Why study economics?

Economics is interesting

Of course, not all economics is interesting to everyone. There are some people who are not really interested in understanding more about the world. This kind of person may well find economics boring. Similarly, not all economics is interesting, even to those who like economics. In some places, you have to think to get the benefit, and thinking can be hard work. If you are not in the mood to do this then it may fail to raise your interest. Even when you are willing to work, you may find some aspects less interesting than others. For us, the most boring part of economics is that devoted to the ways in which we calculate national income and output - National Income Accounting - though others do find this interesting. Sometimes economics fails to be interesting because its relevance is not made clear.

Economic theory is what gives the subject its strength. Subjects that lack theory are forced to become largely descriptive; this is sometimes interesting, but often shallow. The strength of economics as a subject is illustrated by the fact that it is one of the few subjects for which there is a Nobel Prize. Subjects such as law, sociology, marketing and business studies do not have this stature. The 2001 Oscar-winning film, A Beautiful Mind starring Russell Crowe was even based on the life of John Nash who won the Nobel Prize for Economics in 1994. or more information on the Nobel Prize and its winners.

A more serious reason for studying economics is that it helps you realise when politicians are talking academic nonsense. This is not infrequent. One of the great economists of the twentieth century, John Maynard Keynes, concluded his great book The General Theory of Employment, Interest and Money by writing:

the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist

Understanding economics will help you recognise this.

A look at almost any newspaper will show you how closely economics is linked to the real world, and how we cannot really understand the context of our lives unless we have some knowledge of the subject. Some examples can illustrate this:

• How do we know as a society how many pairs of jeans to produce?
• How many portions of fish and chips? How much beer?
• Why does it cost more to watch Manchester United play than it does to watch Stockport County?

The answers to all these questions – and millions others – derive from the economists’ use of demand-and-supply analysis. The conclusion is clear. You cannot understand the world around you unless you have some knowledge of economics in its various aspects.

Economics will give you some very useful mental tools and skills that will be helpful in many other aspects of life. Some of these skills are ‘overarching,’ such as the development of logical thought processes, whilst others are more specific to economics such as the ability to read and interpret economic arguments.

Studying economics helps people realise the difference between statements of fact and expressions of opinion. It also helps develop a logical way of thinking about economic issues and the ability to present statements in a reasoned and relevant way. The ability to present and discuss ideas, concepts and arguments in a clear and accurate manner is an important general skill that is valuable in a wide range of careers. So is the ability to evaluate decisions, arguments and the reliability of information. This is allied to the ability to process data relating to economics, including the collection and collation of data and their use and presentation to support and illustrate arguments or points of view. Writing reports, interpreting data and analysing arguments are central to economics. If you master these skills in your study of economics you will be able to use them in a wide range of contexts, not only as a student but also in your working life.

You will find economic graduates working in a very wide range of jobs. But economics is a subject that also leads to jobs where knowledge of the subject is very useful. Thus about one half of economics graduates go into jobs in the financial services industry. Some of these will work in the commercial banks where a degree in economics is particularly useful since it gives exemption from some bankers’ examinations. This also applies to some accountancy examinations, another source of employment for many graduates in economics. Many economists also work in other sectors of the financial services industry. Insurance companies, building societies and merchant banks all employ economists. In many of these careers knowledge of economics is combined with another area of study. In such cases, economics gives a strong theoretical underpinning to a wide range of careers.

Economists are widely employed in the public service, either as general recruits in the civil service or as specialist economists in the Government Economic Service. The senior members of this Service will advise ministers on the economic implications of alternative courses of action.

There are also overseas jobs for graduates in economics. The European Commission in Brussels and the OECD in Paris both employ a large number of economists. So do international agencies such as the World Bank and the International Monetary Fund.