ECON 378 - Critical Thinking (What Economics is All About)!

Introduction

Sources:  The Foundation for Critical Thinking, Critical Thinking by Richard L. Epstein, Critical Thinking in Economics by Dennis Patrick Leyden, "Promoting Critical Thinking in Economics Education" by Mary Beckman and Kate Stirling, Critical Thinking Activities, no author given.

Critical Thinking:

    What is it?

    Why is it important?

    How Does it Improve Learning?

Quick Exercise:  Everyone do the following:

    Write out the most important thing you know about critical thinking in this form:

    1.  Critical thinking is . . .

    2.  In other words . . .

    3.  For example . . .

We will come back to your answers later -

Why Concern Ourselves With Thinking

Because whenever we are dealing with human life, we are almost always dealing with thinking.  Thinking is the way that the mind makes sense of the world (and remember that economists basically study people - and how those people interact with the physical world - which involves what people think about it and how they value it).

There really isn't any other way to understand anything except through thinking. 

Everything we know, believe, want, fear and hope for, our thinking tells us!

So here's a definition of critical thinking:  Critical thinking is the art of analyzing and evaluating thinking with a view to improving it.

Critical thinking is a self-directed process -- we take deliberate steps to think at the highest level of quality.

or what about:

Critical thinking is thinking about your thinking while you’re thinking in order to make your thinking better.

Richard Paul

    Lower level thinking:  instinctive, automatic, spontaneous.  Unconsciously guided at times.

Includes thinking that is self protecting and self validating.

Includes ideas that are valid, as well as nonsense, confusion, stereotypes, prejudices.  The key is that we cannot distinguish the difference between high and low quality thought if we are doing lower level thinking.  Lower level thinking does not assess itself.

Example from one of my classes:  A student said, "It is immoral to shop at Walmart."

I asked, "Why?"

The student's response:  "Because Walmart is evil."

I asked, "Why?"

The student's response:  "Because Walmart is a corporation."

I asked, "Why are corporations evil?"

The student's response:  "They just are."

    Higher level thinking:  analyzes, assesses and improves on lower level thinking.

Higher level thinking stops and assesses itself before going forward.

It is disciplined, seeks the truth (regardless of what that is), self assessing, self correcting, probing and includes critical thinking.

Another Example (also taken from my classes but also from the general public):  Lower level thinking about minimum wage laws:  people will earn more, people will be happier, it is more "fair", more spending will occur - which is good.

Higher level thinking about minimum wage laws:  employers will respond to the change in their costs, there will be consequences from these higher costs, so there are losers (even among workers), is it really more "fair" - if so, why, will there really be more spending overall and is spending a good goal anyway?

You should be thinking by now that a well cultivated critical thinker:

·         Raises vital questions and problems, formulating them clearly and precisely.

·         Gathers and assesses relevant information, using abstract ideas to interpret it effectively.

·         Comes to well-reasoned conclusions and solutions, testing them against relevant criteria and standards.  Don't jump to conclusions!!

·         Thinks open-mindedly within alternative systems of thought, recognizing and assessing, as need be, their assumptions, implications, and practical consequences.

·         Communicates effectively with others in figuring out solutions to complex problems.

So critical thinking is, in short, self-directed, self-disciplined, self-monitored and self-corrective thinking.

Quick Exercise:

    Think for Yourself - Begin to think about your thinking.

        Make a list of any problems you believe currently exist with your thinking.  Try to be as explicit as possible.  The more problems you identify the better (come up with at least two).  For each problem you identify, complete the following statements:

        1.  One problem with my thinking is . . .

        2.  This is a problem because . . .

        3.  If I adequately addressed this problem, the quality of my life would improve in the following ways . . .

What did you come up with?

Let's Use Some Critical Thinking to Think About some public policies.

Economics and Critical Thinking

Public Policy analyses try to convince people of something.  In fact, people are always trying to convince you of something . . .

Thinking critically is a defense against too many people trying to convince us.  But it is also a way of convincing yourself about an argument (and convincing others).

    Claims:  When you are trying to convince someone of something you are making an argument.  In the process of doing this you will make claims.  Claims are declarative sentences used in such a way that it is either true or false (but not both).

        Examples:  Are the following claims?

                The professor in this course is a female.  (Yes, a claim - it is either true or false).

                White, college-age males are the problem in society (I heard this from a "talking head" the other day).  (Probably not a claim since what the problem is, etc. is too vague.  It is being "claimed" to be true, but critical thinking would explain it as as an opinion -- that could be true but could also be false).

                How can anyone be so dumb as to think that computers can think.  (This is a question, not a claim).

        Be careful about making claims without really analyzing them!!

Economists make claims - and mainstream analysis likes to separate them into two categories:  positive and normative.

Positive:

Normative:

Which of the following are positive and which are normative?

    The Dow-Jones Industrial Average rose last year.

    The government should eliminate all rent control.

    Air pollution is a major problem in many U.S. cities.

    You should get out of the restaurant business vs. You have to get out of the restaurant business if you want to put a stop to your losses.

Be able to distinguish between normative and positive statements.  Positive thinking is all about what simply is - sound reasoning and evidence to support.  Normative thinking is all about what is better or worse and requires sound reasoning based on values.

So sometimes economic questions are categorized this way:

        Asking about what is.

        Asking about what should be.

I don't think it is that cut and with policy analysis - where you are making an argument for a particular strategy -- your question has to be normative.  But in the process of convincing others that your normative stance is correct, you might ask some positive questions (and answer them if data is available).

    Question:  Should policy ABC be passed?  (normative)

    Answer:  Yes

    Argument:  Because right now the following is taking place (positive analysis) and this policy will lead to ABC, which is a preferred outcome.

Cause and Effect

Critical thinking is required to determine cause and effect -- and even with critical thinking, it is sometimes impossible to determine the cause and effect.

But jumping to conclusions about cause and effect is lower level thinking.

Exercise:  Cause and Effect - Be prepared to defend your answer with sound reasoning (critical thinking).

Biases and Points of View

Try to be aware of your own biases.  A good way to do this is think about what you value.  What you value relates to how you filter information.  Try to see other points of view the best you can.

Exercise:  Bias and Government Spending

Status Quo Reasoning

Be very careful not to fall into this “reasoning.”  It is lower level thinking. 

Basically, it goes like this – people believe that with a given policy change the only “change” that will take place is the change they want to take place.  It’s as if the policy takes place in a vacuum.  Or with the assumption of ceteris paribus actually taking place in the real world.

For example:  A policy says that employers must hire so many minorities or women or be sued, fined, etc.

Therefore – employers hire the “quota” of minorities and women to avoid the fine, etc.

In some cases, this will mean that productivity will drop – because the most productive people were not hired in all cases.  A drop in productivity might mean that some jobs will be lost.  Or employers might cut back on perks or bonuses or paid vacations, etc.

Cost cutting can take many forms.

Also – if employers must hire on the basis of sex, for example, they will discriminate on other factors that have to do with productivity.  Women who are less likely to have children and women who are higher on the education scale (who are also less likely to have children) will be hired over other women.

Another obvious example:  Minimum wage laws.  Employers will not be passive to an increase in costs – this will create other outcomes from this policy besides “people getting paid more.”

Some might say that the “other” outcomes are secondary to the positive one that policy is designed to create.  That is OK – as long as the other outcomes are considered and analyzed and not overlooked.