Monday, 26 December 2011
ECONOMICS: PRINCIPLES AND PRACTICE (Standish et al) and STRATEGY SAFARI (Mintzberg et al)
I have a new job, and I read these books in preparation. They are text books from my cousin's MBA at the University of Cape Town.
The ECONOMICS book was essentially a first year university text book, and I found it very interesting. Our old friend the global recession meant that the sections on economic fixes was particularly illuminating. Here basically are the two options to get a market going: increase demand, or increase supply.
Keynesians think the best idea is to increase demand; that is, to give people more money, so that they will buy more stuff. This you will recognise as the New Deal approach – spend money building roads, and so on, so there are more jobs, and thus more consumers have more money to spend. Classical economists take the view that it is a better idea to increase supply; that is, to free up businesses to succeed, thus creating more products and more jobs.
I was struck by how very theoretical both approaches were, and, for a field so full of numbers, how little quantatative evidence there seemed to be for either side.