Like just about every college professor, I give my students a syllabus at the beginning of the semester. However, I write my syllabus like a contract. It is split into sections with clauses. The sections detail various aspects of the class (location, topic list, etc.) but also highlight important policies (late policy, exam make-up, grading scheme, etc.). At seven pages, the syllabus is long. Furthermore, much of the policy parts are replicated in the course shell in Canvas (our online course management system).
Seven pages, plus replication, is a lot of digital ink to spill on course policies. But, from my own personal experience, I find the benefits far exceed the costs. The reason for these rules is straightforward: set expectations. On day 1, my students know what they need to do in order to pass the class. They know when everything is due. They know what everything weighs. They can (in theory) use this information to make reasoned choices about how to allocate their time (and, if they miscalculate, that’s on them).
But, perhaps more importantly, this contract between me and my students known as a “syllabus” acts to bind my hands. It sets students’ expectations of what they can expect from me. I, like most teachers, have extraordinary power over students (at least when it comes to class). My Principles classes are both General Education classes and major classes; if they don’t pass my class, they will have a hard time graduating. Furthermore, there’s relatively little competition (only two other instructors teach Principles and only one other teaches the upper level economics courses). Given this awesome power, it is my duty to my students, my employer, my profession, and to God Himself to act as fair as possible. The syllabus binds my hands from arbitrary behavior.
One thing I know about myself is that I can and will act in an arbitrary manner. I want to help students and my gut reaction is to grant exceptions for this or that rule if it’ll help the student. However, I know that if I act arbitrarily, it will actually undermine my duty. Students will see this arbitrary behavior and shift resources away from actually learning the material and toward trying to mine these loopholes. Even students who want to learn the material will naturally question why to spend effort if it will not result in the needed grade to pass. It will create extra work for me. At the end of the semester, I would have to submit grades to the Registrar and the University which are based on these arbitrary whims. The University and the public rely on my expertise to say “Yes, Students John and Jane Doe satisfied me that they know the material sufficiently well to pass.” Arbitrary behavior undermines that credibility.
So, the reason for rules is to prevent arbitrary behavior. Even when there may be cases where the rules hinder some desired outcome, where the temptation to break rules is highest, rules should be followed. Once the rules are broken, once arbitrary behavior becomes the norm, it makes planning extraordinarily difficult and ends up undermining the goals of the actions.
To move out of the classroom and into economics, we are seeing exactly this now with Donald Trump’s arbitrary tariff “policy” (“policy” is in quotes here because, since there is no consistency, it’s hard to call it policy by any reasonable sense of the word). Trump’s decrees on tariffs change day to day, sometimes even hour to hour. It’s quite impossible to predict what’s going to happen as there is no rhyme nor reason to these changes. Consequently, Americans and foreigners have no idea how to invest. As I write this, the stock market is down about 15% from the beginning of Trump’s 2nd term, with all of the decline during this “will he-won’t he” tariff nonsense. This past week, we got some hard tariff numbers, but even now there is massive uncertainty. The numbers are arbitrary and even miscalculated using their own model. Trump and his advisors are giving contradictory stories for the tarrifs: they’re permanent meant to eliminate trade deficits, or they’re temporary and meant to bring countries to the negotiating table, or they’re permanent and meant to raise revenue. It’s hard to say what even is the purpose. Not to mention legal challenges filed against the Administration over the tariffs.
Forecasters have been downward revising their forecasts, with the consensus going from solid growth toward recession. While there isn’t much hard data yet, early indicators are of investors pulling out of the US. Firms have been pouring more and more resources into seeking exemptions (which, in the long run, will weaken their competitiveness in the global economy). Far from “making America great again,” Trump seems determined to single handedly cause a recession. (As an aside, I for one am shocked, shocked!, that the market isn’t responding favorably to economic pseudoscience from the 1600s).
Rules exist for a reason: they make things predictable. They allow for planning. When, like in the great TV show Whose Line Is It Anyway, the rules are made up and the points don’t matter, people do not know how to act, and resources become wasted.
