Economic Literacy

Yesterday I attended the Economic Literacy for Everyone summit of 2018, organized by I listened to some really informative and inspiring talks by some very involved men and women, however I could not help the feeling that something was missing. In the booklet The Case for Economic Literacy,  economic literacy is defined as being “about having the knowledge, skills and confidence to understand and evaluate the many different ways of thinking about the economy, develop independent ideas about how it could be organised and to be able to understand and use common economic topics and vocabulary to help […] participate in economic conversations”. Everyone has an economic story. I do not want to take off anything from that description, in which all our economic stories add up to one economic system.

One of the instruments to gain a better insight into ones own economic story was presented at the entrance of the hall. It was a drawing of ‘your environment’ that showed all interactions that involved economics. To me it looked very much like the economic cycle, but prettier. But how would my environment have looked if the economic system would have been embedded in the ecological system? Because, ultimately, that is where we draw our existence from. I am not just talking about the support of life, but also about rare earths that are used in, for example, smart phones, and that are not renewable.

In my opinion, to be able to engage in conversations about the economy, you need a common framework, a common understanding of the issues we are confronted with as a – planetary – society, to understand how our economic story fits in this larger context. The core of this framework is the concept of – economic – scarcity, the alternative allocation of resources, which is, I must admit, not the most interesting concept of economics – for most people. But, as one of the members of the panel justifiably remarked: it is not what students find most easy, but what makes them master the subject, that is important.

I tried to bring this point across, yesterday, but did this very awkwardly, for which I am sorry. I started to explain how I always had trouble with bringing the concept of scarcity across, how it is often buried in the first chapter, together with concepts like positive and normative statements, and that there is rarely any reference to it further on in the course. But, for me, this has changed with the introduction of Raworth’s doughnut model, which frames the economic problem unmistakably, and has plenty of possibilities to link further economic learning. From the reaction from the panel I observed that Raworth’s ideas were mostly looked upon from an ecological perspective – the environment -, but mistake not, it is made up of both an ecological ceiling, limiting our use of resources and the extent of production, and a social platform, professing fair living standards for all, actually encompassing economic literacy by including a voice for everyone.

One of the panel members stressed the importance of a pluralist economic education, mentioning Raworth as one of the economic thinkers that could be covered. But I think that is missing the point. I am not vouching for all of Raworth’s ideas, but her model and the embedment of the economic system in the larger ecological system, is simply good practice, for economists of all plumage.