The Economy and Economics Illustrations by Tony Biddle

Please Note This curriculum material has been developed by the Canadian Centre for Policy Alternatives and is provided to support union, community, and non-profit organizations to undertake popular economics training. Non-commercial use and reproduction, with appropriate citation, is authorized. Commercial or professional use is prohibited without approval from the Canadian Centre for Policy Alternatives, Ottawa, Canada. This material has been edited by the NYC Virtual Enterprises Office for educational purposes. Some of the original slides may have been removed and replaced with other slides. www.economicsforeveryone.com © Canadian Centre for Policy Alternatives, 2009

Key Topics Covered Importance of studying economics The economy The purpose of the economy The economy and economics Class Discussion Why do you think it is important to study economics?

Why study economics? Most people think economics is a technical, confusing, and even mysterious subject. Economics should be quite straightforward. You don’t need to be an economist to know a lot about economics. Everyone experiences the economy. Everyone has an interest in the economy: in how it functions, how well it functions, and in whose interests it functions.

What is the Economy? Class Discussion What do you think is the economy? What do you see in these images?

What is the Economy? The economy is more than GDP statistics, the financial pages, and the daily updates we hear about stock markets and foreign exchange. Ultimately economics is simply about how we W-O-R-K. The economy is the sum total of the work we must perform to produce the goods and services we need to survive and live. Economics is about who does what, who gets what, and what they do with it. Without work, nothing happens in the economy

The Economy in YOUR Neighborhood You can see the economy in action by looking around your neighborhood. Type of work people are doing Goods or services people consume Investment or lack of investment to improve or expand the local economy Financial institutions available for people to take out money Condition of the local environment This is the “economics of everyday life.”

The Purpose of the Economy: Meeting Human Needs The “economy” is the sum total of human work. Why do we work? Because we are living beings, and we must work to produce the things we need to stay alive. The requirements of subsistence. But we want more: a full, quality, enjoyable life. We work to meet human needs. An economy that does not meet human needs, is not doing its job very well. There’s nothing more “fundamental” about an economy’s performance, than whether human needs are being met.

What We Produce Goods: tangible products that we can touch. Examples: houses, cars, clothes, food, equipment. Services: functions we perform for other people. Examples: restaurant meals, education, telecommunications, health care, transportation, entertainment, accounting. We need both goods and services. Both goods and services are produced with the same ingredients: productive effort (“work”, aided by tools), and raw materials (harvested from nature).

What is Economics? Economics is a social science. How we work, and what we do with the fruits of our labor. Microeconomics: the study of individual firms & consumers. Macroeconomics: how these players interact on a larger scale Economics has never been value-free. Economists don’t just describe the economy. They have views about how it should function. Economics is not static. It evolves to reflect changes in the economy, and debates and conflicts over the economy.

Reclaim Economics for Ordinary People The rich and powerful of our society create claims about economics to justify their own positions and discourage people from fighting for change. And most economists also have a vested interest in the status quo. Example: banks, brokerages, corporations, etc. It’s important for schools, unions, and social movements to develop the capacity and the confidence to challenge traditional economic claims Economic literacy is thus an important priority.

Homework Assignment Part 1 Examine the economy in your neighborhood. Take a walk in your community, be observant, and be prepared to write responses to the following: List 5 different professions you’ve seen and write a brief description of the work they are doing. Research the average salary for the 5 professions from above using Salary.com. Make a list of 10 different businesses you see and specify the kind of product or service each business offers to its customers. Is there an over abundance of any one particular type of business? Is there any particular kind of business you don’t see that you think the community should have?

Homework Assignment Part 2 What types of products or services are people purchasing? What public services are located in your community? What types of institutions are located in the neighborhood? (ie. School, hospital, non-profits, etc.) Is the local environment healthy or being degraded? (ie. Noise, air, street conditions) Based on your tour of the neighborhood, offer an opinion as to whether or not the economy is functioning well and serving the community.