Thursday, September 30, 2010

Welcome to Birmingham!

The new term and academic year is upon us.  If you are just arriving at Birmingham for the first time, welcome!  If you're returning, welcome back!

This blog is something I've set up for the part of econ101ab (Principles of Economics), an introductory economics course at the University of Birmingham.  I teach the second part ("b"), which is macroeconomics.  In the coming term before Christmas you'll have lectures from Martin Jensen on microeconomics.

If you're unsure of the difference between the two, PJ O'Rourke has helpfully obliged with a definition:

One thing that economists do know is that the study of economics is divided into two fields, "microeconomics" and "macroeconomics". Micro is the study of individual behaviour, and macro is the study of how economics behave as a whole. That is, microeconomics concerns things that economists are specifically wrong about, while macroeconomics concerns things economists are wrong about generally.

Enjoy microeconomics this term!

Monday, September 13, 2010

Strikes Ahead

The TUC (Trade Unions Council) are backing joint strikes if planned Tory Coalition cuts go ahead, it has been announced today.

I generally don't back old Labour, lefty stuff like this: I find unions too militant, and usually too ignorant of economics.  Those of you studying econ101 this coming year will find out exactly why unions often cause more harm than good.

However, they don't necessarily always cause more harm than good, for many reasons.  The first, of course, is when employers are simply wielding disproportionate and unfair power as a single employer of many people.  Collective action on the part of workers can hope to match the employer for bargaining power and strike a better agreement for workers.  Classical economists might complain that this distorts the market value for labour, but does it really?  Is the market value really what employers set for wages, particularly when they wield some kind of market power?  You'll learn about the monopolisation of markets in econ101.

Furthermore, should the cuts go ahead?  There's little doubt that the deficit is very large currently, but is that an excuse to wield the axe left, right and centre, as the Coalition is planning?  Some very interesting analysis can be found by Chris Dillow at a blog called Stumbling and Mumbling that I'm a big fan of: The fact is that no government has the kind of knowledge that the Coalition is talking about using to make these cuts fair because nobody can have that kind of knowledge except God (if he exists*).

So given this, I'm actually sympathetic to the Unions and I hope that collective actions on the part of the masses can force this Coalition to rethink.  Governments can be incredibly arrogant creatures at the best of time; lets see just how arrogant this one will be...

(* - I believe he does. See here if you're interested.)

Wednesday, September 8, 2010

Don't Know

I liked this blog article on the BBC this morning:

It basically says: Polls don't include the "don't know" respondents when reporting results.  So when we're told x% support tighter immigration controls, it's even more bogus a number than we might have already thought.

Yet the "don't knows" are probably the wisest respondents of all, since they realise how complicated the underlying issue is that the questioner is being asked.

Having said that, the case regarding immigration is clear.  If you want more expensive meals, transport, etc., then by all means throw out all the immigrants.  Be careful what you wish for...