Econ­o­mists: Storytelli­ng still mat­ters

STEM pop­u­lar, but hu­man­i­ties and English cour­ses key

Baltimore Sun Sunday - - MARYLAND - By Heather Long

WASH­ING­TON — A great mi­gra­tion is hap­pen­ing on U.S. col­lege cam­puses. Ever since the fall of 2008, a lot of stu­dents have walked out of English and hu­man­i­ties lec­tures and into STEM classes, es­pe­cially com­puter science and en­gi­neer­ing.

English ma­jors are down more than a quar­ter (25.5%) since the Great Re­ces­sion, ac­cord­ing to data com­piled by the Na­tional Cen­ter for Ed­u­ca­tion Statis­tics. It’s the big­gest drop for any ma­jor tracked by the cen­ter in its an­nual data and is quite star­tling, given that col­lege en­roll­ment has jumped in the past decade.

Ask any col­lege stu­dent or pro­fes­sor why this big shift from study­ing Chaucer to study­ing cod­ing is hap­pen­ing and they will prob­a­bly tell you it’s about jobs. As stu­dents feared for their job prospects, they — and their par­ents — wanted a de­gree that would lead to a steady pay­check af­ter grad­u­a­tion. The per­cep­tion is that STEM (science, tech­nol­ogy, en­gi­neer­ing and math) is the path to em­ploy­ment. Ma­jors in com­puter science and health fields have nearly dou­bled from 2009 to 2017. En­gi­neer­ing and math have also seen big jumps.

As hu­man­i­ties ma­jors slump to the low­est level in decades, calls are com­ing from surprising places for a re­vival. Some prom­i­nent econ­o­mists are mak­ing the case for why it still makes a lot of sense to ma­jor (or at least take classes) in hu­man­i­ties along­side more tech­ni­cal fields.

No­bel Prize win­ner Robert Shiller’s new book “Nar­ra­tive Eco­nom­ics” opens with him rem­i­nisc­ing about an en­light­en­ing his­tory class he took as an un­der­grad­u­ate at the Univer­sity of Michi­gan. He wrote that what he learned about the Great De­pres­sion was far more use­ful in un­der­stand­ing the pe­riod of eco­nomic and fi­nan­cial tur­moil than any­thing he learned in his eco­nomic cour­ses.

The whole premise of Shiller’s book is that sto­ries mat­ter. What peo­ple tell each other can have pro­found im­pli­ca­tions on mar­kets — and the over­all econ­omy. Ex­am­ples in­clude the “get rich quick” sto­ries about bit­coin or the “any­one can be a home­owner” sto­ries that helped drive the hous­ing bub­ble.

“Tra­di­tional eco­nomic ap­proaches fail to ex­am­ine the role of pub­lic be­liefs in ma­jor eco­nomic events — that is, nar­ra­tive,” Shiller wrote. “Econ­o­mists can best ad­vance their science by de­vel­op­ing and in­cor­po­rat­ing into it the art of nar­ra­tive eco­nom­ics.”

Shiller, who is fa­mous for pre­dict­ing the dot-com crash and com­ing up with the Case-Shiller Home Price In­dex, is spend­ing a lot of time look­ing at old news­pa­per clip­pings to un­der­stand what sto­ries and terms went vi­ral and how they in­flu­enced peo­ple to buy things — or stop buy­ing things.

When asked if he’s es­sen­tially ar­gu­ing for more English and his­tory ma­jors, Shiller said, “I think so,” adding: “Com­part­men­tal­iza­tion of in­tel­lec­tual life is bad.”

Shiller isn’t alone in wish­ing that there were more sto­ry­tellers (and story an­a­lyz­ers) around. Ev­ery Au­gust, some of the world’s top econ­o­mists gather in Jack­son Hole, Wy­oming, to dis­cuss how the econ­omy is do­ing and how they should tweak their mod­els. On the fi­nal day of events this year, Philip Lowe, head of Aus­tralia’s cen­tral bank, urged his colleagues to spend a lit­tle less time on num­bers and more time on be­ing good sto­ry­tellers.

