Alain Anderton in The Guardian
A Freedom of Information request by the Times, showed that Economics, my A-level textbook and the “bible for those seeking a handle on basic economics”, was the most issued book from the library of the Bank of England. Since it was first published in 1991, the book has been the bestselling text in the A-level economics market. Generations of economists have learned their basic economics from studying it. However, it isn’t the economists at the Bank of England who are borrowing the book now. The bank has helpfully explained that it provides development for secretaries, graduates and school leavers. Panic over – the Bank of England is not being run by economists consulting a school textbook.
What is good about this news is that it means the Bank of England is serious about education and professional development. In Economics, you will find out that these are essential for the growth of the economy. They raise productivity levels of workers and contribute to our national wellbeing. Other topical points raised in the book include the fact that increasing the supply of oil on to world markets will lead to a fall in the price of oil; if you cut government spending, at least in the short term, aggregate demand will fall and so will GDP; that global warming is the result of market failure; and that directors and managers of companies might be more concerned with maximising their own benefits than the benefits of the shareholders of the company.
It is also good news that people want to find out about economics. Since the financial crisis of 2008, the numbers of people studying A-level economics have more than doubled, suggesting that these uncertain times have sparked the curiosity of 16- to 18-year-olds about the world in which they live.
Economics at A-level is fundamentally about studying models: ways of looking at the world and making sense of it. But it is also about evaluating the world around us. Was there an alternative for the UK to fiscal austerity in 2010? Does it matter that the UK persistently runs a current account deficit on the balance of payments? Should we regulate banks more? Would a significant rise in the minimum wage be good or bad and for whom? In A-level exams, only candidates who can show they understand basic economic models and appreciate that there are many sides to each issue will get top marks.
Should our politicians be studying some basic economics? The answer to that is obviously yes. What is particularly disheartening about much current political discourse is the failure of politicians to admit that there will be costs and disadvantages to their policies. Our adversarial system means that any such admission is seized upon by the media and blown up out of all proportion. The simple fact is that almost any economic decision has its costs and benefits.
The first concept an A-level student may well learn is the principle of opportunity cost. If you buy a car, you lose the benefits of what you could otherwise have bought with that money. If the government cuts taxes, what are the benefits that are going to be lost as a result of that decision, benefits like higher government spending or a lower national debt? However, to some extent we get the politicians we deserve. Too many people seem to think that there are simple answers to complex problems; we don’t want to pay for the choices we make. For example, we want high-quality public services but we don’t want to pay for them in taxes.
Our grasp of economics would be more mature if the acceptance of costs and benefits that are being acknowledged in classrooms were also being acknowledged at our dinner tables, in our local council chambers and in parliament.
No comments:
Post a Comment