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The left flunks economics 101

Who might you guess is better informed on issues of economics: liberals who promote government intervention in the economy, or conservatives and libertarians who oppose that?

A recent study found some surprising — or maybe not surprising — results. The study is titled Economic Enlightenment in Relation to College-going, Ideology, and Other Variables: A Zogby Survey of Americans. At this link you can read an abstract of the study and the entire document, too.

An article by one of the authors that appeared in the Wall Street Journal is Are You Smarter Than a Fifth Grader? Self-identified liberals and Democrats do badly on questions of basic economics.

In the study, researchers asked a series of questions designed to “gauge economic enlightenment.” Conclusions included these: First, and surprisingly, “for people inclined to take such a survey, basic economic enlightenment is not correlated with going to college.”

Perhaps more importantly, who scored best: conservatives or liberals? Here’s the rundown:

Adults self-identifying “very conservative” and “libertarian” perform the best, followed closely by “conservative.” Trailing far behind are “moderate,” then with another step down to “liberal,” and a final step to “progressive,” who, on average, get wrong 5.26 questions out of eight.”

The authors say “we should acknowledge that none of the eight questions challenge typical conservative or libertarian policy positions.”

The authors also note:

At least since the days of Frédéric Bastiat, many have said that people of the left often trail behind in incorporating basic economic insight into their aesthetics, morals, and politics. We put much stock in Hayek’s theory that the social-democratic ethos is an atavistic reassertion of the ethos and mentality of the primordial paleolithic band, a mentality resistant to ideas of spontaneous order and disjointed knowledge. Our findings support such a claim, all the caveats notwithstanding. Several of the questions would seem to be fairly neutral with respect to partisan politics, particularly the questions on licensing, the standard of living, monopoly, and free trade. None of those questions challenge policies that are particularly leftwing or rationalized on the basis of equity. Yet even on such neutral questions the “progressives” and “liberals” do much worse than the “conservatives” and “libertarians.”

Author Daniel B. Klein concludes in the Wall Street Journal piece: “Adam Smith described political economy as ‘a branch of the science of a statesman or legislator.’ Governmental power joined with wrongheadedness is something terrible, but all too common. Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us.”

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2 Comments

  1. Ann H. June 13, 2010

    It doesn’t surprise me at all. Liberals in power are only using their economic policy to make more voters dependent on government (which of course is the proof that liberal economic policies do the opposite of helping people, and they know it), which thus increases these corruptocrats’ power and wealth, as more and more voters “need” to vote for them to secure ever more government “aid.” So these liberals already know that liberal economic policy flunks Econ 101, but that is exactly why they employ such policies.

    On the other hand, many liberal “regular people,” like my liberal relatives, don’t have malicious intent, but they believe what they do not because it works or makes economic sense, but because of how they feel about it. They like the way liberal economic policy sounds; it sounds like people are going to be helped, and by voting Democrat, they are helping people get helped. It is all about their emotions, not rational analysis or good economic knowledge. They want our nation to have compassion on our fellow man who is worse off, and it is precisely because they aren’t grounded in Econ 101 that they vote for what *sounds* good to them rather than what is based in sound economics.

  2. Brent Thomas Davis June 22, 2010

    I was discussing the national debt with my son Christopher today and he was talking about how large he heard the debt is. He asked if President Obama was responsible for the debt, and I said, partially, but that his income redistribution ideas will likely not make it better. Then he proposed a solution. He said, why don’t they just print up a bunch of money and pay the debt off (something they may just try to do)? I said, well suppose you and I are the economy. I say that I’ll tend the garden, you do some hunting, make a water supply for irrigaton and make a shelter for us for the night. He said, ok. I said then we would have a very nice living after a while. He said yes. Then I proposed, instead of all that work why don’t we just print up a bunch of money! He thought that was a good idea. I said, so what do we have? He said, we just go to the store and buy everything we need. No, I said, we don’t. Because there isn’t anything to buy because we didn’t make anything. It’s just us in the economy! I said, you see, money is not the source of wealth, it is production. When people print up money without doing any work to earn it they are just stealing other people’s wealth. Whenever we have a system where people can just print money up out of thin air they are stealing other people’s wealth. Only a 100% reserve money supply does not confiscate a portion of people’s wealth in seniorage. Only a 100% reserve banking system does not defraud people of the returns on their contracts. He asked, what can we do? I said, we can educate and we can elect politicians who will force the Federal Reserve to convert to 100% reserves and force the banking system to convert to 100% reserve.

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