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Economics

The Case for Teaching Economics Before Strategy

Strategy frameworks are compressed economics. Students who meet them without the underlying theory learn the compression and not the content.

Daniel Fairbairn15 July 20268 min read
The Case for Teaching Economics Before Strategy
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Nearly every canonical strategy framework is an economic argument wearing a diagram. Barriers to entry, bargaining power, switching costs and rent capture are industrial-organisation concepts that were translated for managerial audiences and then, over time, detached from the theory that justified them.

Detachment has a cost. A student who has internalised the economics can tell when a framework does not apply. A student who has only the diagram will apply it anyway, confidently, to a market whose structure violates its assumptions.

The pedagogical fix is unglamorous: teach the theory first, then the tools, and require students to say which assumption each tool depends on. Institutions with deep economics faculties have an obvious structural advantage in doing this well.

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