High school ghosts

High schools are the biggest problem in economics today. They rob the economy of the greatest human hopes, while the field is carried away by people who could do much better elsewhere - by people who will never understand economics. But it's no wonder when we look at who actually teaches economics there…

High School - Killer of Economics
High School - Killer of Economics

In the last few months, more and more of my acquaintances and friends have been asking me to "sit over the economy" - they are interested in an economic problem, we will meet and discuss it over some good fluid. This is how I helped my friend create a seminar, which - if she worked on it a little more - could easily be transformed into a bachelor's thesis in a few years (for example).

I recently talked like this with my younger friend. He is studying for the third year in high school, focusing on economics. He is taught there by a lady who is between 40 and 50 years old. This lady also "teaches" at the Faculty of Business Administration of the University of Economics in Prague.

By the way, the friend is an interesting man - when I met him two years ago, he claimed to be a young communist. Today, he is quite a solid liberal (in the classical sense). Well, even Hayek was a supporter of Fabian socialism in his youth. But back to the topic.

When I talked to that friend, I remembered one question from one university test (first year). Someone said it at a gathering of people interested in Mises.cz. The question is:

The Computer screen and the Computer are:

a) complements

(b) complements and, in difficult circumstances, substitutes

I do not guarantee that the question with the possibilities is written in the correct original wording, it is loosely "reinterpreted".

What is the correct answer?

Substitutes and complements

For those of you who already know, I repeat - this is a question from the test for the first year. For the other little explanation of what it is surrogate and what is it complement.

While substitutes are goods that replace each other in consumption, complements are goods that complement each other in consumption.

- Robert Holman, Economics (3rd edition)

In other words, if I don't care if I write with a pen or pen, if I buy a pen or pen, the pen and pen are a substitute for me.

Well, if I want to go out in one pair of shoes, for example, the left and right shoes are complements for me.

What about the computer screen and the computer? The correct answer is for B. Not only in this example, but in everyone else. In general, all goods are substitutes and complements. The specific distinction is individual - it depends on the situation and the decision-maker. No farm is a complement or substitute in itself.

That there are certain situational stereotypes (see example with a shoe above), meaning that people often make the same decisions in certain situations (that the left and right shoes are complements when we want to go out in one pair of shoes) doesn't change anything - each such "situational stereotype" is a unique act choices when a person makes a decision. One evaluates things in a certain situation. It does not tell us anything about the properties of the thing, but only about the circumstances of the situation!

We have many stereotypes around us, which does not mean that they are an "iron law" that cannot be changed. What if the fashion of real shoes comes? What if we get into a different situation with the right and left shoes? Everything can change at once.

The task of the economist is to rise above these stereotypes. A person who cannot do this cannot be called an economist. Such a person will always be locked in his own stereotypes in economics, when he will not understand how others choose and evaluate others differently than himself. He will not be able to describe the mechanics of human behavior in a value-neutral way, which is the basic task of economics.

The inability to break free from stereotypes of substitutes and complements means the inability to "think like an economist." This is a fundamental mistake that has absolutely colossal consequences for a person who teaches economics at university and high school. Such a mistake is inadmissible for such a person.

How do you think that teacher answered my friend?

Of course, these are certainly always complements. If it was different in the college test, they had it wrong.

A friend gave an example - what if I come home from work, I'm upset and want to smash something? Then for me, screen and computer can be substitutes.

Answer? It is said to be "something else" that does not belong to the economy.

High school kills economics

Ladies and gentlemen, such experts teach future economists, entrepreneurs, and corporate economists. Dear parents, even "this" is taught to your children. However, this is not very special.

High school economics is teeming with many "experts" who let go of colossal proportions into the world. Who instead of economics in the subject of Economics teaches everything possible, but not that economics. Those people who could already be great economists will be so disgusted with this field that the whole field will lose generations of hope in the future.

These "experts" turn many promising students away from economics and, on the contrary, draw in the study of the field herds of people who already see economics as an easy subject to memorize. Not only do they completely devalue the economy as such (inflation of worthless titles), but they also devalue all other fields, which thus lose their hopes, which in the vision of an easy title will subscribe to the economy, which they will never understand.

Worst of all, these inflationary minds often also teach next-generation economics…

I would cancel the state high school. And all!

