To students of economics, it might
prove to very interesting subject. Yet to many others economics evokes a
phobia, a phobia of those graphs and calculations and theories and assertions
often contradicting and often supplementing and what not. Irrespective of the
context, there is always the other hand which would forecast very differently. This
is something a puzzle to the outsiders or what they might call an economist’s
hedge but to economists it is about viewing things in different perspective and
the manner in which the outcome would differ following the change in any of the
variables. Teaching economics therefore is a challenge in the sense of
convincing the students of the validity of the theories without evoking the boredom
associated with the ingraining of the theoretical contours.
Economics teaching at many a level
especially down the elite grade is all about stereotyping. It is about regurgitation
of the text books. Text books themselves would be a compendium of existing body
of knowledge yet many text books would rarely go beyond the known theoretical
boundaries and thus invoke very less practical approach. The context therefore
would be the divorce of economic theory with practice. There seems to be little
in teaching economics that would be of relevance to practicalities of life and
everything with some abstract context. This is all the more depressing since
economics analyzed at length would be unearthing interesting insights into the
practical applications in real life. Furthermore, economics brings to the fore
the isolation of each of the sub contexts of sub topics rather than an
integrated approach. It might make sense to decode these in isolation in the
text books yet there would be hardly be a case for seeking to decipher in
isolation in teaching the subject. There are many concepts which have same
foundations yet the background in which they are taught are extremely different
thus leading to students, the future practitioners to believe they are very
different like chalk and cheese.
The supply and demand, the popular
manifestations of economics in the mind of the common man or a woman for that
matter evolve from the same roots. It is the response to a certain stimuli. Keeping
isolated all the factors, it is about the response of economic agents to change
in prices. It is about the relationship between the quantity and the price. It is
just that the agents differ in their response based on which side of the aisle
they find themselves in. those on the producer side leads us to the question of
supply whereas those on the side of consumers leads one to an analysis of demand.
Therefore it makes absolute sense to seek to unearth insights in an integrated
manner rather than both being in isolation. While demand and supply interfaces
through the concept of equilibrium are studied, the same cannot be said of many
other concepts.
Another concept that does yield
similar and complementary outcomes is about the utility. Utility is about the
satisfaction of the economic agents. In the context of consumer, the satisfaction
is something relative and abstract. Thus there arises two ways of measuring
utility one through the cardinal and the other through the ordinal. The concept
of satisfaction arises to the agents on the producer side too. The producer
utility is nothing but the returns they generate or the profits they seek to maximize.
In contrast to consumer side, the profits are objective and thus would be
cardinal. While they might appear different in practice, the theoretical roots
remain the same, something untouched by the current economics teaching
orthodoxy. The concept of increasing returns to utility finds itself complemented
by the increasing returns to scale.
Another set of analogues concepts
are linked to the indifference curve. Indifference curve as one knows is a
locus of such combinations of goods that would yield the same level of
satisfaction or returns as one might measure it. In the scenario of utility
analysis, indifference curves analyze those combinations that yield the same
level of utility. They are also known as iso-utility curves. When one gets into
production analysis, there emerges the concept of isoquants. The isoquants are
those combination of inputs that yield the same level of output. Both isoquants
and iso-utility curves are rooted in the same anchor of indifference curves. Yet
the way they are taught would lead to a conclusion that both are very different
and no linkages to each other. The equilibrium in both the contexts are linked
to the constraints. The income is the constraint in the consumption side
whereas the budget of the organization is the constraint on the producer side. The
former is called the budget line whereas the latter is called the iso-cost
line. Both are anchored to the same roots yet their treatment becomes different
when they are taught in the class. At this stage it is important to note that
this isolated or compartmentalized analysis is something that can distort the
views being formed by the students of economics. The compartmentalization is
something that must be rid of.
As one teaches economics, it must be
demonstrated of the integration that happens. Economic agents are the same,
just that their response differs based on their self-interest or their
immediate needs. This must be highlighted. For instance, the indifference
curves might be encompassed with both the utility and producer side thus
bringing to the fore the linkages between the two. The supply and demand sides
can be taught in parallel. In the fact the consumer equilibrium and the producer
equilibrium too can be taught in parallel post the discussion on the
indifference curves. The above illustrations are some instances where there
exists a potential for integration of various topics rather than viewing them
as discrete. There is a continuum and not necessarily discrete when one views
economic theory and concepts. This is something that has to be highlighted. The
underlying foundation of economics lies in exercise of choice on the part of
the agents. The foundational arguments for exercising these choices remain the
same thus little difference in the theoretical evolution. It is only the
variables that might change and the manifestation of response that might
change. This has to be brought to the attention of the students and thus of
critical importance.
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