Web Note 1.1: Costs and Benefits

Learning to think in terms of costs and benefits is useful if done correctly, but misleading if done superficially. The difficulty is to include all the costs and benefits, even those that cannot be measured in money. Economists should know better, but we are often guilty of putting too much emphasis on what can be measured and too little emphasis on what cannot. Thus we provide much ammunition for our critics, who accuse us of reducing everything to means (costs) and ends (benefits) — to inputs and outputs. British economist E. F. Schumacher and his followers have been among the more persistent critics of narrowly construed means (costs) vs. ends (benefits) thinking. Schumacher was particularly critical of economists' habit of thinking of labor as simply a cost.

Article: "On Buddhist Economics," one of the essays in Small Is Beautiful, E. F. Schumacher, Harper & Row, 1975.

Web Site: The E. F. Schumacher Society.

Web Note 1.2: Society and Markets

The ongoing contest between social forces and market forces can lead to some interesting adaptations. Even some cloistered monks, who would prefer to live entirely outside of market society, must come to terms with these forces: even monks want some things that they cannot produce themselves. If a monastery cannot be entirely self-sufficient, its members must produce something that can be sold in order to buy those things they cannot produce.

The Information Technology revolution has provided a solution for several monasteries. Web authoring can be done without leaving the monastery. Most monks are well-educated and proficient in several languages. And monastic life has taught them patience and attention to detail.

Article: "The Electronic Scriptorium" (Heather Millar, Wired , August, 1996).

Web Site: Web Design and Print Design Services from the Monastery of Christ in the Desert.

Web Note 1.3: The Art of Economics

Question: When economists give policy advice to governments or try to influence policy through speeches or articles directed to the general public, are we engaging in positive economics, normative economics, or the art of economics?

Answer: All of the above.

Web Site: Economics professor Paul Krugman tries to influence economic policy through his many columns — formerly for Slate and now for The New York Times. Can you identify the positive economics, normative economics, and the art of economics in some of his columns?