I’ve never had any doubts about some of the basic microeconomic analysis...

Leading politicians are ignoring 

basic economic lessons

Len Shackleton

I started studying economics fifty years ago last month, unbelievably (OK, I was a precocious child). Over the decades I have had many doubts about my chosen discipline. Were its prescriptions too uncaring, its view of human behaviour too narrow? For a time I was seduced by the insidious promise of modern macroeconomics, both in its Keynesian versions and later rational expectations framework, although I struggled to understand dynamic stochastic general equilibrium models. As for the world of the econometricians - the Gauss-Markov Theorem, Kalman Filters and all that stuff – I’m afraid I demur.

But I’ve never had any doubts about some of the basic microeconomic analysis I learnt from dear old Mr Fell at the beginning of my studies. That price controls increase the quantity of a good demanded and reduce its supply, creating a shortage; that minimum wages benefit some workers but penalise others by reducing job availability; that rent controls make it harder for people to find housing. Oh, and there’s no such thing as a free lunch.

Sadly, these lessons do not seem to have been learned by our current generation of politicians despite the fact that several of them purport to have studied a little economics while practising point-scoring at the Oxbridge Unions and drinking large amounts of champagne.

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