Who Flunked Economics 101?
It turns out that how well you know your basic economics principles correlates pretty closely with your spot on the political spectrum.
Who is better informed about the policy choices facing the country—liberals, conservatives or libertarians? According to a Zogby International survey that I write about in the May issue of Econ Journal Watch, the answer is unequivocal: The left flunks Econ 101.
Zogby researcher Zeljka Buturovic and I considered the 4,835 respondents’ (all American adults) answers to eight survey questions about basic economics. We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian.
They describe the specific questions as well as their methodology, which breaks things down by incorrect answers, and where "not sure" doesn’t count against you. I can see one of the questions that I might disagree with what they considered the correct answer, but you had to be positively wrong (so to speak), not just unsure, to get marked off. The results?
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.
Ronald Reagan said, "The trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so." This shows how remarkably true that is.
Filed under: Doug • Economics & Taxes • Liberal • Polls
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I’d have to question the legitimacy of the questions and the “right” answers. They seem to make some presumptions.
I mean, I could give “right” answers based on what many neoliberal* economists would answer, but I question the wisdom of neoliberal economists.
For instance, one question was… “Free trade leads to unemployment” Well, that would depend, wouldn’t it?
I mean the NAFTA DID lead to job losses here in the US and, eventually, Mexico, or at least the argument can be made. If NAFTA results in farmers losing their livelihoods (and it did), then in fact, free trade DOES lead to unemployment.
I also understand that there may be an initial bump in some jobs, but not overall, not sustainably. As one source notes…
Americans were promised that NAFTA would generate large numbers of net new good jobs. Instead, over a million jobs that would otherwise have been created were lost, and wages were pressured downward for a large number of workers with less than a college education.
Mexican employment did increase, but much of it in low-wage “maquiladora” industries, which the promoters of NAFTA promised would disappear. The agricultural sector was devastated and the share of jobs with no security, no benefits, and no future expanded.
Given the real world results of NAFTA and other FTAs, I would tend to answer that question with a YES, with a caveat of “Depends…”
And I would be right. They often weren’t right/wrong questions, but questions that required reasoned responses. So, it makes sense that those who buy into neoliberalism would give the “right” answers.
Seems to me to be a flawed survey. A survey’s results are only as good as its format.
The other questions on the survey I thought were similarly flawed/skewed.
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* RE: Neoliberalism – not wanting to speak down to anyone or make assumptions, but for clarity’s sake, I wanted to note that neoliberalism… “is a ‘market driven’ approach to economic and social policy based on neoclassical theories of economics,” not a liberal view of economics.
Here’s another source:
Why NAFTA would induce a company to move production to China is a puzzle, but you get the idea.
His campaign claims a million jobs have vanished because of the deal. That sounds devastating, but over the last 14 years, the American economy has added a net total of 25 million jobs—some of them, incidentally, attributable to expanded trade with Mexico. When NAFTA took effect in 1994, the unemployment rate was 6.7 percent. Today it’s 4.9 percent.
But maybe all the jobs we lost were good ones and all the new ones are minimum-wage positions sweeping out abandoned factories? Actually, no. According to data compiled by Harvard economist Robert Z. Lawrence, the average blue-collar worker’s wages and benefits, adjusted for inflation, have risen by 11 percent under NAFTA. Instead of driving pay scales down, it appears to have pulled them up.
Manufacturing employment has declined, but not because we’re producing less: Manufacturing output has not only expanded, but has expanded far faster than it did in the decade before NAFTA. The problem is that as productivity rises, we can make more stuff with fewer people. That’s not a bad thing. In fact, it’s essentially the definition of economic progress.
Doing more with less is, indeed, going to cause some unemployment in the short term, but the big picture needs to be considered; not just with regards to the specific manufacturing sector numbers but with trade in general.
And since this is a quiz on economics, it’s good to ask the economists.
None of this is a revelation to economists. The candidates’ broadsides require them to ignore not just a wealth of evidence but the overwhelming consensus of experts. Gary Clyde Hufbauer, an economist at the Peterson Institute for International Economics in Washington, estimates that 90 percent of the people in his profession regard the accord as a good thing.
Jagdish Bhagwati, a Columbia University trade economist, supports Obama and thinks his positions on trade are generally better than [Hillary] Clinton’s. “But on NAFTA,” Bhagwati told me, “he is dead wrong.”
Sooo, YOU would have answered “Yes, with caveats,” too?
An answer of of merely “somewhat agree” would be considered a correct answer (i.e. not counted against you). More than likely, every answer of the 5 possible glosses over some issues and edge cases.
Not sure what your whole point was, especially since you knock the neo-liberalist answer, only to give it. Yes, I’d give it too, but I was “un-knocking” it.
According to that link…
6) Free trade leads to unemployment (unenlightened answer: agree).
My answer is the “unenlightened answer,” not the neoliberal answer (which would be disagree, right? Or am I missing their point?)
No, you’re just fine, Dan. I’m getting the “enlightened” and “agree” labels all turned around.
The big picture is that unemployment was, overall, lower after NAFTA. And manufacturing progress should and will continue with or without NAFTA.
As to my answer, if someone walked up to me on the street and asked me that question, without an Internet connection to look things up, I’d probably say “not sure”, though I’d want to say in my gut “somewhat disagree”.