Economics in Action

From assessing entries to the Economics Network Student Challenge 2011, we have found out that economists are very talented people. They create music, write poems and draw cartoons. More importantly, they can use the power of words to address the most worrying problems in the world, such as hunger and poverty. This is what our runner-up Anu Omotunde-Young (Lancaster University) did this year. Below is her poem about her home country Nigeria with explanation of why studying Economics can help solve all problems there.

WHY STUDY ECONOMICS AT UNIVERSITY?

Her wrinkled, tired face turned to me:

No Roads; No Light

Where is the light at the end of the road?

No Income; No Food

Who am I to want food when my family starves from having no income?

No Hospitals; No Safety

When will it be safe enough to survive in our hospitals?

No Water; No Strength

Do I not need strength to lug water home from the town well?

No Education; No Future

What will the future of my offspring be when I leave them with no basic education?

No Leadership; No Inspiration

How can my children be inspired with no one to genuinely lead?

No Home; No Consideration

Why should I consider the consequences of my actions when I was left with no home?

How can you care? What can you do?

You are only one out of a 150 million others.

I can start by caring enough to want change,

I can start by admitting we have a major problem,

I can start by learning the accumulation and maintenance of wealth.

Mother!

For you, I learn about sustainable development.

For you, I learn the difference between money and wealth.

For you, I learn how I can generate income and growth using our very own resources.

For you, I learn the components needed for a free market,

For you, I learn about Public Goods and can tell you that you deserve access to healthcare, education, water and shelter.

For you, I stay up all night reading and applying the mechanisms that help boost Investment and Savings.

With this, I propose economic growth that will take you a step further towards that essential job you want.

For us, I do a degree that gives me the skill and passion to make our motherland prosperous.

For us, I work towards being the change we need

In a country filled with abundant natural, human, physical and mental resources such as Nigeria, extreme poverty still outweighs the abundance of wealth. Poverty as mentioned does not occur mainly from the lack of resources but from the unequal share of wealth amongst citizens of a proud nation like Nigeria. The wrinkled, tired woman mentioned in the poem represents the average mother in Nigeria who has no choice but to be strong and extremely hardworking to put food on the table and keep a roof over her family’s heads. Nigeria is the 5^th largest oil-producing country in the world and yet over 50% of its inhabitants lack basic water supply, affordable and efficient health services, roads, education and many other basic goods. Nigeria’s economic failure to develop is primarily attributed to its domestic market imperfections, economic inefficiencies, and social rigidities. Political corruption, a parasite social and bureaucratic structure, and the failure to make appropriate Investment in education, agriculture and other prerequisites for economic development restrain the nation.

As a Nigerian student lucky to be born in an averagely comfortable home, I was only made aware of the seriousness of Nigeria’s economic imperfections when as a teen my Father took me to a less developed area in the business capital city of Lagos [areas normally termed the Ghetto] called Ajegunle, and was shocked at the living conditions imposed on the less privileged. This made me aware that life was not all rosy and thus from that moment on, I made a pledge to myself and my fellow countrymen- to do my bit as a citizen of the country to help fully develop the country to a favourable standard. At this time, I was just about to enrol into the upper Secondary School level where I had made plans to take subjects that were intended for a career in creative writing or journalism, however after that experience, I started to read on politics and economics and thus found I had a higher interest in these topics; this made me take these subjects at school and ever since it has been my focus of study till now, and will definitely be for the next few years. The first half of the poem in literary terms depicts the thoughts and fears experienced by the average Nigerian parent on the future of their offspring; the second part is a form of revelation that shows that change can come from the littlest of things, meaning change happens not by thoughts alone but by actions; the third part of the poem substantiates this and shows how in my own way, I am working towards making that change.

Here is the winning rap from Joevas Asare (University of Surrey).

Economics Network Student Challenge 2011 Winning Entry

Following my last post, I have been given a great article by Peter Sozou and Robert Seymour (titled “Costly but worthless gifts facilitate courtship“) about the application of game theory in relationship issues. This unconventional article on game theory shows the great power economists have to solve social problems. It is free and worth reading if you are keen on studying game theory.

And apparently, intrinsically worthless gifts (e.g. an engagement ring?) are great signals.

Game theory is one of the most exciting fields in modern Economics. Yesterday, we started the lecture on Game theory by watching a clip from the Oscar-winning A Beautiful Mind. In the scene, Russell Crowe’s Nash proves that the First Welfare Theorem of Economics does not always hold, and there are circumstances when competition does not lead to a Pareto efficient outcome.

‘Adam Smith is wrong,’ proclaims Nash after deducing that if everyone competes for the attention of the blonde girl, no one will end up with that girl. The ‘invisible hand’ does not work in this situation. So, he advised his friends to go for the brunettes. This result is not, however, one of the Nash equilibria, which predict that one guy will eventually end up with the blonde, while the others will be with the brunettes.

This example shows the power of Economics, and how simple ideas can affect our lives in every single way, be it politics or love. This is why studying Economics is so interesting, and at the same time, so useful for you.

A Beautiful Blonde!

Add contemporary art to the long list of topics that have been illuminated by economics research. Don Thompson of York University, Toronto has studied this market and in his new book, “The $12 Million Stuffed Shark”, examines why art prices reach such staggering heights. Just weeks ago, Damien Hirst auctioned his “Beautiful Inside My Head Forever” collection for nearly two hundred million dollars: enough to buy 272,108 metric tons of rice. Professor Thompson graciously agreed to an interview:

Photo by diametrik on Flickr

What made you study economics in the first place?

It was probably one of those undergraduate surprises; I took a micro course, enjoyed it, took a course in European Economic History and loved it, took a macro course, and launched on a career.

Has being an economist changed the way you appreciate art?

No, you still lust after art that touches your soul that, you want to live with and wake up to. However, knowing the prices of art affects how you look at it, particularly in a contemporary art museum. The “if one like that sold for $20 million there must be something there I haven’t seen, I’ll look harder and reach hard” syndrome is hard to avoid.

Is the economics of contemporary art like other areas of economics, or did you have to build it from the ground up?

I spent a year working on The $12 Million Stuffed Shark because I did not understand how artists got selected to rise to the highest levels (being sold in Sotheby’s or Christie’s evening contemporary auctions), or why prices were 10 or 100 times what seemed reasonable in the absence of scarcity. And because of my profession and personal curiosity, I wanted to learn more.

We have now converted all eleven of our student films to MP4 format for use with iPods and other personal video players. The films have also been remastered to improve colours and contrast, making them even more suited for the small screen.

Made by groups of economics students from a variety of different universities, the films show different perspectives – sometimes serious, sometimes hilarious – on the usefulness of economic concepts.