Before you read today’s article, test yourself by answering the following questions AGREE or DISAGREE, based on your understanding of basic economics:
1) Restrictions on housing development make housing less affordable.
2) Mandatory licensing of professional services increases the prices of those services
3) Overall, the standard of living is higher today than it was 30 years ago
4) Rent control leads to housing shortages
5) A company with the largest market share is a monopoly
6) Third World workers working for American companies overseas are being exploited
7) Free trade leads to unemployment
8) Minimum wage laws raise unemployment
It’s too bad basic econ isn’t actually taught in 5th grade, or 12th grade for that matter. Perhaps our country would be in a better financial situation if it were.
Who is better informed about the policy choices facing the country—liberals, conservatives or libertarians? According to a Zogby International survey the answer is unequivocal: The left flunks Econ 101.
How did the six ideological groups do overall? Here they are, best to worst, with an average number of incorrect responses from 0 to 8: Very conservative, 1.30; Libertarian, 1.38; Conservative, 1.67; Moderate, 3.67; Liberal, 4.69; Progressive/very liberal, 5.26.
Americans in the first three categories do reasonably well. But the left has trouble squaring economic thinking with their political psychology, morals and aesthetics.
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.