You are an everyday economist | Frances Donald | TEDxToronto

Summary

This talk challenges the stereotype of economics as a dry and complicated field, emphasizing its accessibility and relevance to everyone. The speaker, an economist and millennial mom, debunks misconceptions and explains fundamental concepts like supply and demand, using relatable examples. She argues that economics is about making decisions with limited resources and encourages viewers to engage with intimidating subjects, highlighting subfields like environmental and feminist economics that aim to improve societal issues.

Takeaways

• 😀 Economics is often misunderstood as being solely about money, but it's more accurately described as the study of how to allocate scarce resources.
• 👩‍🏫 The speaker, a chief economist and millennial mom, aims to make economics accessible and engaging for everyone, challenging the stereotype of the field.
• 🎓 Economics doesn't require a PhD or a beard; it's about understanding basic concepts like supply and demand, which even non-economists can grasp.
• 👟 The example of limited-edition sneakers illustrates the concept of supply and demand, showing how scarcity and desire can drive up prices.
• 🛒 Everyday choices, like comparing prices online, are economic decisions that demonstrate an understanding of supply and demand.
• 📈 The potential growth rate of an economy is tied to labor force participation and productivity, which can be understood through simple, relatable examples.
• 🍔 By relating economic concepts to familiar scenarios, like a burger joint's output, complex ideas become more digestible.
• 🌐 Economics encompasses a wide range of subfields, including environmental, stratification, and feminist economics, which aim to address societal issues.
• 💪 Economists can be agents of change, using their understanding of economic systems to advocate for improvements and a more sustainable future.
• 🤔 The speaker encourages viewers to engage with intimidating subjects, ask questions, and seek out accessible explanations to demystify complex topics.

Q & A

What is the common misconception about economics mentioned in the script?

The common misconception is that economics is strictly about money, but it is actually the study of the allocation of scarce resources in a given constraint.

What does the speaker suggest is a better definition of economics?

A better definition of economics is that it's the study of the allocation of scarce resources in a given constraint, which is more universal and applicable to various aspects of life.

Why does the speaker believe that economics is accessible to everyone?

The speaker believes economics is accessible to everyone because it involves making decisions about limited resources, which everyone does in their daily life, even if they don't realize it.

What is the fundamental concept in economics that the speaker uses to illustrate the point that economics is not complicated?

The speaker uses the concept of supply and demand to illustrate that economics is not complicated, as it is a basic idea that most people understand even without a formal education in economics.

How does the speaker use the example of sneakers to explain the concept of supply and demand?

The speaker uses the example of limited edition sneakers, where the supply is low and the demand is high, leading to higher prices, to explain the concept of supply and demand.

What is the potential growth rate of an economy according to the script?

The potential growth rate of an economy is the economy's ability to grow, measured as the change in labor force participation rate plus the change in productivity.

Why have economists become concerned about the slowing of economies?

Economists are concerned because economies have been growing at a slower rate than in the past, which could indicate a loss of potential growth and prosperity.

What does the speaker suggest is necessary for economies to live up to and grow their potential?

The speaker suggests that having big conversations about affordable child care, public transportation, competitiveness, and retooling the economy towards sustainability and inclusivity is necessary for economies to live up to and grow their potential.

How does the speaker describe the role of economists in society?

The speaker describes economists as change makers who can contribute to improving the world through various subfields of economics, such as environmental economics, stratification economics, and feminist economics.

What advice does the speaker give to people who encounter daunting subjects like economics?

The speaker advises people to not shut off or avoid daunting subjects but to engage with them, ask questions, and seek out resources that make these topics accessible.

What is the speaker's final message about the importance of understanding and engaging with economics?

The speaker's final message is that understanding economics is critical in the current historical moment and that everyone has the tools and confidence to engage with and learn about economics, even if it seems hard at first.

