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Method of Teaching Economics at School

Sanmitra Ghosh

Department of Economics, Jadavpur University

188, Raja S. C. Mullik Road, Kolkata 700032, India.


The paper attempts to elucidate the correct methodology for teaching Economics to the
beginners. Methods follow from ones objectives. It has been argued that the purpose of
teaching a subject at the school level should not be one of equipping the students with
techniques and specific information on a particular discipline but to give him the widest
possible overview of the subject. The paper proposes the method of case study analysis
rather than a system of instructions and attempts to provide some rationale for this
method. Regarding contents, the case for a study of evolution of economic structures as a
result of interaction between social, political and economic institutions has been argued.
The discussion ends with a caveat that oversimplified modeling cannot do justice to an
empirical discipline like Economics.

Keywords: method; teaching; economics; case study;

Method of Teaching Economics at School

In fact, often enough the very richness of the subject matter has been seen as an
A. Sen, Commodities and Capabilities

The way in which a new discipline makes an entrance into the school syllabus is,
historically, a queer story. It reveals a power structure within the society its evaluation
of different streams of knowledge, and, of course, a hierarchy within academics itself. It
does not, however, necessarily reflect the societys receptivity for this new knowledge.
Four to five centuries ago, natural sciences, and most importantly Physics or Chemistry,
were emerging as new disciplines and apart from a handful of scholars only fashionable,
wealthy and perhaps somewhat eccentric young people took any interest in these
subjects. For the most part, school syllabus used to consist of religious texts, language,
some account of kings, queens and great war-heroes and the arithmetic necessary for
bookkeeping. Today, it is quite amazing to think how this pitiable repertoire could
produce successful men and women in different walks of life.
When I was in the school, the Roman Catholic Church made a proclamation whereby it
officially accepted the Galilean, or rather, Copernican model of the heliocentric universe.
As a kid, I used to wonder that it took the Church four hundred years to learn something
which even my younger brother knew. The diurnal motion of the earth was explained in
the textbook so convincingly with the famous example of a candle and a globe that there
was hardly any room left for doubt. And year after year, millions of schoolchildren
devoured this stuff with the sincerity of reading Holy Scriptures, frustrating the most
essential teachings of Galileo or other crusaders of science. It was only after quite a few
years, during a lazy stroll in the park, that I realized how I had been duped by my science

Before introducing a subject like Economics in the school curriculum we must, therefore,
examine our opinion of the subject. If we consider Economics as a discipline which deals
with the preparation of government budgets, the prevailing tax structure of a country or
the working principles of financial markets in other words, rules and conventions made
by human beings we may conveniently adopt the instrumentalist position as far as
teaching of Economics is concerned. For, in that case, our principal purpose would be
dissemination of information regarding the constitution and operation of these
institutions. My brief misfortune of teaching Economics to a class of Higher Secondary
standard, and the consequent familiarity with the syllabus and the textbooks used there,
has convinced me that this is the view of Economics held by the authority. On the other
hand, if we think of Economics as a discipline whose subject matter includes not only
these institutions as they are, but also their evolution; which, like any other science, seeks
to discover the general principles those govern the behaviour of a rational creature such
as man, we may have to adopt alternative methods for teaching the subject.
Some people might say that, as a starter, a general overview of the subject which will
be essentially informative in character should suffice. It is true that an informed fool is
better than an ill-informed fool, who can be easily cheated by others, and whose
participation in the economic and political decision making process can distort the
solutions. But an informed fool is still no match for a wise person. In a rapidly changing
society, even an informed person may find his stock of knowledge insufficient for
tackling a situation that is completely unprecedented and discover that something
more than skill is required, something which may perhaps be called wisdom. This is
something that must be learnt, if it can be learntAnd it is something more needed now
than ever before, because the rapid growth of technique has made ancient habits of
thought and action more inadequate than in any earlier time. 1 If the aim of education is
to impart wisdom we should not inundate the brain of a young learner with unrelated
facts and figures, but offer him an entire system of analytical tools whereby he can situate
the problem in his ambience.
The pursuit of wisdom may not, however, be the ideal objective for designing a syllabus
from the perspective of the policymakers, because of a number of reasons. Viewed
unilaterally, it is definitely the first best situation. But strategically it may not be an

