Words Matter

In my readings, I stumbled upon this rather interesting article from 2002, The Meaning of Property Rights: Law vs Economics (Land Economics, Vol 78., No. 3).

The authors, a law professor from Indiana University and an economics professor from Butler College, discuss an important, but oft overlooked, issue within interdisciplinary studies:

Economists define [property rights]…sometimes in ways that deviate from the conventional understandings of legal scholars and judges.

This is problematic because:

[Some] economists’ idiosyncratic definitions of property rights, if used to guide policy, could lead to suboptimal economic outcomes.

This is one issue I find with the economics profession in general; we tend to be very loose with our definitions, using terms that may be technically correct but convey unintended meanings.  One such example of this is “trade deficit.”  While it is true that there is a trade deficit, by mathematical definition, when imports exceed exports, the term “deficit” has a negative connotation.  I strongly suspect this is partly what leads to confusion about international trade, why so many people think imports are bad and exports are good.

The good economist, indeed the good scholar of any discipline, must be careful with his words.  Sometimes, it may be a game of semantics, but it is an important one.

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