Refreshing as it is to hear a call for some humility in place of the typical confident assertions* and explanations, "admit you know nothing" is going a bit too far.

First of all, there is a difference between macroeconomics and microeconomics. Macro is, in my view, practically a religion, with bitterly opposed sects: Austrians, Keynesians, monetarists, new classicals, new Keynesians.

No one seems to understand how macro works, and the field is full of speculation on interest rates, central bank machinations, and trade policy. Politicians mess with the economy, because that's their job, and have economists provide advice, because that's their job. It's like trying to target a 3.5% year-over-year growth in the rabbit population by cutting down the right number of trees and feeding squirrels. It's voodoo.

Micro is much more a science, maybe more so than medicine. Compare these hypotheses:

Patients get satisfactory relief when given a placebo.

When stuff costs more, people buy less of it.

Consider the difficulty of confirming the first sentence. Despite careful study, it is possible that medicine has gotten this wrong for decades.

The second sentence hardly needs confirmation. We see it demonstrated every time there is a sale. We demonstrate it ourselves by comparison shopping. It is a simple expression of the Law of Demand. I have cited it when talking about minimum wage.

I am ready to admit that I don't understand much about economics, but instead of mocking the "astoundingly ignorant" public, I try to improve my understanding. MIT offers their Principles of Microeconomics course free online, and I have found it both approachable and rewarding. There are charts and equations, but a lot of it is common sense.

Yesterday I listened to "Applying Consumer Theory: Labor" on the way to work. Professor Gruber used the example of buying steak and potatoes to illustrate two effects of price changes: the substitution effect and the income effect.

When potatoes become more expensive, people tend to buy more steak, that's the substitution effect, because both are foods.

But people have limited budgets, so now that they are spending more on food than before, they might have to reduce the amount they buy, that's the income effect. When potato prices rise, the two effects are in opposite directions for steak, so it's not obvious what will happen to steak quantity purchased.

Of course, since he's an economist, the professor won't be nailed down on potatoes either. It's possible in theory that the income effect is so large it drowns out the substitution effect, and people end up buying more potatoes after potatoes become more expensive. That would make potatoes a Giffen good, and they seem to appear more often in economics textbooks than the real world.

Economics is a study of what all people in all places do all the time, at least when it involves exchange. Of course it's complicated, and the models are imperfect. But that doesn't make it useless, and it doesn't have to be dull or inscrutable.

A book like Freakonomics can be a fun way to explore the "economic way of thinking," which tries to account for incentives, anticipate unintended consequences, and always ask "compared to what?"

* Sam might consider taking his own advice. He confidently asserts that six out of seven voters don’t know the difference between debt and deficit. The source was an online poll about fairness. The words “online poll” alone should shatter our confidence. The survey had an unused slot at the end, so they threw in an extra question:

The government says it wants to eliminate the budget DEFICIT in five years. From your understanding, if it succeeds, will total government DEBT in 5 years time be...

14% said the debt would be higher, the “correct” answer, since the debt should be expected to grow even as the government reduces its habit of spending more than it collects. But a reasonable person might suppose that other factors could enter. Inflation could reduce the burden of debt. Default, debt forgiveness, or other contingencies could be imagined.

Indeed, 18% of poll respondents said they were “Not sure,” which in my opinion is always a good answer.

23% said the debt would be “about the same as it is now.” This is reasonable if the debt is very large compared to the deficit. And so it is: the debt is measured in trillions of pounds, the deficit in billions.