The Case for Economic Literacy

Most of us are poorly versed in economics. We may have studied macro and micro-economics in university and we probably recall some of the core concepts but, for most, it isn't a priority after graduation.

An interesting essay in HuffPo-UK today argues for the need for young people to become literate in economic theory.

...so many people, especially the young, are ready to blame themselves and themselves alone for their predicament. As millions struggle to get a foot on the housing ladder, with stagnating wages and a failure to secure the type of employment that they were told to expect after graduation, introspection becomes a means through which they seek to get themselves out of the dire position they find themselves in. What could I have done differently to succeed? How could I have got those pay rises? What else can I do to better my career?

Such introspection and soul searching, in which the poor and disadvantaged blame only themselves for their perceived failures can only really exist if many buy into the assumptions and beliefs that underpin the neoliberal economic system in which we at present are being consumed by. We must accept that the rules of the game are fair, that hard work alone determines how far we will get and that significant sections of the population are not at an advantage right from the beginning. We must believe that it’s a level playing field.

Unfortunately, far too many young people have bought into this fallacy about the current state of affairs being the natural order of things, believing that there is some natural law that determines market forces. It would be ridiculous to assume that the economic predicament many find themselves in is solely within their own control or that the present economic system is the only alternative in which vast swathes of the population must live with job insecurity. We know that under the present economic system the rich and well off are better placed to succeed in the workforce, passing on many advantages to their children in the form of a private education and wealth to name but a few of the advantages designed to give some a head start.

Yet many of the young people I speak to regarding their frustrations barely ever mention the ideology behind much of their woes, neoliberalism. The ideology that places it’s faith in the market to achieve just outcomes, that champions deregulation and the privatisation of public services, values that contributed majorly to the financial crisis of 2007-08 from which the young and disadvantaged are still struggling to recover from.

In spite of all this, in spite of the economic ‘experts’ failing so badly, many young people continue to believe economics is best left to the experts, for it is too complicated for them. Yet young people have more of a duty than most to get involved in economic debates and to influence economic policy making, for it is future generations that will have the highest price to pay when the ‘experts’ get is so wrong, and that is exactly what we are witnessing today. That is why it’s so important for young people, especially those from disadvantaged backgrounds to familiarise themselves with economic theories and their respective strengths and weaknesses to better understand how they have ended up in the situation they find themselves despite playing by the rules of the game only to find themselves up against a brick wall. The drives to get more young people into politics must go hand in hand with drives to get more young people involved in economics.

Then again, if an entire generation of young people were to achieve functional literacy in economics what would befall our commercial and political institutions. If they discovered how they've been set up for the direct benefit of a narrow segment of society that would surely be dangerous indeed - for some.