Of course, none of this is to say that rules must be rigid and inflexible. That which does not bend will break. Rules can and should be altered as times change. But there must also be a process for which to change those rules (rules about rules, if you will). Understanding why rules are in place and what purpose they serve is vital to any reasonable reforms.
READER COMMENTS
nobody.really
Apr 8 2025 at 9:35am
No quibble about the current tariff chaos. That said….
I wonder.
The unstated assumption here is that the rules actually help you measure whatever it is that you’re supposed to measure. For most of history, university rules would bar admission to women. Permitting even one extraordinarily gifted woman to take your class would have required varying the rule–and you characterize variances as “arbitrary.” Today, we would tend to regard the rule as arbitrary, even if uniformly applied.
(Admittedly, I recently cited Melville’s Billy Budd for the proposition that sometimes we need to enforce rules uniformly, even at the cost of great injustice, in the interest of social cohesion. Do I contradict myself? Hey, I contain multitudes….)
This leads to a larger discussion about what we expect grades to measure/reflect. You might have a genius student who is really terrible at submitting work on time. Your rules to prompt you to give her a low grade, even though you tell us that the grade is supposed to reflect a student’s knowledge rather than a student’s punctuality. Like the Fed, you have more objectives than you have tools to achieve them, so grades end up as some kind of composite signal.
Nobel laureate Kahneman noted that, when confronted with difficult questions, people tend to substitute the answer to an easier question. I could imagine that your rules serve this function: The question “What grade should I give this student?” is hard, so you subtitute “What grade does this formula produce for this student?”, which is comparatively easy. The virtue of your rules may well be that they help reduce conflict and cognative load for you, rather than helping fulfill the public’s expectation that you will use your expertise in identifying how well a given student knows the material.
nobody.really
Apr 14 2025 at 1:34pm
Tangentially related: At age 90–and in stable but gradually declining health– Daniel Kahneman chose to die by assisted suicide on March 27.
David Seltzer
Apr 8 2025 at 10:15am
Jon, Nicely done. “So, the reason for rules is to prevent arbitrary behavior.” Your course syllabus gives your students the information they need to make allocation decisions. They know a priori, the payoffs for following the rules or not following them. Without the rules out lined in your seven page syllabus, uncertainty becomes a problem. Uncertainty applies to situations where we don’t have all the information we need to set odds in the first place. DJT’s capricious tariff “policy” has introduced uncertainty in markets, reducing market cap by some 15%. I suspect the decline has stemmed, in part, from the inability of financial institutions the effectively assess the the riskiness of their investments. In the current market-political environment, people are holding cash or short term treasuries to self-insure against the uncertainties of DJT’s next whim.
Jose Pablo
Apr 8 2025 at 1:52pm
Far from “making America great again,” Trump seems determined to single handedly cause a recession.
Tariffs, anti-immigration measures, and the push to reshore the production of low-value-added goods are all fundamentally anti-growth policies. Each one damages capital accumulation, labor supply, and overall economic efficiency.
It’s no surprise that markets view them this way. What is surprising is the stance taken by Trump’s economic advisers.
Jose Pablo
Apr 8 2025 at 2:48pm
It is an insult to our intelligence to suggest that the American Constitution (understood broadly as the system of customs, norms, and institutions that govern this Republic) was ever designed to permit a “policy” (or even the pretense of one) so far-reaching and so uneven in its effects across individuals and states as these tariffs, to be decided unilaterally by the President.
The Founders explicitly feared executive overreach. That’s why Article I of the Constitution places the power to regulate commerce and levy tariffs squarely in the hands of Congress, the most directly representative body of the people and the states.
This is especially indefensible in a time of peace. To argue that the trade deficit constitutes a “national emergency” is, frankly, another affront to common sense.
This Republic’s system of governance was deliberately designed to make it (very) difficult (and necessarily deliberative) to enact measures of such magnitude in the absence of war or crisis. In peacetime, policies that carry such far-reaching economic and constitutional implications demand broad consensus and legislative legitimacy, not executive fiat.
