What is this all about?
"The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.  Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back."

Why are you here?  What have you gotten yourself into now that you have enrolled in a semester course in introductory economics?  How will this section of the course differ from that which some of your friends may be taking?  How can you improve your odds of success this semester?  

These questions seem to be a good place to start our discussions for the semester.  The answer to the first question is easy.  Experience at URI has shown students have overwhelmingly entered their introductory economics courses because they have been "forced" into the course by curricula that require one or two semesters of introductory economics.  Included here are the business, consumer affairs, and textile marketing students who are required to take ECN201 and ECN202, engineering students who take ECN201 in the second semester of their first year, and pharmacy students who take ECN201 in the first semester of their second year.  

As you will quickly see in the Student's Perspective, however, there is no clear consensus among students as to why they are enrolled in these courses.  One of the goals in the introduction is to provide you with a better sense of what the curriculum designers were thinking when they required you to take economics.  A good place to start would be with the fact that Economics fills a general education requirement in the Social Science division.  Economists, like the other social scientists (Psychologists, Sociologists, and Political Scientists), are concerned with uncovering the secrets of human society. In fact, it would be safe to conclude that the division between these disciplines is often blurred, that economics cuts across topics normally considered within the realm of the other social sciences. Economists, like psychologists, are very much concerned with the study of human behavior, human judgment, and human well-being. (JEL, March 1998).  Economists also share with sociologists an interest in the history and structure of human society - in issues of poverty, crime, and discrimination.  As one student put it, "Economics is the study of how the world works."

To see the breadth of economic analysis we need look no further than the list of BIG stories that students identified. The link to economics of some of the stories - Middle East oil, NAFTA, the Japan crisis and Asian stock markets should be obvious to most of you. Other stories, such as China, the internet, a vaccine for AIDS and a cure for Alzheimer's, overpopulation, and environmental clean-up have very strong economic components that may be a little less obvious.

What separates economics from the other social sciences is not the subject matter.  It is also not the method of analysis.  In each of the social sciences there has been an effort to employ the scientific method - the development and testing of theories and hypotheses.  We are all professional observers of the "real" world whose job it is to make order out of what may appear to many as chaos, to explain why things happen by developing and testing of hypotheses.  This is why some think of Economics as a "bunch of theories."

There may be, however, one minor difference in terms of the method of analysis in the social sciences.  Economics tends to be a bit more mathematical than the other social sciences in the techniques used to study the behavior of individuals and society as well as in the delivery of the stories they tell that appear in introductory textbooks.   This explains why many think of economics as "lots of graphs." Because we will rely on some graphs during the semester we will take a little time at the beginning to review some of the basics of graphical analysis, but there will certainly be fewer graphs and possibly more tables here than you will find in most of the other introductory economics sections.

If it is not method or subject, what then is it that is unique about economics?   We will call it perspective.  Economists tend to begin with the premise that scarcity exists - that it has always existed and it will always exist and that individuals and society must therefore devise systems to deal with it.  At the individual level scarcity means people must make choices - precisely the subject matter of much of what you study in microeconomics.  Certainly this is something you already know a good deal about, something you have had to deal with.  Most of you have at some point felt that you did not have enough money to do everything you wanted, that there was not enough time to get everything done.  You needed to make a choice between a Marketing or English major, a computer or writing course, working on an ECN assignment or heading to a party.  And if you think the choices will end when you graduate - you are wrong.   You are only beginning to deal with the problems of time allocation, balancing your professional and personal lives, and balancing consumption for today with investment for tomorrow. Success, both here at the University and out there in the "real World", will be dependent upon your decision making skills.

The same is true at a larger, societal level.  There is not enough "stuff" so that everyone can have a 'hot' car, a fancy house, a good education and first-class health care, so each society has had to develop a system to allocate scarce resources.  Even though the economic systems vary across space and time, each system must provide the answers to a set of very basic questions scarcity has imposed on each society - What will be produced? How will it be produced? and Who will get it?  Economics is the study of the systems that have been devised to solve these three basic questions - what we will call an economic system. 

We will begin by taking some time to examine alternative economic systems.  As we look back over time there have been many "solutions" to the basic economic questions, but they can be classified into three broad classes - Tradition, Command, and Market.  It will not take you long to realize that economists have a well earned reputation for disagreement, and one thing they disagree on is the relative merits of these economic systems.  These competing views on economic systems will be discussed in the alternative perspectives section.  This should provide you with the background necessary to understand why economists disagree so often and why what you read about in the financial section of the New York Times is likely to be so different from what you read about in the Wall Street Journal. 

The focus here will be on the economic system you are living in, a market system often called capitalism.  If you are going to be a part of this system, you might as well know the rules.  But what are the rules?  Before we talk about the rules of capitalism, let's talk about the rules for this course.  It should come as no surprise that economists have very different views on the students' role in the course, how the material will be presented, and what should be included in the introductory course.  For a more detailed answer to these and other bureaucratic questions (number of exams, attendance policies...) you should check out the syllabus. 

Once you have looked at the structure of this course you can turn your attention to the Introduction.