My First Day of Class
By David Henderson
I started my Executive MBA economics class today that I teach in front of a camera to 3 remote locations: D.C., Norfolk, and Oceana. I’ve taught since 1975 with 4 years off to work at Cato or in the Reagan Administration, 1 year off for 2 half-year sabbaticals, and 1 year of leave without pay to work on the original Encyclopedia of economics. I keep expecting that I’ll get bored teaching the same stuff over and over. I’m not. I’m as excited teaching it as I was my first year at the University of Rochester in the fall of 1975 when I was 24. (I remember walking across campus in my cut-off shorts in August 1975 and asking a young lady where I could find the bookstore. She told me to walk with her and, making conversation, she said, “Are you a freshman here?”) And I’m way better at it.
When I give them my phone number so they can reach me (it ends with 1776), I ask them the significance. Invariably someone answers that it was the pub date of Adam Smith’s Wealth of Nations (after the first typical answer that it was the date of the Declaration of Independence.) Then I show them The Wealth of Nations and tell them that many people dismiss it because it’s “so 18th century.” Then I read to them the famous quote about benevolence of butcher, brewer, and baker:
It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.
and the famous quote about the invisible hand:
by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.
Then I read to them Smith’s prediction that the 13 colonies would win the war and that they would become the most powerful nation in the world. I still get goose bumps when I read those quotes. Later, when I lay out The Ten Pillars of Economic Wisdom and get to Pillar #10, “Information is costly and valuable, and is inherently decentralized,” I read to them from one of my favorite books from the 1990s, Dismantling Utopia: How Information Ended the Soviet Union, by Scott Shane, then of the Baltimore Sun and now of the New York Times. When I read that passage about shoes, there go those goose bumps again. I e-mailed Scott a fan note a couple of years ago and asked him if had ever taken economics. He said no, and I told him that I thought he stated Hayek’s insight better than Hayek had.
It’s kind of amazing to be 58 years old, to have taught basic economics over half my life, and still to be excited about teaching it. I’ll take it.