Economics

Meet the Economics Team | FAQ

Most people think that Economics is about money and money is interesting! if money is about resources then they are on the right lines. Put bluntly ‘Who gets what in life’? Many people profess to know very little about economics but most people are aware that top premiership footballers get paid as much in a day as nurses earn in a year; that taxes go up every year; and that average house prices every day actually outstrip the amount an average person earns in a day; and that economics is IMPORTANT!

There are three key questions to answer in Economics.
What goods and services are produced?
How are they produced?
How are they distributed?

The more observant will recognise that the latter question equates to ‘Who Gets What’. This raises issues of political economy since government intervenes to ensure that living standards are equalised to a certain extent. Taxation is used in part to redistribute income. This is a politicised issue since nobody likes paying taxes and everybody likes
‘something for nothing’. An old economic adage is that ‘there is no such thing as a free lunch’. If we are freeloading, somebody, somewhere must be paying for it. Government doesn’t spend its own money its spends our money!. Ask yourself a question. Who spends money best? Is it the principal who earns the money i.e yourself or an agency i.e government who spends it on your behalf? Ask yourself another question. What couldn’t you buy if government didn’t provide it for you? It is on issues like these that the first question ‘What goods and services are produced’ revolves.

In a market system, we take the view that markets work best to provide things people want e.g. Big Brother, Who Wants to be a Millionaire, left handed potato peelers, Rubik’s cube or whatever. The Dragon’s Den programme acts as a good example of entrepreneurs seeking to persuade backers and ultimately customers that they have a good idea and good product. The market will decide. Lots of restaurants close not because the chef was rubbish but because of competition and a failure to make enough money to stay in business. The market is an unforgiving place but this gives dynamism to an economy. When an entrepreneur fails, resources are reallocated. So economists may regard failure as a good thing!

The second question ‘How are goods and services produced’ makes us examine the concept of efficiency. This is often seen as a key driver in a market based economy. It may mean that as individuals we have to do more work. It can also be a source of frustration when Government spends money without always achieving very much in terms of end results. For instance could the health service be better organised? Most governments think so because it is always being reorganised but not always to good effect. How should the NHS be run? Before thinking that through just ponder on the fact that it employs over a million workers and spends £175 million every day. Also just think about why ‘post code rationing’ occurs so that where you live influences the level of services you receive. How can that be justified? If you were thinking of being ill, you need to think not just about where you live but the time of year. It might be tricky if you are ill in March as hospitals tend to run out of money in the Spring. Much better to wait for the summer to be ill.

Global warming is a constant theme in the news. Economists have some of the best ideas to deal with this. They don’t advocate environmental solutions based on ‘do gooding’ but prefer to focus on economic incentives. Trading of pollution permits for example is an elegant example of this. And it is much more efficient than taxing something or banning it which simply reduces consumer choice.

Following an Economics course will change the way you think. Following an Economics course will change the way you think. I’ve written this twice because it is so important and enduring. Long after you have forgotten what you did at school, the toolkit of Economics will remain with you. Economists very rarely consider issues in black and white terms but focus on the concept of the margin. This will give you a different way of looking at familiar and unfamiliar things. The economics of parking on double yellow lines; of charity giving; of dating; or even of partying are all capable of being resolved using an economists insight. You will doubtless want to investigate the latter two during your time in the sixth form.

A parent will nearly always tell you to “do your best”. This allows for an expectation that you will work to the level that you can achieve ie. fulfil your potential. Of course most of including your parents (although they may not know it) will be satisficers. Most of us don’t actually maximise anything. We are not striving to win an Olympic gold medal. We don’t strive to be the best at anything since we seek a balance in our life. An economics course will offer you some insights into motivation theory and time management. The latter is particularly useful for sixth formers.

Our aim here is to teach Economics in the round: – covering the syllabus content and giving you exam techniques to do well but also making you think much more critically at the same time. And we hope that you will enjoy some fun in your economics lessons and at the end of course will be able to make an intelligent appreciation of the economic world around you.

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