The Corner


This Helps Explain Economic Illiteracy

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Many American students learn little in high school, but what they do learn is apt to be loaded with statist misinformation. Those who are paying attention are hit with textbooks and teachers pushing “progressive” ideas.

In this Bet On It post, Professor Bryan Caplan trains his sights on high school history texts. Re-examining one he had as a student, he finds it to be miserably slanted, with page after page creating the impression that the U.S. economy was almost unbearable for all but the rich.

Here’s a slice:

The rise of the factory system placed such a gulf between employers and employees that the former no longer took a personal concern in the welfare of the latter.

First problem: The main determinant of wages and working conditions is workers’ marginal productivity, not “personal concern.” Are we really supposed to believe that implicit employer charity was a large fraction of employee compensation during the pre-modern era?

Second problem: Personal concern clearly plays some role in modern businesses (see here and here for starters). Today’s firms exhibit a much larger “gulf” between employers and employees than could possibly have existed in the first half of the 19th century. Are we really supposed to believe that personal concern was important in the pre-modern period, disappeared in the 19th century, then returned in the 20th?

Third problem: Keynesian economists emphasize that wage-fairness norms lead to labor surpluses, also known as “unemployment.” So the overall effect of greater personal concern on workers’ well-being is unclear. Mediocre jobs you can actually get are far better than great jobs you can’t get.

Caplan proceeds to shred the book.

The author hasn’t just made a few errors that are worth quibbling about. He’s produced a book that has nothing good to say about laissez-faire, property rights, limited government. And that’s typical. Students get a steady drumbeat of criticism of our foundations and hardly anything arguing that there are benefits to them. Little wonder that a high percentage say we’d be better off with socialism.

George Leef is the the director of editorial content at the James G. Martin Center for Academic Renewal. He is the author of The Awakening of Jennifer Van Arsdale: A Political Fable for Our Time.
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