Comments on: Economic Illiteracy

By: Nimai Mehta

Nimai Mehta — Sat, 27 Sep 2008 03:28:12 +0000

The survey of business instructors is surprising, though what sort of colleges were these, in what areas? As a measure of economic literacy, the question of growth rates is a bit silly — I would likely fail it if asked that today. But illiteracy in the sense of ignorance of economic calculus or logic — of opportunity costs, etc. is an issue. I doubt the East Asian populace fares any better on this measure however. The Americans perhaps a bit better, but not by much. Economic literacy however can also mean the broader philosophical perspective on role of the state, markets, business, etc. Here, the past few annual PEW Global Attitudes Surveys (http://pewglobal.org/reports/display.php?ReportID=258 ) are instructive. They reflect a far greater share of popular support for Trade, for Foreign Companies and for Free Market amongst the populace in India than what is found in the US. For example, in 2007, 89% in India favored Trade over 59% in the US; 64% in India favored Foreign Companies over 45% in the US; and 75% in India supported Free Markets over 70% in the US. Perhaps it is the economic theories of the literate rather than the values of the illiterates in India that need to be refreshed.

By: Reema

Reema — Fri, 12 Sep 2008 10:04:32 +0000

This survey’s results sound a bit unbelievable. Yes, I concur that understanding of economy is not as great as it should be among average Indians, however, show me one country where it is great. In the US of A, how can you explain people going crazy on their credit cards. Don’t they understand that the interest on the credit card debt adds and adds until one day they are deeply tangled in the web of their own making to be rescued? Don’t they understand that leasing of car is the biggest scam business? Why do they flock to auto agencies to lease a new car every few years then? The point is, not everybody in this world is born to understand and live by the numbers. Good for them who do.

Indians are not economic illiterates. They just don’t think as much about the numbers. Kind of like the Italians.

As for the critique of REGS, I would take the first person account of Dhansekar a bit more credibly than some public policy school professor’s musings made sitting thousands of miles away from the place of action.

And, lastly, I don’t think that India has any dearth of good economists. What we don’t have are people who can implement the policies laid out by these economists. It is a matter of political will rather than economic intelligence.

By: shagun

shagun — Sat, 23 Aug 2008 05:16:17 +0000

Lack of adequate knowledge on the consequences of economic policies is one of the main reasons foreconomic illiteracy.In orderto have a clear understanding of the wide opportunities made available by economic reforms it is necessary to sensitise the economy on the variuos issues and challenges of gloabalisation.

By: Rajalakshmy

Rajalakshmy — Sat, 23 Aug 2008 05:16:01 +0000

I agree with this article.Economixc literacy is vital to make appropriate and practical policy decisions which will benefit the people.Today our political leaders are more interesed in votes and they lack vision. A high literacy state like Kerala for example is lagging behind .

By: ruchi sagar

ruchi sagar — Sat, 23 Aug 2008 05:14:31 +0000

I do not agree with this article.Most of the economics teachers i know are quite well versed and update with economic situation prevailing in the country.Actually, it is the polititians who are to be blamed for economic illiteracy.They keep us in disguise about the actual impact of deals&policies.

By: a common man

a common man — Sat, 23 Aug 2008 05:12:54 +0000

there is no doubt that not only the common man but also most of the educated lot of India is economically illiterate.we have to improve ourselves and change our outlook towards economic change.

By: Dhanasekar

Dhanasekar — Fri, 01 Aug 2008 22:01:42 +0000

@ little Ram says
//This informal educational endeavor can make up for the errors of the MBA schools and other institutes.//

Why cant we make it formal educational endeavor? We do have a large number of Indian economists, Engineers, Business leaders in western world with years of experience. Many of them still investing in Indian real estate and want to come back to India at some point in time.Why cant all make it now ? Our NRI educationists should think of coming back to home, teach students. Don’t expect the same money/infrastructure , but lets give back our life of 4-5 years for the country which gave us a lot for 20-30 years!

We got good free/subsidized education (my Engg college fees per semester from 2001-05 is Rs.2000 to 3000 - second least in a Govt aided college, but now increased to 20-30K) and whether any of us did at least a visit to our schools back to meet teachers/students to share the learning ?

The best we did till now is capitalize the opportunity in market economy with cheap labour and IT, invested in real estate to hype the prices, inflation and made the disparity wider. Should we look forward and do something to create a independent domestic market, helping people to understand the system, teach the benefits of paying tax and live better?

A simple thought, taught by my friend. Don’t blame the system unless do something to correct it. First let us correct ourselves then neighbors, community and country will follow.

By: Jitendra

Jitendra — Fri, 01 Aug 2008 13:02:12 +0000

I agree with you.

Rather than lamenting this state of affairs, the best we can do is to make sure that we use our individual circle of influence to spread and share what we learn. This informal educational endeavour can make up for the errors of the MBA schools and other institutes.

By: Prashant

Prashant — Sun, 27 Jul 2008 10:00:29 +0000

@ little Ram says

Bingo, LR! This a key driver behind IEB…

And, (ahem) we’re always looking for more people willing to “spread and share what we learn”

By: little Ram

little Ram — Sun, 27 Jul 2008 09:55:53 +0000

This observation about the state of economics education in this country is spot-on. I went to one of the country’s top B-schools and was taught by some ‘eminent’ economists. Nevertheless, economics remained one of the most poorly taught disciplines.

This is not going to change any time soon as there are very few good teachers around, very few textbooks that can hand-hold the student through the learning that they need to acquire. I am not at all sure that the general population in other Asian countries or elsewhere is better educated. However, I suspect the best students in some other countries have a better knowledge of economics than we do and that could (partially) explain the outcome of relatively bad policies in India.

Unless employers demand or see the need for better educated staff, we are going to keep churning out ill-educated graduates be it in engineering, or any other area. The most important thing good education does for anyone is to help you know that you do not know. Leaving this aside, in practical terms I feel a well-educated workforce should lead to greater innovation and invention. This is probably being a bit unkind, but whatever we see by way of creative endeavour is possibly in spite of our education system! It is a tribute the endless inventive capacity of human beings that we get a few wonderful things happening despite mediocrity in education.