When I learned economics from Hans Sennholz at Grove City College he often made two claims. First, he would tell us what sound economics -- or what he sometimes called orthodox economics, but at other times called free market economics -- taught about mutually beneficial trade, the division of labor, the free mobility of goods, services and people across international borders, the importance of sound money and of fiscal responsibility, and the failures of socialism and interventionism. The laws of economics, he would say, were inexorable. Second, he stressed to us how few people actually understood economics even among professional economists. Roughly 10% of professional economists circa 1980 was his figure, but that 10% understood a truth that traced back centuries to the founding traditions of sound economic reasoning and simply reflected the refinement and updated application of that orthodox tradition.
The task of the economic educator was to communicate to students and the public the truth of the first claim. The task of the economic scholar/scientist was to correct the reality of the second claim and in doing so bring the economics profession back into line with the core teachings of the discipline. To do so, Sennholz insisted that one must study closely the teachings of the alternative schools of economic thought --- Marxist, Institutionalist, Keynesian -- but also Monetarism -- and as such we read original works in his classes and seminars from Marx, Veblen, Galbraith, Keynes, and Friedman, as well as Menger, Bohm-Bawerk, Mises, and Hayek. We also read Adam Smith, David Ricardo, J. B. Say, and J. S. Mill.
When I went to graduate school to earn a PhD and become an economic educator and economic scholar/scientist, both of Sennholz's claims were my guideposts. This remains true to this day -- thus my distinction between mainline economics and mainstream economics. Mainline economics is simply the intellectual tradition of sound economic reasoning from Adam Smith to Vernon Smith that starting from the fact of scarcity recognizes that trade-offs abound, and as such individuals must constantly negotiate carefully these trade-offs and that in order to do so they must rely on institutions that provide incentives for attentiveness to the situation and information that clarifies the situation and guides decision making. The animating individuals interact within various institutional filters which possess alternative incentive structures and levels of informational clarity which in turn produce equilibrating tendencies in a welfare enhancing direction or a welfare reducing one. Claims about the "invisible hand of the market", in other words, are not invariant to specifications of the institutional environment within which self-interest pursuits are played out by individuals.
Failure to appreciate this mainline, or orthodox, mode of economic reasoning results due to philosophical blind-spots -- often played out in methodological disputes such as the debate with the historicists and institutionalists at the turn of the 20th century, or the debate with the formalist and empiricists mid-20th century. Methodology matters, but it perhaps matters most at times when the professional consensus is one which stresses that it doesn't matter at all. When we don't think about methodology those philosophical blind-spots become permanent blind-spots, and thus educators and researchers tend to think what currently is the practice is the only way to practice the discipline. For those who disagree with the current consensus, it becomes imperative to try by any means possible to open eyes of ones fellow educators and researchers.
Dr. Sennholz was a passionate economic preacher who taught in a small Christian college in western PA, so one can perhaps understand why his message might not have persuaded many of his peers within the professional ranks of educators and researchers. But his impact on students was certainly not trivial, and his message can also be found repeated in various forms by many leading practitioners of mainline economics and political economy. Consider the paragraph in Ronald Coase's 1959 paper on the Federal Communications Commission where he discusses the novel theory of Adam Smith in addressing the power of the price system, and the relative ineptness of political allocation in comparison. Or, passages from James Buchanan on what the task of the economists should be in terms of studying exchange relations and the institutions within which those relationships are formed and sustained. My favorite passage is actually from Ludwig von Mises's Human Action where he sums up the situation as follows:
The body of economic knowledge is an essential element in the structure of human civilization; it is the foundation upon which modern industrialism and all the moral, intellectual, technological, and therapeutical achievements of the last centuries have been built. It rests with men whether they will make the proper use of the rich treasure with which this knowledge provides them or whether they will leave it unused. But if they fail to take the best advantage of it and disregard its teachings and warnings, they will not annul economics; they will stamp out society and the human race.
I believe with all sincerity each word of this ending passage from Mises's great work, and it fuels my passion as an educator and as a research scholar/scientist. And, I think it should fuel you as well.
But let me add some historical perspective to this position again. If you read Hayek's 1933 piece on "The Trend of Economic Thinking" you will see the same essential message as that of Sennholz's claims being made. Hayek's great concern is the contradictory implication of the two claims for the interpretation of economic events and for practical economic policy. But you can see Hayek raising this concern already in his review essay on Edwin Cannan's An Economist's Protest which was published in 1929 in the Zeitschrift Fur Nationalokonomie. In that review Hayek applauds Cannan for showing "how far economic policy in all countries departed from what economic reason would have called for." He also stresses how "clear-sighted economists" such as Cannan (and later in the review he would invoke Mises as another example) were disregarded to the detriment of the societies. Proposals instead are followed, "in spite of all the warnings of science" because statesmen choose policies based on faulty or spurious reasoning -- perhaps due to special interest pleading but also due to the prevalence of popular fallacies. The only antidote is the "ruthless consistency" of the economic way of thinking. As Hayek concludes his essay, the only lament a reader should have after working through Cannan's volume is "if only we had had in recent years many more economists as able and willing to protest as was Cannan!" And despite the lost intellectual battles of the past two decades, Hayek suggests that Cannan's example shows a "new generation of learned economists what they are capable of accomplishing for the common good" and that An Economist's Protest would be excellently suited as a "reader for the economist who wants to learn how to make the results of his science generally useful."
Sound economic reasoning teaches many things, but perhaps the most important lesson is about the importance of the instituitonal framework for marshalling the self-interest of individuals into publicly desirable outcomes by enabling the judicous negotiation of trade-offs so that the gains from trade and the gains from innovation are realized. Some instituitonal environments promote productive specialization and peaceful social cooperation among individuals, others don't. Economic reasoning is essentially discursive reasoning in comparative institutional analysis. As you prepare yourself for the fall term of teaching in a contemporary context full of examples of popular fallacies perpetuated by politicians and pundits, and methodological blind-spots causing professional apathy on the one hand, and professional malpractice on the other, think of Hayek's examples of "clear-sighted economists" such as Cannan and Mises (and Hayek and Friedman; and Buchanan and Coase; and Rothbard and Stringham/Leeson/Skarbek; and Higgs and Coyne/Powell, etc.). Economists can, and must, do a lot of common good by teaching to their students and the public the results that the science has to offer that emanate from sound economic reasoning about scarcity, self-interest, and spontaneous order. Ruthless consistency in the economic way of thinking is not a vice, it is a virtue.