A bit of Economics in Everyday Life | Adamas University

A bit of Economics in Everyday Life

Economics, Humour

A bit of Economics in Everyday Life

Many years back when I was in my school final years and deciding which discipline to pursue for higher education, my choice was clear. I wanted to take Economics and so I did. I was introduced to Economics in the ninth grade and gradually I fell in love with the subject and as we all know especially in these tough times, falling in love is a good thing!

But things may not necessarily be so linear for many. Students are advised to take up Economics for their graduate courses because it has great career prospects. And that is true indeed. An Economics graduate or a masters with good scores can build a wonderful career in the corporate sector with data analysis skills. A large part of Economics is about how money circulates in the economy and being trained accordingly maybe you will eventually find yourself to be the CEO of bank XYZ or a renowned investment banker frequently appearing on national television or perhaps even chairing the position of chief economist in RBI! It is a wonderful dream and we faculties will always be there to help you walk on that path that leads to that dream. The path will not be easy but with a little bit of perseverance you can and will land on the pedestal.

These skills will eventually help you land in a good research institute or bag yourself a social sector job where you learn to work with people in the field, implement your discipline trainings directly at the grassroot. Finally, you can always teach like I do. It is a daunting and a lovely task, something I enjoy every minute.

However, despite all these beautiful lucrative prospects many students find the discipline tough to cope with. It is a common concern. I see fresher students feeling flustered with apparently complicated words like “bargaining”, “strength in scarcity”, “opportunity cost” and so on. The feeling is very natural and there is nothing to be ashamed about it. My purpose of writing this post is to let you to know that Economics is not quite the teeth wrecking devilishly complicated stream that many misunderstand. Economics is all about understanding the rationality behind decisions that we take. Economics is there in our everyday life, in almost every choice we make, every decision we take. Today when we are all feeling a little blue in the tough pandemic, in this post I am going to try to bring a bit of humour by throwing a little light on some concepts that are extremely frequently talked about even by our parents sometimes (who might not be economists!) and to do that there can be no better platform than our very own Bollywood.

When you step in for graduation in Economics the list of words you will encounter most commonly are:

  • Choice
  • Opportunity Cost
  • Bargaining

These words will be the foundation stones of your entire course and even in future when you are some successful hotshot remembering us who mentored you, yelled at you and were mostly immensely proud of you. The first thing in Econ 101 is that we will teach you that we have scarce resources and that human wants are unlimited. We are obviously quite aware of that. We need a smartphone then want an iphone then ipad, branded Puma shoes, and it keeps growing. But most of us do not have the means to buy everything. Try asking for all of this from your mom or dad. It is too scary for me to even imagine! So, the problem is choice. How to choose from our unlimited list of wants. This is the basic question of economics: Choice in scarcity. So, if you have about 1000 rupees for spending the evening treating your friends you can either spend it on a movie or you can order pizza but perhaps doing both is expensive. So, you choose and in doing that you take a small mental note of what we have next, the opportunity cost. It is the next best alternative that you give up when you choose something. In this case you might have to sacrifice the happiness from the cheesy delightful pizza if you decide to go for the movie. Choice and opportunity cost are present everywhere in our lives, whenever we take any decision, whether it is about switching jobs or choosing between mangoes and watermelon in summer which is personally a very tough choice!

In the movie Udaan (2010) Rohan is an aspiring writer while his father pushes him to be an engineer. Probably a common problem in Indian households! Rohan’s problem is to choose between engineering and writing. Being an engineer means Rohan is giving up his passion and being a writer means he is giving up a quick road to an established career. Nevertheless, we are all happy at the end when Rohan manages to reach Bombay to become a writer!

            Any decision involves bargaining. When I was in school my bargain with my mother in agreeing to finish the chapati and cabbage was to let me watch the cartoon Duck Tales. A nineties kid would not miss it for anything! As we grow up our bargaining spheres evolves too. We might bargain with our employers for salary that we take or with our domestic help for the salary that we pay. Bargaining strength lies in scarcity but remember we can bargain with few people in power, despite being less powerful if we have the collective strength. Nothing but Lagaan (2001) can be a better example of bargaining. Set in the British ruled India (Thank God that is over!) our favourite Bhuvan accepts Captain Russell’s cricket match challenge. It all started with a draught that severely affected the village and the villagers had requested for waiving off the annual tax or lagaan. The bargain came down to this. If the villagers lost the match, they pay “teen guna lagaan!”(Oh Man!) whereas if the British lost they waive off lagaan for three years. If the villagers had greater bargaining power probably the bargain would lead to a better deal. Like not having to pay the tax at all. Villagers being much less powerful could not possibly strike that deal but ultimately, we had all cheered our hearts out when they won the match and Bingo! no moreTum humko teen guna lagaan dega”! It was the collective strength of the people that made them win through a tough situation even with much lesser bargaining power.

            So, you see, there are wonderful ways to help you understand Economics. Our lives are dynamic enough to offer us examples, analogies and anecdotes that we can relate to the discipline. There are ample real-life examples that you can immediately relate to and all this will help you to sail through. You will no longer have to struggle to love your subject. Instead you will automatically learn to love it. We are there to help you with that so do not feel blue and share the blog if you like it!

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