Coming soon: Economics for Business

It's official: I am excited! It has been ten years since my first book, Focus on Financial Management was published by Imperial College Press, so a new book is long overdue. On November 3rd my latest attempt at a very student-friendly book, Economics for Business, will be published by Kogan Page. I am led to believe that my University will be hosting a "book launch" at some stage.

Writing a textbook for students is a venture fraught with immense difficulty. The writing itself can be tedious and lonely, in some cases made all the more frustrating by reviewers' and editors' comments with which you disagree. In my case, the editors at Kogan Page have been little short of incredibly supportive and encouraging, making this a very enjoyable journey. However, probably the biggest difficulty is that the students for whom I wrote this book (and my previous book) are not necessarily going to discover it and buy it. A student tends to buy a book because it has been recommended (or, more often, required) by their University instructor for a particular course. Thus, while I have made every effort to make my book immensely readable, engaging and student-friendly, it will also need to attract the interest of lecturers if it is to sell.

Far too many books with the same of similar title appear to be texts on Economics with a nod to Business. There are often business examples, but more usually as bolt-ons rather than integrated into the underlying theory. I hope this is a pitfall I have been able to avoid. I hope you will agree.

While I have enjoyed the process of writing this book over the past two years I am also pleased to see the process finally come to a fruitful end. I hope that you will purchase a copy of it: at £29.99 it is very much cheaper than many University-level texts, written especially for students. It has been reviewed by some of my own students to ensure that it achieves what I set out to achieve. I hope you will agree. When the "launch" is announced I hope you will be able to attend. I will be happy to sign your copy should you desire!

You can pre-order a copy of Economics for Business directly from Kogan Page (www.koganpage.com/product/economics-for-business-9780749470197) or Amazon (www.amazon.co.uk/Economics-Business-Decision-Complex-Macroeconomy/dp/0749470194/ref=sr_1_1?ie=UTF8&qid=1445522045&sr=8-1&keywords=ivan+k.+cohen). It is also available at Book Depository (www.bookdepository.com/Economics-for-Business-Ivan-Cohen/9780749470197) and Bokus.com (www.bokus.com/bok/9780749470197/economics-for-business/) as well as Barnes & Noble (www.barnesandnoble.com/w/economics-for-business-ivan-k-cohen/1122049878?ean=9780749470197).

We are all ... or are we?

Throughout modern history commentators from various sources have resorted to declaring a particular viewpoint as the mainstream orthodoxy by suggesting that "we are all ....". Thus, in 1888, William Vernon Harcourt, a British politician (Liberal party) declared "we are all socialists now". Looking back 130 years, this now appears as ludicrous hyperbole. Even when made with genuine earnestness at the time, such declarations will almost always be proven to be incorrect by the fullness of time.


The phrase "we are all Keynesians now" was originally attributed by Time (1965) to arch-Monetarist and Nobel Laureate, Milton Friedman. A renowned anti-Keynesian, Friedman tried to clarify his stance in a 1966 letter: "In one sense, we are all Keynesians now; in another, nobody is any longer a Keynesian." What Friedman intended to convey by this statement is difficult to determine, but we know for certain that he was no great proponent for Keynesian economics; to the contrary. It is reasonable to suggest that Friedman was making the point that Keynesian economics had become the mainstream orthodoxy of the 1960s, to the detriment of other perspectives. In many ways this could be seen as a variant of Goodhart's Law: in this case, when a particular economic doctrine becomes mainstream, the economy ceases to operate as that doctrine suggests, thereby making its policy prescriptions valid.

The same phrase later became associated with (and then attributed to) US President Richard M. Nixon. A Republican, with natural tendencies towards less government intervention, Nixon pragmatically found himself embracing orthodox Keynesian interventionist policies during the early 1970s. In 1971, after removing the United States from the international gold standard, Nixon was quoted: "I am now a Keynesian in economics".

In 2002, UK Labour politician Peter Mandelson declared in an article in The Times that "we are all Thatcherites now", suggesting that acceptance of the policies of Margaret Thatcher was now rife, even among the other political parties in the UK. That these other parties had strongly fought and contested Thatcherite policies at the time of their instigation was now a matter of history.