Outlines

00:00

🌐 Economics Made Accessible

The speaker, an economist and millennial mom, challenges the common perception that economics is a dry, complicated field. She emphasizes that economics is about the allocation of scarce resources within constraints, not just about money. Using the example of supply and demand, she illustrates how this fundamental economic concept is relatable and understandable to everyone, even without a formal education in economics. She also highlights how everyday decisions, such as comparing prices online, are economic in nature, and how even during the pandemic, people demonstrated an understanding of economic principles when they were willing to pay higher prices for scarce goods like toilet paper.

05:01

📈 Understanding Economic Growth and Potential

The speaker delves into the concept of economic growth, explaining the potential growth rate of an economy as the sum of changes in labor force participation and productivity. She simplifies this economic measure by likening it to a burger joint's output, dependent on the number of workers and their efficiency. She then discusses the importance of recognizing and fulfilling an economy's potential, drawing a personal anecdote about her mother's different expectations for her and her brother's potential. The speaker advocates for broader conversations on social issues like childcare, public transportation, and economic reskilling to enhance sustainable and inclusive growth.

10:02

🛠 Economics as a Tool for Change

In the final paragraph, the speaker reflects on her initial doubts about pursuing economics due to its perceived detachment from societal issues. However, she now sees economists as agents of change, capable of influencing the world for the better. She mentions various subfields of economics, such as environmental, stratification, and feminist economics, that focus on improving societal conditions. The speaker encourages the audience to embrace challenging subjects, to ask questions, and to seek understanding rather than avoiding complexity. She concludes by expressing confidence in the audience's ability to tackle difficult topics, given their demonstrated comprehension of economics in a short time.

Keywords

💡Economics

Economics is the social science that studies the production, distribution, and consumption of goods and services. In the video, it is redefined as the study of the allocation of scarce resources in a given constraint, emphasizing its relevance to everyday life beyond just money. The video aims to demystify economics, showing it as accessible and integral to understanding various life decisions.

💡Scarce Resources

Scarce resources refer to limited supplies of goods, services, or assets that are not available in quantities sufficient to satisfy all wants and needs. The video uses this concept to illustrate the fundamental economic principle that scarcity necessitates choices and prioritization, as seen in the example of limited edition sneakers having high demand and thus high prices.

💡Supply and Demand

Supply and demand is a fundamental economic model that describes how the quantity of a good or service that producers are willing to supply meets the quantity that consumers are willing to purchase. The video explains this concept by using the example of sneakers, where low supply and high demand lead to higher prices, and vice versa.

💡Potential Growth Rate

Potential growth rate is an estimate of the maximum rate of economic growth that an economy can achieve without causing inflation. The video simplifies this concept by likening it to a burger joint's ability to make burgers, dependent on the number of workers (labor force) and how quickly they can produce each burger (productivity).

💡Productivity

Productivity refers to the efficiency with which an individual, team, or system produces goods or services. In the video, it is used in the context of the potential growth rate of an economy, where higher productivity means more output per worker, contributing to economic growth.

💡Labor Force Participation Rate

The labor force participation rate is the percentage of the working-age population that is employed or actively looking for work. The video uses this metric to explain how an increase in the number of people working can contribute to an economy's growth potential.

💡Economic Growth

Economic growth is the increase in the production of goods and services in an economy over a period of time. The video discusses the concern of slowing economic growth rates and how understanding economic concepts can help individuals and societies to address this issue.

💡Sustainable

Sustainable refers to an approach that meets the needs of the present without compromising the ability of future generations to meet their own needs. The video suggests that sustainable economic practices are part of realizing an economy's potential and ensuring long-term growth.

💡Inclusive

Inclusive describes an approach that ensures the participation and consideration of all members of a society, regardless of factors such as race, gender, or income. The video argues for an inclusive economy that provides opportunities for everyone and addresses inequalities.

💡Environmental Economics

Environmental economics is a branch of economics that studies the environmental consequences of production and consumption activities. The video mentions this subfield as an example of how economics can be used to address global issues like preserving the planet.

