The biggest misconception people have about economics is that it is all about greed. In reality, economics is about the allocation of scarce resources and the factors people consider in deciding how to allocate those resources. Economists recognize that decisions are based on not only profit and self-interest but also factors like concern for others.

 


Magazine
Fall/Winter 1999

Todd Clark '85
economist, Federal Reserve Bank

What 20th century event had the greatest impact on your profession or field of study?

Of the many important events of the 20th century, the Great Depression has had the greatest effect on economics. The Depression provided hard lessons about appropriate monetary and fiscal policies. Even today we have in place stabilization policies that are, broadly speaking, intended to prevent the economy from experiencing another Depression. Finally, some of the great minds in economics Nobel laureates such as James Tobin—have cited the Depression as a compelling factor in their decision to study economics.

What lesson do you take away from that event? Personally, what is the most meaningful life lesson you have taken from your vocation or avocation?

The most meaningful life lesson I take from my profession is essentially the paradigm of economics: that people make choices based on costs and benefits (although, in my liberal training, perhaps not entirely).

What person(s) or mentor(s) have had the most significant impact on your life? Can you describe how that person affected your life?

Honestly, Wabash economics professors John Naylor, Steve Schmutte, and Bob Whitesell have been crucial to my professional life. Without their mentoring, I may never have considered earning a Ph.D. in economics. In particular, Bob Whitesell, who came to Wabash as an assistant professor during my junior year, encouraged me to pursue a career in economics and took pains to make sure I was prepared for the challenges of graduate work, both academically and psychologically. Without a doubt I was better prepared for the psychological rigors of graduate school than virtually any of my classmates.

In your experience, what is the greatest misconception the public has about your vocation (or field of study) or the people in that vocation?

Misconceptions about economists and economics...where to start? Really, our social skills are not that bad, and we don't always disagree. More seriously, probably the biggest misconception is that economics is all about greed. In reality, economics is about the allocation of scarce resources and the factors people consider in deciding how to allocate those resources. Economists recognize that decisions are based on not only profit and self-interest but also factors like concern for others.

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