When someone tells you they’re an economics major, you probably think you understand them. They’re a corporate sellout, wishing they could major in finance but settling for the closest alternative at a liberal arts institution — all in preparation for a career in investment banking or consulting. It’s almost embarrassing to admit you’re an economics major. There has been, perhaps rightfully, a growing critique of students turning away from the more traditional liberal arts majors like English and history in favor of more ‘professionally applicable’ ones like economics and computer science.
I won’t deny that many economics majors are drawn to the field by the prospect of a career in finance. Exit opportunities are often a driving factor in any student’s choice of major. But unlike computer science for software engineers, pre-medicine for doctors and engineering for engineers, economics is not a prerequisite for bankers. Any economics major learns very quickly that most of what they are learning in the classroom will not be directly applicable to a job on Wall Street. In fact, even the finance track in the economics department teaches more structure and theory than practical financial skills like accounting and traditional finance — and will not train students for a finance job.
There is, of course, a strong correlation between wanting a career in finance and pursuing an economics major. I don’t, however, believe the relationship is causal. Because finance companies recruit from all majors — and, with its enforced B+ median, economics is one of the more difficult paths at Dartmouth — it does not make much sense to pursue the major solely for the sake of finance recruitment. Economics majors have to study finance technicals or consulting cases just the same as everyone else.
In some cases, more diverse majors may even be sought out by finance recruiters. I recently went to a finance event where a recruiter asked attendees to state their majors. The exercise aimed to demonstrate the diverse interests — from environmental science to English to history — represented at a Dartmouth recruiting event, a contrast to other universities where, as the recruiter pointed out, everyone at finance events seems to be a finance major. The fact that the majority of us were, in fact, economics majors was left unacknowledged.
The value of the economics major should not be conflated solely with finance. I suggest that instead of looking at major choices solely through the lens of career prospects, we consider them as a reflection of the question a person is most interested in answering and through which perspective.
Here are some examples of the questions that a particular major may be most interested in exploring:
How do minds work? — Psychology (Social perspective), Neuroscience (Scientific perspective)
How does life work? — Biology (Scientific perspective), Religion (Spiritual perspective), Philosophy (Moral perspective)
How do things work? — Physics (Theoretical perspective), Engineering (Application perspective)
How does the Earth work? — Environmental Studies (Social perspective), Earth Sciences (Scientific perspective)
How do stories shape us? — History (Factual perspective), English (Literary perspective)
How does society work? — Government (Organizational perspective), Sociology (Social perspective), Economics (Exchange perspective)
At first glance, exchange does not sound like a flashy perspective through which to view society. But if you consider what factors impact human lives the most, exchange is perhaps the most fundamental one. It is how we satisfy our basic needs and desires. One of the most consistent factors for Americans in elections is economic conditions — hence the saying, “It’s the economy, stupid.”
Economics views the world through the transaction of resources and attempts to pinpoint the most effective means to create utility. It takes abstract ideas and grounds them in equations. There are equations and models to predict how options should be priced, whether someone will pursue higher education or whether a marriage will be successful — evaluating a marriage through the ‘outside options’ of the two people involved. It is not very romantic, but a useful way to model decisions. Maybe the reason why divorce rates are lower in countries with arranged marriages is not because divorce is more taboo in those communities, but rather because there would be fewer ‘outside options’ for a divorcee. These are the kinds of questions economics looks to answer.
To many people unfamiliar with the field, economics is synonymous with finance. That association is not wrong, but it is incomplete. I used to think that research was a pretentious guise through which someone tried to assert their opinion about the world. After taking econometrics and better understanding how economics research works, I find something very beautiful in the idea of running experiments and evaluating counterfactual worlds to come to an evidence-based assertion on how a program or policy impacts the world. Economics evaluates all kinds of exchange — from your decision to buy a Collis Cafe smoothie to international trade — and suggests how they can be done better. So please, give the ‘econ bros’ some credit — we’re here for more than just ‘selling out.’ And if we aren’t, well, at least we’ll be able to afford to pay the credit back.
Opinion articles represent the views of their author(s), which are not necessarily those of The Dartmouth.
