Economics is a branch of knowledge concerned with production, consumption and transfer of wealth. This can also pass as a definition of common sense. So, why is it so difficult to understand economics, build a fair world and pass economically sound policies? My answer, we still do not understand economics.
To breakdown the complexities of economics, I am going to assume we have a mono-economy (only one product), and that product is also the currency - yams. We have a country of 180 million people that all produce yams. Every other need we have has to be paid with yams. The richest man is Alhaji Dangoyam. He has so many yam production farms that he can afford to pay for anything in yams (We can say he is worth Trillions of Yams). There are also large corporations that have been set up to produce yams in large quantities, they employ millions of people to work for them and pay them a percentage of the yams produced. But, they are only able to employ a fraction of the population. Another fraction own small farms producing yams just enough to meet their own daily needs plus a bit. In all of these, there is 100 million people left who barely produce any yams and are barely surviving. You'd say, why cant they just get a farm and produce their own yams to meet their own daily needs? Well, it is not that easy. First, you need to learn how to produce yams (education) and then you need yams(capital) to get a farm to produce yams. No one is going to teach you how to produce yams if you do not give them some yams first. Wow.
Then we have the Government. The Government produces ZERO yams but they take a share of everybody's yam production and distributes as they please (policies).
The big challenge remains how to solve the following problems.
1. If the government takes too much from those that produce yams (taxes), they risk losing them to other countries where they can produce more yams, keep more of their yams, and get more value for the share the government takes.
2. The 100 million starving people want the government to employ them or give them free yams. They are mad at the system, but the total yams that accrues to the government is just not enough to go round. They do not believe it.
3. A lot of the yams that accrues to the government are stolen by employees of the government for their own personal consumption. How do we stop this?
4. It has been proven that countries that produce more yams, generally have more yams to go round. How do we get the country to produce more yams?
As 2019 approaches, think of who can strategically solve the problems above. How do we get more productive to ensure we have enough yams to go round? How do we get more value for the yams we give to the government? How do we stop government employees from stealing our collective yams? How do we get more people to pay their fair share of yams due to the government? What do we do about the 100 million disadvantaged citizens? How do we teach them how to produce yams (education) and give them access to farms to produce yams (capital) ? Think of all these difficult questions and ask again. Why is it so difficult to understand economics?
This post was written by Olajide Ola for ToptenNG
