The Reason of Rules: Uncertainty is the Growth Killer

Like many college professors, I present my students with a syllabus at the semester’s onset. However, mine resembles more of a legal contract than a mere course outline. It’s segmented into distinct sections complete with clauses that not only detail logistics—like location and topic coverage—but also enumerate essential policies, including late submission rules, exam make-up procedures, and grading criteria. At a hefty seven pages, it’s quite the tome. Moreover, much of this policy content is redundantly uploaded to our online course management system, Canvas.

Seven pages, plus duplication, may seem excessive for course policies. Yet, based on my experience, the advantages significantly outweigh the drawbacks. The rationale behind these rules is simple: to establish clear expectations. From day one, my students are aware of what they must do to succeed in the class. They know the deadlines and the weight of each assessment. In theory, this information allows them to make informed decisions about how to manage their time—though, if they misjudge, that’s on them.

More critically, this contract, or syllabus, effectively restrains my own discretion. It delineates students’ expectations regarding my responsibilities. As an instructor, I wield considerable influence over my students’ academic trajectories—especially within my Principles classes, which serve as both General Education and major courses. Failing my course can jeopardize their graduation prospects. With limited competition (only two other instructors for Principles and just one for upper-level economics), it becomes imperative that I uphold fairness. The syllabus serves as a safeguard against arbitrary behavior.

I am acutely aware of my tendency to act unpredictably. My instinct is often to accommodate students by bending rules. However, I recognize that such arbitrary behavior ultimately undermines my obligations. When students observe inconsistency, they may divert their focus from genuine learning to exploiting loopholes. Even the most motivated students might question the value of their efforts if the grading system seems capricious. This unpredictability complicates my role, especially when it comes to submitting final grades to the Registrar and the University, which should reflect my professional judgment that students have sufficiently grasped the material. Arbitrary actions erode the credibility of that judgment.

Thus, rules exist to prevent capriciousness. Even in cases where strict adherence to rules might obstruct specific favorable outcomes, it is crucial to maintain them. Once the integrity of rules is compromised, the ability to plan effectively is severely hampered, ultimately undermining the objectives they were designed to achieve.

Shifting our focus from academia to the realm of economics, we can observe a similar phenomenon with Donald Trump’s erratic approach to tariffs. I use the term “policy” loosely, as it lacks any semblance of consistency. Trump’s tariff decrees fluctuate dramatically—sometimes even within the same day. This unpredictability leaves investors, both domestic and international, in a state of uncertainty. As I draft this, the stock market has plummeted about 6.5% since the start of Trump’s second term, with the downturn largely attributable to ongoing tariff indecision.

Economic forecasters are revising their predictions downward, shifting from expectations of robust growth to fears of stagnation, if not recession. Early indicators suggest a withdrawal of foreign investment from the U.S. Firms are increasingly allocating resources to seek exemptions rather than enhancing their competitiveness—an ironic twist on the notion of “making America great again.” Frankly, I find it astonishing—astonishing!—that the market is reacting poorly to economic theories that date back to the 1600s.

Rules serve a vital purpose: they create predictability, which is essential for effective planning. When, like in the classic show Whose Line Is It Anyway, the rules become arbitrary and points are meaningless, individuals are left in confusion, leading to wasted resources.

That said, I do not advocate for an unyielding adherence to rules. Rigid rules can lead to brittleness. It is essential to adapt them as circumstances evolve. However, any modifications should follow a structured process—essentially, rules about rules. Understanding the rationale behind rules and their intended purposes is crucial for any meaningful reform.