Why Economics is Important: Importance of Economics in Our Daily Life

The reason why economics is important is because without the study of economics it has a detrimental impact on humanity. The importance of economics in our daily life helps us to improve the standard of living of the masses.Show more

An argument I recently had on Facebook shows the gross misunderstanding of the study of economics, one must understand the importance of economics in our daily life because then they will comprehend why you cannot place 'humanity' before economics. There are many examples of disastrous consequences that have occurred as a result of ignorance of the subject of economics, such given policies had detrimental effects on society, many were so disastrous that it led millions to their death.

As I explain on why economics is important, I touch upon the difference between 'goals' and the 'intentions' that people may have, to that of the consequences people may face. Economics is a study of our place on this earth with scarce resources and the study of economics is a study of trade offs. I mentioned about profits and losses in part 1 on the economic calculation problem, but what I didn't touch upon was the 'incentives' that drive from profits and how prices help us to ration what is scarce in a society that's demands far exceed what is available to them. Scarcity, much like profits are is grossly misunderstood.

The examples I give in this video will help you better understand the importance of economics in our daily life, to explain of the disastrous consequences we face if one believes they can simply ignore the study of economics or even argue with what history has already proven from said given policies. The examples I give help clarify the relationship between consumer behavioural patterns to the impact it has when a price ceiling is imposed creating a 'price shortage'.

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