Markets for Managers: A Managerial Economics Primer

Introduction

‘Managers can't just employ economists, they must become economists.’

—Shlomo Maital¹

Imagine that it is 1910 and you are presented with the following list of problems:²

1. To build and maintain roads adequate for use of conveyances, their operators and passengers.
2. To transport physically a person from Manchester to Washington DC in around 8 hours.
3. To convey instantly the visual replica of an action, such as a football match, to devices that people can fit in their pocket.
4. To find a way for women to be able to have sex without having children, or to have children without having sex.
5. To increase the average span of life by 30 years.

Put in this way, doesn't the first item seem easiest? And indeed this is the one that governments were committed to achieving. But with dubious success. In comparison, as John Sparks said, ‘the other problems would have seemed fantastic and quite likely would have been rejected as the figments of someone's wild imagination.’ And yet all of those have been accomplished. We barely give them a second thought.

This isn't to ignore the role that government plays in the medical and engineering achievements of modernity, but it is telling that the greatest achievements tend to stem from the creativity and tenacity of free individuals. Not from central planning, but from decentralised experimentation. This book will provide the economic ammunition for the argument that great things happen when people are free to try. Managerial Economics helps ...