Economics Masterclass

Sunday’s Economics Masterclass aimed to equip students to uncover and explore the economic forces which lie behind so much of the activity that governs their daily lives. Through a mixture of teaching, discussion and structured debate, the quick-to-learn students came away with a nuanced appreciation of economic policy-making and its effect on the incentives that structure the decision-making of a range of actors from government to firms to consumers.

We began by looking at how market mechanisms function in allocating resources, and how they fail to do so in a socially optimal fashion in certain conditions or in markets for particular kinds of good. For me, a particularly interesting discussion centred on unpacking the numerous reasons why healthcare would be underdemanded under purely free market conditions. We explored policy solutions for market failure and their drawbacks, before concluding the morning with an interactive, group-based exercise whereby students had to consider the privatisation of various industries and how government and firms should interact in providing them so as to maximise welfare.

In the afternoon we broadened our focus beyond individual markets, beginning with an examination of the causes of absolute and relative poverty and potential policy solutions. We then turned to the macro-economy, and students gained the theoretical tools to understand the dynamics of the current recession. The whole day was rounded off with three debates on key macro policy issues: the structure of the tax system, central bank independence and, especially topically, deficit financing. The students showed a capacity to reason their way to distinctive and imaginative conclusions and to defend and criticise these conclusions. By moving beyond the standard arguments of exam-oriented school courses, and examining the value judgments lying behind economic proposals, students got closer to the real world logic of economic practice.

Find more information about our Economics and Finance events here.

Alex Worsnip, Economics Tutor