Dear Econ Major, 4/3

Never take another econ course

If you are an economics major, then you have already taken too many economics courses for your lifetime. Stop taking econ, and think in terms of alternatives to going for an advanced degree.

You already have been exposed to all of the important principles in economics. Applying those principles, you should appreciate that the marginal value of another economics course is low relative to its opportunity cost.

When you consider your future, think in terms of someone you would want to end up like. For your personal life, I recommend aiming to end up as a grandparent. There used to be a bumper sticker “Ask me about my grandchildren.” It reflects the fact that grandparents feel that we have won at life. But this essay is about your career, not your personal life.

For your career, I am telling you not to do what I did. I obtained a Ph.D in economics. After I graduated college in 1975, I was a research assistant at the Congressional Budget Office and then at the Fed. The Fed was strongly credentialist, as are most government agencies. So I knew that without a Ph.D my ceiling there was below the floor I could have with a doctorate.

For actually understanding the economy, it is hard to think of any course I took in graduate school that had value. I learned a lot of mathematical models, some of which were wrong and all of which were useless. My knowledge of economics has increased over time, but from general reading, not from graduate school.

After graduate school, the best job offer I had was back at the Fed. As it turned out, I was too restless to be satisfied with a long career toiling there. Some of my colleagues coveted academic positions, and a few were able to obtain them. Other colleagues wanted to climb the ladder within the Fed, but I was too rebellious to play that game. Finally, there were those who escaped to the private sector, primarily Wall Street. I was in that category, although in my case I went to Freddie Mac.

Once at Freddie Mac, I soon decided against being just an economist. I taught myself quantitative finance, and I learned from colleagues about management. I was derailed as a manager, but when I left Freddie Mac I landed in the world of Internet business just as the Web was starting on its growth path.

I would advise my younger undergraduate self to obtain a job in an established business. Today, you are most likely to be hired as a data analyst, a computer programmer, or a social media marketer. Make sure that you have good mentors, who approach their tasks with rigor. Try to work for a firm that undertakes careful experiments in its marketing. If you are hired to work on a computer system, make sure that the executives in charge apply state-of-the art methods.

Connect with other people who are intellectually curious. You can continue to broaden your knowledge of economics. I particularly recommend books on economic history, such as This Time is Different or Manias, Panics, and Crashes. Finance is useful, and A Random Walk Down Wall Street provides an elementary introduction, if needed. I’ll recommend my own Specialization and Trade and Invisible Wealth as guides to the contemporary economy. But there are many books on psychology, anthropology, sociology, history, and business from which you can learn.

At this point, having taken several economics courses, you don’t have much more to learn from economics professors. There are other people in the world who have more to teach you.