By Arthur Wang | Reporter
With the recent COVID-19 pandemic and some of the actions people have taken (such as hoarding toilet paper and hand sanitizer), I think it’s more important than ever to learn about one thing: economics.
See, economics isn’t just the management of money and numbers, but it’s also the management of resources and decisions. It can help ensure that you take into account all the risks and benefits an action will bring—whether you’re deciding when and how you should go to the store to what you should buy when you’re there. Those are both decisions we face on a daily basis, but in our current circumstances of self-isolation they’re even more important.
Now, I’m well aware that everyone hates math—and unfortunately that is a part of economics—but it’s not the most important part of it. The most important part of economics is decision making—how one chooses to use their limited resources. Even if you never want to touch a calculator ever again, knowing how some decisions can affect other decisions and understanding how to make the best of your limited time and resources is vital.
Furthermore, a good deal of economics, particularly macroeconomics, has to do with how governments make decisions on what to do with the economy— how issues arise and how governments may choose to resolve them, and the kinds of effects their methods may have. These methods can include anything from changes in the tax rate to limits on how much of a certain good can be produced.
Economics can teach one that not all legal actions result in the intended effects. For instance, one way a government can attempt to encourage people to buy something is to put a limit on how expensive it can be—for instance, rent on apartments. However, this can actually result in fewer renters than before, as the people who were willing to rent out the apartments at the unregulated, higher prices decided renting out their space is no longer worth it. This results in fewer apartments being available in spite of a larger demand due to the lowered price, and thus, a shortage ensues. An attempt to make goods easier to buy can, in fact, make them harder to acquire.
It’s lessons like these that make economics such an important subject—what might be a sensible decision at first may have consequences that have undesired results.
Learning how the world works and that things may not always be as they seem—those two things may sound like common knowledge, but as my example shows, the effects of some actions can defeat their intended purpose or even make the situation worse. This is what knowledge in economics can help recognize and prevent—mistakes in judgment that could turn out to cost more than they’re worth, like buying up all the toilet paper and hand sanitizer.
Ultimately, I believe everyone should learn more about economics simply because everyone is involved in it, and everyone is involved in it because they make decisions. Through learning about economics, people learn how to take into account all the things that can affect the decisions they make—and learn about what influences the decisions others make as well.