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Why It's Better to Study History Than Economics

January 5, 2014, 10:00 AM

When we look at how today’s teenagers compare to other countries, for example, by using international standardized tests of literacy and numeracy, here’s the shocking thing.  When the Organization for Economic Cooperation and Development does its standardized assessment of numeracy, or what they call mathematical literacy, they find that the Shanghai Educational District is far ahead of the United States and my country, the United Kingdom. 

Indeed, the gap between Shanghai and the U.S. in terms of mathematical attainment at age 15 is as big as the gap between the U.S. and Albania or Tunisia.  So we actually have a problem that goes beyond just the hardworking ethic of many young Asians.  We may actually not be equipping our young people to compete particularly in areas like math or science where you do have to do quite a lot of boot camp-type education to get proficient.  Just to be able to knock off those quadratic equations is not something that you are born able to do.  

So how do we play this?  If I’m suddenly 30 years younger and I’m a classmate and we’re figuring out our future, when I was asking questions about my future, I thought, well, I should really try to learn about economics and I probably should learn a language like German because the Germans look like they’re still important. 

I still think it may pay to get some economics under your belt, but I don’t think economics looks quite as crucial a discipline as it used to.  It’s certainly a discipline that conspicuously failed to predict the biggest financial crisis since the 1930’s.  So I’d say, "Eh, you’d probably lighten up on the econ, you won’t cluster around that particular major in U.S. colleges."  Maybe that’s a little bit of group think.  

Remember, the key in your 20’s is to stand out and not be in the herd.  If the herd are all sitting in Econ 101, you should probably be taking another course, Economic History or just history - knowing about the past, not many people seem to.

I’m constantly struck by the levels of historical ignorance that I encounter.  In rooms full of very well-paid financial professionals, nobody appears to have read any of the major works of financial history of the last 30 or 40 years.  So I would say choose your options academically and choose your language.  It’s a very good idea to speak a language, but I would say a language spoken by 20 percent of humanity, say Chinese, would trump one spoken by 2.5 percent, German.  So, I think there are different ways of strategizing what you do after college.  

In Their Own Words is recorded in Big Think's studio.

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