Following the financial crisis of 2007, the phrase "we are all Keynesians now" gained new life, when economists called for massive investment in infrastructure and job creation as a means of economic stimulation. It is a matter of historical record that many governments opted for the exact reverse, bringing in 'austerity' policies.

Following the Iowa cucuses in 2012, Republican presidential candidate, Ron Paul offered a different perspective: 'I'm waiting for the day we can say, 'We're all Austrians now.'" Austrian economics has long been side-lined by mainstream perspectives. However, it takes the view that markets are better placed than governments to deal with economic issues. They argue that less government intervention is better, a laissez faire view of the world which is in stark contrast to Keynesian economics. However, while the right wing of the US political spectrum advocate less government, their aims tend to be more vocal than concrete. For government to vote to remove itself from economic intervention would seem tantamount to the proverbial turkeys voting for Xmas!

So are we all anything now? After all, before the publication of his General Theory.... in 1936 Keynes was as much as "classical economist" as anyone else. By 1936 he had changed his views, although he never became a Keynesian (in the same way as Marx never became a Marxist). As he was fond of noting: "When the Facts Change, I Change My Mind. What Do You Do, Sir?"

I would argue that economic perspectives are like popular music. In the 1950s and 1960s all popular music was mainstream, with few diverse genres. This was also true for economics. In the 21st century "pop music" is simply one genre among many others which make up popular music. This includes reggae, country, hip hop, house, trance, and many others. It is the same with economics: nowadays almost anything goes. Economists have increasingly gone tribal, with individual economists often having affiliations with more than one school. And where do I fit? Like Keynes, when the facts change I change my mind.

The importance of Higher Education

For my father's generation education was they key to everything: success, happiness, social mobility, prosperity. Brought up during the years of the Great Depression and World War II, his generation suffered the kind of deprivation which most of us can only imagine. Yet, alongside that deprivation, others continued to thrive.

During my youth my parents inculcated in me the importance of getting as good an education as possible. Without it I would have ended up as factory fodder, with low income and virtually zero job satisfaction (whatever that is). With the best education the British welfare state could provide I have managed to avoid deprivation and live in a fairly affluent manner, my wife and I providing for our kids at a level unimaginable when I was their age. And without the loss of any job satisfaction.

As an economist I genuinely believe that education is the key to the future. It may not guarantee happiness, but it can improve a person's chances of success, social mobility and prosperity. At a macroeconomic level it is the primary generator of economic growth in the medium- and long-term, especially at the level of Higher Education (HE). And yet, it appears that post-secondary education in the UK is under attack, and in decline on global relative league tables. That attack comes from several fronts, of which the most important is the lack of vision among UK governments for nearly a decade.

For HE to succeed it needs to be able to attract the best potential, regardless of their current position on the socio-economic ladder. For this to occur, the funding of HE must not act as a hindrance to access; currently it does. To not invest in the future minds of young people is not only economically damaging, it is also morally abhorrent.

At the time I entered University, UK HE was based on the Robbins principle: that HE "should be available to all who were qualified for them by ability and attainment". It was recognised that HE was an investment, not only in the individual, but also by the state in the future of the state: a social investment. Thus, if you were good enough the state paid your fees and provided an income-based maintenance grant.

At that time less than 10% of the population went into HE, a figure far exceeded today. And things are more complicated by the legal requirement to treat all EU students equally. So how might we return to a system similar to that which gave me a "leg up" in society? One that promotes HE? I believe the principle is simple, and not so very different from that which prevailed in the early 1970s. Back then, to qualify for payments of fees and a grant you had to be UK-resident for three or more years. I would argue that a similar system in place today would ensure that good minds from poorer backgrounds would not be deterred from entering HE, and also be primarily available for UK students without breaching EU regulations, thus it would not only be affordable, but the future benefits to the UK would significantly outweigh the costs to the public purse (i.e. the taxpayer).

It is time that we demanded a longer-term perspective, especially on education, from the governments we elect in this country. To do anything else is an economic and moral abdication of our duty to future generations.

(also available on LinkedIn: https://www.linkedin.com/pulse/article/importance-higher-education-ivan-k-%25E5%258F%25AF%25E6%25B1%2597-cohen/edit)