This course equips students with an understanding of how useful economics is for energy professionals. The Micro part of the course covers market design and the interpretation of price information, and relates this to the challenges posed by disruptive technologies. The Macro part looks at the changing nature of the energy industry, including new technologies, sustainability objectives, and geopolitical implications. The course presents this material in an integrated way and challenges students to become effective problem solvers in both individual and team based settings.
This course provides an overview of core economic concepts and how they relate to senior executive management. Particular focus will be placed on the theory and practice of internal markets and how organisations have harnessed the knowledge and incentives provided by market mechanisms. Group work will focus on an analysis and assessment of the macro context for a relevant country, looking at monetary and fiscal policy as well as a broader set of social and environmental indicators.
60% Final exam (online) – the best way to revise for the exam is the quizzes used during the course, such as Managerial Insights, India, and Macro trends.
Course handouts: will be made available during the course
Pre class activities
Please read all of the information below carefully in order to prepare for the course. The textbook references are background materials and can be read anytime. The required materials should be read or watched in advance. At the end of Day 1 I will be referring to the 2016 film ‘Arrival’. Here’s a trailer. If you’ve not already seen it, I suggest familiarising yourself with the plot (spoiler alert). Or better still, watch it!
The textbook is Economics: A Complete Guide for Business by Anthony J. Evans (2020). I wrote it specifically for this course and all students are advised to read it in conjunction with the lectures.
There are plenty of other good textbooks on the market. I also recommend Managerial Economics by Luke M. Froeb, Brian T. McCann, Michael R. Ward and Mikhael Shor (Thomson Southwestern 3rd edition, 2013) and A Concise Guide to Macroeconomics by David Moss (Harvard Business School Press, 2007).
“I, Pencil” (Leonard Read, 1958, Foundation for Economic Education)
“What is Seen and What is Not Seen” (Frederic Bastiat, 1850, Paris: Guillaumin. This version taken from The Bastiat Collection, 2nd Ed., Mises Institute, 2007, pp. 1-11 only)
Here is a PDF copy of the reading pack which should be read:
Note: Sessions marked with an asterix (*) have a lecture handout available in advance, which can be downloaded. Cases marked with a pound sign (£) are available through the Programme Office. Follow the + links for additional resources.
There are widespread concerns that social and political divisions are being exacerbated by information technology, and that this is having a profound impact on the capabilities and quality of both global and local institutions. In a similar way to how the advent of the printing press prompted the rise of democracy and the nation state, perhaps digital transformation is contributing to a similar disruption in governance.
Such trends are particularly relevant in regimes where statehood was not an internal process, and was adopted either through colonial or international activity. Rising populism and authoritarianism provides the social and political backdrop to our analysis of the broad impact of technology, and we will consider whether pluralist approaches may help to combat some of the emerging threats to liberal democracy.
This course investigates how digital transformation relates to democracy and governance in an increasingly connected yet potentially polarised world.
60% Final exam (MCQ) – this relates to all lecture content and the readings from the content section
For a good example of a subject matter for the group report I highly recommend reading The Story of VaccineCA. In particular, consider how the following elements coincide: the type of organisation chosen to pursue this objective (initially volunteers but then a Delaware corporation; the institutional context (i.e. liberal market democracy where sharing such information wasn’t illegal); and the cultural attitude toward problem solving and tech optimism. For a great interview with Patrick McKenzie about his background and advice listen to his Conversation with Tyler.
Prerequisite
Students should have already taken my 6 hour component of the Business Frontier Technologies course. This includes some of the following content:
To understand some of the context for my construction of this course I recommend:
Matthew Perry on BBC Newsnight, (yes, one can make the contrarian and pedantic point that humans exercise “choice” in every decision we make, but this interview demonstrates the importance of acknowledging the human cost of not being in full/partial/any control of things that are harmful to your well being. Particularly poignant given Perry’s death in 2023).
12. Conspiracy Theories, The Rest is History, Jan 4th 2021 (a short overview of the history of conspiracy theories, with emphasis on how they tend to satisfy a need for us to try to make sense of shocking events).
