Network for Economic Education

How to Teach “Efficiency” to Middle/High School Students

It is rather difficult to teach such abstract concepts as "efficiency" and "optimality" to middle/high school students. The following is an idea of teaching these concepts relatively easily to students

1) Economics is a subject to "economize," that is to eliminate or minimize "waste" in our life as well as in our society.
2) Then, what is "waste"? There is some visible waste such as stockpiles of unsold goods and involuntary unemployment.
3) However, there is much more "invisible" than visible waste, such as mismatch between goods and taste and also between skills and jobs.
4) The economy is said to be "efficient," if there is no such waste in the economy. But how such an efficient economy can be realized?
5) Efficiency could be realized if there were the Almighty God who knows everything including people's taste and skills.
6) In reality, communist dictators tried to be the Almighty God, but they failed since they could not possibly know each and every individual's taste or skills. Then, is there any way the economy can achieve efficiency? The answer is "yes, there is a way."
7) That is through the free market system, in which individuals can buy goods and services in the free market, according to their taste, subject to their income, and earn income by supplying labor in the free market. The free market system can achieve efficiency as if individuals were led by the God's "invisible hand."
8) It is needless to say that in reality markets are not so free and, as a result, there is some waste existing in the economy. We should study under what conditions efficiency can be achieved or cannot be achieved, and how waste can be eliminated if it exists in the market economy.

This idea came out of the exchange of opinions in the "Open Discussion Room" (http://seadog.gifu.shotoku.ac.jp/econ-edu/gate/) on the homepage of the Network for Economic Education (http://www.econ-edu.net/).

For a Japanese version of this report, see the following:
http://blog.so-net.ne.jp/miyao-blog/archive/20070415

Time: 01:13 PM

NEE ANNUAL MEETINGS: MARCH 2007

Date: March 17 (Sat), 2007
Place: Economics Department, Nihon University, Tokyo

After brief opening remarks by Prof. Soichi Shinohara (Head, NEE) and Prof. Harunobu Onagi (Nihon Univ.), a keynote speech was given by Prof. Shinohara, who emphasized the importance of "messages" in economic education for the purpose of educating pupils to be good citizens in modern society. After the speech, a Q&A session took place regarding how to choose appropriate topics for economic education.
Then, the general meeting was held to approve the budget and activity reports as well as the revised fiscal year cycle (9/1-8/31) and the date for the next annual meetings (9/15/2007).
In the first afternoon session, Mr. Saegusa (Meguro Chuo Middle School) gave an experimental class by using a revised version of “Beef Bowl Shop Simulation” with more factors and flexibility in decision-making.
In the second afternoon session, a panel discussion was held, led by Prof. Kurihara (Shinshu Univ.) as the coordinator, with three panelists, Mr. Kikimaru (Yokohama-ichiritsu Ichiba Middle School), Ms. Masuno (Otsuma Middle-High School) and Mr. Hotate (Tokodaki-fuzoku Kagaku-gijutsu High School), who explained about their approaches and materials to attract pupils’ attention to such economic topics as corporate stocks, income distribution, industry and corporate management, etc. . Then, Prof. Otake (Osaka Univ.), as the commentator, pointed out that some more ideas may be needed to teach pupils about social implications of the topics and episodes that are taken up in class.
Then, a lively discussion followed, and continued at the party in the reception room.
Reference:
For a Japanese summary and some pictures, see:
http://blog.so-net.ne.jp/miyao-blog/archive/20070318

Time: 12:53 PM