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What use is economics?

Updated Thursday 13th October 2005

Why should any of us worry about economics? PY Gerbeau has his reasons...

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Economics is about how, as individuals and groups, we get the things we want to buy and the services we need and want. From a £5 flight to Belfast to a penny off income tax, from a National Health Service that's free at the point of use to the price of a can of beans – economic models help people understand why things are the way they are and why changes happen.

It's about how money is made and lost, used and misused. From private funding for new schools and hospitals to the use of public money to bail out Railtrack, the success of EasyJet to the collapse of ITV Digital – economics has something to say about all of these.

From gender discrimination in the workplace to the influence of trade unions on employment and wages, the price of new cars on the forecourt to new ways of tackling pollution – economics touches on almost every aspect of everyday life.

On the larger scale, when the national economy does well, lots of us feel the benefits in terms of more jobs, higher wages and better services. When the national economy is not doing well, unemployment rises, and the quality of public services drops.

Internationally, economics is at the heart of issues like whether we should join the Euro, the impact of globalisation, the price of oil, and what should be done about the third world debt.

But economics is not a subject which gives one single correct answer to every problem! Economists – and political groupings with particular economic views – often disagree totally on the causes of particular problems and on what the best solution will be. New Labour's solutions to the problem of unemployment are guided by different economic principles to solutions put forward by the Socialist Workers' Party. George Bush's actions on global warming are guided by very different economic principles to the actions of most other governments in the developed world.

Whether it's a personal issue like an increase in council tax, a national issue like the Euro, or a global issue like exploitation of workers in developing counties, even a basic knowledge of economics helps you to get a better understanding of what's going on in the world around you.

 

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