That simple.
steve
Apr 8 2025 at 4:05pm
Washington pointed out that if parties became ascendant our system wouldn’t work well. It was assumed that Congress would be jealous of its powers and actually represent the states they came from. Now it’s just very tribal national parties. Congress will do little (or nothing) to rein in a POTUS from its own party. That leaves the courts which offer some hope but too many of our courts are dominated by ideologues.
Steve
Jose Pablo
Apr 8 2025 at 4:31pm
Congress will do little (or nothing) to rein in a POTUS from its own party.
Well, I don’t know. Ask Joe Biden, who also had control of Congress for the first two years of his presidency.
In fact, history is full of examples where Congress controlled by the President’s own party has blocked key legislation. For instance, Bill Clinton’s healthcare reform and Barack Obama’s public option in the Affordable Care Act were both obstructed by moderate Democrats within their own party.
Specifically, regarding these tariffs, I’m very doubtful that Congress would approve them. And in any case, this isn’t really about the outcomes; it’s about the procedure (as is often the case in ‘true’ democracies).”
Mactoul
Apr 9 2025 at 12:35am
Oren Cass, who is apparently the chief economist at American Compass, a conservative economic think tank, has written a NYT op-ed: Stop Freaking out. Trump’s tariff can still work.
https://www.nytimes.com/2025/04/08/opinion/trump-tariffs-success-failure.html
“The 10 percent global tariff — a foundational permanent policy, which has already taken effect, and which carries a tolerable cost — is the right starting point. Congress should vote it into law as soon as possible. That would confirm its permanence and also provide substantial tax revenue that could help Capitol Hill solve some of its budget math problems. A bill to this effect, the Built USA Act (which I have championed), was introduced in January by Representative Jared Golden, a conservative Democrat”
“Among targets of the reciprocal tariffs, China belongs in its own category. Having already raised tariffs on China to 20 percent across the board since taking office, above other tariffs already in effect for some products, the president added 34 percentage points on “Liberation Day” and on Monday threatened an additional 50 percentage points if China didn’t back down from its retaliation. The new base line of 54 percent, absent retaliation, approximates the 60 percent tariffs for China on which he campaigned and is best understood as permanent. That’s the right move if the goal is, as it should be, to disentangle the American and Chinese economies. In his first term, he sought to make a deal with Xi Jinping. Now Mr. Trump is, rightly, walking away.”
“But going from 0 to almost 60 so fast is unnecessary and unwise. The most determined company could not shift production so quickly. A better approach would be to raise the tariff in three steps — 20 percentage points now, in a year, and in two years — and for Congress to legislate this by revoking China’s permanent normal trade relations status, as was the bipartisan recommendation of the House Select Committee on the Chinese Communist Party and the U.S.-China Economic and Security Review Commission in 2024. Legislation already exists for this, cosponsored by Marco Rubio (now Mr. Trump’s secretary of state) when he was in the Senate and accompanied by a bipartisan bill in the House. That legislation envisions tariffs on strategically important goods rising in steps over five years.”
Only arbitrariness Trump might be guilty of is in suddenly going full steam on tariffs.
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Jon Murphy
Apr 9 2025 at 11:51am
Cass has been dead wrong about tariffs at every step of the way. No reason to think he’s about to start improving now.
Jose Pablo
Apr 10 2025 at 11:12am
There are two separate debates here.
The first is technical, about the likely economic effects of tariffs. On this point, I believe the consensus is clear: tariffs are a nonsensical, anti-growth policy.
Of course, there are always contrarians with alternative views. The odds of these Illuminati being right are slim, but then again, flat-earthers haven’t disappeared either!
The second debate is about governance, about rules, authority, and ultimately, who in a republic has the right to make even the wrong decisions on tariffs.
In this light, the fact that a single individual can “create” $5 trillion in market value with a tweet, simply by changing his mind and with any public debate, strikes me as the very definition of modern-day tyranny.