Beware the Jabberwock, This American Life, March 15th 2019 (a single episode that provides a detailed look at the origins of the Sandy Hook conspiracy theory and one parents attempt to fight misinformation. The second half of this episode is an interesting, but less relevant profile and interview with Alex Jones).
Four Hours at the Capitol, BBC (a documentary about the storming of the US Capitol building on January 6th 2021)
The Coming Storm, BBC Sounds (7 part podcast documentary on the rise of QAnon)
Death by Conspiracy, BBC Sounds (an 11 part podcast documentary on Gary Matthews, who died from covid in January 2021 having been drawn to social media claims that it was a hoax. I listened to this as a parallel to The Coming Storm but it strayed too far into covid, media ethics, and psychology for me to incorporate it more fully in this course, which attempts to avoid those areas. I didn’t learn much about conspiracy theories aside from episode 9 which provided a good attempt to understand why our common conception is often misplaced. Ultimately I just found this sad.)
Things Fell Apart, BBC Sounds (a documentary that looks at the different origins of the culture wars, which are defined as “the battle for dominance over conflicting values”, or the things we shout about on social media)
Command and Control, PBS (a documentary looking at how close we came to a major nuclear accident)
The Last Podcast on the Left (Episodes 400-405) – this series was recommended as a deep dive into the original and most important conspiracy theory of all time, but I found it so irritating and juvenile in presentation that I didn’t get past the first episode. I did like the claim that conspiracy theories require a conspiracy vacuum, however.
Chris Blattman on War and Centralized Power, Conversations with Tyler, Episode 149, May 4th 2022 – this is a fascinating interview with a global expert on war (Blattman’s core thesis is that violence occurs when centralised groups have no check on their ability to indulge their narrow preferences). It doesn’t have direct relevance to this course but it is very interesting and touches upon the concept of polycentricity (which is the notion of multiple centres of power).
#365 – Sam Harris: Trump, Pandemic, Twitter, Elon, Bret, IDW, Kanye, AI & UFOs, Lex Fridman podcast – a good overview of the ethics of public vs. private conservation (i.e. platforming); the weaponization of social media (i.e. why Harris deleted his Twitter account); the health of democracy and our capacity to deal with social problems such as a potential future pandemic. Also relevant to future AI prospects.
#429 – Paul Rosolie: Jungle, Apex Predators, Aliens, Uncontacted Tribes, and God, Lex Fridman podcast – a fascinating conversation that helps us to link animals, consciousness, intelligence, and AI. The section from 1:41:00 to 1:58:46 is a wonderful conceptualisation of how we, as “meat vehicles on a floating rock”, should think about these things.
#367 – Sam Altman: OpenAI CEO on GPT-4, ChatGPT, and the Future of AI, Lex Fridman podcast – Altman defends OpenAI’s strategy of transparency and iterative progress that gets tested on a wide scale. He believes that AI alignment can keep pace with its capabilities. A good counterexample is nuclear weapons.
#371 – Max Tegmark: The Case for Halting AI Development – Lex Fridman podcast – Tegmark claims that AI development is a suicide race not an arms race, and it’s not obvious that other countries, who might have more to lose from cutting edge technology, will continue regardless. The open letter than he organised was specifically intended to deal with the collective action problem whereby AI developers want everyone else to slow down but can’t do so unilaterally.
Episode 25: Is it the phones? The Studies Show, January 30th 2024 – a look at the evidence relating to social media and teen mental health
Episode 11: The AI apocalypse debate The Studies Show, September 19th 2023 – two science journalists discuss whether AI will cause the end of human life.
Civil society – Paul Aligica on Human freedom and the Third Sector, Mercatus Center – an interview with an academic (one of my PhD committee!) who articulates the importance of polycentric solutions to solve social problems, and the normative importance of respect for individual autonomy and consent. This is particularly relevant for students who are from former communist countries, or those interested in modern forms of indoctrination.
