The economics profession’s jargon serves a variety of purposes. For example, their common terminology serves to make for more precise communication. It allows ideas to be communicated clearly and exactly. This exactness and clarity of terminology serves society by allowing economists to discuss economics with each other and with society with clarity so that other economists have a better understanding of what an economist is saying.
A common terminology also serves to divide insiders from outsiders. For outsiders, for example economic students, who do not have a clue what these terms mean, economists’ terminology is exclusionary. It makes economists the gatekeepers of economic ideas. Economists’ terminology serves as a barrier to entry, restricting the supply of economists, and increasing the value of the services provided by existing economists.
Which of these two reasons is the strongest? To answer that question let us consider two examples given by Amanda Bennett, the author of The Wall Street Journal article, “Economists + Meeting = A Zillion Causes and Effects” [The Wall Street Journal, January 10, 1995]. The two examples are the concepts of externality and utility, Why do economists use these terms? Based on her article, and on my classroom experience, I would judge that, of the two reasons, the self-serving reason is the stronger. Essentially, economists create their terminology primarily to make life difficult for students.
Consider the first example: externality. Why no simple call externalities “unintended side effects”? It would be much easier for students to comprehend. Or alternatively, consider the second, utilities. How much clarity can the concept, utility, provide when the text tells us that, essentially, it means happiness? If it means happiness, why not use the term, happiness? The very fact that Ms. Bennett can provide a simple translation of economists’ jargon suggests that the jargon was unneeded for precise communication. And even, if there is some value added in terms of clarity of the jargon, do its costs in additional memorization for students, outweighs the gain. For me, the answer is clearly, no.
Actually, to answer anything other than economists are self-serving would show that I have not done my homework. Economists’ basic premise is that people are self-serving. Why should economists be any different. With a difficult to learn economic terminology, economists can create a monopoly position for themselves; they can restrict supply and increase price for their services. To quote the textbook, “people do what they do because it’s in their self interest.” Thus, the preponderance of the evidence suggests that economists have developed their economic jargon with their self-interest, not society’s interest, in mind.