Certain subjects taught in schools are of little or no value to most students after school days. I had problems trying to understand geometry. During my working and business life stretching over six decades I have never solved a problem with the knowledge of geometry.
Certain subjects taught are useful not only in the acquisition of a job, but also in performing the duties of citizenship. This is where economics came in.
There is no standard definition of economics. Every writer of a text on economics has given a definition that points to the theme that the text will contain. According to what I am going to say in this essay, I would say economics is a study of human behaviour and activities in the course of making a living.
If the things we need for survival and development were as free and abundant as air there would be no subject called economics.
Economics became a special discipline for studying when scholars such as Adam Smith saw the problem of scarcity of the things that people need or want. No one has money, time and energy of ability enough to acquire all things they need or want.
Because the means of acquiring the things we need are scarce, people behave according to two elementary postulates of principles in economics: One is called preference and the other is called opportunity cost.
When we discuss scale of preference, psychologists such as Abraham Maslow come in. He originated the principle of hierarchy of needs. With scarce means on hand, people try to satisfy psychological needs first. These are food, shelter and clothing, the rest thereafter.
A month or so ago, there was criticism of the DPP government for allegedly having failed to build the five universities the late president Bingu wa Mutharika had promised.
If those who were making the criticism were thinking and reasoning with the help of economics, they would have moderated or withheld their criticism in view of the insight given to us by Maslow.
At present, the basic and urgent need of a large proportion of our population is food for survival. Which of the two would save people’s lives: provision of the deficient foods or extra five universities? Wisely, the President and his staff decided to spend the money on food and shelve the university programming.
The ideal of course would have been to provide both the food and the universities. But the budget was not big enough to cater for both. Therefore, there had to be a scale of preference, one need was given priority while the other had to wait.
The postulate of opportunity cost is a valuable tool in reasoning. It says whenever you spend money or time on one thing; you forgo something else on which you could have spent the money, energy or time.
When we ask the government to allocate to us a bigger portion of the budget and it does, another group will at some time have less than is due to it. In economics, costs are reckoned not only in financial terms, but also in real terms. When you decide to build a stadium worth K10 billion, you automatically give up something else which in your estimation, perhaps is less valuable or urgent. What you have forgone is the opportunity cost.
There is nothing wrong in presenting the government with our needs, but we must appreciate at the same time that it can only do so much. The provision of certain needs must wait for growth of gross domestic product (GDP) and the consequent growth of tax revenue.
Some do-gooders blame the government if civil servants’ morale is low or some of them solicit and accept bribes. They urge the government to pay teachers higher salaries if they are to produce better class results. Give students higher allowances if there is to be no strikes and school closures.
These are sound appeals. But unless there has been palpable growth of the economy the government can succumb to the demand of the one group only at the expense of another.
Elements of economics should be taught even in primary schools. At secondary school level, it should be one of the compulsory subjects. All people who participate in public life should be cognizant of the simple facts of economic life, namely we can all earn more and enjoy higher living standards only if the economy grows.
For the economy to grow we must work harder; when in a stagnant economy someone becomes super-rich possibly he has done so by diminishing the wealth of other people.
Members of Parliament and top civil servants should have some understanding in economics. Economics is about economising; they must devise realistic policies for the nation. n