What Economic Ideas Are True And Nontrivial?

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Short answer: comparative advantage is a plausible candidate. This story is an old one, but perhaps it has become old enough that some readers will not be familiar with it. It’s told in a 1969 address by Paul Samuelson (Samuelson, Paul A.  1969. “Presidential Address: The Way of the Economist.” In P. A. Samuelson (ed.), International Economic Relations. pp. 1-11.) Here’s Samuelson telling the story:

[O]ur subject puts its best foot forward when it speaks out on international trade. This was brought home to me years ago when I was in the Society of Fellows at Harvard along with the mathematician Stanislaw Ulam. Ulam, who was to become an originator of the Monte Carlo method and co-discoverer of the hydrogen bomb, was already at a tender age a world famous topologist. And he was a delightful conversationalist, wandering lazily over all domains of knowledge. He used to tease me by saying, ‘Name me one proposition in all of the social sciences which is both true and non-trivial.’ This was a test that I always failed. But now, some thirty years later, on the staircase so to speak, an appropriate answer occurs to me: The Ricardian theory of comparative advantage; the demonstration that trade is mutually profitable even when one country is absolutely more – or less – productive in terms of every commodity. That it is logically true need not be argued before a mathematician; that it is not trivial is attested by the thousands of important and intelligent men who have never been able to grasp the doctrine for themselves or to believe it after it was explained to them.


I like Samuelson’s answer, but it also raises additional questions. If the “non-trivial” criterion can be met by any economic theory where thousands of intelligent and important people are unable to grasp or believe it, then it seems to me that many economic theories are true and (apparently) non-trivial, including the (apparently) widespread belief that governments can set prices or impose tariffs without experiencing tradeoffs, along with many more. The news headlines provide examples of (apparently) intelligent and important people who seem unable to grasp or believe economic insights pretty much every day.


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