💡Feminist Economics

Feminist economics is an interdisciplinary field that critically examines economic phenomena from a feminist perspective. The video highlights this subfield to show how economics can be used to study and address gender disparities, such as the male-female wage gap.

Highlights

The speaker is an economist challenging the stereotype of the profession, emphasizing its accessibility to everyone.

Economics is often misunderstood as being solely about money, but it's more about the allocation of scarce resources.

The speaker introduces a more relatable definition of economics as the study of what we do with limited supply under given constraints.

Supply and demand is a fundamental economic concept that can be understood without a formal education in economics.

An example of everyday economics is the high prices of rare sneakers due to low supply and high demand.

The speaker's husband, an artist, demonstrates that non-economists also make economic decisions in their daily lives.

Economic decisions can be subtle, like checking prices online before purchasing, or more obvious, like panic buying during a crisis.

The concept of potential growth rate in economics is explained using the analogy of a burger joint's production capacity.

Economists are concerned about the slowing growth rates of economies, which is a departure from historical norms.

The speaker's mother used different expectations of potential to motivate her children, illustrating the concept of potential in a personal context.

The speaker advocates for conversations about societal improvements to increase economic potential, such as affordable childcare and public transportation.

Economists can be agents of change, challenging the flawed systems and advocating for a better world.

There are subfields of economics dedicated to social issues like environmental preservation, income inequality, and gender wage gaps.

The speaker encourages the audience to engage with intimidating subjects and not to be deterred by perceived intellectual superiority.

The talk concludes with a call to action for the audience to embrace difficult topics and to seek understanding rather than avoidance.

The speaker expresses confidence in the audience's ability to learn and understand complex subjects like economics.

Transcripts

[Music]

