Necessity it has been said is the mother of invention. It is when a person has been through or is entangled in a difficult situation that he or she thinks of repositioning himself or herself, of living differently or learning a new skill to try and cope with the new situation. Where life goes on normally without disturbances of any sort, the incentive to do something out of the ordinary does not exist.
In developed countries, especially Britain, where modern economics was invented by Adam Smith, there was widespread belief in academia that the teaching and contents of economics had been perfected. This equanimity was jolted following the financial and economic problems that visited Europe and North America in years 2007 and 2008. During the days the leaders were meeting in the capitals of the world to try and work out a common strategy and reverse the nascent economic depression.
Her Majesty Queen Elizabeth of Britain, on a visit to the London School of Economics, asked the economists, “Why did you not foresee this crisis coming?”
That question has troubled economists in Britain ever since, both those in the academia and in the civil service or industry.
In February 2012, the Bank of England and the Government Economic service sponsored a conference for employers of graduates in economics and the academia to discuss and share views on the shortcomings in the knowledge and skills of young people who were taught economics in UK universities.
There was a consensus between employers and academia that economics had become unduly narrow and reductive and that the financial crisis had revealed or underlined these weaknesses.
The February 2012 conference had set up a steering group to make recommendations on revising the teaching of economics. Let us review some of this groups recommendations as reported in the Royal Economic Society’s News Letter of April 2013. We will relate these recommendations to our situation which sometimes both resembles and differs from that of a developed or industrialised country.
Greater awareness of economic history and current affairs. Those of us who like to comment on the present economic hardships of our country, to what extent do our views highlight our knowledge of economic history and current affairs? There is high inflation in Malawi, indeed too high but some of us write as if this situation is unprecedented in the history of this country. The truth is that the multi-party era started in 1994 with double digit inflation more than twice what we experience nowadays. The economy had been saturated with excess liquidity during campaigns for the presidential election. Thereafter, the party in power has generally not resisted the temptation to try and raise campaign funds by ordering the Reserve Bank to “lend” it money.
How much does the current real world guide our thinking and our views? It is a pity that the very influential, enlightening and informative magazine, The Economist is no longer as visible in our bookshops as it was 20 or 30 years ago. This is the magazine which economic ministries should make compulsory reading for their staff, anyone who teaches economics without supplementing his lectures with current news from The Economist is short-changing the young graduates.
A number of commentators pull no punches in criticising Malawi President Joyce Banda for as they say not standing up to the conditionalities of the IMF and the donors. If only they were reading The Economist and other world magazine that report on the debt ridden countries in the European Union (EU). Changes of governments in Greece and Italy have made little difference to the conditions on which the IMF and EU will rescue them from the brink of economic collapse.
Greater ability to communicate economics to non-specialists. This is most desirable in the country like ours where illiteracy is still very high and among those who are educated there is scanty knowledge of economics. While economics is taught at the O-level in Britain, it is not taught at the Malawi School Certificate of Education (MSCE) level which is supposed to be its equivalent. Many people attribute the high prices in Malawi solely to devaluation, and think that had our President not caved in to the demands of the IMF and donors, we would be better off, forgetting that these measures were adopted to try and decelerate the economic decay of the country. No amount of street demonstration will improve the situation unless the supply-side of economics is tackled. The wealth of a country consists of products and services and these come about through the efforts of the people.
A more pluralistic approach to economics. This is not an entirely new idea, John Maynard Keynes had even before he published the General Theory advised a would-be economist to have more than a working knowledge of subjects that relate to human problems, history, philosophy, psychology and mathematics. I have lost touch with the University of London but I do remember that the Bachelor of Science in Economics (Bsc.Econ) degree which I studied embraced a variety of subjects apart from economics.
Indeed, sometimes foreigners have given us what appears to be sound advice, but which has failed to bear the right fruits because those foreigners are unaware of our culture and history. Economics is about human behaviour in the courses of making a living. Some societies are more acquisitive than others. For the less acquisitive you have to try and reshape their culture before you can make them work harder in order to have the things that are impossible to have with less than maximum effort.
I appeal to our bookshops to stock The Economist and Time Magazine and to the economic departments in our universities to get acquainted with the discussions that are going on about teaching economics after the crises.