Intro to economics   no comments

Posted at 4:45 pm in Economics

Having initially planned to research Economics and Sociology, I have now decided to change tack a little bit. I’ve now decided to look at Economics and Philosophy. I saw the first option as a fairly safe bet, and after hearing some of the adventurous plans of the rest of the group, not least of which Rob’s venture in to Oceanography and complex systems (!?), I thought I would push the boat out and dip in to Philosophy.

I’ve started my reading with two introductory Economics textbooks. One aimed at A-level students and one aimed at undergraduate students. This has worked really well so far as it has allowed me to gain a more shallow but wide overview from the A-level textbook, and when I’ve found a topic that I want to delve deeper in to I can look it up in the more detailed undergraduate textbook.  Fortunately the contents page of the two textbooks are almost identical, both covering the same topics just in differing levels of detail.

So far I have learnt that Economics is split in to two sections, micro and macro Economics. Microeconomics is the study of economic decisions made by particular individuals and businesses, e.g. whether buying a piece of new tractor is worth the investment for a farm. Macroeconomics is the study of the economy and the whole and focuses on economic decisions made by governments, for example asking questions like ‘will investment in education now mean the nation will have a more skilled workforce in 20 years time?’.  These two approaches seem separate but are actually interdependent, with many issues overlapping; economic decisions made by governments effect small businesses, and how small businesses perform effect the government’s decision making. Effectively microeconomics takes a bottom up approach to studying the economy whereas macroeconomics takes a top down approach.

The web issue that I will focus on is digital piracy. I’m not sure at this point whether I will look at this generally on all types of digital content or pick a media to focus on. I’m leaning towards focusing purely on music piracy. Demand curves described by the textbook speak about how as the price of a song drops, the buyer will purchase more songs. A rise in price will always mean a drop in demand and a fall in price will always cause an increase in demand. However the relationship between demand and price is not linear becuase willingness to buy more of a product drops as the number of purchases increases, this leads to what is known as effective demand. At first glance this seems like a theory that can be applied to the change in how music has become available for people to access either more cheaply or free (an economic view wouldn’t take in to account that the free option is illegal, it changes demand none the less), which may help explain the recent decline in the music industry.

In the following week I will start reading about Philosophy, the idea being to get a broad understanding of how philosophers approach problems, and then with a view to look at how moral philosophy can apply to illegally downloading music on the internet.

Written by William Lawrence on October 15th, 2012

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