Catherine R. Pakaluk, Ph.D.
Assistant Professor of Economics
The Busch School of Business and Economics
Friday, October 6, 2017
Good afternoon! Pleasure to be with you as we close out this tremendous gathering.
I was asked to speak about putting Good Profit into action. I was recently reminded, at a colloquium discussion on political economy earlier this week, that economists don’t know anything about making money. I’ll volunteer of my own accord that economists are also not particularly practical people—we know little about putting things into action. So—I fear that my title may be the most misleading title for our whole conference. Also, as they say, I am standing between you and your lunch. So there are two strikes against me. My goal, then, is to provide a little material for reflection and inspiration as you leave here to put Good Profit into action.
I want to proceed then, where economists may be good—if they are good. Thus, I shall lay a first bit of groundwork by quoting one of the best-loved passages about good economists, from Frederic Bastiat’s What is Seen and What is Not Seen, published in 1848 together with other essays on political economy.
In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.
There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.
Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil.
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