equilibrium. The fruits of wisdom are often intangible and invisible in the short run. In
face of competition from a syllabus which enables the student to gather information
quickly and teaches him to solve certain prototypical problems efficiently thereby
guarantying his success in competitive exams, our designers of the syllabus may be
compelled to follow suit. The root cause of this evil lies in an erroneous incentive
structure propagated on the wings of a faulty examination system. Fortunately, this
scenario has started to change. Once upon a time, our colonial rulers had devised an
examination system with the sole purpose of testing clerical skills like encoding and
decoding information. This had led to the development of the notion of an inherent
contradiction between education for the job market and that for wisdom. With the
advancement of technology the importance of human agents has considerably decreased
for carrying out such menial tasks, thereby dispelling the notion at least partially. There is
evidence that the market creates incentives for a system of education which aims at
stimulating original thinking rather than instilling certain mechanical skills in the
students. Pioneering business schools all over the world are switching to syllabi which
are heavily biased in favour of case study analysis rather than a system of instructions.
The motto of this new system is that the student must not be flooded with alternative
solutions to a problem, which, most often, are little more than hypotheses in nature; but
should be equipped with tools suitable for describing the problem reasonably. Established
solutions, if any, should be presented only at an advanced stage. One can offer at least
two philosophical bases for this schema.
The first one is an ancient theory of methods renowned as the Socratic elenchus. Socrates
maintains that A man who does not know has in himself true opinions on a subject
without having knowledgeThis knowledge will not come from teaching but from
questioning. He will recover it for himself. 2 The true opinion cannot be called
knowledge unless it is articulate and retrievable. The function of education is to elicit
logical responses from a rational being. This is especially relevant for Economics, since
the bases of all economic analysis are only a few elementary principles, which, in turn,
are founded on no counterintuitive axiom, but plain common sense.
The second theory addresses a more practical aspect of the problem of instruction. An
instruction is like transference of consciousness from one body to another a continuum

with language as a medium. Propositions are perceptible expressions of thought and

thoughts are logical pictures of facts. What is thus encoded in language at one end must
be decoded at the other end. According to Wittgenstein, What a picture must have in
common with reality, in order to be able to depict it correctly or incorrectly in the
way it does, is its pictorial form. A picture can depict any reality whose form it has. A
picture cannot, however, depict its pictorial form: it displays it. 3 But precisely because a
picture is unable to depict its pictorial form we never know how the encryption takes
place. For, in order to know it, we must separate ourselves from it as the object under
scrutiny. Thus we also remain ever ignorant of the laws of decipherment and are unable
to control what is being read from the picture. These are like missing links at the two
ends of the chain.
To compensate for this shortcoming of language we must look beyond the syntactical
properties of words and sentences. Russell distinguished between what a sentence
expressed and what it indicated. He used the example of an object-word such as Fire!
to demonstrate how with the help of it the speaker could express his own state and at the
same time indicate an occurrence different from his state. Wittgenstein in his later works
maintained that the meaning of a word was not an object for which it stood, but its use in
the context of the language game. Russell wrote, The distinction between significant and
nonsensical strings of words compels us to recognize that a significant sentence has a
non-linguistic property namely significance which has nothing to do with truth or
falsehood, being more subjective. We may identify the significance of a sentence with
what it expresses, which is a state of the speaker. 4 It seems that what a system of
propositions cannot achieve an expression can, namely, bridge the gap between the giver
and receiver of instruction, by embodying the state of the speaker in the symbols used for
communication. To the extent that the examples, metaphors and analogies as presented
by the case studies help to simulate the context of a problem they succeed in enabling
the students to grasp a theory better than any cold mathematical proof does. Fictional
truths are probably closer to common sense than philosophical truths are.
Let us remember, at this point, that the objective of our endeavour is to present before the
students an investigation into the process of evolution of social institutions. To develop
such a structure, emphasis must not be placed on the intricacies of a particular branch of

social science, such as Economics; but on the methods of social science in general, with
suitable examples from Economics, Sociology or History. Different angles of the
analysis, and the scope of each discipline, should be demonstrated following a particular
generic example. As we have already noted, the success of teaching depends to a large
extent on the students ability to understand the context of a problem. For this reason we
must be careful in choosing the examples. Since there is a wide divergence between the
structures of the rural and urban societies in India, it is very difficult to achieve desirable
results with examples chosen from a particular sector. This problem can be solved by
employing literary style. Being born and brought up in a city, and having had little
intercourse with rural life except as a tourist, I did not find it hard to identify myself with
the pains and aspirations of the characters in Tarashankar Bandopadhyayas
Ganadevata 5 , for instance, and indeed learned more about the pattern of risk sharing in
agriculture, the interlocking behaviour in the rural credit markets or the structure of social
security network in a society midway through its transition from a non-market to a
market system than I could hope to learn from any textbook. Any art form, and especially
literary style, synthesizes different aspects of reality into an organic whole thereby giving
its structure an internal consistency, which has an appeal in itself. Aristotle observes,
Objects which in themselves we view with pain, we delight to contemplate when
reproduced with minute fidelity: such as the forms of the most ignoble animals
and of dead bodies. The cause of this again is that to learn gives the liveliest
pleasure, not only to philosophers but to men in general; whose capacity,
however, of learning is more limited. Thus the reason why men enjoy seeing
likeness is that in contemplating it they find themselves learning or inferring, and
saying perhaps, Ah, that is he. For if you happen not to have seen the original,
the pleasure will be due not to imitation as such, but to the execution, the coloring
or some such other cause. 6
This technique was recognized by the early peripatetic school and can be traced in the
usage of fables and folklores in our ancient epics and even in Kathamala and
Contents should also be such as can be identified by the learners to be a part of their
experience. In its purified or abstract form, no problem is more important than any other.