“It’s im­por­tant we don’t just talk about num­bers, co­ef­fi­cients and rules, but sto­ries that peo­ple can un­der­stand,” Lowe said. “Sto­ries about how poli­cies are con­tribut­ing to eco­nomic wel­fare and the things that re­ally mat­ter to peo­ple.”

Lowe’s words struck a nerve, partly be­cause Aus­tralia has not had a re­ces­sion in more than 25 years and partly be­cause cen­tral bankers around the room gen­er­ally agreed that their com­mu­ni­ca­tion could be bet­ter.

One econ­o­mist pointed out that Ja­maica’s cen­tral bank is em­ploy­ing reg­gae artists to ex­plain that “high in­fla­tion is a wicked ting.” The Fed­eral Re­serve doesn’t have any­thing quite like that, but it is search­ing for a se­nior speech­writer who can help top cen­tral bank of­fi­cials speak “to a wide va­ri­ety of au­di­ences.”

“I am ex­pected to be, and I am, a sto­ry­teller. I tell sto­ries about the fu­ture,” said Ste­fan Ingves, gov­er­nor of Swe­den’s cen­tral bank. “We hu­man be­ings sim­ply love sto­ries about the fu­ture. That’s part of my job.”

Ingves re­minded his colleagues that they have a big plat­form that al­lows them to talk to busi­ness lead­ers and the pub­lic about the econ­omy. If they tell a con­vinc­ing story that growth will con­tinue, peo­ple are likely to say, “Hmm, that’s rea­son­able.” That could help keep con­fi­dence high, al­low­ing com­pany pres­i­dents to keep hir­ing and con­sumers to keep spend­ing. As the global econ­omy slows to its low­est rate in a decade, wor­ries are high about how much longer the econ­omy can power on.

In many ways, Pres­i­dent Don­ald Trump’s con­stant at­tempts to call this the great­est econ­omy of all time are an ef­fort to tell a pos­i­tive story to en­cour­age Amer­i­cans to keep spend­ing, Shiller said, even if his claim is not based in fact.

Per­haps the most pow­er­ful ar­gu­ment for why stu­dents (and their par­ents) might want to think twice about aban­don­ing hu­man­i­ties is the data. The Na­tional Cen­ter for Ed­u­ca­tion Statis­tics also keeps track of pay and un­em­ploy­ment rates by ma­jor.

There’s no deny­ing that the typ­i­cal com­puter science ma­jor makes more money shortly af­ter grad­u­a­tion than the typ­i­cal English ma­jor.

Con­trary to pop­u­lar be­lief, English ma­jors ages 25 to 29 had a lower un­em­ploy­ment rate in 2017 than math and com­puter science ma­jors.

That early STEM pay pre­mium also fades quickly, ac­cord­ing to re­search by David J. Dem­ing and Kadeem L. No­ray from Har­vard. Af­ter about a decade, STEM ma­jors start ex­it­ing their job fields as their skills are no longer the lat­est and great­est. In con­trast, many hu­man­i­ties ma­jors work their way to high-earn­ing man­age­ment po­si­tions. By mid­dle age, aver­age pay looks very sim­i­lar across many ma­jors.

“By age 40, the earn­ings of peo­ple who ma­jored in fields like so­cial science or his­tory have caught up,” wrote David Dem­ing in a re­cent New York Times op-ed.

In man­age­ment and lead­er­ship po­si­tions, com­mu­ni­ca­tion is key, as lead­ing econ­o­mists and cen­tral bankers have been quick to point out at this crit­i­cal junc­ture for the world econ­omy.


The premise of No­bel Prize-win­ning econ­o­mist Robert Shiller’s new book “Nar­ra­tive Eco­nom­ics” is that sto­ries mat­ter.

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