Economics is a subject that dominates public policy battles these days, but if Michiganians have to rely on what they've learned of it in the public schools, many of them may be entering the fray unarmed.
More than one-quarter of Michigan public high schools do not offer Economics in their curriculum and the subject is not required in almost half of those which do. Those were among the startling findings of a recent Mackinac Center poll.
According to the data, 72 percent of the state's high schools offer Economics. But of those, 51 percent make it a required course while 49 percent offer it as an "elective." Only a tiny fraction of students choose to take the subject when the choice is up to them. Barely 49 percent of Michigan students had actually completed one Economics course before graduation in 1992.
Three hundred of Michigan's 650 high schools responded to the poll, providing a substantial sample. It may be a reasonable assumption that schools with little or no Economics were less likely to respond than those which offer the subject, in which case the "Economics Knowledge Deficit" may be even worse than these numbers suggest.
Our poll involved no value judgments regarding the kind of Economics taught. Some courses deal with little more than "consumer" issues: how to balance a checkbook, how to find the best deals in the market, or how to borrow money at the lowest interest rate. Those are all useful things to know, but the mental tools and essential principles needed to analyze and evaluate the paramount public policy issues of the day are too often missing.
Moreover, even a cursory examination of texts used in high school Economics courses reveals a dismal level of understanding or outright bias by the text authors
themselves. Students are sometimes reading, for instance, that Americans are undertaxed, that government spending creates new wealth, and that politicians are better long-term planners than private entrepreneurs. It is not uncommon for texts to portray free market competition and private property in a suspicious light while presenting government intervention with little or no critical scrutiny.
Sound economics, stripped of ideological bias, can be of immense importance. It teaches us that everything of value has a cost that somebody must pay. It informs us that higher standards of living, if they are not to come at someone's expense, can only come about through greater production. It tells us that nations become wealthy not by printing money or spending it, but through capital accumulation and the creation of goods and services.
It reminds us to think of the long-term effects of what we do, not just the short-term or the flash-in-the-pan effects. It tells us a great deal about the critical role of incentives in shaping human behavior. In short, sound economics is a blueprint for a sound economy, which is indispensable to satisfying human needs and wants.
When people have little or no economic understanding, they embrace the "quick fix" and support impractical "pie-in-the-sky" solutions to problems. They may think that whatever the government gives must really be "free." They don't know the difference between the budget deficit and the national debt. They might even think that trade is a bad thing, that if we shut the borders to the flow of goods our living standards would rise. They will not only be unable to see through economic snake oil, they won't be able to identify its harmful consequences either.
Arguably, America's great economic problems have their roots in widespread ignorance of economic principles. When the noted economist John Maynard Keynes was asked in the late 1930s if we should be concerned about rising debt and printing press money, he flippantly remarked, "In the long run, we're all dead anyway." Today, unfortunately, is the tomorrow that yesterday's bad economics told us we could ignore.
From the Clinton budget plan to the financing of education in Michigan, our citizens are being asked to form judgments and cast votes for ideas that are largely economic in nature. Maybe we should start talking about how we provide the missing tools we need to make such decisions, so that we don't dig ourselves deeper in the muck of bad public policy.