The first Italian University to offer a degree in Economics in 1902 … Welcome to Bocconi! … and one of the leading European Universities in Economics, Business, and Law today

What is economics about? … but let’s start from the beginning “An Inquiry into the Nature and Causes of the Wealth of Nations” (Adam Smith, 1776) (with roots in moral philosophy)

Some Questions  Why are some countries richer than others?  Why have some countries become richer (poorer)?  Not only “wealth of nations” but also of social groups, organizations, individuals

Different levels  World  Countries  Organizations (e.g. Bocconi, Microsoft, the baker near your house)  Families, Individuals

Economics is about CONSTRAINTS: The “Dismal” Science  You cannot spend more than what you earn (… or of what you can return after borrowing)  This is true of individuals, families, organizations, countries  Therefore, to spend more ultimately you have to produce more

 Thus, economics is about how to produce more (and spend better) The “Dismal” Science  At all the levels of individuals, families, organizations, countries, the World

Thus, preliminary answers  But why they produce more?  Some countries are richer because they produce more/better

Which is the richest country of the world today? (easy) “Trivias” And in 1850? (somewhat easy) And in 1700? (more difficult) And in 1500? (difficult)

USA 2001:$ 28,000 Italy 2001:$ 19,000 UK 1850:$ 2,300 NL 1700:$ 2,130 Italy 1500:$ 1,100 What are the annual incomes (per capita) of these countries? Africa 2001:$ 1,500

Countries with per capita income > 20K USD in 2001

Countries with per capita income > 15K USD in 2001

Countries with per capita income > 10K USD in 2001

And in the Future?

Growth of income per capita in 16 countries: Source: Angus Maddison, A Millennium Perspective

What do these countries have in common? Trivia again  Political Democracy  Economic Democracy  You can buy and sell many things at your will, and can retain a good part of what you earn  A set of rules, norms, laws, which govern in a “clear and predictable way” the interactions amongst citizens

 Political Democracy  Role of the State and its institutions (e.g. Central Bank), functioning of the economic system (Macroeconomics)  Economic Democracy  Firms, consumers (Microeconomics, Business/ Management Studies)  Rules  Law (Commercial, Administrative, Criminal, including history of how norms are formed and evolve) The Big Subject Areas

 Where it comes from and why is it relevant  1688 The Glorious Revolution  Division of labor (Adam Smith, once again) Some more about economic democracy … and rules  But this has to be governed: Rules  Role of the State  Law and institutions  Freedom of enterprise / markets  Management (how to organize business)  Competition (Strategy)  Inventiveness

 Multidisciplinarity  Economics: Macro, micro, business studies  Law  Mathematics, statistics (the “tools” to understand)  Social Sciences: Sociology, economic history (b/c economics & business cannot do it alone)  Languages, computers (“tools” again)  Real applicability (from macro problems to everyday life) Features of Economic & Business Studies

 You have an important responsibility  Future is yours All the Best!  Fulfill your own ambitions and goals in life but don’t forget the moral philosophy root   Economics (Business, Law) were made to understand how to make countries, firms, institutions, and ultimately the world better  There is still a lot of work to do!