Using The Merchant of Venice
in Teaching Monetary Economics
Donna M. Kish-Goodling
Rhetoric and prose writing were Adam Smith’s greatest tools in documenting
his meticulous powers of observation and his “modern” theories of political
economy. Today’s economists use more statistical and analytical tools consisting
of complex mathematical models and econometric studies. Just as economics
encompasses all aspects of how we live our daily lives, literature and drama give
us the mirrors to reflect on the human condition across the centuries and around
the globe. Often literary works reflect our economic life more accurately than
today’s economic statistical techniques and mathematical models. Yet, under-
graduate economics education has left the legacy of powerful prose and story-
telling to concentrate on more “rigorous” modes of analysis.
The use of literary works in economics instruction has been well documented
by Watts and Smith (1989, 284). Citing over 70 literary works with rich eco-
nomic themes and theories, they noted that using such auxiliary readings can
help reach students who find economics boring and can add to an instructor’s set
of examples and allusions. Rockoff’s (1990) analysis of The Wizard of Oz as an
allegory about the controversy of bimetallism is another example. Farnam (1931)
discussed the historical economic background and economic theories in 36 of
Shakespeare’s plays. Recently, Perlstein (1995) compiled a list of new books on
the subject of the market society.
Undergraduate courses in monetary economics typically include topics such as
the behavior of interest rates and present value analysis as a prelude to building
a model of the supply and demand of bonds in a loanable funds framework.
When I teach the course, my presentation of the notion of a price for the use of
money includes a section about usury in the modern connotation of charging
exorbitant or illegal rates of interest. I generally comment on how unscrupulous
loan sharks are the Shylocks of contemporary society. Typically, only