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My Path to Economical Discovery

I’ll be the first to admit, for the longest time, I couldn’t tell the difference between economics, accounting or anything else even vaguely related to finances.

Several events led me to greater understanding. Firstly, was my day job. Newspapers move around lots money as a side effect of the sale of advertising. This needs to be accounted for, and so I ended up with my head buried in concepts like Account Receivable and Invoicing.

The second event was a chance purchase of Joseph Stiglitz’s Globalization.

I grabbed the book on a whim at Hong Kong airport and started reading it while waiting for the plane. Continued reading it on the plane, succumbed to sleep and then finished it when I got home.

The content of the book in itself was interesting. Stiglitz is very passionate about the potential for good in the interaction between the IMF, the World Bank, WTO, and the countries they were designed to help. It is an interesting introduction, from an insider, to these institutions and their role in recent events.

More important to me, however, was the language and the science behind his arguments. As an economist, his logic was founded in the concepts of economics. For the first time, I saw economics as a science — a science that attempted to explain the world in which we live.

I’ve spent lots of time learning about physics to try develop an understanding of the world, and it came up somewhat short for me - although I did enjoy the maths. Economics attempts to explain human interaction across two realms: microeconomics and macroeconomics.

Microeconomics attempts to explain the day to day activities of consumers and markets. Macroeconomics attempts to explain the interactions of countries and governments, of interest rates and unemployment.

With a taste of this body of knowledge, I was hooked. I wanted more.

Fortunately, a close friend of mine had majored in economics at university, so I borrowed some of his text books. Very slow going, but the language and theories of basic economics are slowly coming into focus. The only downside is that basic economics isn’t satisfying my thirst for knowledge. The mathematics is simplistic and the assumptions so broad that I question the rationale of the conclusions.

Definitely a reason to look deeper.