they studied economics they wouldn't really have understood what thedecision was all about.

So one great value of economics isbeing part of the conversation where you can use the terms and have greaterunderstanding. A second area are the benefits that come as you play all yourdifferent rules in the economy. Now, as we've talked about, economics is not aset of answers. You can't solve the economy like a math problem and get a rightanswer. Economics is not a set of instructions for what to buy, but it doesperhaps help you think about the trade-offs involved when you act as aconsumer, it doesn't tell you what career to follow, but it helps you thinkabout what careers might turn out to be growing industries with higher wages ornot so fast growing industries with lower wages.

It doesn't tell you how to get rich,but it helps you think about what are the different ways of investing? What arethe trade offs and the choices you face? Many people prefer to avoid thinkingabout trade-offs. It's uncomfortable to remember that when you make one choice,you're often giving up on other choices. But economics is the science ofscarcity. And thinking about trade-offs using the language of economicsprovides a useful background for so many of the choices that people face intheir lives. Let's finish by talking about the challenges of China's economy.

And I quote here from a speech thatwas given in two thousand and seventeen by China's president Xi Jinping, atwhat is called the World Economic Forum, and held each year in Switzerland. Um,and this is what was said, “There was a time when China had doubts abouteconomic globalization and was not sure whether it should join the World Trade Organization.But we came to the conclusion that integration into the global economy is ahistorical trend. To grow its economy, China must have the courage to swim inthe vast ocean of the global market. If one is always afraid of the storm andexploring the new world, he will sooner or later get drowned in the ocean.Therefore, China took a brave step two, embrace the global market. We've hadour fair share of choking in the water and encountered whirlpools and choppywaves. But we have learned how to swim in this process. It has proved to be aright strategic choice, whether you like it or not, the global economy is a bigocean that you cannot escape from. Any attempt to cut off the flow of capital,technologies, products, industries and people between economies and channel thewaters in the ocean back into isolated lakes and creeks is simply not possible.”

Well, that speech was focused on theglobal economy and international trade, so it made sense to focus on China'sparticipation in the global economy. But the power of this argument goes beyondinternational trade. I mean, China's participation in the international economyis important both for China and for the rest of the world, but only a littleless than twenty percent of what China produces in goods and services isexported. While China's imports are more than eighteen percent of China's grossdomestic product. This means that eighty percent or more of China's economy isabout goods and services that are both produced in China and also consumed in China.

China's economic transformation duringthe last forty years or so is not mostly about the growth of China's trade.It's mostly about the growth of China's domestic economy. Now I'm sure that in Chinathere are disputes over many issues as there are in all countries. Disputesover taxes and government spending, rules about debt and borrowing, about whatinfrastructure to build about pollution and poverty， education， technology, health care, manyother issues. But as far as I can tell, there is really almost no one in Chinawho actually wants to go back to the economy that China had forty years ago.

For China, it's not just aboutembracing the global market. It's also about embracing the broader set ofeconomic changes. As China has moved away from being an economy of mostly lowincome rural farmers to being a country where workers are hired by privatefirms for manufacturing and services, jobs, that over time are making more andmore use of better educated workers and more advanced technology. Yes. With allof China's economic changes, there will be times of whirlpools and choppywaves. And economy always has issues and challenges in China and everywhereelse.

But the issues of an economy that islarge and growing are much more pleasant than the issues of an economy that ismuch smaller or not growing. It's much easier for society to think about choicesabout consumption, education, health care, retirement benefits, all thoseissues. When there are large and growing economic resources to do so，the problems of economic stagnationor recession are a lot harder and a lot less pleasant than the problems ofgrowing prosperity. Well, time has come for me to pull these lectures to anend. If you're listening to this lecture, I see a new lesson to many, or evenall of the earlier lectures,too, and you've spent a lot of your valuable timewith me.

If you've made it this far, you made achoice to spend more than twenty hours of your time with me. Indeed, the valueof the time you've spent with me is probably more than the value of the moneyyou actually paid for this class. Time is a scarce resource. None of us, nomatter how rich or how poor has more than a hundred and sixty eight hours in aweek. Their opportunity costs of your time there, other things you could havebeen doing with your time. In fact, before I agreed to record these lectures, Ihad to sit down and have a long talk with my wife about the opportunity costsof my time and the trade offs that we would face as a family.

I know you had opportunity costs ofyour time as well. Other pod casts you could listen to, or other things youcould do. So I hope you feel the time with me. And with these lectures has beenwell spent. As we reached the very end of these lectures. I want to make sure Isay a couple of things. First of all, I want to say congratulations, congratulationson making it all the way to the end. A lot of the terminology and topics andarguments we've talked about are not simple and not easy.

They take time to think about in timeto understand, by sticking with me all the way to the end, you showed some realpersistence. I also want to say thank you, as I discussed at the very beginningof these lectures, I've spent a lot of my own scarce resources of time duringmy entire life, studying economics, editing economics written by others,writing about economics, talking about economics myself, teaching economics tostudents. It's always great to have a chance to share something that you'reinterested about to share something that you're passionate about. So having achance to share all of this stuff about economics is a real and deep pleasure forme.

It's also true that whenever you teacha subject, you learn more about it. I knew a lot about China's economy before Iagreed to do this course. But when I agreed to do the course, it has given me agood excuse to dig down into a lot of details about China's economy that Iprobably would not have found the time and energy to do on my own. I've triedto be both a teacher and also a tour guide to the world of economics, so thankyou for being willing to listen. Thank you for giving me a chance to learn.Thank you for being willing to share my interests.

I don't know if you really needanymore review questions at this stage. But as you think back over this course,think about some of these issues. Can you remember some of the specificeconomic terms you've learned? Can you remember some of the examples and factsyou've learned, including stories that might be useful for showing a point? Afterlearning some economics,do you see the different roles you play in the economyin a different way，like your choices about shopping to buy goods or working or savingor investing money? Do you have a vision of how you are actually interactingwith other people all across the economy on the demand and supply side of somany different markets?

After learning some economics，do you see the role of companies,including the companies that employ you or your family and friends in somedifferent ways? And after learning some economics, do you see the economicchallenges of China and indeed the entire world in some different ways? I hopeso. And one final time I will finished by saying, I'm Timothy Taylor. Thank youfor listening to Himalaya.