Recommended movie night
This is not massively related to this course, but I really enjoyed watching Top Gun: Maverick (you may need to watch the original Top Gun first to get the full benefit). It reminded me of how Rocky IV contrasted American individualism, authenticity, and heart against superior Soviet technology. I saw Maverick as a rumination on automation, and the continued role for human emotion, and decision making that is instinctive, impulsive, and emotive, and how that gets managed. The subtext is that unmanned drones and algorithms are the future. In the film, US technology is deemed inferior but it is all about who is in the plane and not the plane itself. Traditional pilots needs to eat, sleep and piss but remain the driving force of future success, and whatever is is that ensures a future is worth achieving.
Here’s an absorbing and fascinating explanation of how the Mach 10 scene resembles a perfect pop song:
The best 3 movies related to AI and our conception of reality (in my opinion) are:
Recommended activity
Play Moderator Mayhem, a game that helps understand more about internet safety
Recommended case studies on digital transformation
Perhaps the best case study of the importance of an effective digital transformation is the UK Post Office Horizon scandal (Wikipedia). There is an excellent podcast about it produced by BBC Sounds and in January 2024 ITV aired a documentary.
Further academic reading
Giraudo, M., 2022, “On legal bubbles: Some thoughts on legal shockwaves at the core of the digital economy“. Journal of Institutional Economics,18(4), 587-604 – an account of how changes in expectations around how data gets protected as private property has influenced Big Tech. I found the article badly written but conceptual and therefore reasonably accessible to a non academic audience.
If you detect an attempt to link together the claims that “an important solution to social media addiction is good parenting” and “we have to learn how to raise AI” then this is deliberate. Indeed Stuart Ritchie (who works at Anthropic) captures it perfectly:
And it’s apt that I teach this course at ESCP. As Martin Luther said, Paris is “the parent of learning”.
“I, Pencil” (Leonard Read, 1958, Foundation for Economic Education)
“What is Seen and What is Not Seen” (Frederic Bastiat, 1850, Paris: Guillaumin. This version taken from The Bastiat Collection, 2nd Ed., Mises Institute, 2007, pp. 1-11 only)
You can download all of the above in a single PDF file here.
This course considers different ways of understanding the concept of justice, and how managers can apply these insights within an organisational setting.
This course will develop student’s capacity for economic analysis and awareness of the insights for management. The focus of the course is on the principles of microeconomics relevant for managerial decision making and the limits of markets, including asymmetric information; monopolies; and ethical frontiers.
This course provides an overview of core economic concepts and how they relate to senior executive management. Particular focus will be placed on the theory and practice of internal markets and how organisations have harnessed the knowledge and incentives provided by market mechanisms. Group work will focus on an analysis and assessment of the macro context for a relevant country, looking at monetary and fiscal policy as well as a broader set of social and environmental indicators.
Cases marked with a pound sign (£) are available via the learning platform.
What I’ve been reading:
Ghattas, K, 2020, Black Wave, Wildfire
What I’ve been listening to:
The Tragedy of the Middle East: A Letter from Lebanon, The David McWilliams Podcast, October 1st 2024 – recorded in September 2024, I found this this interview with Carole Nakhle to provide a good perspective on the economic history and current political situation.
This course gives participations a coherent view of core economic concepts from the perspective of managers and policymakers. We will look at the principles of microeconomics that are relevant for managerial decisions, including value creation, supply decisions, and the use of markets to allocate scarce resources. Particular techniques involving the interpretation of market data will be explored to provide a useful, practical toolkit.
The course also exposes participations to some of the key frameworks and models in macroeconomic theory, and provides a policy-oriented decision-making context. Newspapers and social media are full of macroeconomic commentary, but many people can feel intimidated by the terms being used and the thinking behind them. Participants will not only understand why certain decisions were made, but formulate their own views on the arguments in favour and against. In doing so, participations will be obliged to think big about the macro policy environment.
Finally, economics is focused on human action and therefore we will look at some key findings from the behavioural economics literature and how they relate to corporate decision making.
“Sun: A CEO’s Last Stand”, Business Week, July 26th 2004 (£)
You should consult the schedule below to see additional instructions for each of these readings. There are also links to relevant sections of the textbook but these are not mandatory.
Sessions marked with an asterix (*) are lectures and have handouts available. Cases marked with a pound sign (£) are available via Canvas. Each session contains a link (+) to additional resources.
