Economics: an intro

Economics: an intro

One of the authors of a secondary school textbook that I swotted over doing economics at secondary school died recently. His name was Neville Drohan. He was a highly regarded teacher and Principal at Melbourne High School and a graduate of the University of Melbourne. He also trained economics teachers for many years. You could say he was the Mr Chipps of Australian secondary school economics! Many Australian economists will recall his books, co-authored with Tom Day. Texts like The Australian Economic Framework transformed the teaching of economics in secondary schools and made it popular in schools. Another product by the duo was Readings in Australian Economics (1965). It had contributions from Melbourne and Monash academics. I wondered as I read it whether I would get to meet these people in the flesh.

Economics instruction has changed considerably since the days of Drohan and Day. Today you have to do a fair amount of maths and econometrics. I would even stress that ability in this, as well as clear thinking, logic and good communication ability will ensure that you have it made. If your maths is not top rate you will need to do remedial work here. For, unlike the 1970s, economics today is quite mathematically bent and foremost in the presentation of economic principles. When I went to Monash in 1975 there was a course for mathematical delinquents called Elementary Mathematics for economists. It was all about calculus, regression and probability. There was also a compulsory course in statistics and econometrics. It would be barely suffice today. Of course, it is not just the quant skills you need to in order be a good economist. The master economist of the 20th century, John Maynard Keynes, who was very good at mathematics, once described the challenging personal attributes and qualifications required to practice economics:

‘The study of economics does seem to require any specialised gifts of an unusually high order, is it not, intellectually regarded, a very easy subject compared with higher branches of philosophy or pure science. An easy subject, at which few excel! The paradox finds it explanation, perhaps in that the master economist must possess a rare combination of gifts. He must be mathematician, historian, statesman, philosopher – in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought, he must study the present in the light of the past for the purpose of the future, no part of mankind’s nature or his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician’.

No room here, then, for number crunchers or plodders. With the encroachment of behavioural economics into the economics curricula we might add to Keynes’ desiderata some appreciation of psychology. That and some imagination. The other thing is to have, of course, an open mind. Forty years ago the biggest scare was that the quadrupling of oil prices by the OPEC group were stabilising the industrialised economies and putting them into a mire of inflation and unemployment. It was called stagflation. Look at oil prices today! As for OPEC, its power as a cartel died long ago. Stagflation has been banished and, in its place, is deflation. The only constant with our economic environment is change. To paraphrase our new Prime Minister, it is an exciting time to be alive.

Alex Millmow teaches economics at Federation University, Australia.