hi

i'm an economist and this is a talk

about economics

but wait don't turn off don't press the

next button

hear me out look i get it

i know that when the topic of economics

comes up most people

shut off and i'm pretty sure

i'm not what you picture when you think

about a chief economist at a major

financial institution

you know a taylor swift loving

millennial mom to a mischievous toddler

but that's not your fault we're taught

that

economics is a dry complicated and

sometimes heartless field

i'm here to tell you that actually

economics is accessible to each and

every one of us

and if you open up to the field

you might discover something even more

powerful within yourself

let's start with the biggest

misconception about economics

that it's strictly about money

even if you look up the definition of

economics it'll tell you it's about the

production

consumption and transfer of wealth

boring and kind of wrong

a better definition of economics the one

i've always subscribed to

is that it's the study of the allocation

of scarce resources in a given

constraint

okay also a little boring but so much

more

universal basically economics is the

study of

what we do with things that we have in

limited supply

and when we're given rules around how to

use them

sure money is one thing that most of us

don't have an unlimited amount of but

what about the planet or

the scarcest resource of all time

economics studies all of these things

and more

but economics is complicated right

don't you need a phd maybe a beard a

library with leather-bound books

no let me show you

let's break down the most fundamental

concept in economics

supply and demand the idea that when

supply is low

and demand is high prices rise

and vice versa okay you're picturing

your econ 101 textbooks your stomach

is dropping but i bet you understand the

concept of supply and demand

just as well as any professionally

working economist

you know who's not a professionally

working economist

my husband he's pretty much the farthest

thing from it he's a painter

an artist and he's also

a sneaker head now to me a sneaker

is a sneaker but to him the world of

sneakers is a complex web of limited

edition drops and

competition for the most coveted pairs

he'll be the first to tell you that if a

very rare sneaker is released

very little supply but everybody wants

them

lots of demand well those sneakers could

be worth anywhere from

300 to a thousand dollars

but a regular old pair of tennis shoes

available at any mall

tons of supply little demand well those

fifty sixty dollars max

see my husband the artist well

he's also an everyday economist

and so are you you make

complex economic decisions every day

sometimes they're pretty subtle like

have you ever gone to a store

and pulled a product off the shelf and

then thought you know what i'll just

check on amazon to see if it's cheaper

and sometimes large disruptive

forces make those economic choices more

obvious to us

i remember in the depths of the pandemic

seeing people

lined up down the street to purchase

coveted

toilet paper at twice the price

coming out of the stores feeling

victorious

these people understood very little

supply

tons of demand equals very

expensive toilet paper

here's another idea that's central to

economics that

seems complicated but is actually pretty

straightforward

so lately economists have become

concerned that

our economies are slowing you know back

in the 1970s and 80s north american

economies could easily grow at three

four or five percent and those were

considered good numbers

associated with prosperity lately

our economies have been growing at two

percent

or below it seems we've just

lost the ability to grow like we used to

we call an economy's ability to grow its

potential growth rate and economists

measure

it as the change in labor force

participation rate plus the change in

productivity

okay i'm already bored too so you know

what let's just throw out the formulas

and from now on when you think of an

economy i want you to picture

your favorite burger joint yes

and the growth rate of that burger joint

is really simply

how many burgers can it make that's

always going to be a function of two

things

first how many people work behind the

counter

your labor force and second how

fast can each one make a hamburger your

productivity

if you followed this far boom you

understand the concept of an economy

and its potential growth rate and here

comes the fun part

once we know what our potential is the

next step

is to live up to it both as individuals

but also in our economies at large

you know i have this memory of coming

home from school one day with a c minus

on my math test

and my mom taking away my tv privileges

for the day

but then the next day my brother came

home with a c minus on his history test

and

we all went to pizza hut to celebrate i

remember asking my mom what's going on

she said well sweetheart i have

different estimates of your potential

see my mom at the time a stay-at-home

parent though she

easily could have been ceo of a

multinational if she wanted to be

she was also an everyday economist

how do we make sure that our economies

are not just

living up to their potential but growing

their potential over time

well in my mind we need to have some

pretty big conversations about

affordable and accessible child care

public transportation

competitiveness and even reskilling

and retooling our economy towards a more

sustainable

and inclusive future that's our real

economic potential

sustainable inclusive not typically

words associated with the dry dreary

world of economics

i remember being a 17 year old who

questioned

whether economics was the right choice

for me

if i became an economist would i be

complicit

in a system that in many ways is deeply

flawed

i even remember an early economics

teacher telling me economics is a

positive discipline not a normative

discipline

or put differently economics just

studies the way the world

is not how it should be

but i am so happy that 17 year old me

took that leap because now i know

economists can be change makers

and just as all architects don't believe

that all buildings are beautiful or

all artists don't love every piece of

art

not all economists agree that the

economy is as it should be or even agree

on the best ways

to fix it there are entire subfields of

economics devoted to improving the way

the world works

there's environmental economics which

seeks to preserve our planet

stratification economics which studies

income and racial inequalities

feminist economics which looks into

issues like the male female wage gap

see not only is economic something that

we can all

understand there is a place for all of

us

in it so

i haven't been entirely upfront

this is not just a talk about economics

this is a talk about facing subjects

that seem

daunting like economics head

on about not turning off or pressing

next

this is a talk about knowing that no

subject

no field no title has intellectual

superiority

over you next time you come against

something that

feels complicated do like you did today

don't shut off engage if somebody uses a

term

you don't understand bravely ask them to

put it into terms that you do

find people that make intimidating

topics accessible to you

whether it's your neighbor who loves to

talk about accounting or

your uncle the mechanic or bill nye the

science guy

ask questions and don't hold back just

because you think you should know

something that you don't

chances are you'll probably catch on

pretty quick

this is a critical moment in our history

there will be more critical moments

ahead it's going to be hard

but if you can learn economics

in 10 minutes you can do hard

you have all of the tools and now

i hope the confidence that you need

you