0 comments

  1. So I have to stand up for that teacher, even if I don't know her and who, maybe she's really bad. If I remember well the lessons of Microeconomics I and II, then the question of complement and substitute is solved when deciding on the ORDER of a given thing. It is a total nonsense to consider the possibility of substitution when breaking a thing, and the mentioned high school student only proved that he likes to distort things that he does not understand so that they sound absurd. And as for the "tricky" question about complements, then its wording is completely misleading. Remember the indifference curves and their different shapes. Only in extreme cases can it be said that something is PERFECT complement (L-shaped indifference curves). In all other cases, the economy recognizes that two goods can be substituted in some way. The fact that the teacher declared the monitor and the PC box as clear complements only shows that she abstracted from unrealistic cases where, for example, someone is considering buying a paperweight and for this purpose he gets the best choice of these two farms. Since human imagination knows no bounds between them, economists MUST abstract from certain parts of possible solutions, because otherwise they would have to consider even utter nonsense, such as that there are people who think that a PC monitor is the same as a fishing rod and therefore these two things can be appropriately substituted. By tying this up, you would never get any advice, and you would have to say that "people just shop and no one knows what and why."
    PS: I would like to read your possible study on the possibilities of substitution of goods intended for the destruction of the place of acquisition. Please note that this is really "something else" in terms of indifference analysis as we really know it "does not belong"

  2. "The smash situation is a bit artificial, maybe it's true."

    It may not be the cause of market demand, but otherwise it is not artificial at all. This is proved by the decal of my "screen" in the floating floor, when the screen and the computer were for Dad in that situation, I dare say, really a substitute.

  3. "Ladies and gentlemen, such experts teach future economists, '"

    Was it not stated at the beginning of the article that the person in question was torturing at the Faculty of Business Administration?

  4. Here, I would like to ask - what do you mean by economist? one shoe, or a different on each leg. Which can only be done by an avant-garde artist or a highly pro-risk investor.
    On the contrary, as an economist in a regular company, I have to know the stereotypes very well and take them into account.

  5. The situation with the breaking is a bit artificial, it may be true. However, the teacher claims that such a situation does not exist at all, by claiming that they can never be sub-institutes. And that's a pretty strong statement.
    Otherwise, a slightly more realistic example of what occurred to me: Parents have a budget of 300 euros for a Christmas present for a synacic. For this I can buy a new quality LCD monitor or a new PC case.

  6. Cyborg - no. I'm not interested in PROC economics or a bit. This is solved by psychologists, perhaps somewhere in marketing jen The economy only takes into account, as Lukas rightly says, that people demand goods and PROC economists are not interested at all… The economist does not care if people ask for bananas to eat or satisfy mistresses. Seriously.

  7. @Kyborg - yes, the question is badly rewritten, it is possible (I write next to the question), I do not remember the assignment exactly. // Edit: so with the help of Dominika Stroukal, I've probably got the really original wording of the option for B - now it really makes sense, originally it was so similar here 🙂

    From the point of view of economics, any act of human action is important.

    @meca - :)) But the bastard. This exaltation means that a glass of beer is not a glass of beer, but a farm that can satisfy our needs - but the needs are individual. So one of the needs may be to break the co-neighboring glass by the head, the other may be any other… 🙂

  8. "The task of an economist is to rise above these stereotypes." .. You started flirting with a girl from gender studies, right?

  9. In economics, it's about why the person buys the thing, not what he uses it for. And no one will buy a computer to have anything to break when he's upset. So I think the teacher was right.

    But if I proceed from what you wrote: “In general, all goods are substitutes and complements. The specific distinction is individual - it depends on the situation and the deciding individual. ", Then both options are correct, because we know nothing about the individual or the situation.

    But it's just a layman's opinion, I don't understand economics…

  10. Jacob, of course, I quote:

    "In general, all goods are substitutes and complements. The specific distinction is individual - it depends on the situation and the decision-maker. "

    So the left and right shoes of one pair are in this situation ("I want to go out in one pair of shoes") complements 🙂

    Substitutes in you again. BTW - when I was thinking about shoes and substitutes, it occurred to me that if I want to throw a shoe at the American president, for example, he is a left and right substitute. But I don't know how Muslims have it - if religion doesn't tell them to use a specific shoe (left or right) 🙂

  11. I'm glad that thanks to you I got out of those who "try to get through" the economy at school. 😀 I have a great example, Míša Macasová wants to go to the national economy, I ask her and what field? She: "I don't know." So I named a few for her and she "hmm, it's all terrible boredom, I don't know yet" 😀

  12. As I said at the mises.cz meeting, I don't really like the example with shoes as complements. 🙂

  13. It is similar with a monopoly. Today, a monopoly is considered to be where what, without defining the market in which the entity is to be a monopoly…

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