Is the standard-model Econ 101 course bad? One person who thinks so is University of Connecticut law professor James Kwak. He has written a book and published at least two articles (in The Atlantic and The Chronicle Review) arguing that students are misled by the “simplistic” ideas taught in Econ 101, revolving around supply and demand. What bothers him especially is that students may become skeptical about the sorts of interventionist policies that leftists favor, such as minimum-wage increases.
In this Martin Center article, economics professor Don Boudreaux of George Mason University rises to the defense of Econ 101 — at least when taught as it should be.
Boudreaux nails it when he writes, “It turns out that the analyst who is simple-minded is not the good Econ 101 student, but instead, Kwak himself, who clearly doesn’t have what it takes to reason as carefully as does this student.”
Fortunately, despite the excessive formality of advanced economics, good Econ 101 courses are not uncommon. In those courses, students learn the “mental toolkit” of economists.
They learn that prices and wages are not set arbitrarily, that voluntary trade that crosses political borders is no less mutually advantageous than is voluntary trade that doesn’t, that all goods and services have costs that someone must pay, that profits are a reward for serving consumers and not an unjust extraction from workers, that intentions are not results, and much more.
Along the way, they also learn that most of what non-economists, and their political representatives, believe about the economy is mistaken.
The college curriculum is degraded enough, and if schools take out Econ 101 in favor of nothing or (worse) fluff courses that will further incline students toward the belief that government can solve all our problems, the country will be much worse off. And before “progressives” embrace Kwak’s notions fully, they might contemplate that students who can see the folly in believing that minimum-wage laws only have good consequences are also students who can see how Trump’s attack on free trade will harm most of us. An economically ignorant population cuts both ways.
Incidentally, I strongly recommend a daily trip to Don’s Cafe Hayek.