The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics
– Thomas Sowell, economist.
Back-to-school shopping is a time-honoured tradition that we all know and love. As early as January, sale signs and store displays start popping up, and newspapers are filled with stories of frantic parents rushing to buy all the essentials for their kids. Of course, no back-to-school season would be complete without the inevitable trips to malls and shopping districts like India Street, where tensions run high and arguments break out between parents and their children over what to buy.
While the conflicts between parents and children may have been somewhat quiet, they certainly haven’t disappeared entirely – instead, they’re happening more behind closed doors, out of public view.
Adding to the stress that many families are already feeling, unfortunately, is the current climate of sharply inflated prices. For my wife and myself, the cost of preparing our 11-year-old daughter and 8-year-old son for the new school year came out to nearly RM800 – and that’s not even including their school fees. Yet, we made sure to equip them with everything they needed, from long pants and uniforms to stationery, socks, and shoes.
At the core of decision-making in economics, the principle that incentives matter plays a crucial role. People, including parents, are motivated by the prospect of larger benefits or lower costs, even if it means making decisions that may not seem entirely rational – especially when it comes to their children. This is particularly evident during the back-to-school shopping season, where differences in costs and benefits can lead to disagreements between parties who must jointly make purchasing decisions, even within the context of family life.
Parents and children often approach back-to-school shopping with very different priorities and perspectives. Kids are often focused on the social aspect of their choices, wondering things like “Where will this put me on the school’s social hierarchy?” or “Will this be considered cool?” Parents, on the other hand, tend to take a more practical approach. They ask questions like “How durable are these clothes?” and “Will they be easy to wash and dry?” These different perspectives can lead to conflicts and disagreements between parents and children, with both sides feeling strongly about what should or should not go into the shopping cart.
For parents, every purchase must be weighed against its perceived value and price since they are the ones footing the bill. Children, on the other hand, don’t bear the financial burden of their shopping choices (aside from whining, guilt-tripping, extorting, or arguing with their parents). This creates a huge gap between what kids might want at a zero price and what they actually end up getting when their parents consider the real-world costs. Finding a balance between what kids want and what parents can reasonably afford is often easier said than done.
Have you ever wondered why young children seem to act up more often in store checkout lines than they do at home? Again, it’s all about incentives. For them, the benefits of grabbing some easily accessible candy or ice-cream are simply too tempting to resist, and the costs of being punished in public are relatively low – they’re less likely to be punished when everyone around them is a stranger.
They always seem to be clamouring to eat out, even though it is often expensive. The reason? Simple. It’s not their money! They don’t bear the costs, so they don’t think twice about splurging on a meal out. The same goes for their desire to have their clothes washed almost daily as it’s not their time and effort being expended. However, when it comes to chores like cleaning their rooms or washing dishes, they suddenly become much more resistant because this time and effort is theirs to bear, and they’d rather spend it on things they enjoy. As for studying, parents often want their kids to study more than the kids themselves do. After all, it’s the children’s time and effort on the line, and they’d rather be doing something else. As they mature, their priorities and incentives evolve. Eager to enjoy the benefits without bearing the full costs, they often want to borrow their father’s motorbike, for example. I can relate—back in the day, I used to sneak out on my father’s bike!
Interestingly, the dynamics of back-to-school shopping can also serve as a reflection of larger societal and political issues. Just like parents and children navigating the shopping process, groups within society have distinct preferences for what they want the government to do and are constantly advocating for policies that benefit them at the expense of others. These desires are often inconsistent and conflicting, making it impossible for everyone to get what they want. Moreover, the costs of government policies can vary widely depending on who bears the burden. Some may be forced to pay more for government expenditures, including future taxes and unfunded liabilities.
In the case of back-to-school shopping, the government does not merely decide on school supplies, but also determines who will be treated as ‘children’ and what they will receive, and who will have to bear the ‘parent’s’ tab. This disparity can lead to disagreements and conflicts, especially when children want to spend more than parents are willing to pay. The tension is further amplified when we consider the government’s role in redistributing resources.
Despite the fact that economics teaches us that there is no free lunch, politicians continue to make promises of something-for-nothing solutions that ultimately lead to higher costs and fewer benefits. This is a vicious cycle that we must break if we hope to create a more sustainable and equitable future.
