Literacy is commonly perceived as being able to read and write and that is an incredibly important skill for anyone’s success. But there are many variations on literacy that enable individuals and societies to progress and grow. One area of utmost importance is economic literacy. Notice, I said “economic” and not business, financial, or other subdisciplines of economics. Literacy in business, finance, marketing, management, and a multitude of other areas is important, but a basic understanding of economics is foundational to understanding most decisions regarding the allocation of scarce resources (a common definition of economics).
One of the burdens of adulthood is being responsible for your economic well-being. Often this involves multiple individuals (families) and usually culminates in community, organizational, and governmental decisions. As simple an equation as Profit = Revenue – Costs has significant and universal ramifications for individuals, families, businesses, and communities. Even non-profit organizations, such as churches and museums, are constantly faced with this stark reality. But this equation has its roots in fundamental economic principles regarding consumers, businesses, and the choices they constantly make.
We know that literacy is best addressed when a person is young when they are usually eager to learn. This is why we have early reading programs and pre-school programs for children. Economics tells us that these programs are one of society’s best investments and the return is high.
The good news here in Mississippi is that economic literacy is not an afterthought and has been the primary focus of the Mississippi Counsel on Economic Education (MSCEE)) for over 17 years. MSCEE is one of 26 state partners of the Council on Economic Education (CEE), the national organization whose mission is “ to equip K-12 students with the tools and knowledge of personal finance and economics so that they can make better decisions for themselves, their families, and their communities.” One of the main programs sponsored by the MSCEE is the Master Teacher of Economics (MTE) certification program where teachers progress through a series of lessons with the intent of learning basic economic principles and applications to use in the K-12 classrooms. Over 700 Mississippi teachers have become MTEs and are better prepared to teach economics, which a required course for all Mississippi high school students.
In addition to the MTE program, MSCEE has similar teacher training programs for entrepreneurship (MTEN) and personal finance (MTPF). Student competitions include essay, stock market trading, and economic and personal finance challenges.
Each of us are confronted daily with economic decisions. Some have individual consequences, and some have local, state, and national significance. A fundamental understanding and application of economic principles can guide us to make profitable decisions, both personally and as a society. It does not matter what we are discussing, the equation, P=R-C, is a certainty, like gravity. Even with something as ubiquitous as government, at least on the state level, the equation holds. Thus, if a budget is going to be balanced, (P=0), revenue must equal costs. To decrease revenues in the face of rising or stable costs is a risky decision and not sustainable.
Steve Turner is a professor of Agricultural Economics at Mississippi State University and a board member of the Mississippi Council on Economic Education.
