Anyone who wants to get into business and investing is going to have an advantage if they know their economics. But how do we go about studying such a big subject?
Here’s a quick introduction to doing just that.
Why should I get to know more about economics?
A lot of people don’t quite understand what economics is. They believe that it’s a subject that’s heavy with numbers and complex mathematics. This view of what the subject of economics is has refused to die over the decades in which it has been practiced. And with so many people unconfident about their math skills, it’s no wonder that a lot of people simply turn away from it.
But outside of remembering some key values and figures, there really isn’t that much number work in economics at all. There’s basically no mathematics to do at all; even someone with dyscalculia could become proficient in the subject! To put it very simply, economics is about the politics and psychologies involved in the behavior of world markets. And getting to know about this stuff will put you at an extreme advantage when it comes to doing business. Above all, however, economics is an extremely interesting subject for anyone to get involved in.
The first key lesson
This is first thing the economics student might get acquainted with. It’s the difference between microeconomics and macroeconomics. Microeconomics leads you to the understanding of the decisions that individuals and businesses make. Macroeconomics is the study of the larger economic framework of which those individuals and businesses are a part. It focuses on entire industries and the things that affect the economy as a whole.
It’s important to understand that you shouldn’t choose just one of these areas and study that exclusively. They are both extremely important to understanding the subject!
Yes, I know that you want to just learn everything from the Internet. But everything that people have to say on the Internet about economics all stems from what was learned in books. The most influential economic writings of all time are to be found on actual, paper pages. (Unless you’re using an e-reader. But then you’re just spoiling the whole “real books are the best” vibe I’m trying to get across here.)
You should be looking at as wide a range of books as you can, even if you already know you don’t agree with the main arguments made by a particular writer. It may still be worth your while to get to know their thought process better. People who are anti-Marxist, for example, can better articulate the problems with the ideology if they read Marx’s works!
There are loads of books out there that are over a hundreds years old and yet are still highly influential today. Don’t think that just because a book was written in an old economic climate that they hold no relevance today! These texts are often key to understanding a lot of the more modern texts. And I mean that more literally than you may think.
In many modern economics books, many authors will refer to loads of eponymous ideologies. Often, they will do so without much explanation, assuming that you already know what they’re talking about. Words like “Keynesian”, “Marxism”, and “Smithian” are often thrown around in such a manner. This is why you should read the classics written by the people who lent their names to such trains of thought. The General Theory of Employment, Interest and Money by John Maynard Keynes is essential. Kapital by Karl Marx is undeniably interesting. And The Wealth of Nations by Adam Smith is the book that started it all!
The modern classics
Of course, you may be more interested in finding books that are a little more modern. But don’t limit yourself to modern economic texts that were written no earlier than 2000! Works from the 1960s through to the 1990s will give you invaluable insight into how we’ve gotten to where we are today. Capital in the Twenty-First Century, Mad Money, and Bad Samaritans are among the essential works.
Of course, you shouldn’t be afraid to get modern works that act as introductions to the more classic economic thoughts. Some people see “introductory” books as something only children or teenagers should use. But this is far from the truth. They can be extremely valuable to anyone willing to learn anything at any age. Oh, and remember to use the endnotes and bibliographies found in modern texts. They will introduce you to even more works!
Using the Internet
The Internet is an incredible source of economic information. My gushing about “real” books doesn’t negate this fact. There are history websites, online encyclopedias, courses, and news outlets all waiting for you out there. Many people now use the Internet instead of subscribing to economy magazines. I wouldn’t recommend ignoring magazines. But economic websites with subscription fees are often fantastic alternatives. You should consider bookmarking economic news websites and visiting them a few times a week.
You could, of course, also look into going in a more academic direction. There are loads of online courses you can take to improve your knowledge about economics. Sounds of them require fees, of course. But there are loads out there that are completely free. If you don’t want something so formal, then there’s a great YouTube series that might be perfect for you.
Looking outside your own country
You shouldn’t limit yourself to understanding how the economy in your country functions. It’s true that a lot of what economics teaches us can be applied to the workings of most other countries. But it’s important to understand that what happens to the economy in one country can have great effects on the economy in a different country.
This may seem like an obvious statement to make. But people often underestimate its importance. This was put directly into the spotlight this week with the UK’s decision to leave the European Union. Many people in countries outside of Europe didn’t think it would affect them much. But the “Brexit” has negatively affected most of the world’s economy, from Indian markets to US retailers. So remember to be in the know about what’s going on outside your own country!