Tuesday, December 20, 2011
Are high school economics textbooks reliable?
These observations about economics are profound. Nations (and individuals) can rise or fall on the basis of their knowledge of economics. When people don't understand economics, they gullibly embrace "quick fix" promises (such as government "stimulus" schemes) that make problems multiply and worsen.
Errors abound in the economics texts students are reading. What follows is a sample of statements I found in economics texts over the years -- statements that do not inform students but instead mislead them.
The philosopher Leonard Read pointed out that the impossible task of one person planning the life of another is made even more complex when a handful of people in government set out to plan the lives of millions.
"No mind of man," Read noted, "nor any combination of minds can even envision, let alone intelligently control, the countless human energy exchanges in a simple society, to say nothing of a complex one."
"Despite fears by some Americans that governmental tampering with the free enterprise system would be harmful, most government policies have met with success." David E. O'Connor teaches this to high school students in his text, "Economics -- Free Enterprise in Action."
Government doesn't always fail, but the track record hardly suggests that "most" of its policies have been successful. Education? Studies show the more government spends and regulates, the worse the schools become. Monetary policy? Several recessions, a Great Depression, and a currency worth a nickel of its value when the Federal Reserve System was established don't add up to success. Poverty? Recent scholarship shows that $5 trillion in poverty spending after 1965 only worsened the problem.
"Under a balanced budget, the government would not be able to do things that many people think it should do, like building roads and providing for the needy.'' Henry Billings, in his "Introduction to Economics," apparently believes one of the following: a) when government spends more than it raises in taxes, we get the extra goodies for free; or b) people have to be bamboozled into supporting programs they wouldn't knowingly want to pay for.
High school students need to learn that deficit spending simply means that today's taxpayers get the goodies and tomorrow's get the bills, plus a hefty interest charge.
Perhaps today's economic texts need to come with warning labels. If the current crop of textbook authors could be sued for malpractice, many would need skillful attorneys to stay out of jail.