But there are certain aspects of life which form the immediate reality for a group of
people. Of the various features of underdevelopment, our country, and particularly, our
state, is characterized by extreme pressure of population on land, migration to and from
neighbouring states and countries and from rural areas to the urban centers, interest group
politics, a growing informal sector and a rapidly changing family structure and social
security system. On the other hand, our people are perhaps among only a few races in the
world who have had so much exposure to different cultures and civilizations. Many of
these issues have a two-way relationship to Economics. The orthodox economic theories
presume the existence of a set of social and political institutions, and concentrate on the
formulation of optimum development strategies. But the process of development itself
tends to transform some of the former institutions and this reverse feedback creates
additional complications in the analysis. Thus, development is often regarded as a
discipline whose central focus should be on the evolution of institutions and contracts and
the complexities arising thereof. It is distinct from the orthodox approach in that it admits
the possibility of inefficient and often inappropriate institutions. Every set of institutions
gives birth to a set of powerful interest groups. The extent to which these groups are able
to block changes in the institutional forms necessitated by new economic environments,
the inappropriate institutions remain in place. Marx sought to explain the determinants of
the superstructure in terms of underlying economic forces. Several alternative
explanations have appeared since then. 7
Conversely, the existing set of institutions delimits the scope of current economic
contracts and directly influences the values of several behavioural parameters of an
economic model. Contrary to the idea of a benevolent government, the interplay between
political institutions and utility maximizing individuals, parties and interest groups shape
the redistributive policies within a political set up. Incorporating the incentives and the
constraints of politicians in the model provides greater insight into the formation of
economic policies. It also enables one to have an understanding of the sensitivity of the
observed policy decisions on respective institutional forms, by studying the differences in
policies undertaken across political institutions. 8
The interaction between economic and social institutions is another crucial aspect in
understanding economic development. Demographic theories point out the importance of

economic motives in shaping reproductive decisions within a family. An institution like a

joint or extended family offers substitutes for economic contracts in the areas of old age
security and community welfare. Once the process of development gets under way, the
informal social contracts face competition from more formal economic institutions such
as market. In the recent past, globalization and enhanced labour mobility have forced
family to undergo rapid transition in several ways. The student should be apprised of
these problems.
Understanding institutions is also an essential prerequisite for the students introduction
to alternative theories of value a discipline that is usually neglected in the
undergraduate syllabus. It can be taught very effectively at the school level, since it does
not warrant the knowledge of complicated mathematical techniques.
There are longstanding debates among economists regarding the methodology of
economic sciences. The dominant trend in macroeconomic policy analysis and treatment
of multiple equilibria is a direct inheritance of the doctrine of rational expectations and
(non-cooperative) game theory. These tools, however, have been extremely
unsatisfactory in certain respects. They seek to explain observed, time-consistent
phenomena as equilibrium outcomes of well defined games. 9 But this ex post
rationalization of observed facts concedes inordinate importance to parameter values in
these models. Unlike models in natural sciences, where the validity of a law is a timetested truism, models of economic activities and their postulates are most often
hypothetical in nature with little predictive power. Under such circumstances, parameter
values are only of secondary importance. The oversimplification in theoretical modeling
often renders economic models tautological and an exercise in purely logical
propositions. Though it has its own beauty, the students should not be burdened with a
syllabus that presents such a narrow vista of the subject.


Russell (1950).

Plato (1956).

Wittgenstein (1961), 2.17 2.172.

Russell (1940), Ch- XIX.

Bandopadhyaya (1969).

Aristotle (1961), IV, 3 5.

For a detailed treatment of origin and transition of institutions refer to several works by Daron
Acemoglu. One representative example is Lecture Notes on Political Economy of Development
and Underdevelopment (Gaston Eyskens Lectures, Number 1, Leuven 2005). See References for

Persson and Tabellini (2000).

Ibid., Ch.-1.