What is Economics?

Have you ever wondered why some are so rich, while others are so poor? Or why the economy sometimes grows strongly, and other times falls into crisis and recession? Or why government programs often fail to deliver the results that politicians promise? Whether you struggle with such questions or have barely thought of them, you will benefit from economics courses at The King’s College.

At The King’s College, committed to integrating faith and learning, we know that the Bible is not an economics textbook, but we do see in it God’s concern for human dignity, responsibility, and true justice. The Bible affirms private property, supports entrepreneurial activity, and calls us as Christians to be honest, hard-working, thrifty, just, and generous in exercising stewardship with our talents and resources. We believe that a market economy characterized by substantial individual freedom and a limited role for government best promotes these values and virtues. We also affirm that markets work best when individuals exercise virtue.

We teach that economics is not basically about money: It’s a way of thinking about how people make choices on the basis of expected costs and benefits. Beyond that, economics is a way of thinking about the consequences of people’s choices when people interact—buying, selling, giving, competing, and ultimately cooperating in helping each other pursue their separate projects. In other words, economics is about how markets work. Markets coordinate the choices of different people, using incentives to bring choices to produce and sell any product into balance with choices to buy and consume.

At The King’s College, you will learn about markets. You will learn how market exchange creates benefits for both buyers and sellers, both employers and employees. It is not a zero-sum game where one party gains at the expense of another. The development of markets has been the most important feature bringing modern, high levels of economic growth to one region of the world after another. Markets, where they are allowed to work, lift millions of people out of poverty. You will also learn how entrepreneurs bring change to an economy, introducing new products, new technologies, and new ways of doing things. In the process, they promote economic growth and greater prosperity.

We also pay attention to the economic effects of government policy—regulation, welfare and entitlement programs, and efforts to promote overall stability and growth. Policies can succeed only when they take account of market incentives. Policies fail when they ignore economic incentives, when they attempt to override markets in a heavy-handed way, and when they pursue intended benefits without considering all the costs. Indeed, a major purpose of economics is to discern the unintended consequences that accompany every policy. Economists must often be party poopers, telling policy-makers that there is “no free lunch.”

At The King’s College, we know that good intentions do not give policy-makers an exemption from economics. We learn even as children to abide by the laws of nature. If we ignore gravity, gravity reminds us with bumps and bruises. If policy-makers ignore human nature and the laws of economics, we all suffer bumps and bruises. If they offer free lunches, beware: people will soon be starving.

Policy-making without understanding market forces is like designing a spaceship without understanding mathematics or performing surgery without knowing anatomy. We would be better served by corrupt but economically savvy leaders than by benevolent but economically ignorant ones, if that were the only choice, but it’s not. Our goal is to graduate biblically-grounded students who know how social systems work and what their outcomes are.

Next FAQ