I recently read an impressive article in the March 2nd WSJ
by a high school junior, Benjamin Auslin. He pleaded with President Trump to require high school students to complete a course in basic economics! I encourage you to read his article if you subscribe to The Wall Street Journal. If you don't, here is a summary.
Mr. Auslin wrote, "Students don't know what the economy is, how it works, or how to succeed in it". Most of this article focused on financial literacy. He cited the FINRA
Investor Education Foundation study that concluded credit scores improved in Georgia, Texas, and Utah among recent graduates shortly after these states required a financial literacy course. Mr. Auslin pins some of the responsibility on parents. Unfortunately, many parents are ignorant of basic economic concepts because economics was not offered when they attended high school.
I believe an understanding of basic economic theory is just as important as financial literacy. Obviously, anyone interested in starting a business needs to understand concepts like the demand
and elasticity of demand
for their good or service. They need to know and understand their fixed and variable costs. A grasp of supply and demand is essential. (Higher Rock has eleven lessons related to supply and demand. Visit our Supply and Demand catalog
Admittedly, I am an economics nerd, but I believe understanding basic economic theory is also important for those who choose not to become business people. Let's face it - we are all part of the business community. Financial decisions are more sound when pricing is understood. The basic economic concept of opportunity cost
teaches how to weigh the advantages and disadvantages of virtually every decision we make in a way that takes a longer perspective. It is helpful in negotiating if we understand a business's perspective – which requires a basic understanding of supply and demand. Most of us vote our pocket books. A basic understanding of macroeconomic theory helps us discern the proposals our candidates put forward and vote more responsibly. Who benefits and who is hurt by an increase in the minimum wage
, or a restriction on trade? Will a new government regulation benefit me – or will it cost me? The answers to these and similar questions are sometimes not as apparent as we think. Politicians have different answers which can be confusing even to economists. Without any understanding, we may be inclined to accept the most attractive promise, even if it ultimately hurts us because we don't understand the ramifications of what is being promised.
It has been Higher Rock Education's mission is to teach high school students basic economic theory since 2011. All our lessons are free. Our web site offers lessons, complete with interactive exercises, videos, and review questions. We are equally committed to the relationship between Christianity and economic theory. God calls us to manage His creation, His resources – and economics teaches how to do just that in the most efficient way. Each lesson includes a scripture lesson which brings scriptural relevance to the economic concept.
Mr. Auslin, thank you for your plea. I hope our leaders listen – but even if they don't, feel free to visit our free lessons and read our blogs.