ceteris paribus.

One of the major tenets of microeconomics is the ceteris paribus assumption. Latin for all things held constant, ceteris paribus happens to be one of the rather misleading economic principles, in my opinion.

The ceteris paribus assumption simplifies mathematical models governing the behavior of individuals. Think of it this way—if you could control the world around you and let only one thing change every now and then, you will end up with a far clearer point of view on how one thing affects all the others. Let’s say you’re in kindergarten, and you’d like to know if plants would die faster in draught or in darkness. What you would normally do is to make sure that everything else is held the same, except for these two factors. That way, you ensure causality—that is, you’re absolutely sure that the changes in the speed at which the plant met its maker would have been caused by that one thing that would have been different between the two plants.

But I’m a fan of the butterfly effect. They say that the beating of a butterfly’s wings in Florida can cause hurricanes on the Mexican shore of the gulf. Although ceteris paribus makes everything simpler, ceteris paribus disregards an entire universe of contributory factors to how you and I would make decisions. In fact, ceteris paribus may even disregard factors that contribute to what choices we must pick from.

In the tree of human knowledge, microeconomics falls under the social sciences. As the branch name suggests, social sciences are methodical fields of study concerning human beings. Economics is methodical in the sense that a good grasp of mathematical concepts contributes to the depth of your understanding of microeconomics. Economists borrow plenty of material from the mathematicians of history—Nash, Lagrange, Professor Calculus. All of this is with merit, however. After all, any study dealing with money (and large amounts of it, at that) must be expressible in numbers. Numbers help us quantify and thus, ease the tensions of decision-making. It is easier to choose between spending two dollars or three dollars to buy the same thing, rather than choosing between appeasing one’s hunger or appeasing one’s thirst first.

Economists, however, seldom borrow material from their fellow social scientists. For instance, when was the last time an economics class concerned itself with the dynamics of choosing—are women or men more inclined to buy cars in certain colors? Or, let’s say we are deciding which jacket to buy. Do we consider the effect of three stripes versus a single check mark on the brand we prefer?

Of course, to factor these in a single mathematical equation would be impossible. To attempt it would be downright stupid. But why not include it in a study of microeconomics? In making managerial decisions, one must consider both quantitative and qualitative data. When conducting market studies, one does not just survey people, one facilitates focused group discussions. The body of data gathered attempts to reconcile market-wide statistics with individual concerns.

I do understand that on the first day of every economics class, the vital economic assumptions are discussed, and that the material discussed for the semester would have to be anchored on those three assumptions. This gives the subject the necessary structure to stay afloat or hold water, whichever idiom sounds better. But that may be playing things a bit too safe. There is nothing wrong with attempting to fathom the other factors of decision-making—after all, the act of choosing does not involve one simply punching numbers into a calculator. And I believe that to attempt to discuss the many factors that play into the decisions being made at the grassroots of the economy will entail just as much critical thinking as, say, solving a mathematical problem. I daresay it may even involve a bit more creativity.

I believe that the study of economics should be mathematical. But a strictly mathematical dive into the depth of microeconomics will not do the subject matter justice. A simple lecture on the mechanics of cost-minimization works, but it does not lay the foundations for higher evaluative thinking. And, well, how do we begin to formulate solutions for real life decisions, when all we’ve ever done is ceteris paribus?