A few years ago, I read Jonathan Foer’s book, Eating Animals. This book opened my eyes to the behind the scenes look at for-profit animal agriculture. One thing that instantly caught my attention was the fact that the animal agriculture industry is the number one cause of climate change (http://www.un.org/apps/news/story.asp?newsID=20772#.VqAAN1MrJBw). In addition to environmental impact and the inhumane treatment of these animals, I couldn’t get over how affordable these meals were (and still are). Let’s think about it. A burger on the dollar menu costs between $1-$1.50 depending on where you go. If you look into what goes into a burger, from raising, feeding and caring for the livestock, to slaughtering the meat, to transportation costs, to the labor to prepare the burger, it becomes very apparent that $1 does not capture the entire cost of that burger. By comparison, if you go get a burger at a sustainable farm-to-table restaurant (http://www.local360.org/) it will cost $12. I understand there are scales of economies involved, but it doesn’t account for all of the costs and externalities. Somewhere along the line, other costs are “absorbed/lost”, but at what expense? The environment? People’s health?
Creating shared value (https://hbr.org/2011/01/the-big-idea-creating-shared-value) addresses how for-profit companies do great social harm by pursuing profits at all costs (In this case, making and selling a burger at such a low cost), and how companies need to move away from classical economic theory and embrace bringing business and producing social goods together. It also suggests government policy decisions are made ineffectively to help curb these externalities that are not accounted for by businesses. The conclusion of the article suggests that business schools will need to change their curriculum in variety of areas to help steer the future leaders of the country towards creating shared value. However, I believe that it’s not just enough to limit this to business schools and majors. I believe a critique of this current business model is necessary for all students to understand how economics and politics intersect and how policies harm people and nations, especially those that are most vulnerable.
Regardless of your major in college, I feel that all students should be required to take a course in political economics. Much like taking English, math, and science, political economics will shape the way you view the world. A common denominator for the American public is that we are all consumers. An incomplete understanding of costs and commodity production, leads to imperfect and irrational economic choices in spending, investing, and consuming. I can attest that taking my first economics class in graduate school changed the way I viewed the world. I can only imagine how taking a political economics class would have influenced many of my engineering classmates and myself had we taken it over 10 years ago. Teaching students at such a young age about how the world works and how business, economics, politics, and societal goods are intertwined are just as important as literature, mathematics, and science. This will not only be the key to successfully change the future of business but also the outlook of the world.